Order No. 2015-003

In the Matter Of:

James R. Parker
Chairman of the Board of Directors
And Former President
And Chief Executive Officer
The Elkhart State Bank
Charter Number 1601-34

And

Director, and Former President
And Chairman of the
Board of Directors
Elkhart Bancorporation, Inc.
Elkhart, Texas

CONSENT REMOVAL ORDER

On this day, the matter of JAMES R. PARKER, Elkhart, Texas (“Respondent”) was submitted to me, Charles G. Cooper, Banking Commissioner of the State of Texas (“Commissioner”), for consideration and action. Respondent is the chairman of the board of directors, and former president and chief executive officer of The Elkhart State Bank, Elkhart, Texas (the “Bank”). The Bank is owned 100% by Elkhart Bancorporation, Inc., a Texas corporation (the “Holding Company”). Respondent is a director and the controlling shareholder of the Holding Company. Until January 2015, Respondent was the president and chairman of the board of directors of the Holding Company.

The Texas Department of Banking (“Department”) is the appropriate state banking agency to bring this enforcement action pursuant to Texas Finance Code §§ 35.003 and 202.005, and the Commissioner has jurisdiction over Respondent and the subject matter of this proceeding.

Respondent has been informed that he has the right to receive a proposed order detailing the violations of law or regulation, unsafe or unsound banking practices and/or breaches of fiduciary duty that the Department charges against Respondent. Respondent has been informed and understands that he has the right to a hearing on the alleged charges under Texas Finance Code §§ 35.003(c) and 35.004. Respondent waived those rights and entered into a Stipulation and Consent to the Issuance of a Removal Order (“Consent Agreement”) with the Department, which agrees to the disposition of this matter pursuant to the provisions of Texas Government Code § 2001.056.

Respondent entered into the Consent Agreement solely for the purpose of this proceeding, and, without admitting or denying any violations of law or regulations or unsafe or unsound banking practices and/or breaches of fiduciary duty, Respondent consented to the issuance of this Removal Order.

The Commissioner has considered the matter and determines that, based upon bank examination and other credible evidence, that Respondent’s actions satisfy the statutory requirements for the issuance of a Removal Order as set forth in Texas Finance Code § 35.003.

In particular, the Commissioner determines that:

(1) Respondent has intentionally committed or participated in violations of law or regulations, unsafe or unsound practices, and/or breaches of fiduciary duty with regard to the affairs of the Bank;

(2) Because of these actions by Respondent, the Bank has suffered or will probably suffer financial loss or other damage; the interests of the Bank’s depositors and shareholders have been or could be prejudiced; and/or Respondent received financial gain or other benefit by reason of the actions; and

(3) Such actions involve personal dishonesty on the part of Respondent or demonstrate Respondent’s willful and/or continuing disregard for the safety and soundness of the Bank.

The Commissioner further determines that such violations of law or regulations, unsafe or unsound practices, and/or breaches of fiduciary duty demonstrate Respondent’s unfitness to serve as a director, officer, or employee of the Bank or the Holding Company. Accordingly, the entry of this Removal Order appears to be necessary and in the best interest of the public.

I. Order of Removal

It is, therefore, ORDERED, ADJUDGED and DECREED that, pursuant to Texas Finance Code §§ 35.003 and 202.005, JAMES R. PARKER is hereby removed as chairman of the board of directors and from any other employment by The Elkhart State Bank, Elkhart, Texas and as a director of Elkhart Bancorporation, Inc.

It is further, ORDERED, ADJUDGED and DECREED that, pursuant to Texas Finance Code § 35.007, without prior written approval of the Banking Commissioner, JAMES R. PARKER may not:

1.serve as a director, officer, or employee of a state bank, holding company of a state bank, or state trust company, or as a director, officer, or employee with financial responsibility of any other entity chartered, registered, permitted, or licensed by the Banking Commissioner under the laws of this state;

2.directly or indirectly participate in any manner in the management of such entity or in the conduct of their affairs;

3.directly or indirectly vote for a director of such an entity; or

4.solicit, procure, transfer, attempt to transfer, vote, or attempt to vote any proxy,consent, or authorization with respect to voting rights in such an entity.

The voting securities of JAMES R. PARKER are considered to be authorized but unissued for purposes of determining the procedures for and results of a shareholders’ vote conducted by Elkhart Bancorporation, Inc.

II. Effective Date

This Removal Order against Respondent JAMES R. PARKER is effective February 11th, 2015, and is final and nonappealable as of that date. The provisions of this Order will remain effective and in force except in the event that, and until such time as, this Order shall have been modified, terminated, suspended, or set aside in accordance with Texas Finance Code § 35.0071, or other applicable law.

It is so ORDERED.

Signed this 11th day of February, 2015.

/s/ Robert L. Bacon
For Charles G. Cooper
Banking Commissioner of the State of Texas

APPROVED AS TO FORM:

/s/ James W. Huggler, Jr. February 11, 2015
James W. Huggler, Jr.
Attorney for Respondent

/s/ Brenna McGee February 11, 2015
For Deborah H. Loomis
Deputy General Counsel
Texas Department of Banking