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

Allowance for Loan and Lease Losses. (1) Within thirty (30) days 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 (“Allowance”) in accordance with Generally Accepted Accounting Principles. The 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 (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 (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, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies; (c) Procedures for independent validation of the 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 Call Reports for the Allowance. Any deficiency in the Allowance shall be remedied in the quarter it is discovered, prior to the filing of the Call Report, 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 thirty sixty (3060) days of the date of this Agreementdays, 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 (“AllowanceALLL”) in accordance with Generally Accepted Accounting Principlesgenerally accepted accounting principles. The Allowance 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), ) and the with “Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank and Savings InstitutionsLosses,” dated July 20, 2001 (OCC Bulletin 2001booklet A-37)ALLL of the Comptroller’s Handbook, 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, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies; (c) Procedures procedures for independent validation of validating the Allowance ALLL 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) 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 Reports of Condition and Income (“Call Reports Reports”) for the AllowanceALLL. (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 in the Allowance shall be remedied in the quarter it is discovered, prior to the filing of the Call ReportConsolidated 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 thirty ninety (3090) days of the date of this Agreementdays, the Board shall adopt, implement, review and thereafter ensure adherence to written policies and procedures for maintaining an adequate revise the adequacy of the Bank's Allowance for Loan and Lease Losses (“ALLL” or “Allowance”) in accordance with Generally Accepted Accounting Principlesand shall establish a program for the maintenance of an adequate Allowance. The Allowance 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 OCC Bulletin 2006-47 and 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; and the guidance of OCC Bulletin 20062012-47), 6 and the “Policy Statement Interagency Guidance on Allowance for Loan and Lease Losses Methodologies (ALLL) Estimation Practices for Junior Liens dated January 31, 2012; and Documentation for Bank and Savings Institutions” dated July 20, 2001 accounting guidance of Generally Accepted Accounting Principles (OCC Bulletin 2001-37GAAP), and shall at a minimum includefocus particular attention on the following factors: (a) Procedures for determining whether a loan maintaining an allowance that 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 Loanthe Bank’s risk profile; (b) Procedures for segmenting the ensuring accurate and timely problem loan portfolio and estimating loss on groups of loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingenciesnon-accrual recognition; (c) Procedures for independent validation of developing alternative methods to capture changing credit risk characteristics in the Allowance methodologyportfolio; (d) Procedures to ensure that conducting an analysis of 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 loansjunior lien home equity portfolio; (iie) Adjustments obtaining current appraisals or conducting independent evaluations to ensure the ALLL methodology impairment allocations for collateral dependent commercial real estate loans are accurate and balance are directionally consistent with credit riskwell supported; (iiif) Methods to incorporate more recent loss history when calculating historical loss rates; (iv) Increasing the range ensuring impaired portions 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 collateral dependent commercial real estate loans are grouped together based on similar characteristics; (vi) Determining the likelihood of funding off-balance sheet commitments when applying charged off in 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 conditionstimely manner; and (xg) Applicable experience ensuring an appropriate allowance estimate for junior liens following the guidance of the Bank’s lending staffOCC Bulletin 2012-6. (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 Call Reports for the AllowanceBoard at least once each calendar quarter. Any deficiency in the Allowance shall be remedied in the quarter it is discovered, prior to the filing of the Call Consolidated Reports of Condition and Income (CALL Report), 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 thirty ninety (3090) days of the date 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 (“Allowance”) in accordance with Generally Accepted Accounting PrinciplesGAAP. The 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 (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 (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, consistent with Accounting Standards Codification 450-20 (formerly known as FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies); (c) Procedures procedures for independent validation of validating the Allowance methodology;; and (d) Procedures procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) Trends trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) Adjustments to results of the ALLL methodology and balance are directionally consistent with credit riskBank’s external loan review; (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 concentrations of credit in the Bank; (ixiv) Present present and prospective economic conditions; and (xv) Applicable 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 Call Reports for the Allowance. Any deficiency in the Allowance shall be remedied in the quarter it is discovered, prior to the filing of the Call Report, 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 thirty (30) days The Board shall review the adequacy of the date of this Agreement, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Bank's Allowance for Loan and Lease Losses (“Allowance”) in accordance with Generally Accepted Accounting Principlesand shall establish a program for the maintenance of an adequate Allowance, including use of impairment analyses. The Allowance 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 13, 2006 (OCC Bulletin 2006-47), and booklet of the “Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank and Savings Institutions” dated July 20, 2001 (OCC Bulletin 2001-37)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 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, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencieseach significant credit; (c) Procedures for independent validation of the Allowance methodologyloan loss experience; (d) Procedures to ensure that the estimation trends 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; (iie) 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 concentrations of credit in the Bank; (ixf) Present present and prospective economic conditions; andconditions;and (xg) Applicable experience recurring independent validation of Allowance methodology; (2) The Board shall require management to support the Bank’s lending staffimpairment analysis provided to the Board no less than quarterly which shall include, but not be limited to, the 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 record allocations and charge-offs. (23) 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 Call Reports for the AllowanceBoard at least once each calendar quarter. Any deficiency in the Allowance shall be remedied in the quarter it is discovered, prior to the filing of the Call ReportConsolidated 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 thirty (30) days of the date 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 (“Allowance”) in accordance with Generally Accepted Accounting PrinciplesPrinciples (“GAAP”). The 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 (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 (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 Codification Topic 310 Receivables, 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, consistent with FASB Codification Topics 310 Receivables and 450 Contingencies, Statement of Financial Accounting Standards No. 5, Accounting for Contingencies; (c) Procedures procedures for independent validation of validating the Allowance methodology;; and (d) Procedures procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) Trends trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) Adjustments to results of the ALLL methodology and balance are directionally consistent with credit riskBank’s external loan review; (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 concentrations of credit in the Bank; (ixiv) Present present and prospective economic conditions; and (xv) Applicable 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 Call Reports for the Allowance. Any deficiency in the Allