Common use of Allowance for Loan and Lease Losses Clause in Contracts

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with generally accepted accounting principles. The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL methodology; (d) a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. Any deficiency between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call Reports.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the The Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate review the adequacy of the Association's Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesand shall establish a program for the maintenance of an adequate Allowance. The ALLL policies This review and procedures program shall be consistent with designed in light of the guidance set forth comments on maintaining a proper Allowance found in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated Losses (December 132006), 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum includefocus particular attention on the following factors: (a) procedures for determining whether a results of the Association's internal loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loanreview; (b) procedures for segmenting results of the Association's external loan portfolio and estimating loss on groups of loans that are consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statementreview; (c) procedures for validating the ALLL methodologyan estimate of inherent loss exposure on each significant credit; (d) a process for summarizing an estimate of inherent loss exposure on each credit in excess of one hundred and documenting, for the Board’s review fifty thousand dollars ($150,000); (e) loan loss experience; (f) trends of delinquent and approval, the amount to be reported nonaccrual loans; (g) concentrations of credit in the Consolidated Reports Association; (h) present and prospective economic conditions; and (i) appropriate treatment of Condition classified loans pursuant to the Interagency Policy Statement on the Allowance for Loan and Income Lease Losses (“Call Reports”December 2006), ASC 450-20 (FAS 5), and ASC 310-10 (FAS 114). (2) The program shall provide for a review of the ALLLAllowance by the Board at least once each calendar quarter. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsThrift Financial Report or Consolidated Report of Condition and Income, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (3) The Board shall ensure that the Association has processes, personnel, and control systems to ensure implementation of and adherence to the program developed pursuant to this Article.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the The Board shall adoptcontinue to adhere to and shall submit within forty-five (45) days of the date of this Agreement, implementto the Assistant Deputy Comptroller for a prior written determination of no supervisory objection, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with generally accepted accounting principles. The ALLL policies and procedures shall be remain consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) (“Interagency Statement”) ), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL methodology;; and (d) a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call Reports, through additional provision expense.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysdays of this Agreement, the Board shall adopt, implement, and thereafter ensure adherence to revise the Bank’s written policies and procedures for maintaining and documenting an adequate appropriate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGenerally Accepted Accounting Principles (“GAAP”). The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) (“Interagency Statement”) ), and other applicable supervisory guidance, and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan;Codification 310-10; and (b) procedures for segmenting estimating losses for various segments of the loan portfolio and estimating loss on groups of loans that are portfolio, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement;Codification 450-20. (c2) procedures Within sixty (60) days of this Agreement, the Board shall ensure the Bank’s program for validating the ALLL methodology;maintenance of an appropriate Allowance includes guidelines for obtaining and utilizing current collateral valuations on impaired loans. (d3) The program shall provide for a process for summarizing and documenting, for review of the Board’s review and approval, Allowance by the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLLBoard at least once each calendar quarter. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Consolidated Reports of Condition and Income (“Call Reports”), by additional provisions from earnings, as needed. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (4) Upon adoption of the Board's Allowance program, a copy shall be submitted to the Assistant Deputy Comptroller and the Bank shall implement and adhere to the program. (a) a focus on the following factors: (a) results of the Bank's loan review program; (b) loan loss experience; (c) trends of delinquent and nonaccrual loans; (d) concentrations of credit in the Bank; and (e) present and prospective economic conditions and other significant environmental factors.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysdays of this Agreement, the Board shall revise, adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate appropriate Allowance for Loan and Lease Losses (“ALLL”"Allowance") in accordance with generally accepted accounting principlesGAAP. The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in in: (a) the Federal Financial Institutions Examination Council’s “'s "Interagency Policy Statement on the Allowance for Loan and Lease Losses” " dated December 13, 20062006 (OTS CEO Memorandum No. 250); (b) OTS' Examination Handbook, Section 261, "Adequacy of Valuation Allowances;" (OCC Bulletin 2006c) OTS CEO Memorandum No. 304 (ALLL-47Observed Thrift Practices Including Sound Practices), dated May 22, 2009; or (d) any applicable successor regulation and guidance as specified by the Comptroller. (“Interagency Statement”2) The Allowance policies and procedures required under paragraph (1) of this Article shall include, at a minimum includeminimum: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with Accounting Standards Codification 310-10 (formerly known as FASB Statement of Financial Accounting Standards No. , 114, Accounting by Creditors for Impairment of a Loan); (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with Accounting Standards Codification 310-10 and 450-20 (formerly known as FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address Contingencies);procedures for validating the nine qualitative factors set forth in the Interagency Statement;Allowance methodology; and (c) procedures for validating to ensure that the ALLL methodologyestimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank's internal risk ratings, delinquent and nonaccrual loans; (dii) results of the Bank's external loan review; (iii) concentrations of credit in the Bank; (iv) present and prospective economic conditions; and (v) applicable experience of the Bank's lending staff. (3) The program shall provide for a process for summarizing and documenting, for the Board’s 's review and approval, the amount to be reported in the Consolidated Thrift Financial Reports of Condition and Income (“or Call Reports”) Report, as applicable, for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Thrift Financial Report or Call ReportsReport, as applicable, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the Board shall adopt, implement, strengthen its methodology for assessing the adequacy of the Allowance for Loan and thereafter ensure adherence to Lease Losses by adopting and implementing written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) ALLL in accordance with generally accepted accounting principles. The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) (“Interagency Statement”) ), and shall at a minimum shall include: (a) procedures detailing the process for determining whether a loan is identifying loans considered impaired and measuring how the amount of impairmentimpairment for those loans will be measured, consistent with FASB Statement of Financial Accounting Standards No. Number 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. Number 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement;; and (c) procedures for validating the ALLL methodology;. (d2) The revised policies and procedures shall address specific actions needed to improve the methodology outlined in the Matters Requiring Board Attention on page 7 of the December 31, 2007 Report of Examination and in any subsequent Report of Examination. (3) The revised policies and procedures shall provide for a process for summarizing and documenting, for the Board’s review and approval, approval of the amount to be reported in Allowance by the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLLBoard at least once each calendar quarter. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsConsolidated Reports of Condition and Income, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (4) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the policies and procedures developed pursuant to this Article.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the The Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate review the adequacy of the Association’s Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesand its program for the maintenance of an adequate Allowance. The ALLL policies This review and procedures program shall be consistent with comport to the guidance set forth comments on maintaining a proper Allowance found in the Federal Financial Institutions Examination Council’s Council (“FFIEC”) Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Banks and Savings Institutions (July 6, 2001), and the Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated Losses (December 132006), 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum includefocus particular attention on the following factors: (a) procedures for determining whether a results of the Association’s internal loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loanreview; (b) procedures for segmenting results of the Association’s external loan portfolio and estimating loss on groups of loans that are consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statementreview; (c) procedures for validating the ALLL methodologyan estimate of inherent loss exposure on each significant credit if determined to be impaired; (d) a process for summarizing and documentingan estimate of inherent loss exposure on each credit, for the Board’s review and approval, the amount if determined to be reported impaired, in excess of two hundred and fifty thousand dollars ($250,000); (e) loan loss experience; (f) trends of delinquent and nonaccrual loans; (g) concentrations of credit in the Consolidated Reports Association; (h) present and prospective economic conditions; and (i) appropriate treatment of Condition classified loans pursuant to the Interagency Policy Statement on the Allowance for Loan and Income Lease Losses (“Call Reports”December 2006), ASC 450-20 (FAS 5), and ASC 310-10 (FAS 114). (2) The program shall provide for a review of the ALLLAllowance by the Board at least once each calendar quarter. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsThrift Financial Report or Consolidated Report of Condition and Income, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (3) The Board shall ensure that the Association has processes, personnel, and control systems to ensure implementation of and adherence to the program developed pursuant to this Article.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysdays of this Agreement, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGenerally Accepted Accounting Principles. The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) ), and July 20, 2001 (“Interagency Statement”) OCC Bulletin 2001-37), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL Allowance methodology; (d) procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) results of the Bank’s external loan review; (iii) concentrations of credit in the Bank, present and prospective economic conditions; and (iv) applicable experience of the Bank’s lending staff. (2) The program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (3) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the policies and procedures developed pursuant to this Article.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysdays of this Agreement, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGenerally Accepted Accounting Principles (“GAAP”). The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) ), and July 20, 2001 (“Interagency Statement”) OCC Bulletin 2001-37), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL Allowance methodology; (d) procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) results of the Bank’s external loan review; (iii) concentrations of credit in the Bank; (iv) present and prospective economic conditions; and (v) applicable experience of the Bank’s lending staff. (2) The program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the Board shall adoptrevise, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with generally accepted accounting principlesGenerally Accepted Accounting Principles. The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) (“Interagency Statement”) ), and shall at a minimum include, but not be limited to: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL methodology; (d) procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) results of the Bank’s external loan review, conducted pursuant to Article IX of this Agreement; (iii) concentrations of credit in the Bank; (iv) present and prospective economic conditions; and (v) applicable experience of the Bank’s lending staff. (2) The program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLL. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the ALLL.

Allowance for Loan and Lease Losses. (1) Within sixty thirty (6030) daysdays of the date of this Agreement, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGenerally Accepted Accounting Principles. The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) ), and the “Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank and Savings Institutions” dated July 20, 2001 (“Interagency Statement”) OCC Bulletin 2001-37), and shall at a minimum include: (a) procedures Procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures Procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures Procedures for validating independent validation of the ALLL Allowance methodology; (d) Procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) Trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) Adjustments to the ALLL methodology and balance are directionally consistent with credit risk; (iii) Methods to incorporate more recent loss history when calculating historical loss rates; (iv) Increasing the range of qualitative factor adjustments to allow proper adjustment for current factors that may impact historical loss rates; (v) Determining and applying qualitative adjustments to historical loss rates by loan portfolio type, or by portfolios that are grouped together based on similar characteristics; (vi) Determining the likelihood of funding off-balance sheet commitments when applying a loss rate to commitments; (vii) Results of the Bank’s independent loan review; (viii) Concentrations of credit in the Bank; (ix) Present and prospective economic conditions; and (x) Applicable experience of the Bank’s lending staff. (2) The program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysdays of this Agreement, the Board shall revise, adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate appropriate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGAAP. The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) ), and July 20, 2001 (“Interagency Statement”) OCC Bulletin 2001-37), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with Accounting Standards Codification 310-10 (formerly known as FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan); (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with Accounting Standards Codification 310-10 and 450-20 (formerly known as FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement); (c) procedures for validating the ALLL Allowance methodology;; and (d) procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) results of the Bank’s external loan review; (iii) concentrations of credit in the Bank; (iv) present and prospective economic conditions; and (v) applicable experience of the Bank’s lending staff. (2) The program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysdays of this Agreement, the Board shall revise, adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate appropriate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGenerally Accepted Accounting Principles (“GAAP”). The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) ), and July 20, 2001 (“Interagency Statement”) OCC Bulletin 2001-37), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with Accounting Standards Codification 310 (formerly known as FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan); (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with Accounting Standards Codification 450 (formerly known FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement); (c) procedures for validating the ALLL Allowance methodology;; and (d) procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) results of the Bank’s external loan review; (iii) concentrations of credit in the Bank; (iv) present and prospective economic conditions; and (v) applicable experience of the Bank’s lending staff. (2) The program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance.

Allowance for Loan and Lease Losses. (1) Within sixty thirty (6030) daysdays of this Agreement, the Board shall adoptrevise, implement, and thereafter continue to ensure adherence to written policies and procedures for maintaining an adequate appropriate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGAAP. The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) ), and July 20, 2001 (“Interagency Statement”) OCC Bulletin 2001-37), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and procedures for measuring the amount of impairment, impairment that are consistent with Accounting Standards Codification 310-10 (formerly known as FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan); (b) procedures for identifying a dollar amount for loans the Bank deems “material” for purposes of performing an impairment analysis pursuant to this Subparagraph (a); (c) procedures for determining the amount of impairment pursuant to ASC 000- 00-00-00 by using the present value of the expected future cash flows when the loans are not collateral dependent and for which there is no observable market price for the loan; (d) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with Accounting Standards Codification 450-20 (formerly known as FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement); (ce) procedures for validating the ALLL Allowance methodology; (df) procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings, delinquent, and nonaccrual loans; (ii) results of the Bank’s external loan review; (iii) concentrations of credit in the Bank; (iv) present and prospective economic conditions; and (v) applicable experience of the Bank’s lending staff; and (g) procedures to ensure that the weight or percentages assigned to the relevant qualitative and environmental factors are validated for reasonableness. (2) The program shall continue to provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysEffective immediately, the Board shall adopt, implement, and thereafter take the necessary steps to ensure adherence to written policies and procedures for maintaining the Bank maintains an adequate appropriate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGAAP. The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 20062006- 47), and July 20, 2001 (OCC Bulletin 2001-47) (“Interagency Statement”) 37), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with Accounting Standards Codification 310-10 (formerly known as FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan); (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with Accounting Standards Codification 310-10 and 450-20 (formerly known as FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement;); and (c) procedures for validating to ensure that the ALLL methodologyestimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings, and delinquent and nonaccrual loans; (dii) the Bank’s historical accuracy of internal risk ratings; (iii) results of the Bank’s external loan review; (iv) concentrations of credit in the Bank; (v) present and prospective economic conditions; and (vi) applicable experience of the Bank’s lending staff. (2) The program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the Board shall adoptdevelop and submit to the Assistant Deputy Comptroller for a prior written determination of no supervisory objection, implement, and thereafter ensure adherence to a written policies and procedures program for maintaining the maintenance of an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with generally accepted accounting principles). The ALLL policies Following receipt of this written determination, the Board shall implement, and procedures thereafter ensure Bank adherence to this program. This program shall be consistent with designed in light of the guidance set forth comments on maintaining a proper Allowance found in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, (booklet of the Comptroller’s Handbook and in OCC Bulletin 20062001-4737 Policy statement on ALLL Methodologies and Documentation for Banks and Savings Institutions”. (2) (“Interagency Statement”) and The program shall at a minimum includefocus particular attention on the following factors: (a) procedures Amending the ALLL policy to describe loans requiring impairment analyses; line officer/line management responsibilities for determining whether a loan is impaired developing impairment calculations; and measuring requirements for documentation supporting the amount basis of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan;the impairment analyses. (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine Including qualitative factors set forth impacting the bank’s credit quality and ALLL adequacy in the Interagency Statement;ALLL policy. (c) procedures for validating Ensuring that the bank’s ALLL methodology complies with Generally Accepted Accounting Principles (GAAP). More specifically, the ALLL methodology;must be well documented and contain clear explanations of the supporting analyses and rationale. (d) a process for summarizing and documenting, for the Board’s review and approvalUnder GAAP, the amount to methodology must also be reported in periodically validated. (3) The program shall provide for a review of the Consolidated Reports of Condition and Income (“Call Reports”) for Allowance by the ALLLBoard at least once each calendar quarter. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsConsolidated Reports of Condition and Income, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (4) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program developed pursuant to this Article.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysdays of this Agreement, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGAAP. The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) ), and July 20, 2001 (“Interagency Statement”) OCC Bulletin 2001-37), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL Allowance methodology; (d) procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) results of the Bank’s external loan review; (iii) concentrations of credit in the Bank; (iv) present and prospective economic conditions; and (v) applicable experience of the Bank’s lending staff. (2) The program shall provide a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (3) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the policies and procedures developed pursuant to this Article.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the The Board shall adopt, implement, immediately require and the Bank shall implement and thereafter ensure adherence adhere to written policies and procedures a program for maintaining the maintenance of an adequate Allowance for Loan and Lease Losses (“"ALLL”) in accordance with generally accepted accounting principles"). The ALLL policies and procedures program shall be consistent with the guidance set forth comments on maintaining a proper ALLL found in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the ALLL contained in OCC Bulletin 2006-47 (December 13, 2006) and with "Allowance for Loan and Lease Losses” dated December 13," booklet A-ALLL of the Comptroller's Handbook, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum includeincorporate the following: (a) procedures for determining whether a loan is impaired and measuring the amount internal risk ratings of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loanloans; (b) procedures for segmenting results of the Bank's independent loan portfolio and estimating loss on groups of loans that are consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statementreview; (c) criteria for determining which loans will be reviewed under Financial Accounting Standard ("FAS") 114, how impairment will be determined, and procedures for validating to ensure that the ALLL methodologyanalysis of loans complies with FAS 114 requirements; (d) a process criteria for summarizing determining FAS 5 loan pools and documenting, for the Board’s review an analysis of those loan pools; (e) recognition of non-accrual loans in conformance with generally accepted accounting principles (“GAAP”) and approval, the amount to be reported regulatory guidance; (f) loan loss experience; (g) trends of delinquent and non-accrual loans; (h) concentrations of credit in the Consolidated Reports Bank; and (i) present and projected economic and market conditions. (2) The program shall provide for a review of Condition and Income (“Call Reports”) for the ALLLALLL by the Board at least once each calendar quarter. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to filing the filing Consolidated Reports of Condition and Income, by additional provisions from earnings. Written documentation shall be maintained of the Call Reportsfactors considered and conclusions reached by the Board in determining the adequacy of the ALLL and made available for review by National Bank Examiners. (3) A copy of the Board's ALLL program, and any subsequent revisions to the program, shall be submitted to the Assistant Deputy Comptroller for review.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysdays of the date of this Agreement, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGenerally Accepted Accounting Principles. The ALLL Allowance policies and procedures shall be consistent with the guidance set forth for in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) ), and the “Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank and Savings Institutions” dated July 20, 2001 (“Interagency Statement”) OCC Bulletin 2001-37), and shall at a minimum include: (a) procedures for determining whether a loan Adjusting the Bank’s historical charge-off calculation to one that is impaired more reflective of current trends and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loanconditions; (b) procedures for segmenting Performing an analysis of recent underwriting changes and incorporating their analysis into the loan portfolio and estimating loss on groups of loans that are consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency StatementALLL adequacy determination; (c) procedures Performing an analysis of the deferred payment programs and the effect the programs have on delinquency and loss trends and reserve for validating the ALLL methodologythese factors accordingly; (d) Using the higher of the historical net loss analysis and the roll-rate analysis estimates when assessing Allowance adequacy; (e) Using other judgmental factors when determining Allowance adequacy; (f) Periodically validating the adequacy of specific factors used in determining Allowance adequacy; and (g) Performing a complete analysis of certain high risk accounts specified in the Report of Examination dated October 27, 2008, and, if necessary, setting aside a specific allocation for potential loss in their portfolios. (2) The program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance.

Allowance for Loan and Lease Losses. (1) Within sixty ninety (6090) days, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with U.S. generally accepted accounting principlesprinciples (“GAAP”). The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with GAAP (including FASB Statement of Financial Accounting Standards No. 114ASC 310- 10, Accounting by Creditors for Impairment of a LoanReceivables - Overall - Subsequent Measurement – Impairment); (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with GAAP (including FASB Statement ASC 450-20, Loss Contingencies). These procedures shall require the Bank to document its estimation of Financial Accounting Standards No. 5, Accounting for Contingencies, credit losses and address its analysis of the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL methodology;; and (d) a process for summarizing and documenting, for the Board’s prior review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. (2) The Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures to ensure that all official and regulatory reports filed by the Bank accurately reflect an adequate ALLL balance as of the date that such reports are submitted. Any deficiency difference between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, balance shall be remedied through additional provision expense appropriate account adjustments in the quarter it is discovered, prior to the filing of the Call Reports.

Allowance for Loan and Lease Losses. (1) Within sixty thirty (6030) daysdays of this Agreement, the Board shall adoptrevise, implement, and thereafter continue to ensure adherence to written policies and procedures for maintaining an adequate appropriate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGAAP. The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) ), and July 20, 2001 (“Interagency Statement”) OCC Bulletin 2001-37), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with Accounting Standards Codification 310-10 (formerly known as FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan); (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with Accounting Standards Codification 310-10 and 450-20 (formerly known as FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement); (c) procedures for validating the ALLL Allowance methodology;; and (d) procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings, delinquent, and nonaccrual loans; (ii) results of the Bank’s external loan review; (iii) concentrations of credit in the Bank; (iv) present and prospective economic conditions; and (v) applicable experience of the Bank’s lending staff. (2) The program shall continue to provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysEffective immediately, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGenerally Accepted Accounting Principles (“GAAP”). The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 20062006- 47), and July 20, 2001 (OCC Bulletin 2001-47) (“Interagency Statement”) 37), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL Allowance methodology; (d) procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) results of the Bank’s external loan review, including but not limited to, the accuracy of internal risk ratings; (iii) concentrations of credit in the Bank; (iv) present and prospective economic conditions; and (v) applicable experience of the Bank’s lending staff. (2) The program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (3) Upon adoption, a copy of the policies and procedures required by this Article shall be forwarded to the Assistant Deputy Comptroller.

Allowance for Loan and Lease Losses. (1) Within sixty ninety (6090) days, the Board shall adoptadopt or revise, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“"ALLL”") in accordance with U.S. generally accepted accounting principlesprinciples ("GAAP"). The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “'s "Interagency Policy Statement on the Allowance for Loan and Lease Losses” " dated December 13, 2006, (OCC Bulletin 2006-47) (“"Interagency Statement”") and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with GAAP (including FASB Statement of Financial Accounting Standards No. 114ASC 310-0, Accounting by Creditors for Impairment of a LoanReceivables- Overall- Subsequent Measurement Impairment); (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with GAAP (including FASB Statement ASC 450-20, Loss Contingencies). These procedures shall require the Bank to incorporate annualized year-to-date credit losses into each quarterly analysis and document its estimation of Financial Accounting Standards No. 5, Accounting for Contingencies, credit losses and address its analysis of the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL methodology; (d) a process for summarizing and documenting, for the Board’s 's prior review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. Any deficiency between . (2) The Board shall adopt or revise, implement, and thereafter ensure adherence to written policies and procedures to ensure that all official and regulatory reports filed by the Bank accurately reflect an adequate ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of date that such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call Reportsreports are submitted.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the The Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures a program for maintaining the maintenance of an adequate Allowance for Loan and Lease Losses (“"ALLL”) in accordance with generally accepted accounting principles"). The ALLL policies and procedures program shall be consistent with the guidance set forth comments on maintaining a proper ALLL found in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the ALLL contained in OCC Bulletin 2006-47 (December 13, 2006) and with "Allowance for Loan and Lease Losses” dated December 13," booklet A-ALLL of the Comptroller's Handbook, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum includeincorporate the following: (a) procedures for determining whether a loan is impaired and measuring the amount internal risk ratings of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loanloans; (b) procedures for segmenting results of the Bank's independent loan portfolio and estimating loss on groups of loans that are consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statementreview; (c) criteria for determining which loans will be reviewed under Financial Accounting Standard ("FAS") 114, how impairment will be determined, and procedures for validating to ensure that the ALLL methodologyanalysis of loans complies with FAS 114 requirements; (d) a process criteria for summarizing determining FAS 5 loan pools and documenting, for the Board’s review an analysis of those loan pools; (e) recognition of non-accrual loans in conformance with generally accepted accounting principles (“GAAP”) and approval, the amount to be reported regulatory guidance; (f) loan loss experience; (g) trends of delinquent and non-accrual loans; (h) concentrations of credit in the Consolidated Reports Bank; and (i) present and projected economic and market conditions. (2) The program shall provide for a review of Condition and Income (“Call Reports”) for the ALLLALLL by the Board at least once each calendar quarter. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to filing the filing Consolidated Reports of Condition and Income, by additional provisions from earnings. Written documentation shall be maintained of the Call Reportsfactors considered and conclusions reached by the Board in determining the adequacy of the ALLL and made available for review by National Bank Examiners.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysBy no later than March 31, 2012, the Board shall adoptrevise, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with U.S. generally accepted accounting principlesprinciples (“GAAP”). The Bank’s revised ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with GAAP (including FASB Statement of Financial Accounting Standards No. 114ASC 310-10, Accounting by Creditors for Impairment of a LoanReceivables - Overall - Subsequent Measurement – Impairment); (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with GAAP (including FASB Statement ASC 450-20, Loss Contingencies). These procedures shall require the Bank to document its estimation of Financial Accounting Standards No. 5, Accounting for Contingencies, credit losses and address its analysis of the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL methodology;; and (d) a process for summarizing and documenting, for the Board’s prior review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. (2) The Board shall revise, implement, and thereafter ensure adherence to written policies and procedures to ensure that all official and regulatory reports filed by the Bank accurately reflect an adequate ALLL balance as of the date that such reports are submitted. Any deficiency difference between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, balance shall be remedied through additional provision expense appropriate account adjustments in the quarter it is discovered, prior to the filing of the Call Reports.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with generally accepted accounting principles. The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) (“Interagency Statement”) ), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL methodology; (d) a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call Reports, through additional provision expense. (2) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the policies and procedures developed pursuant to this Article. (3) A copy of the Board's program shall be submitted to the Assistant Deputy Comptroller for review and prior written determination of no supervisory objection. Upon receiving a determination of no supervisory objection from the Assistant Deputy Comptroller, the Bank shall implement and adhere to the program.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysdays of this Agreement, the Board shall revise, adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGenerally Accepted Accounting Principles (“GAAP”). The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) ), and July 20, 2001 (“Interagency Statement”) OCC Bulletin 2001-37), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL Allowance methodology;; and (d) procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) results of the Bank’s external loan review; (iii) concentrations of credit in the Bank; (iv) present and prospective economic conditions; and (v) applicable experience of the Bank’s lending staff. (2) The program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance.

Allowance for Loan and Lease Losses. (1) Within sixty thirty (6030) daysdays of this Agreement, the Board shall adopt, implement, and thereafter take the necessary steps to ensure adherence to written policies and procedures for maintaining the Bank maintains an adequate appropriate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGAAP. The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) ), and July 20, 2001 (“Interagency Statement”) OCC Bulletin 2001-37), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of assessing loans for impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting to ensure that the loan portfolio estimation of credit losses considers the relevant qualitative and estimating loss environmental factors, as it applies to each pool, with a focus on groups of loans that are consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth following: (i) trends in the Interagency StatementBank’s internal risk ratings, delinquent loans and nonaccrual loans; (cii) procedures for validating the ALLL methodologyBank’s historical risk rating accuracy; (diii) results of the Bank’s external loan review; (iv) concentrations of credit in the Bank, and present and prospective economic conditions; (v) the sufficiency of current financial and operating information; and (vi) applicable experience, performance and sufficiency of the Bank’s lending staff. (2) The program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (3) The Board shall take the necessary steps to ensure that an independent review and test of the Allowance sufficiency is performed prior to the filing of each Call Report.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the Board shall adopt, implement, and thereafter ensure adherence to adopt a written policies and procedures program for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with U.S. generally accepted accounting principlesprinciples (“GAAP”). The ALLL policies and procedures shall be consistent with the guidance guidelines set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with GAAP (including FASB Statement of Financial Accounting Standards No. 114ASC 310-10, Accounting by Creditors for Impairment of a Loan;Receivables (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with GAAP (including FASB Statement ASC 450-20, Loss Contingencies). These procedures shall require the Bank to document its estimation of Financial Accounting Standards No. 5credit losses, Accounting for Contingencies, and address the nine including but not limited to an analysis of qualitative factors set forth in the Interagency Statement; (c) a process to accurately measure historical loss calculations; (d) a process to measure impairment for impaired collateral dependent loans, as required on pages 31-32 of the most recent XXX; (e) procedures to ensure that correct inputs, including modified repayment terms, are used to calculate net present value of future cash flows; (f) procedures for validating the ALLL methodology;; and (dg) a process for summarizing and documenting, for the Board’s prior review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. (2) A copy of the ALLL program, or any subsequent amendments or changes to the program, shall be forwarded to the Assistant Deputy Comptroller for review and determination of no supervisory objection. Any deficiency between Upon receiving a determination of no supervisory objection from the Assistant Deputy Comptroller, the Board shall implement and thereafter ensure adherence to the program. (3) Within sixty (60) days, and thereafter on an ongoing basis, the Board shall ensure that all official and regulatory reports filed by the Bank accurately reflect an adequate ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of date that such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call Reportsreports are submitted.

Allowance for Loan and Lease Losses. (1) Within sixty ninety (6090) days, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with U.S. generally accepted accounting principlesprinciples (“GAAP”). The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with GAAP (including FASB Statement of Financial Accounting Standards No. 114ASC 310- 10, Accounting by Creditors for Impairment of a LoanReceivables - Overall - Subsequent Measurement – Impairment); (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with GAAP (including FASB Statement ASC 450-20, Loss Contingencies). These procedures shall require the Bank to document its estimation of Financial Accounting Standards No. 5, Accounting for Contingencies, credit losses and address its analysis of the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL methodology;; and (d) a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. The Bank shall maintain written documentation indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (2) The Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures to ensure that all official and regulatory reports filed by the Bank accurately reflect an adequate ALLL balance as of the date that such reports are submitted. Any deficiency between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call Reports. (3) Upon adoption, the Board shall submit a copy of the policies and procedures required by this Article to the Assistant Deputy Comptroller for determination of no supervisory objection.

Allowance for Loan and Lease Losses. (1) Within sixty forty-five (6045) days, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with generally accepted accounting principles. The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL methodology; (d) a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. Any deficiency between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call Reports. (2) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the policies and procedures developed pursuant to this Article.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with U.S. generally accepted accounting principlesprinciples (“GAAP”). The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with GAAP (including FASB Statement of Financial Accounting Standards No. 114ASC 310- 10, Accounting by Creditors for Impairment of a LoanReceivables - Overall - Subsequent Measurement – Impairment); (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with GAAP (including FASB Statement ASC 450-20, Loss Contingencies). These procedures shall require the Bank to document its estimation of Financial Accounting Standards No. 5, Accounting for Contingencies, credit losses and address its analysis of the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL methodology; (d) a process for summarizing and documenting, for the Board’s prior review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. Any deficiency between . (2) The Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures to ensure that all official and regulatory reports filed by the Bank accurately reflect an adequate ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of date that such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call Reportsreports are submitted.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysBy no later than January 31, 2010, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGenerally Accepted Accounting Principles (“GAAP”). The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) ), and July 20, 2001 (“Interagency Statement”) OCC Bulletin 2001-37), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL Allowance methodology;; and (d) procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) results of the Bank’s external loan review; (iii) concentrations of credit in the Bank; (iv) present and prospective economic conditions; and (v) applicable experience of the Bank’s lending staff. (2) The program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the The Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate immediately review the adequacy of the Bank's Allowance for Loan and Lease Losses (“ALLL”) and, within thirty (30) days of the date of this Agreement, establish a program for the maintenance of an adequate ALLL in accordance with generally accepted accounting principles. The ALLL policies This review and procedures program shall be consistent with the guidance set forth comments on maintaining a proper ALLL found in the Federal Financial Institutions Examination Council’s “OCC Bulletin 2006-47: Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) Losses and shall at a minimum includeincorporate the following factors: (a) procedures for determining whether a results of the Bank's internal and external loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loanreviews; (b) procedures for segmenting the loan portfolio and estimating loss on groups trends of loans that are consistent with FASB Statement of Financial Accounting Standards No. 5problem, Accounting for Contingenciesdelinquent, and address the nine qualitative factors set forth in the Interagency Statementnonaccrual loans; (c) concentrations of credit in the Bank; (d) present and prospective economic conditions; (e) analytical support for historic loss factors, including the qualitative adjustments to the historical loss factors; (f) criteria for determining which loans will be reviewed for impairment under Accounting Standard Codification ("ASC") 310, how impairment will be determined, and procedures to ensure that the analysis of loans complies with ASC 310 requirements; (g) accurate measurement of impairment amounts at the time a loan is determined to be impaired; (h) for impaired collateral dependent loans secured by real estate, the use of reliable real estate appraisals or evaluations, adjusted for selling costs, to determine the fair value of the collateral; (i) timely recognition of losses, including the recognition of the impaired portion of collateral dependent loans as loss; and (j) procedures for validating the ALLL methodology;. (d2) The program shall provide for a process for summarizing and documenting, for review of the Board’s review and approval, ALLL by the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLLBoard at least once each calendar quarter. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsConsolidated Reports of Condition and Income, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the ALLL. The Board shall ensure that its financial reports and statements are timely and accurately prepared in accordance with 12 C.F.R. § 162 and include an accurate statement of ALLL balances.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the The Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate review the adequacy of the Bank's Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesand shall establish a program for the maintenance of an adequate Allowance. The ALLL policies This review and procedures program shall be consistent with designed in light of the guidance set forth comments on maintaining a proper Allowance found in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated contained in OCC Bulletin 2006- 47 (December 13, 2006), (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum includeincorporate the following: (a) procedures internal risk ratings of loans; (b) results of the Bank's internal loan review; (c) results of the Bank's independent loan review; (d) criteria for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB which loans will be reviewed under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 310 Receivables (Pre-codification reference: Statement of Financial Accounting Standards ("FAS") Statement No. 114), Accounting by Creditors for Impairment how impairment will be determined, and procedures to ensure that the analysis of a Loan;loans complies with ASC 310 requirements; and (be) procedures criteria for segmenting the determining loan portfolio and estimating loss on groups of loans that are consistent with FASB pools under ASC 310 (Pre-codification reference: FAS Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, ) and address the nine qualitative factors set forth in the Interagency Statement;an analysis of those loan pools. (c2) procedures The program shall provide for validating an independent review of the ALLL methodology; (d) a process for summarizing and documenting, for Allowance by the Board’s review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLLBoard at least once each calendar quarter. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsConsolidated Reports of Condition and Income, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (3) A copy of the Board's review of the adequacy of the Allowance shall be forwarded to the Assistant Deputy Comptroller on a quarterly basis. (4) A copy of the Board's program developed pursuant to this Article shall be submitted to the Assistant Deputy Comptroller for review and prior written determination of no supervisory objection. Upon receiving a determination of no supervisory objection from the Assistant Deputy Comptroller, the Bank shall implement and adhere to the program.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the Board shall adopt, implement, and thereafter ensure adherence to revise its written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with U.S. generally accepted accounting principlesprinciples (“GAAP”). The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum include: (a) policies and procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with GAAP (including FASB Statement of Financial Accounting Standards No. 114ASC 310-10, Accounting by Creditors for Impairment of a LoanReceivables - Overall - Subsequent Measurement — Impairment); (b) policies and procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with GAAP (including FASB Statement ASC 450-20, Loss Contingencies). These procedures shall require the Bank to document support for its estimation of Financial Accounting Standards No. 5, Accounting credit losses including support for Contingencies, and address qualitative adjustments using the nine qualitative factors set forth in the Interagency Statement;: and (c) procedures for validating the ALLL methodology;. (d2) a process for summarizing and documenting, for the Board’s review and approvalWithin sixty (60) days, the amount Board shall revise its written policies and procedures to be reported in ensure that all official and regulatory reports filed by the Consolidated Reports Bank accurately reflect an adequate ALLL balance as of Condition and Income (“Call Reports”) for the ALLLdate that such reports are submitted. Any deficiency difference between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, balance shall be remedied through additional provision expense appropriate account adjustments in the quarter it is discovered, prior to the filing of the Call Reports. (3) Upon revision, the Board shall submit a copy of the ALLL policies, procedures, and analysis required by this Article, or any subsequent amendments or changes to those policies and procedures, to the Assistant Deputy Comptroller for determination of no supervisory objection. Upon receiving a determination of no supervisory objection from the Assistant Deputy Comptroller, the Board shall adopt, implement and thereafter ensure adherence to the revised policies and procedures.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the The Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate review the adequacy of the Bank's Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesand shall establish a program for the maintenance of an adequate Allowance, including use of impairment analyses. The ALLL policies This review and procedures program shall be consistent with designed in light of the guidance set forth comments on maintaining a proper Allowance found in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13booklet of the Comptroller’s Handbook, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum includefocus particular attention on the following factors: (a) procedures for determining whether a results of the Bank's external loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loanreview; (b) procedures for segmenting the loan portfolio and estimating an estimate of inherent loss exposure on groups of loans that are consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statementeach significant credit; (c) procedures for validating the ALLL methodologyloan loss experience; (d) a process for summarizing trends of delinquent and documentingnonaccrual loans; (e) concentrations of credit in the Bank; (f) present and prospective economic conditions; and (g) recurring independent validation of Allowance methodology; (2) The Board shall require management to support the impairment analysis provided to the Board no less than quarterly which shall include, for the Board’s review and approvalbut not be limited to, the amount following written information: (a) narrative statements identifying the impairment method used, sets forth the basis of collateral values and identifies any troubled debt restructuring that is encompassed within the analysis; (b) rationale for not ordering and considering a current appraisal of assets securing a specific credit; (c) list of factors considered in determining whether to be reported in record allocations and charge- offs. (3) The program shall provide for a review of the Consolidated Reports of Condition and Income (“Call Reports”) for Allowance by the ALLLBoard at least once each calendar quarter. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsConsolidated Reports of Condition and Income, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. The program shall provide for the application of accounting treatment on a consistent basis in conformity with generally accepted accounting principles, Section 310-10 of the Accounting Standards Codification of the Financial Accounting Standards Board and OCC Bulletin 2006-47 (dated December 13, 2006). (4) Within thirty (30) days, the Board shall ensure that the Bank evaluates staffing levels in the asset recovery department of the Bank. (5) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program developed pursuant to this Article.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysdays of this Agreement, the Board shall revise, adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate appropriate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGAAP. The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) ), and July 20, 2001 (“Interagency Statement”) OCC Bulletin 2001-37), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Accounting Standards Codification 310-10 (formerly known as FAS Statement of Financial Accounting Standards No. 114, ) and Accounting by Creditors for Impairment of a Loan; Standards Codification 450-20 (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with FASB formerly known as FAS Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address ); (b) procedures for the nine qualitative factors set forth in the Interagency Statementdesignation of loan pools containing loans with similar risk characteristics; (c) procedures for validating the ALLL Allowance methodology; (d) procedures for the estimation of credit losses that consider the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) results of the Bank’s external loan review; (iii) concentrations of credit in the Bank; (iv) present and prospective economic conditions; and (v) the applicable experience of the Bank’s lending staff; (e) procedures to require that loans which have been designated impaired undergo impairment testing during each calendar quarter; and (f) immediate and periodic training for staff and management personnel responsible for calculating the Allowance. (2) The Allowance program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the appropriateness of the Allowance. (3) Upon receiving a written determination of no supervisory objection from the Assistant Deputy Comptroller, the Board shall immediately implement and thereafter ensure adherence to the program, policies, and procedures required by this Article.

Allowance for Loan and Lease Losses. (1) Within sixty ninety (6090) days, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate review the adequacy of the Bank's Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesand shall establish a program for the maintenance of an adequate Allowance. The ALLL policies This review and procedures program shall be consistent designed in light of the comments on maintaining a proper Allowance found in the “Allowance for Loan and Lease Losses” booklet of the Comptroller’s Handbook, and shall focus particular attention on the following factors: (a) results of the Bank's internal loan review; (b) results of the Bank's external loan review; (c) an estimate of inherent loss exposure on each significant credit; (d) an estimate of inherent loss exposure on each credit in excess of five hundred thousand ($500,000) dollars; (e) loan loss experience or if none, the loan loss history of other institutions with similar portfolios, which should be adjusted for qualitative factors such as environmental conditions; (f) trends of delinquent and nonaccrual loans; (g) concentrations of credit in the Bank; (h) present and prospective economic environment and conditions; and (i) conforming with the guidance set forth guidelines specified in the Federal Financial Institutions Examination Council’s “OCC Bulletin 2006-47 Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13Losses and FAS 114, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum include:particularly impairment analysis. (a2) procedures The program shall provide for determining whether a loan is impaired and measuring review of the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting Allowance by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL methodology; (d) a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLLBoard at least once each calendar quarter. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsConsolidated Reports of Condition and Income, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (3) A copy of the Board's program shall be submitted to the Assistant Deputy Comptroller for review and prior written determination of no supervisory objection. Upon receiving a determination of no supervisory objection from the Assistant Deputy Comptroller, the Bank shall implement and adhere to the program. (4) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program developed pursuant to this Article.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysdays of this Agreement, the Board shall revise, adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate appropriate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGAAP. The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) ), and July 20, 2001 (“Interagency Statement”) OCC Bulletin 2001-37), and shall at a minimum include: (a) procedures Procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with Accounting Standards Codification 310-10 (formerly known as FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan); (b) procedures Procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with Accounting Standards Codification 310- 10 and 450-20 (formerly known as FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement); (c) procedures Procedures for validating the ALLL Allowance methodology;; and (d) Procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) Trends in the Bank’s internal risk ratings, delinquent, and nonaccrual loans; (ii) Results of the Bank’s external loan review; (iii) Concentrations of credit in the Bank; (iv) Present and prospective economic conditions; and (v) Applicable experience of the Bank’s lending staff. (2) The program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (3) Upon receiving a written determination of no supervisory objection from the Assistant Deputy Comptroller, the Board shall immediately implement and thereafter ensure adherence to the program, policies, and procedures required by this Article.

Allowance for Loan and Lease Losses. (1) Within sixty thirty (6030) days, in the Board shall adoptdevelop, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with generally accepted accounting principles). The ALLL policies and procedures shall be consistent with generally accepted accounting principles, the guidance set forth in OCC Bulletin 2006-47, the “Allowance for Loan and Lease Losses” booklet of the Comptroller’s Handbook, and the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall address the corrective actions prescribed in the XXX that are related to the ALLL, and shall at a minimum include: (a) results of the Bank’s internal and external loan reviews; (b) a standard method of adjusting and applying the Bank’s historical loan loss experience and also considering ratio analysis; (c) procedures for considering all relevant qualitative and environmental factors as outlined in relevant regulatory guidance; (d) qualitative factor adjustments in each homogeneous pool to reflect credit underwriting and management practices in place at the Bank; (e) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114ASC 310-10, Accounting by Creditors for Impairment of a LoanLoans; (bf) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. 5ASC 450-20, Accounting for Loss Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (cg) procedures for validating the ALLL methodology;; and (dh) a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLL. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call Reports, through additional provision expense. (2) Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the ALLL. (3) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program developed pursuant to this Article.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the Board shall adoptrevise, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with generally accepted accounting principlesGenerally Accepted Accounting Principles. The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) (“Interagency Statement”) ), and shall at a minimum include, but not be limited to: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL methodology; (d) procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings, delinquent, and nonaccrual loans; (ii) results of the Bank’s external loan review conducted pursuant to Article VII of this Agreement; (iii) concentrations of credit in the Bank; (iv) the quality of the Bank’s credit administration practices, including the progress made in addressing the requirements of Article IV of this Agreement; (v) present and prospective economic conditions; and (vi) applicable experience of the Bank’s lending staff. (2) The ALLL program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLL. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the ALLL.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysBy January 31, 2021, the Board shall adopt, implement, and thereafter ensure adherence to safe and sound written policies and procedures for maintaining an adequate Allowance allowance for Loan loan and Lease Losses lease losses (“ALLL”) ). The Board shall ensure the policies and procedures establish loss reserves in accordance with generally accepted accounting principlesGAAP. The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s Refer to OCC Bulletin 2006-47, “Interagency Policy Statement on the Allowance for Loan and Lease Losses;” dated December 13, 2006, (OCC Bulletin 20062001-47) (37, “Interagency Statement”) Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Banks and Savings Institutions;” and the “Allowance for Loan and Lease Losses,” booklet of the Comptroller’s Handbook for guidance. The policies and procedures shall at a minimum includeinclude following: (a) procedures for determining a determination of whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a LoanCodification (ASC) 310-10 (Receivables – Overall – Subsequent Measurement – Impairment); (b) procedures identification of triggers for segmenting impairment analysis for loans impacted by economic conditions; (c) ensure the appropriate method of impairment analysis for loans that are not collateral dependent; (d) ensure that if a loan is collateral dependent the fair market value of the collateral is supported by a current appraisal or other appropriate evaluation; (e) a segmentation of loan portfolio and estimating loss losses on groups of loans that are consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for ASC 450-20 (Loss Contingencies, and address the nine qualitative factors set forth in the Interagency Statement); (cf) procedures for validating a validation of the ALLL methodology; (dg) support for each of the qualitative factor adjustments and impairment analysis calculations included in the written analysis; (h) a designation of individuals responsible and methodology used to determine the ALLL; (i) a process for summarizing ensuring that the estimation of credit losses considers the relevant qualitative and documentingenvironmental factors, including particular focus on the following: (i) trends in internal risk ratings and delinquent and nonaccrual loans; (ii) concentrations of credit in the Bank; (iii) present and perspective economic conditions; and (iv) experience of the Bank’s lending staff; (j) a review on at least a quarterly basis to determine the adequacy of the ALLL. The Board shall maintain written documentation indicating the factors considered and conclusions reached in its review; and (k) a summary with supporting documentation for the Board’s prior review and approval, approval of the ALLL amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. Any deficiency between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport.

Allowance for Loan and Lease Losses. (1) Within sixty ninety (6090) days, the Board shall adoptadopt or revise, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with U.S. generally accepted accounting principlesprinciples (“GAAP”). The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with GAAP (including FASB Statement of Financial Accounting Standards No. 114ASC 310- 10, Accounting by Creditors for Impairment of a LoanReceivables - Overall - Subsequent Measurement – Impairment); (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with GAAP (including FASB Statement ASC 450-20, Loss Contingencies). These procedures shall require the Bank to incorporate annualized year-to-date credit losses into each quarterly analysis and document its estimation of Financial Accounting Standards No. 5, Accounting for Contingencies, credit losses and address its analysis of the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL methodology; (d) a process for summarizing and documenting, for the Board’s prior review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. Any deficiency between . (2) The Board shall adopt or revise, implement, and thereafter ensure adherence to written policies and procedures to ensure that all official and regulatory reports filed by the Bank accurately reflect an adequate ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of date that such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call Reportsreports are submitted.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate appropriate Allowance for Loan and Lease Losses (“ALLL”) in accordance with U.S. generally accepted accounting principlesprinciples (“GAAP”). The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with GAAP (including FASB Statement of Financial Accounting Standards No. 114ASC 310- 10, Accounting by Creditors for Impairment of a LoanReceivables, Overall - Subsequent Measurement - Impairment); (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with GAAP (including FASB Statement ASC 450-20, Loss Contingencies). These procedures shall require the Bank to document its estimation of Financial Accounting Standards No. 5, Accounting for Contingencies, credit losses and address its analysis of the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating an independent review of the ALLL methodology;methodology to validate its appropriateness; and (d) a process for summarizing and documenting, for the Board’s prior review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. (2) Within sixty (60) days, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures to ensure that all official and regulatory reports filed by the Bank accurately reflect an appropriate ALLL balance. Any deficiency difference between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, balance shall be remedied through additional provision expense appropriate account adjustments in the quarter it is discovered, prior to the filing of the Call Reports.

Allowance for Loan and Lease Losses. (1) Within sixty ninety (6090) daysdays of this Agreement, the Board shall revise, adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate appropriate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGAAP. The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in in: (a) the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 20062006 (OTS CEO Memorandum No. 250); (b) OTS’ Examination Handbook, Section 261, “Adequacy of Valuation Allowances;” (OCC Bulletin 2006c) OTS CEO Memorandum No. 329 (Accounting for Credit Losses and Impairments), dated December 9, 2009; (d) OTS CEO Memorandum No. 304 (ALLL-47Observed Thrift Practices Including Sound Practices), dated May 22, 2009; or (e) any applicable successor regulation and guidance as specified by the Comptroller. (“Interagency Statement”2) The Allowance policies and procedures required under paragraph (1) of this Article shall include, at a minimum includeminimum: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with Accounting Standards Codification 310-10 (formerly known as FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan); (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with Accounting Standards Codification 310-10 and 450-20 (formerly known as FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement); (c) procedures for validating the ALLL Allowance methodology;; and (d) a process for summarizing procedures to ensure that the estimation of credit losses considers the relevant qualitative and documentingenvironmental factors, for with particular focus on the Board’s review and approval, the amount to be reported following: (i) trends in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. Any deficiency between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balanceinternal risk ratings, regardless delinquent and nonaccrual loans; (ii) results of the amount Bank’s external loan review; (iii) concentrations of such deficiency, shall be remedied through additional provision expense credit in the quarter it is discovered, prior to the filing Bank; (iv) present and prospective economic conditions; and (v) applicable experience of the Call ReportsBank’s lending staff.

Allowance for Loan and Lease Losses. (1) Within sixty forty-five (6045) days, the Board shall adopt, implement, and thereafter ensure adherence to adopt written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with U.S. generally accepted accounting principlesprinciples (“GAAP”). The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses,” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum include: (a) procedures for determining whether a loan is impaired and impaired, measuring the amount of impairment, and ensuring impairment testing is being performed, consistent with GAAP (including FASB Statement of Financial Accounting Standards NoASC 310-10, Receivables - Overall - Subsequent Measurement – Impairment) and the Bank’s established parameters. 114, Accounting by Creditors for Impairment of a LoanThese procedures shall reference the most recent accounting and regulatory guidance; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with GAAP (including FASB Statement ASC 450-20, Loss Contingencies). These procedures shall require the Bank to document its estimation of Financial Accounting Standards No. 5, Accounting for Contingencies, credit losses and address its analysis of the nine qualitative factors set forth in the Interagency Statement. These procedures shall require the Bank to monitor adjustments made to the qualitative factors to ensure they are directionally consistent with Bank and market changes and trends; (c) procedures for validating the ALLL methodology;; and (d) a process for summarizing and documenting, for the Board’s prior review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLL. (2) Within forty-five (45) days the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures to ensure that all official and regulatory reports filed by the Bank accurately reflect an adequate ALLL balance as of the date that such reports are submitted. Any deficiency difference between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, balance shall be remedied through additional provision expense appropriate account adjustments in the quarter it is discovered, prior to the filing of the Call Reports. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the ALLL. (3) Upon adoption, the Board shall submit a copy of the policies and procedures required by this Article, or any subsequent amendments or changes to those policies and procedures, to the Assistant Deputy Comptroller for determination of no supervisory objection. (4) Upon receiving a determination of no supervisory objection from the Assistant Deputy Comptroller, the Board shall implement and thereafter ensure adherence to the policies and procedures. The Board shall ensure that the Bank has processes, personnel, and control systems in place to ensure implementation of and adherence to the program developed pursuant to this Article.

Allowance for Loan and Lease Losses. (1) Within sixty forty-five (6045) days, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with U.S. generally accepted accounting principlesprinciples (“GAAP”). The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated OCC Bulletin 2006-47 (December 13, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) or any subsequent guidance which supersedes or supplements this guidance in the future and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with GAAP (including FASB Statement of Financial Accounting Standards No. 114ASC 310- 10, Accounting by Creditors for Impairment of a LoanReceivables - Overall - Subsequent Measurement – Impairment); (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with GAAP (including FASB Statement ASC 450-20, Loss Contingencies). These procedures shall require the Bank to document its estimation of Financial Accounting Standards No. 5, Accounting for Contingencies, credit losses and address its analysis of the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL methodology;; and (d) a process for summarizing and documenting, for the Board’s prior review and approval, the amount to be reported in the Thrift Financial Report for December 31, 2011 and thereafter in the Consolidated Reports of Condition and Income (collectively “Call Reports”) for the ALLL. (2) The Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures to ensure that all official and regulatory reports filed by the Bank accurately reflect an adequate ALLL balance as of the date that such reports are submitted. Any deficiency difference between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, balance shall be remedied through additional provision expense appropriate account adjustments in the quarter it is discovered, prior to the filing of the Call Reports. (3) Upon adoption, the Board shall submit a copy of the policies and procedures required by this Article to the Assistant Deputy Comptroller for determination of no supervisory objection. (4) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program developed pursuant to this Article.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysdays of this Agreement, the Board shall adoptprepare and submit to the Assistant Deputy Comptroller for a prior written determination of no supervisory objection, implementa revised program, and thereafter ensure adherence to including written policies and procedures procedures, for maintaining an adequate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGenerally Accepted Accounting Principles (“GAAP”). The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) ), and July 20, 2001 (“Interagency Statement”) OCC Bulletin 2001-37), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL Allowance methodology;; and (d) procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) results of the Bank’s external loan review; (iii) concentrations of credit in the Bank; (iv) present and prospective economic conditions; and (v) applicable experience of the Bank’s lending staff. (2) The program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (3) Upon receiving a written determination of no supervisory objection from the Assistant Deputy Comptroller, the Board shall immediately implement and thereafter ensure adherence to the program, policies and procedures required by this Article.

Allowance for Loan and Lease Losses. (1) Within sixty thirty (6030) days, the Board shall adoptdevelop, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with generally accepted accounting principles. The ALLL policies and procedures shall be consistent with the guidance set forth in OCC Bulletin 2006-47 and the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) 2006 and shall at a minimum include: (a) results of the Bank's internal and external loan reviews; (b) a standard method of adjusting and applying the Bank’s historical loan loss experience; (c) trends of delinquent and nonaccrual loans; (d) concentrations of credit in the Bank; (e) present and prospective economic conditions; (f) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114ASC 310-10, Accounting by Creditors for Impairment of a LoanLoans; (bg) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. 5ASC 450-20, Accounting for Loss Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (ch) procedures for validating the ALLL methodology;; and (di) a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLL. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call Reports, through additional provision expense. (2) Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the ALLL. (3) A copy of the Board's program shall be submitted to the Assistant Deputy Comptroller for review and prior written determination of no supervisory objection. Upon receiving a determination of no supervisory objection from the Assistant Deputy Comptroller, the Bank shall implement and adhere to the program. (4) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program developed pursuant to this Article.

Allowance for Loan and Lease Losses. (1) Within sixty ninety (6090) days, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with generally accepted accounting principles. The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL methodology;; and (d) a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. Any deficiency between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call Reports. (2) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the policies and procedures developed pursuant to this Article.

Allowance for Loan and Lease Losses. (1) Within sixty thirty (6030) daysdays of this Agreement, the Board shall adoptprepare and submit to the Assistant Deputy Comptroller for a prior written determination of no supervisory objection, implementa revised program, and thereafter ensure adherence to including written policies and procedures procedures, for maintaining an adequate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGenerally Accepted Accounting Principles (“GAAP”). The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) ), and July 20, 2001 (“Interagency Statement”) OCC Bulletin 2001-37), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Codification Topic 310 Receivables, Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Codification Topics 310 Receivables and 450 Contingencies, Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL Allowance methodology;; and (d) procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) results of the Bank’s external loan review; (iii) concentrations of credit in the Bank; (iv) present and prospective economic conditions; and (v) applicable experience of the Bank’s lending staff. (2) The program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (3) Upon receiving a written determination of no supervisory objection from the Assistant Deputy Comptroller, the Board shall immediately implement and thereafter ensure adherence to the program, policies and procedures required by this Article. (4) The Board shall take the necessary steps to ensure that an independent review and test of the Allowance sufficiency is performed prior to the filing of each Call Report beginning with the quarter ending June 30, 2010.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the Board shall adoptrevise, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) ALLL in accordance with generally accepted accounting principlesGenerally Accepted Accounting Principles. The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) (“Interagency Statement”) ), and shall at a minimum include, but not be limited to: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) results of the Bank’s external loan review, conducted pursuant to Article VI of this Agreement; (iii) concentrations of credit in the Bank; (iv) present and prospective economic conditions; and (v) applicable experience of the Bank’s lending staff. (d) procedures for validating the ALLL methodology; (d2) The ALLL program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLL. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the ALLL.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysdays of this Agreement, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGenerally Accepted Accounting Principles. The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) ), and the “Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Banks and Savings Institutions” dated July 20, 2001 (“Interagency Statement”) OCC Bulletin 2001-37), and shall shall, at a minimum minimum, include: (a) procedures Procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures Procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating Procedures to ensure that the ALLL methodologyestimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) Trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (dii) Results of the Bank’s external loan review; (iii) Concentrations of credit in the Bank, present and prospective economic conditions; and (iv) Applicable experience of the Bank’s lending staff. (2) The program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysdays of this Agreement, the Board shall revise, adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate appropriate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGAAP. The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) ), and July 20, 2001 (“Interagency Statement”) OCC Bulletin 2001-37), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with Accounting Standards Codification 310-10 (formerly known as FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan); (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with Accounting Standards Codification 310-10 and 450-20 (formerly known as FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement); (c) procedures for validating the ALLL Allowance methodology;; and (d) procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings, delinquent, and nonaccrual loans; (ii) results of the Bank’s external loan review; (iii) concentrations of credit in the Bank; (iv) present and prospective economic conditions; and (v) applicable experience of the Bank’s lending staff. (2) The program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (3) Upon receiving a written determination of no supervisory objection from the Assistant Deputy Comptroller, the Board shall immediately implement and thereafter ensure adherence to the program, policies, and procedures required by this Article.

Allowance for Loan and Lease Losses. (1) Within sixty thirty (6030) days, the Board shall adoptrevise, implement, and thereafter ensure adherence to its written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with generally accepted accounting principles. The ALLL policies and procedures shall be consistent with the guidance set forth in OCC Bulletin 2006-47 and the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” Losses dated December 13, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) 2006 and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring to ensure the amount of impairment, consistent with ALLL methodology conforms to accounting standards contained in FASB Statement of Financial Accounting Standards No. 114, ASC 310-10 (Accounting by Creditors for Impairment of a Loan) and FASB ASC 450-20 (Loss Contingencies); (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL methodology;; and (dc) a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLL. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call Reports, through additional provision expense. (2) Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the ALLL. (3) A copy of the Board’s program shall be submitted to the Assistant Deputy Comptroller for review and prior written determination of no supervisory objection. Upon receiving a determination of no supervisory objection from the Assistant Deputy Comptroller, the Bank shall implement and adhere to the program. (4) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program developed pursuant to this Article.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the Board shall adopt, implement, and thereafter ensure adherence to develop written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with U.S. generally accepted accounting principlesprinciples (“GAAP”). The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” Losses dated December 13, 2006, 2006 (OCC Bulletin 2006-47) (“Interagency Statement”) and shall shall, at a minimum minimum, include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with GAAP (including FASB Statement of Financial Accounting Standards No. 114ASC 310-10, Accounting by Creditors for Impairment of a LoanReceivables - Overall - Subsequent Measurement - Impairment); (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with GAAP (including FASB Statement ASC 450-20, Loss Contingencies). These procedures shall require the Bank to document its estimation of Financial Accounting Standards No. 5, Accounting for Contingencies, credit losses and address its analysis of the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating an independent review to validate the ALLL methodology;; and (d) a process for summarizing and documenting, for the Board’s prior review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLL. (2) Upon completion, the Board shall promptly submit a copy of the ALLL policies and procedures to the Assistant Deputy Comptroller for review and prior written determination of no supervisory objection. Upon receiving a determination of no supervisory objection from the Assistant Deputy Comptroller, the Board shall promptly adopt, implement, and thereafter ensure Bank adherence to the ALLL policies and procedures. (3) Within sixty (60) days, the Board shall adopt, implement, and thereafter ensure Bank adherence to written policies and procedures to ensure that all official and regulatory reports filed by the Bank accurately reflect an adequate ALLL balance as of the date that such reports are submitted. Any deficiency difference between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, balance shall be remedied through additional provision expense appropriate account adjustments in the quarter it is discovered, prior to the filing of the Call Reports.

Allowance for Loan and Lease Losses. (1) Within sixty ninety (6090) daysdays of this Agreement, the Board shall revise, adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate appropriate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGAAP. The ALLL Allowance policies and procedures shall be consistent with designed in light of the guidance set forth comments on maintaining a proper Allowance found in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006A-ALLL, (OCC Bulletin 2006-47) (“Interagency Statement”) of the Comptroller’s Handbook, and shall include, at a minimum includeminimum: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with Accounting Standards Codification 310-10 (formerly known as FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan); (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with Accounting Standards Codification 310-10 and 450-20 (formerly known as FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement); (c) procedures for validating the ALLL Allowance methodology;; and (d) procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) results of the Bank’s external loan review; (iii) concentrations of credit in the Bank; (iv) present and prospective economic conditions; and (v) applicable experience of the Bank’s lending staff. (2) The program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) Report for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysdays of this Agreement, the Board shall revise, adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate appropriate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGenerally Accepted Accounting Principles. The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) ), and July 20, 2001 (“Interagency Statement”) OCC Bulletin 2001-37), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with Accounting Standards Codification 310-10 (formerly known as FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan); (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with Accounting Standards Codification 310-10 and 450-20 (formerly known as FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement); (c) procedures for validating the ALLL Allowance methodology;; and (d) procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) results of the Bank’s external loan review; (iii) concentrations of credit in the Bank; (iv) present and prospective economic conditions; and (v) applicable experience of the Bank’s lending staff. (2) The program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (3) Upon adoption, a copy of the written policy shall be forwarded to the Assistant Deputy Comptroller for review.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the The Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate review the adequacy of the Association's Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesand shall establish a program for the maintenance of an adequate Allowance. The ALLL policies This review and procedures program shall be consistent with designed in light of the guidance set forth comments on maintaining a proper Allowance found in the Federal Financial Institutions Examination Council’s “Council (FFIEC) Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Banks and Savings Institutions (July 6, 2001), and the Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated Losses (December 132006), 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum includefocus particular attention on the following factors: (a) procedures for determining whether a results of the Association's internal loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loanreview; (b) procedures for segmenting results of the Association's external loan portfolio and estimating loss on groups of loans that are consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statementreview; (c) procedures for validating the ALLL methodologyan estimate of inherent loss exposure on each significant credit; (d) a process for summarizing an estimate of inherent loss exposure on each credit in excess of five hundred and documenting, for the Board’s review thousand dollars ($500,000); (e) loan loss experience; (f) trends of delinquent and approval, the amount to be reported nonaccrual loans; (g) concentrations of credit in the Consolidated Reports Association; (h) enhanced segmentation of Condition 1-4 family residential junior lien loans and Income lines of credit, and appropriate ALLL calculations in accordance with OCC Bulletin 2012-6 (“Call Reports”Interagency Guidance on ALLL Estimation Practices for Junior Liens); (i) present and prospective economic conditions; and (j) appropriate treatment of classified loans pursuant to the Interagency Policy Statement on the Allowance for Loan and Lease Losses (December 2006), ASC 450-20 (FAS 5), and ASC 310-10 (FAS 114). (2) The program shall provide for a review of the ALLLAllowance by the Board at least once each calendar quarter. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsThrift Financial Report or Consolidated Report of Condition and Income, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (3) The Board shall ensure that the Association has processes, personnel, and control systems to ensure implementation of and adherence to the program developed pursuant to this Article.

Allowance for Loan and Lease Losses. (1) Within sixty ninety (6090) dayscalendar days of the effective date of this Agreement, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate review the adequacy of the Bank's Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesand shall establish a written program for the maintenance of an adequate Allowance. The ALLL policies This review and procedures program shall be consistent with designed to conform to the guidance set forth pertaining to the maintenance of a proper Allowance found in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, Losses (which may be found attached to OCC Bulletin 2006-47) (), to such guidance found in the “Interagency Statement”) Allowance for Loan and Lease Losses” booklet of the Comptroller’s Handbook, and to other applicable guidance, if any, regarding maintenance of adequate Allowance that the Comptroller may have issued by such time. The program shall at a minimum includefocus particular attention on the following factors: (a) procedures for determining whether a results of the Bank's internal loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loanreview; (b) procedures for segmenting results of the Bank's external loan portfolio and estimating loss on groups of loans that are consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statementreview; (c) procedures for validating the ALLL methodologyan estimate of inherent loss exposure on each significant credit; (d) a process for summarizing loan loss experience; (e) trends of delinquent and documenting, for the Board’s review and approval, the amount to be reported nonaccrual loans; (f) concentrations of credit in the Consolidated Reports Bank; and (g) present and prospective economic conditions. (2) The program shall provide for a review of Condition and Income (“Call Reports”) for the ALLLAllowance by the Board at least once each calendar quarter. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsConsolidated Reports of Condition and Income, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (3) A copy of the Board's program shall be submitted to the ADC for review and a prior written determination of no supervisory objection. Upon receiving a prior written determination of no supervisory objection from the ADC, the Bank shall implement and adhere to the program. If the ADC provides a written notice of supervisory objection to the submitted program, the Board shall promptly amend it as necessary in order appropriately to address the basis of such supervisory objection, thereafter implement it, and ensure Bank adherence to it. (4) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program developed pursuant to this Article.

Allowance for Loan and Lease Losses. (1) Within sixty forty-five (6045) days, the Board shall adopt, implement, and thereafter ensure adherence to updated written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with generally accepted accounting principlesGAAP. The Board shall ensure that the ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated OCC Bulletin 2006-47 (December 13, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) or any subsequent guidance which supersedes or supplements this guidance in the future and shall at a minimum includeminimum: (a) Include procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with GAAP (including FASB Statement of Financial Accounting Standards No. 114ASC 310­-10, Accounting by Creditors for Impairment of a LoanReceivables - Overall - Subsequent Measurement – Impairment); (b) Include procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with GAAP (including FASB Statement ASC 450-20, Loss Contingencies). These procedures shall require the Bank to document its estimation of Financial Accounting Standards No. 5, Accounting for Contingencies, credit losses and address its analysis of the nine qualitative factors set forth in the Interagency Statement; (c) Include procedures for validating annual independent validation of the ALLL methodology, which shall include: (i) testing the accuracy of source documents and assumptions being used in developing the ALLL; and (ii) any changes or adjustments to the ALLL methodology must be well documented and supported; and (d) Ensures that management develops historical loss rates for each homogenous loan pool and then adjusts those rates based on qualitative factors for current conditions; (de) Ensure the ALLL is directionally consistent with changes based on internal and external factors; (f) Ensure that collateral shortfalls are determined based on current collateral valuations; (g) Ensure that any collateral shortfalls on collateral dependent impaired loans are charged-off in a timely manner; and (h) a process for summarizing and documenting, for the Board’s prior review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (( “Call ReportsReport”) for the ALLL. (2) The Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures to ensure that all official and regulatory reports filed by the Bank accurately reflect an adequate ALLL balance as of the date that such reports are submitted. Any deficiency difference between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, balance shall be remedied through additional provision expense appropriate account adjustments in the quarter it is discovered, prior to the filing of the Call Reports. (3) Upon adoption, the Board shall submit a copy of the policies and procedures required by this Article to the Assistant Deputy Comptroller for determination of no supervisory objection.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the Board shall adoptreview, implementrevise, and thereafter ensure Bank adherence to its written policies and procedures for maintaining program designed to ensure the maintenance of an adequate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principles). The ALLL policies and procedures An acceptable program shall be consistent with designed in light of the guidance set forth comments on maintaining a proper Allowance found in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) booklet of the Comptroller’s Handbook and shall at a minimum includefocus particular attention on the following factors: (a) procedures for determining whether a results of the Bank's internal loan is impaired review; (b) results of the Bank's external loan review; (c) an estimate of inherent loss exposure on each credit in excess of one million dollars ($1,000,000); (d) loan loss experience; (e) trends of delinquent and measuring nonaccrual loans; (f) concentrations of credit in the amount Bank; (g) present and prospective economic conditions; and (h) appropriate treatment of impairmentclassified loans pursuant to OCC Bulletin 2006- 47 – Allowance Guidance and Frequently Asked Questions on the ALLL, consistent with FASB Statement of Financial Accounting Standards No. 114Standard (FAS) 5 – Accounting for Contingencies, and FAS 114 – Accounting by Creditors for Impairment of a Loan;. (b2) procedures The program shall provide for segmenting a review of the loan portfolio and estimating loss on groups of loans that are consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address Allowance by the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL methodology; (d) a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLLBoard at least once each calendar quarter. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsConsolidated Reports of Condition and Income, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (3) Upon revision, a copy of the program shall promptly be submitted to the Assistant Deputy Comptroller. (4) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program developed pursuant to this Article.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysdays of this Agreement, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGenerally Accepted Accounting Principles (“GAAP”). The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) ), and July 20, 2001 (“Interagency Statement”) OCC Bulletin 2001-37), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, including adequate documentation to support the impairment analysis, consistent with FASB Statement of Financial Accounting Standards No. 114 (“FAS 114”), Accounting by Creditors for Impairment of a Loan, including, but not limited to, troubled debt restructure. For purposes of this paragraph, on collateral dependent loans, the fair value of the collateral must be reflective of current market conditions; (b) procedures for performing the FAS 114 analysis of impaired loans each quarter with any charge-offs recognized, if applicable, in the appropriate quarter; (c) procedures for segmenting the loan portfolio and estimating loss on groups of loans, including, but not limited to loans that are risk graded special mention and substandard, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (cd) procedures for determining the reserve for unfunded commitments; (e) procedures for validating the ALLL Allowance methodology; and (f) procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, and documentation to include narrative support of adjustments made to these factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings, and delinquent and nonaccrual loans; (dii) results of the Bank’s external loan review; (iii) concentrations of credit in the Bank; (iv) present and prospective economic conditions; and (v) applicable experience of the Bank’s lending staff. (2) The program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (3) A copy of the Allowance program shall be forward to the Assistant Deputy Comptroller within fifteen (15) days of approval by the Board of Directors.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the The Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate review the adequacy of the Bank's Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesand shall establish a program for the maintenance of an adequate Allowance. The ALLL policies This review and procedures program shall be consistent with designed in light of the guidance set forth comments on maintaining a proper Allowance found in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on contained in OCC Bulletin 2006-47 (December 13, 2006) and the “Allowance for Loan and Lease Losses” dated December 13booklet of the Comptroller’s Handbook, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum includeincorporate the following: (a) procedures internal risk ratings of loans; (b) results of the Bank's internal loan review; (c) results of the Bank's independent loan review; (d) criteria for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB which loans will be reviewed under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 310 Receivables (Pre-codification reference: Statement of Financial Accounting Standards ("FAS") Statement No. 114), Accounting by Creditors for Impairment how impairment will be determined, and procedures to ensure that the analysis of a Loan;loans complies with ASC 310 requirements; and (be) procedures criteria for segmenting the determining loan portfolio and estimating loss on groups of loans that are consistent with FASB pools under ASC 310 (Pre-codification reference: FAS Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, ) and address the nine qualitative factors set forth in the Interagency Statement;an analysis of those loan pools. (c2) procedures The program shall provide for validating an independent review of the ALLL methodology; (d) a process for summarizing and documenting, for Allowance by the Board’s review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLLBoard at least once each calendar quarter. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsConsolidated Reports of Condition and Income, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (3) A copy of the Board's review of the adequacy of the Allowance shall be forwarded to the Assistant Deputy Comptroller on a quarterly basis. (4) A copy of the Board's program developed pursuant to this Article shall be submitted to the Assistant Deputy Comptroller for review and prior written determination of no supervisory objection. Upon receiving a determination of no supervisory objection from the Assistant Deputy Comptroller, the Bank shall implement and adhere to the program.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysdays of this Agreement, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGenerally Accepted Accounting Principles. The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) ), and July 20, 2001 (“Interagency Statement”) OCC Bulletin 2001-37), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL Allowance methodology; (d) procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) results of the Bank’s loan review; (iii) concentrations of credit in the Bank, present and prospective economic conditions; and (iv) applicable experience of the Bank’s lending staff. (2) The program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (3) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the policies and procedures developed pursuant to this Article.

Allowance for Loan and Lease Losses. (1) Within sixty forty-five (6045) days, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with generally accepted accounting principles). The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with generally accepted accounting principles (“GAAP”) (including FASB Statement of Financial Accounting Standards No. 114ASC 310-10, Accounting by Creditors for Impairment of a LoanReceivables - Overall - Subsequent Measurement - Impairment); (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with GAAP (including FASB Statement ASC 450-20, Loss Contingencies). These procedures shall require the Bank to document its estimation of Financial Accounting Standards No. 5, Accounting for Contingencies, credit losses and address its analysis of the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL methodology;; and (d) a process for summarizing and documenting, for the Board’s prior review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. Any deficiency between . (2) Within forty-five (45) days the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures to ensure that all official and regulatory reports filed by the Bank accurately reflect an adequate ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of date that such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call Reportsreports are submitted.

Allowance for Loan and Lease Losses. (1) Within sixty forty-five (6045) days, the Board shall adopt, implement, and thereafter ensure adherence to adopt written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with U.S. generally accepted accounting principlesprinciples (“GAAP”). The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with GAAP (including FASB Statement of Financial Accounting Standards No. 114ASC 310- 10, Accounting by Creditors for Impairment of a LoanReceivables - Overall - Subsequent Measurement – Impairment); (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with GAAP (including FASB Statement ASC 450-20, Loss Contingencies). These procedures shall require the Bank to document its estimation of Financial Accounting Standards No. 5, Accounting for Contingencies, credit losses and address its analysis of the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL methodology;; and (d) a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLL. (2) The Board shall adopt written policies and procedures to ensure that all official and regulatory reports filed by the Bank accurately reflect an adequate ALLL balance as of the date that such reports are submitted. Any deficiency between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call Reports. (3) Upon adoption, the Board shall submit a copy of the policies and procedures required by this Article, and any subsequent amendments or changes to those policies and procedures, to the Assistant Deputy Comptroller for determination of no supervisory objection. Upon receiving a determination of no supervisory objection from the Assistant Deputy Comptroller, the Board shall implement and thereafter ensure adherence to the policies and procedures.

Allowance for Loan and Lease Losses. (1) Within sixty forty-five (6045) days, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with generally accepted accounting principles. The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” (OCC Bulletin 2006-47), dated December 13, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum shall include: (a) consideration of the Bank’s loan loss experience, concentrations of credit in the Bank, and present and prospective economic conditions; (b) procedures detailing the selection process for determining whether a loan is loans considered impaired and measuring procedures detailing how the amount of impairmentimpairment for those loans will be measured, consistent with FASB Statement of Financial Accounting Standards No. Number 114, Accounting by Creditors for Impairment of a Loan; (bc) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. Number 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement;; and (cd) procedures for validating the ALLL methodology;. (d2) The revised policies and procedures shall address specific actions needed to improve the methodology outlined in the XXX and in any subsequent Report of Examination. (3) The revised policies and procedures shall provide for a process for summarizing and documenting, for the Board’s review and approval, approval of the amount to be reported in Allowance by the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLLBoard at least once each calendar quarter. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsConsolidated Reports of Condition and Income, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the The Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate review the adequacy of the Bank's Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesand shall establish a program for the maintenance of an adequate Allowance. The ALLL policies This review and procedures program shall be consistent with designed in light of the guidance set forth comments on maintaining a proper Allowance found in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on contained in OCC Bulletin 2006- 47 (December 13, 2006) and the “Allowance for Loan and Lease Losses” dated December 13booklet of the Comptroller’s Handbook, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum includeincorporate the following: (a) procedures internal risk ratings of loans; (b) results of the Bank's internal loan review; (c) results of the Bank's independent loan review; (d) criteria for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB which loans will be reviewed under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 310 Receivables (Pre-codification reference: Statement of Financial Accounting Standards ("FAS") Statement No. 114), Accounting by Creditors for Impairment how impairment will be determined, and procedures to ensure that the analysis of a Loan;loans complies with ASC 310 requirements; and (be) procedures criteria for segmenting the determining loan portfolio and estimating loss on groups of loans that are consistent with FASB pools under ASC 310 (Pre-codification reference: FAS Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, ) and address the nine qualitative factors set forth in the Interagency Statement;an analysis of those loan pools. (c2) procedures The program shall provide for validating an independent review of the ALLL methodology; (d) a process for summarizing and documenting, for Allowance by the Board’s review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLLBoard at least once each calendar quarter. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsConsolidated Reports of Condition and Income, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (3) A copy of the Board's review of the adequacy of the Allowance shall be forwarded to the Assistant Deputy Comptroller on a quarterly basis. (4) A copy of the Board's program developed pursuant to this Article shall be submitted to the Assistant Deputy Comptroller for review and prior written determination of no supervisory objection. Upon receiving a determination of no supervisory objection from the Assistant Deputy Comptroller, the Bank shall implement and adhere to the program.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the Board shall adopt, implement, and thereafter ensure adherence to revise its written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with U.S. generally accepted accounting principlesprinciples (“GAAP”). The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum include: (a) policies and procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with GAAP (including FASB Statement of Financial Accounting Standards No. 114ASC 310-10, Accounting by Creditors for Impairment of a LoanReceivables - Overall - Subsequent Measurement – Impairment); (b) policies and procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with GAAP (including FASB Statement ASC 450-20, Loss Contingencies). These procedures shall require the Bank to document support for its estimation of Financial Accounting Standards No. 5, Accounting credit losses including support for Contingencies, and address qualitative adjustments using the nine qualitative factors set forth in the Interagency Statement;; and (c) procedures for validating the ALLL methodology;. (d2) a process for summarizing and documenting, for the Board’s review and approvalWithin sixty (60) days, the amount Board shall revise its written policies and procedures to be reported in ensure that all official and regulatory reports filed by the Consolidated Reports Bank accurately reflect an adequate ALLL balance as of Condition and Income (“Call Reports”) for the ALLLdate that such reports are submitted. Any deficiency difference between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, balance shall be remedied through additional provision expense appropriate account adjustments in the quarter it is discovered, prior to the filing of the Call Reports. (3) Upon revision, the Board shall submit a copy of the ALLL policies, procedures, and analysis required by this Article, or any subsequent amendments or changes to those policies and procedures, to the Assistant Deputy Comptroller for determination of no supervisory objection. Upon receiving a determination of no supervisory objection from the Assistant Deputy Comptroller, the Board shall adopt, implement and thereafter ensure adherence to the revised policies and procedures.

Allowance for Loan and Lease Losses. (1) Within sixty thirty (6030) days, the Board shall adopt, implement, require and the Bank shall implement and thereafter ensure adherence adhere to written policies and procedures a program for maintaining the maintenance of an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with generally accepted accounting principles). The ALLL policies and procedures program shall be consistent with the guidance set forth comments on maintaining a proper ALLL found in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the ALLL contained in OCC Bulletin 2006- 47 (December 13, 2006) and with the “Allowance for Loan and Lease Losses,” dated December 13booklet A-ALLL of the Comptroller’s Handbook, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall incorporate, at a minimum includeminimum, the following: (a) procedures for determining whether a results of the Bank's internal loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loanreview; (b) procedures for segmenting results of the Bank's external loan portfolio and estimating loss on groups of loans that are consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statementreview; (c) criteria for determining which loans will be reviewed under Financial Accounting Standard (“FAS”) 114, how impairment will be determined, and procedures for validating to ensure that the ALLL methodologyanalysis of loans complies with FAS 114 requirements; (d) a process criteria for summarizing determining FAS 5 loan pools and documenting, for the Board’s review an analysis of those loan pools; (e) loan loss experience; (f) trends of delinquent and approval, the amount to be reported nonaccrual loans; (g) concentrations of credit in the Consolidated Reports Bank; and (h) present and projected economic and market conditions. (2) The Board shall ensure that the Bank, in implementing the program required under paragraph (1), does the following: (a) reviews and revises the rationale and methodology for developing historical loss rates, ensuring the rationale is appropriately supported and consistently applied; (b) stratifies loan types to more accurately assess risk; (c) develops and provides additional support for qualitative factors used in the ALLL analysis and ensures that the directional movement of Condition the allocation for each factor is clearly supported; (d) documents updated evaluations and Income appraisals for impaired loans; (“Call Reports”e) incorporates requirements for periodic independent validation of the ALLLBank’s ALLL methodology, and revises the methodology when appropriate. (3) The program shall provide for a review of the Allowance by the Board at least once each calendar quarter. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsConsolidated Reports of Condition and Income, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysdays of this Agreement, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGenerally Accepted Accounting Principles (“GAAP”). The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) ), and July 20, 2001 (“Interagency Statement”) OCC Bulletin 2001-37), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL Allowance methodology;; and (d) procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) results of the Bank’s external loan review; (iii) concentrations of credit in the Bank; (iv) present and prospective economic conditions; and (v) applicable experience of the Bank’s lending staff. (2) The program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (3) A copy of the Allowance program shall be forward to the Assistant Deputy Comptroller within fifteen (15) days of approval by the Board of Directors.

Allowance for Loan and Lease Losses. (1) Within sixty thirty (6030) daysdays of this Agreement, the Board shall adoptrevise, implement, and thereafter continue to ensure adherence to written policies and procedures for maintaining an adequate appropriate Allowance for Loan and Lease Losses (“ALLL”"Allowance") in accordance with generally accepted accounting principlesGAAP. The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “'s "Interagency Policy Statement on the Allowance for Loan and Lease Losses” " dated December 13, 2006, 2006 (OCC Bulletin 2006-47) ), and July 20, 2001 (“Interagency Statement”) OCC Bulletin 2001-37), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with Accounting Standards Codification 310-10 (formerly known as FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan); (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with Accounting Standards Codification 310-10 and 450-20 (formerly known as FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement); (c) procedures for validating the ALLL Allowance methodology;; and (d) procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank's internal risk ratings, delinquent, and nonaccrual loans; (ii) results of the Bank's external loan review; (iii) concentrations of credit in the Bank; (iv) present and prospective economic conditions; and (v) applicable experience of the Bank's lending staff. (2) The program shall continue to provide for a process for summarizing and documenting, for the Board’s 's review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysBy March 31, 2020, the Board shall adopt, implement, prepare and thereafter ensure adherence submit to the Assistant Deputy Comptroller for a prior written determination of no supervisory objection revised policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) ALLL in accordance with the Federal Accounting Standards Advisory Board’s (“FASB”) generally accepted accounting principlesprinciples (“GAAP”). The ALLL policies and procedures shall be consistent with the guidance set forth in Refer to the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, (OCC Bulletin 2006-2006- 47) (“Interagency Statement”) ), for guidance. The ALLL policies and shall procedures shall, at a minimum includeminimum, include the following: (a) criteria and procedures for determining whether a loan is impaired and measuring the amount of impairment, impairment consistent with FASB Statement of Financial Accounting Standards No. 114GAAP including FASB’s ASC 310-35, Accounting by Creditors for Impairment of a LoanReceivables - Overall - Subsequent Measurement – Impairment; (b) criteria and procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with FASB Statement GAAP including FASB’s ASC 450-20, Loss Contingencies. These procedures shall require the Bank to document its estimation of Financial Accounting Standards No. 5, Accounting for Contingencies, credit losses and address its analysis of the nine qualitative factors set forth in the Interagency StatementOCC Bulletin 2006-47; (c) procedures for validating the ALLL methodology; (d) ensuring that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings as well as in delinquent and nonaccrual loans; (ii) results of the Bank’s external loan review; (iii) concentrations of credit in the Bank; (iv) present and prospective economic conditions; and (v) applicable experience of the Bank’s lending staff; (e) loans designated as TDRs, including “special mention” and “pass,” receive an impairment analysis; (f) reviewing on at least a process for quarterly basis, to determine the adequacy of the ALLL. The Board shall maintain written documentation indicating the factors considered and conclusions reached in its determination of the adequacy of the ALLL; and (g) summarizing and documenting, for the Board’s prior review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Bank’s Call Reports”) Report for the ALLL. (2) The Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures to ensure that all official and regulatory reports filed by the Bank accurately reflect an adequate ALLL balance as of the date that such reports are submitted. Any deficiency material difference between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, balance shall be remedied through additional provision expense appropriate account adjustments in the quarter it is discovered, prior to the filing of the Bank’s Call Reports. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the ALLL. (3) Within thirty (30) days of receipt of the Assistant Deputy Comptroller’s written determination of no supervisory objection, the Board shall adopt and Bank management, subject to Board review and ongoing monitoring, shall immediately implement and thereafter ensure adherence to the Bank’s revised policies and procedures for maintaining an adequate ALLL and any amendments or revisions thereto.

Allowance for Loan and Lease Losses. (1) Within sixty forty-five (6045) days, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate review the adequacy of the Bank’s Allowance for Loan and Lease Losses (“Allowance” or “ALLL”) and shall establish a program for the maintenance of an adequate Allowance. This review and program shall be designed in accordance with light of (i) the comments on maintaining a proper Allowance found in the “Allowance for Loan and Lease Losses” booklet of the Comptroller’s Handbook; (ii) U.S. generally accepted accounting principles. The ALLL policies and procedures shall be consistent with the guidance set forth in principles (“GAAP”); (iii) the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) (“Interagency Statement”) ); and the instructions for reporting the Allowance on the Call Report. The program, and any revisions thereto, shall at a minimum includefocus particular attention on the following: (a) procedures for determining whether a loan is impaired and measuring an appropriate outline of the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loanqualitative factors included in the ALLL methodology; (b) procedures for segmenting a requirement that the loan portfolio and estimating loss on groups of loans that are consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address narrative accompanying the nine ALLL report to properly support the qualitative factors set forth in the Interagency Statementand explain why and how management uses each factor; (c) procedures for validating the ALLL methodology;; and (d) procedures to ensure the ALLL methodology properly reflects losses and recoveries year-to-date and the balance remains sufficient. (2) The program shall provide for a process for summarizing and documenting, for review of the Board’s review and approval, Allowance by the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLLBoard at least once each calendar quarter. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Consolidated Reports of Condition and Income, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (3) The Bank shall refile the December 31, 2014 Call ReportsReport to reflect correct losses and recoveries year-to-date. (4) Upon adoption, the Board shall submit a copy of the policies and procedures required by this Article, or any subsequent amendments or changes to those policies and procedures, to the Assistant Deputy Comptroller for determination of no supervisory objection. Upon receiving a determination of no supervisory objection from the Assistant Deputy Comptroller, the Board shall implement and thereafter ensure Bank adherence to the policies and procedures. (5) The Board shall ensure that the Bank has the processes, personnel, and control systems to ensure implementation of and adherence to the policies, programs, and procedures developed pursuant to this Article.

Allowance for Loan and Lease Losses. (1) Within sixty ninety (6090) daysdays of this Agreement, the Board shall revise, adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate appropriate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGAAP. The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) ), and July 20, 2001 (“Interagency Statement”) OCC Bulletin 2001-37), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with Accounting Standards Codification 310-10 (formerly known as FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan); (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with Accounting Standards Codification 450-20 (formerly known as FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement); (c) procedures for validating the ALLL Allowance methodology;; and (d) procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) results of the Bank’s external loan review; (iii) concentrations of credit in the Bank; (iv) present and prospective economic conditions; and (v) applicable experience of the Bank’s lending staff. (2) The program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance.

Allowance for Loan and Lease Losses. (1) Within sixty forty-five (6045) days, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with U.S. generally accepted accounting principlesprinciples (“GAAP”). The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with GAAP (including FASB Statement of Financial Accounting Standards No. 114ASC 310-10, Accounting by Creditors for Impairment of a Loan;Receivables (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with GAAP (including FASB Statement ASC 450-20, Loss Contingencies); (c) documentation of Financial Accounting Standards No. 5, Accounting for Contingencies, its estimation of credit losses and address its analysis of the nine qualitative factors set forth in the Interagency Statement; (cd) utilization of historical loss calculations that are reflective of the current risk in the portfolio, including year to date losses; (e) procedures for validating the ALLL methodology;; and (df) a process for summarizing and documenting, for the Board’s prior review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. (2) The Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures to ensure that all official and regulatory reports filed by the Bank accurately reflect an adequate ALLL balance as of the date that such reports are submitted. Any deficiency difference between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, balance shall be remedied through additional provision expense appropriate account adjustments in the quarter it is discovered, prior to the filing of the Call ReportsReports or amendment and refilling of a previously filed Call Report.

Allowance for Loan and Lease Losses. (1) Within sixty one hundred and twenty (60120) days, the Board shall adopt, implement, and thereafter ensure adherence to adopt revised written policies and procedures for maintaining that ensure it maintains an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with U.S. generally accepted accounting principlesprinciples (“GAAP”). The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with GAAP (including FASB Statement of Financial Accounting Standards No. 114ASC 310- 10, Accounting by Creditors for Impairment of a LoanReceivables - Overall - Subsequent Measurement – Impairment); (b) procedures for measuring the amount of impairment for loans that have undergone troubled debt restructurings. If impairment is measured using an estimate of the expected future cash flows, the interest rate used to calculate the present value of the cash flows must be based on the original effective interest rate on the loan, and not the rate specified in the restructuring agreement; (c) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with GAAP (including FASB Statement ASC 450-20, Loss Contingencies). These procedures shall require the Bank to document its estimation of Financial Accounting Standards No. 5, Accounting for Contingencies, credit losses and address its analysis of at least the nine qualitative factors set forth in the Interagency Statement; (cd) incorporate a process to ensure loss is recognized in a timely manner in accordance with interagency guidance; (e) procedures for validating the ALLL methodologymethodology and reporting the findings to the Board; (df) a process procedures for summarizing and documenting, for the Board’s prior review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL; and (g) a requirement that the Board review and approve the ALLL policies and procedures at least annually. (2) Within one hundred and twenty (120) days, the Board shall adopt revised written policies and procedures that ensure all official and regulatory reports filed by the Bank accurately reflect an adequate ALLL balance as of the date that such reports are submitted. Any deficiency difference between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, balance shall be remedied through additional provision expense appropriate account adjustments in the quarter it is discovered, prior to the filing of the Call Reports. (3) Upon adoption, the Board shall submit a copy of the revised policies and procedures required by this Article, or any subsequent amendments or changes to those policies and procedures, to the Assistant Deputy Comptroller for review and determination of no supervisory objection. Upon receiving a determination of no supervisory objection from the Assistant Deputy Comptroller, the Board shall implement and thereafter ensure adherence to the policies and procedures.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the Board shall adoptdevelop, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with generally accepted accounting principles. The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) (“Interagency Statement”) and with "Allowance for Loan and Lease Losses," booklet A-ALLL of the Comptroller's Handbook, and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL methodology; (d) a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call Reports, through additional provision expense. (2) A copy of the Board's program shall be submitted to the Assistant Deputy Comptroller for review and prior written determination of no supervisory objection. Upon receiving a determination of no supervisory objection from the Assistant Deputy Comptroller, the Bank shall implement and adhere to the program.

Allowance for Loan and Lease Losses. (1) Within sixty forty-five (6045) days, the Board shall adopt, implement, and thereafter ensure adherence to updated written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with generally accepted accounting principlesGAAP. The Board shall ensure that the ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated OCC Bulletin 2006-47 (December 13, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) ), “ALLL Methodologies and Documentation” OCC Bulletin 2001-37 (July 20, 2001), and any subsequent guidance which supersedes or supplements this guidance in the future, and shall at a minimum includeminimum: (a) revise the calculation of the historical loss factors to include specific valuation allowances established in lieu of charge-offs, and; (i) ensure qualitative factors and adjustments to factors are documented and well-supported; and (ii) provide a detailed narrative showing trends and financial data to support the reasonableness of assigned percentages for each factor; and (b) include procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with GAAP (including FASB Statement of Financial Accounting Standards No. 114ASC 310­-10, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency StatementReceivables - Overall - Subsequent Measurement – Impairment); (c) include procedures for validating annual independent validation of the ALLL model and methodology, which shall include: (i) testing the accuracy of source documents and assumptions being used in developing the ALLL; and (ii) any changes or adjustments to the ALLL methodology must be well documented and supported; and (iii) ensures the ALLL methodology;’s reasonableness and effectiveness to estimate potential losses in the loan portfolio and compliance with GAAP and regulatory guidance. (d2) a process for summarizing The Board shall adopt, implement, and documenting, for thereafter ensure adherence to written policies and procedures to ensure that all official and regulatory reports filed by the Board’s review and approval, Bank accurately reflect an adequate ALLL balance as of the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLLdate that such reports are submitted. Any deficiency difference between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, balance shall be remedied through additional provision expense appropriate account adjustments in the quarter it is discovered, prior to the filing of the Call Reports. (3) Prior to adoption by the Board, the Board shall submit a copy of the ALLL policies and procedures required by this Article to the Assistant Deputy Comptroller for written determination of no supervisory objection. Upon receiving a written determination of no supervisory objection from the Assistant Deputy Comptroller, the Board shall adopt and the Bank shall immediately implement and adhere to the ALLL program required by this Article.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with U.S. generally accepted accounting principlesprinciples (“GAAP”). The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination CouncilFFIEC’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with GAAP (including FASB Statement of Financial Accounting Standards No. 114ASC 310- 10, Accounting by Creditors for Impairment of a LoanReceivables - Overall - Subsequent Measurement – Impairment); (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with GAAP (including FASB Statement ASC 450-20, Loss Contingencies). These procedures shall require the Bank to document its estimation of Financial Accounting Standards No. 5, Accounting for Contingencies, credit losses and address its analysis of the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL methodology; (d) a process for summarizing and documenting, for the Board’s prior review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. (2) Within sixty (60) days the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures to ensure that all official and regulatory reports filed by the Bank accurately reflect an adequate ALLL balance as of the date that such reports are submitted. Any deficiency difference between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, balance shall be remedied through additional provision expense appropriate account adjustments in the quarter it is discovered, prior to the filing of the Call Reports.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with U.S. generally accepted accounting principlesprinciples (“GAAP”). The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with GAAP (including FASB Statement of Financial Accounting Standards No. 114ASC 310- 10, Accounting by Creditors for Impairment of a LoanReceivables - Overall - Subsequent Measurement – Impairment); (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with GAAP (including FASB Statement ASC 450-20, Loss Contingencies). These procedures shall require the Bank to document its estimation of Financial Accounting Standards No. 5, Accounting for Contingencies, credit losses and address its analysis of the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL methodology;; and (d) a process for summarizing and documenting, for the Board’s prior review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. Any deficiency between . (2) Within sixty (60) days the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures to ensure that all official and regulatory reports filed by the Bank accurately reflect an adequate ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of date that such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call Reportsreports are submitted.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysdays of this Agreement, the Board shall adoptprepare and submit to the Assistant Deputy Comptroller for a prior written determination of no supervisory objection, implementa revised program, and thereafter ensure adherence to including written policies and procedures procedures, for maintaining an adequate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGenerally Accepted Accounting Principles (“GAAP”). The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) ), and July 20, 2001 (“Interagency Statement”) OCC Bulletin 2001-37), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL Allowance methodology;; and (d) procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings, and delinquent and nonaccrual loans; (ii) results of the Bank’s external loan review; (iii) concentrations of credit in the Bank; (iv) present and prospective economic conditions; and (v) applicable experience and competence of the Bank’s lending staff. (2) The program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (3) Upon receiving a written determination of no supervisory objection from the Assistant Deputy Comptroller, the Board shall immediately implement and thereafter ensure adherence to the program, policies and procedures required by this Article. (4) The Board shall take the necessary steps to ensure that an independent review and test of the Allowance sufficiency is performed prior to the filing of each Call Report beginning with the quarter ending June 30, 2010.

Allowance for Loan and Lease Losses. (1) Within sixty ninety (6090) days, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with generally accepted accounting principles. The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL methodology; (d) a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. Any deficiency between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call Reports.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the The Board shall adopt, implement, immediately require and the Bank shall implement and thereafter ensure adherence adhere to a written policies and procedures program for maintaining the maintenance of an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with generally accepted accounting principles). The ALLL policies and procedures program shall be consistent with the guidance set forth comments on maintaining a proper ALLL found in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the ALLL contained in OCC Bulletin 2006-47 (December 13, 2006) and with “Allowance for Loan and Lease Losses,” dated December 13booklet A-ALLL of the Comptroller’s Handbook, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum includeincorporate the following: (a) procedures internal risk ratings of loans; (b) results of the Bank’s independent loan review; (c) trends of delinquent and non-accrual loans; (d) criteria for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB which loans will be reviewed under Financial Accounting Standard (“FASB”) Accounting Standards Codification (“ASC”) Topic 310 Receivables (Pre-codification reference: Statement of Financial Accounting Standards (“FAS”) Statement No. 114), Accounting by Creditors for Impairment how impairment will be determined, and procedures to ensure that the analysis of a Loanloans complies with ASC 310 requirements; (be) procedures criteria for segmenting the determining loan portfolio and estimating loss on groups of loans that are consistent with FASB pools under ASC 450 (Pre-codification reference: FAS Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, ) and address the nine qualitative factors set forth in the Interagency Statementan analysis of those loan pools; (cf) procedures for validating the ALLL methodologyrecognition of non-accrual loans in conformance with generally accepted accounting principles (“GAAP”) and regulatory guidance; (dg) loan loss experience; (h) concentrations of credit; and (i) present and projected economic and market conditions. (2) The program shall provide for a process for summarizing and documenting, for review of the Board’s review and approval, ALLL by the amount to be reported Board at least once each calendar quarter. The Board shall ensure that any deficiency in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. Any deficiency between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to filing the filing call report, by additional provisions from earnings. Written documentation shall be maintained of the Call Reportsfactors considered and conclusions reached by the Board in determining the adequacy of the ALLL and made available for review by National Bank Examiners. (3) Upon completion, a copy of the Board’s ALLL program and quarterly analysis, and any subsequent revisions to the program and analyses, shall be submitted to the Director.

Allowance for Loan and Lease Losses. (1) Within sixty The Board shall require, and within thirty (6030) daysdays of the Effective Date of this Agreement, the Board Bank shall adopt, implement, implement and thereafter ensure adherence adhere to written policies and procedures a program for maintaining the maintenance of an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with generally accepted accounting principles). The ALLL policies and procedures program shall be consistent with the guidance set forth comments on maintaining a proper ALLL found in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the ALLL contained in OCC Bulletin 2006-47 (December 13, 2006) and with the “Allowance for Loan and Lease Losses,” dated December 13booklet A- ALLL of the Comptroller’s Handbook, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall incorporate, at a minimum includeminimum, the following: (a) procedures for determining whether a results of the Bank’s loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loanreview; (b) criteria for determining which loans will be reviewed under Financial Accounting Standard (“FAS”) 114, how impairment will be determined, and procedures for segmenting to ensure that the loan portfolio and estimating loss on groups analysis of loans that are consistent complies with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency StatementFAS 114 requirements; (c) procedures criteria for validating the ALLL methodologydetermining FAS 5 loan pools and an analysis of those loan pools; (d) a process for summarizing loan loss experience; (e) trends of delinquent and documenting, for the Board’s review and approval, the amount to be reported nonaccrual loans; (f) concentrations of credit in the Consolidated Reports Bank; and (g) present and projected economic and market conditions. (2) The Board shall ensure that the Bank, in implementing the program required under paragraph (1), does the following: (a) reviews and revises the rationale and methodology for developing historical loss rates, ensuring the rationale is appropriately supported and consistently applied; (b) stratifies loan types to more accurately assess risk; (c) develops and provides additional support for qualitative factors used in the ALLL analysis and ensures that the directional movement of Condition the allocation for each factor is clearly supported; (d) documents updated evaluations and Income appraisals for impaired loans; (“Call Reports”e) utilizes more robust tools, such as migration analysis and stress testing, to assess historical losses and better project future losses; (f) incorporates requirements for periodic independent validation of the ALLLBank’s ALLL methodology, and revises the methodology when appropriate. (3) The program shall provide for a review of the ALLL by the Board at least once each calendar quarter. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsConsolidated Reports of Condition and Income, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the ALLL. (4) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program developed pursuant to this Article.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysdays of the effective date of this Agreement, the Board shall adoptrevise, implement, and thereafter ensure adherence to its written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) ALLL in accordance with generally accepted accounting principlesGAAP. The revised ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “OCC Bulletin 2006-47 – Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December Losses (Dec. 13, 2006), (OCC Bulletin 2006-47) (“Interagency Statement”) and shall include, at a minimum includeminimum: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with GAAP (including FASB Statement of Financial Accounting Standards No. 114ASC 310- 10, Accounting by Creditors for Impairment of a LoanReceivables - Overall - Subsequent Measurement – Impairment); (b) procedures for segmenting the loan portfolio and estimating loss losses on groups of loans using historical loss data that are reflect current economic conditions and the current financial condition of the bank, consistent with GAAP (including FASB Statement ASC 450-20, Loss Contingencies). These procedures shall require the Bank to document its estimation of Financial Accounting Standards No. 5, Accounting for Contingencies, credit losses and address an appropriate analysis of the nine qualitative factors set forth in the Interagency StatementOCC Bulletin 2006-47; (c) procedures for validating the ALLL methodology;; and (d) a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLL. (2) The Board shall ensure that all official and regulatory reports filed by the Bank accurately reflect an adequate ALLL balance as of the date that such reports are submitted. Any deficiency difference between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, balance shall be remedied through additional provision expense appropriate account adjustments in the quarter it is discovered, prior to the filing of the Call Reports.

Allowance for Loan and Lease Losses. (1) Within sixty thirty (6030) days, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with U.S. generally accepted accounting principlesprinciples (“GAAP”). The ALLL policies and procedures shall be consistent with the guidance guidelines set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with GAAP (including FASB Statement of Financial Accounting Standards No. 114ASC 310-10, Accounting by Creditors for Impairment of a Loan;Receivables (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with GAAP (including FASB Statement ASC 450-20, Loss Contingencies). These procedures shall require the Bank to document its estimation of Financial Accounting Standards No. 5, Accounting for Contingencies, credit losses and address its analysis of the nine qualitative factors set forth in the Interagency Statement; (c) a process to accurately measure historical loss calculations; (d) procedures for validating the ALLL methodology;; and (de) a process for summarizing and documenting, for the Board’s prior review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. Any deficiency between . (2) Within thirty (30) days the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures to ensure that all official and regulatory reports filed by the Bank accurately reflect an adequate ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of date that such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call Reportsreports are submitted.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the The Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate review the adequacy of the Bank's Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesand shall establish a program for the maintenance of an adequate Allowance. The ALLL policies This review and procedures program shall be consistent with designed in light of the guidance set forth comments on maintaining a proper Allowance found in the Federal Financial Institutions Examination Council“Allowance for Loan and Lease Losses” booklet of the Comptroller’s “Handbook and OCC Bulletin 2006-47, Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum includefocus particular attention on the following factors: (a) procedures Documented processes for impairment evaluation. Management must specify through policy which loans will be evaluated for impairment under ASC 310-10 (formerly FAS 114). Loans within the scope of ASC 310-10 that are determined to be impaired or are considered troubled debt restructured loans, must be individually reviewed under ASC 310-10 guidelines, on a quarterly basis, using the three available methods when determining whether a specific reserve allocations: (i) Present value of expected future cash flows discounted at the loans effective interest rate; (ii) Observable market price; or (iii) Fair value of collateral. Required method if the loan is impaired and measuring the amount of impairmentcollateral dependent (e.g., consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan;repayment is solely contingent on underlying collateral). (b) procedures Incorporating the analysis and support for segmenting the loan portfolio and estimating loss on groups existing unallocated reserve calculation to within the ASC 450-20 (formerly FAS 5) component of loans that are consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement;methodology. (c2) procedures The program shall provide for validating a review of the ALLL methodology; (d) a process for summarizing and documenting, for Allowance by the Board’s review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLLBoard at least once each calendar quarter. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsConsolidated Reports of Condition and Income, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (3) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program developed pursuant to this Article.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the Board shall adopt, implement, and thereafter ensure adherence to updated written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with generally accepted accounting principles. The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) (“Interagency Statement”) and with "Allowance for Loan and Lease Losses," booklet A-ALLL of the Comptroller's Handbook, and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL methodology;; and (d) a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. (2) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the policies and procedures developed pursuant to this Article. (3) A copy of the Board’s program shall be submitted to the Assistant Deputy Comptroller for review and prior written determination of no supervisory objection. Upon receiving a determination of no supervisory objection from the Assistant Deputy Comptroller, the Bank shall implement and adhere to the program. (4) The program shall provide for a review of the Allowance by the Board at least once each calendar quarter. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsConsolidated Reports of Condition and Income, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysBy March 31, 2019, the Board shall adoptestablish and forward to the Assistant Deputy Comptroller for his review, implement, and thereafter ensure adherence to written policies and procedures for maintaining impaired loan identification and the maintenance of an adequate Allowance allowance for Loan loan and Lease Losses lease losses (“ALLL”) in accordance with generally accepted accounting principlesallowance). The ALLL These written policies and procedures shall be consistent with (i) U.S. generally accepted accounting principles (GAAP); (ii) 12 C.F.R. § 160.160 (Asset classification); and (iii) the guidance set forth in instructions for reporting the allowance on the Consolidated Reports of Condition and Income. Refer to the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) (“Interagency Statement”) for guidance. The policies and shall procedures shall, at a minimum includeminimum, incorporate the following: (a) the identification and amount of delinquent loans and leases, nonaccrual loans and leases, and troubled debt restructurings; (b) criteria and procedures for determining whether when a loan is impaired and measuring the amount of impairment, impairment consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; Codification (bASC) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement310-10; (c) procedures a process for validating determining when it is appropriate to use present market value of expected future cash flows, fair value of collateral, or the ALLL methodologyobservable market price method for determining impairment amount; (d) a process for summarizing impaired loan testing, including a review of all loans currently identified as impaired to determine if these loans meet the definition of an impaired loan; (e) a process for identifying troubled debt restructuring loans in accordance with ASC 310-40 and documentingassigning appropriate risk ratings for allowance purposes; and (f) for collateral dependent loans, a process for determining when subsequent reappraisals will be required to determine if any additional impairment has occurred over time. (2) The policies and procedures shall provide for a review of the Board’s allowance by the Board at least once each calendar quarter. The Board shall review and approval, the amount to be reported allowance more frequently if required by the Assistant Deputy Comptroller in writing. The Board shall ensure that the Bank remedies any deficiency in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. Any deficiency between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, shall be remedied through additional provision expense allowance in the quarter it is discovered, prior to discovered by additional provisions from earnings. The Board shall maintain written documentation indicating the filing factors it considered and conclusions it reached in determining the adequacy of the Call Reportsallowance. (3) The Board shall ensure that all Bank lenders or any other personnel responsible for impaired loan identification and testing receive training in impaired loan identification, impairment testing, troubled debt restructuring identification, and related accounting principles. Processes and procedures shall be in place to ensure that additional training is provided as needed.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the Board shall adopt, implement, and thereafter ensure adherence to updated written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with generally accepted accounting principles. The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) (and with “Interagency Statement”) Allowance for Loan and Lease Losses,” booklet A-ALLL of the Comptroller’s Handbook, and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL methodology;; and (d) a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. (2) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the policies and procedures developed pursuant to this Article. (3) A copy of the Board’s program shall be submitted to the Assistant Deputy Comptroller for review and prior written determination of no supervisory objection. Upon receiving a determination of no supervisory objection from the Assistant Deputy Comptroller, the Bank shall implement and adhere to the program. (4) The program shall provide for a review of the Allowance by the Board at least once each calendar quarter. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsConsolidated Reports of Condition and Income, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysdays of the date of this Agreement, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with generally accepted accounting principles. The ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) (“Interagency Statement”) ), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine . The procedures should include methods to determine proper qualitative factors set forth in the Interagency Statementadjustments to historical loan loss rates to incorporate current conditions impacting current estimates of loan losses; (c) procedures for validating the ALLL methodology; (d) ; a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. (d) The program shall provide for a review of the ALLL by the Board at least once each calendar quarter. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the ALLL. (2) The Board shall submit a copy of the ALLL policy and procedures required by this Article to the Assistant Deputy Comptroller.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysdays of this Agreement, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGenerally Accepted Accounting Principles. The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) ), and July 20, 2001 (“Interagency Statement”) OCC Bulletin 2001-37), and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c) procedures for validating the ALLL Allowance methodology; (d) procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) results of the Bank’s external loan review; (iii) concentrations of credit in the Bank; (iv) present and prospective economic conditions; and (v) applicable experience of the Bank’s lending staff. (2) The program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Call Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (3) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the policies and procedures developed pursuant to this Article.

Allowance for Loan and Lease Losses. (1) Within sixty (60) days, the The Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate review the adequacy of the Bank's Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesand shall establish a program for the maintenance of an adequate Allowance. The ALLL policies This review and procedures program shall be consistent with designed in light of the guidance set forth on maintaining a proper Allowance found in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” in OCC Bulletin 2006-47 dated December 13, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) and shall at a minimum shall include: (a) procedures detailing the selection process for determining whether a loan is loans considered impaired and measuring procedures detailing how the amount of impairmentimpairment for those loans will be measured, consistent with FASB Statement of Financial Accounting Standards No. Number 114, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. Number 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement;; and (c) procedures for validating the ALLL methodology;. (d2) The program shall provide for a process for summarizing and documenting, for review of the Board’s review and approval, Allowance by the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLLBoard at least once each calendar quarter. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsConsolidated Reports of Condition and Income, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance. (3) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program developed pursuant to this Article.

Allowance for Loan and Lease Losses. (1) Within sixty (60) daysdays of this Agreement, the Board shall adopt, implement, and thereafter ensure adherence to the Bank has appropriate written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLLAllowance”) in accordance with generally accepted accounting principlesGAAP. The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan 12 C.F.R. § 160.160 and Lease Losses” dated applicable regulatory guidance, including, but not limited to, and Xxxxx Xxxxxx, December 13, 2006, (; and OCC Bulletin 20062001-47) (“Interagency Statement”) 37: Policy Statement on Allowance for 2001, and shall at a minimum include: (a) procedures for determining whether a loan is impaired and measuring validating the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a LoanAllowance methodology; (b) procedures for segmenting to ensure that the loan portfolio estimation of credit losses considers relevant qualitative and estimating loss environmental factors, with particular focus on groups of loans that are consistent with FASB Statement of Financial Accounting Standards No. 5the following: (i) trends in the Bank’s internal risk ratings, Accounting for Contingenciesdelinquent, and address nonaccrual loans; (ii) results of the nine qualitative factors set forth Bank’s external loan review; (iii) the quality of credit risk management, including trends of credit and collateral exceptions; (iv) concentrations of credit in the Interagency StatementBank; (v) present and prospective economic conditions; and, (vi) experience of the Bank’s lending staff; (c) procedures for validating to ensure the ALLL methodology;overall balance of the Allowance remains directionally consistent with the direction of credit risk in the overall loan portfolio; and (d) procedures to ensure that all calculations and decisions affecting the Bank’s Allowance determination are supported by documentation. (2) The program shall provide for a process for summarizing and documenting, for the Board’s review and approval, the amount of the Allowance to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsReport, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance.

Allowance for Loan and Lease Losses. (1) Within sixty forty-five (6045) days, the Board shall adopt, implement, and thereafter ensure adherence to updated written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with generally accepted accounting principlesGAAP. The Board shall ensure that the ALLL policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated OCC Bulletin 2006-47 (December 13, 2006, (OCC Bulletin 2006-47) (“Interagency Statement”) ), “ALLL Methodologies and Documentation” OCC Bulletin 2001-37 (July 20, 2001), and any subsequent guidance which supersedes or supplements this guidance in the future, and shall at a minimum includeminimum: (a) revise the calculation of the historical loss factors to include specific valuation allowances established in lieu of charge-offs, and; (i) ensure qualitative factors and adjustments to factors are documented and well-supported; and (ii) provide a detailed narrative showing trends and financial data to support the reasonableness of assigned percentages for each factor; and (b) include procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with GAAP (including FASB Statement of Financial Accounting Standards No. 114ASC 310-10, Accounting by Creditors for Impairment of a Loan; (b) procedures for segmenting the loan portfolio and estimating loss on groups of loans that are consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency StatementReceivables - Overall - Subsequent Measurement – Impairment); (c) include procedures for validating annual independent validation of the ALLL model and methodology, which shall include: (i) testing the accuracy of source documents and assumptions being used in developing the ALLL; and (ii) any changes or adjustments to the ALLL methodology must be well documented and supported; and (iii) ensures the ALLL methodology;’s reasonableness and effectiveness to estimate potential losses in the loan portfolio and compliance with GAAP and regulatory guidance. (d2) a process for summarizing The Board shall adopt, implement, and documenting, for thereafter ensure adherence to written policies and procedures to ensure that all official and regulatory reports filed by the Board’s review and approval, Bank accurately reflect an adequate ALLL balance as of the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLLdate that such reports are submitted. Any deficiency difference between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, balance shall be remedied through additional provision expense appropriate account adjustments in the quarter it is discovered, prior to the filing of the Call Reports. (3) Prior to adoption by the Board, the Board shall submit a copy of the ALLL policies and procedures required by this Article to the Assistant Deputy Comptroller for written determination of no supervisory objection. Upon receiving a written determination of no supervisory objection from the Assistant Deputy Comptroller, the Board shall adopt and the Bank shall immediately implement and adhere to the ALLL program required by this Article.

Allowance for Loan and Lease Losses. (1) Within sixty thirty (6030) daysdays of the date of this Agreement, the Board shall adopt, implement, review the adequacy of the Bank’s Allowance for Loan and thereafter ensure adherence to Lease Losses (“Allowance”) and shall revise the Bank’s written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“ALLL”) in accordance with generally accepted accounting principlesGenerally Accepted Accounting Principles (“GAAP”). The ALLL Allowance policies and procedures shall be consistent with the guidance set forth in the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) (), and the “Interagency Statement”) Allowance for Loan and Lease Losses” booklet of the Comptroller’s Handbook, and shall at focus particular attention on directional consistency between portfolio risk and the reserve balance. At a minimum includeminimum, the following factors shall be considered and included in the revised methodology: (a) procedures Procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a Loan;; and (b) procedures Procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency Statement; (c2) procedures The program shall provide for validating the ALLL methodology; (d) a process for summarizing and documenting, for the Board’s review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLLAllowance. Any deficiency between in the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, Allowance shall be remedied through additional provision expense in the quarter it is discovered, prior to the filing of the Call ReportsConsolidated Reports of Condition and Income, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the Allowance.

Allowance for Loan and Lease Losses. (1) Within sixty ninety days (6090) daysof this Agreement, the Board shall adoptreview, implementrevise, and thereafter ensure adherence submit to the Assistant Deputy Comptroller for prior written determination of no supervisory objection policies and procedures for maintaining and documenting an adequate Allowance appropriate allowance for Loan loan and Lease Losses lease losses (“ALLL”) in accordance with generally accepted accounting principlesGenerally Accepted Accounting Principles (“GAAP”). The ALLL policies and procedures shall be consistent with the guidance set forth in Refer to the Federal Financial Institutions Examination Council’s “Interagency Policy Statement on the Allowance for Loan and Lease Losses” dated December 13, 2006, 2006 (OCC Bulletin 2006-47) (“Interagency Statement”) Bulletin-47), for guidance. The ALLL policies and procedures shall include, at a minimum includeminimum: (a) criteria and procedures for determining whether when a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114, Accounting by Creditors for Impairment of a LoanCodification (“ASC”) 000-00-00; (b) procedures requiring use of the correct accounting method for measuring the amount of impairment; (c) procedures to document the reasons for impairment; (d) procedures to maintain documentation for each impaired loan; (e) a review of each impaired loan no less than quarterly; (f) procedures to ensure that if a loan is collateral dependent the fair value of the collateral is supported by a current appraisal or other appropriate evaluation; (g) criteria and procedures for segmenting the loan portfolio and estimating loss on groups of loans that are loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies, and address the nine qualitative factors set forth in the Interagency StatementASC 450-20; (ch) procedures for validating an outline of qualitative factors, including the rate of exceptions within the loan portfolio, that will be used in ALLL methodologycalculations; (di) written narratives to support qualitative factor adjustments; (j) presentation to the Board no less than quarterly of a process for summarizing and documenting, for written narrative to support the BoardALLL balance; (2) Following receipt of the Assistant Deputy Comptroller’s review and approvalwritten no supervisory objection, the amount Board shall promptly adopt, and the Bank shall implement and adhere to, the ALLL policies and procedures required by Paragraph (1) of this Article. Any revisions to the ALLL policies and procedures shall be reported submitted to the Assistant Deputy Comptroller for a prior written determination of no supervisory objection. (3) The Board shall ensure that the Bank remedies any deficiencies in the Consolidated Reports of Condition and Income (“Call Reports”) for the ALLL. Any deficiency between the ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance, regardless of the amount of such deficiency, shall be remedied through additional provision expense in the quarter it is discovered, prior to discovered by additional provisions from earnings. The Board shall maintain written documentation indicating the filing factors it considered and conclusions it reached in determining the adequacy of the Call ReportsALLL.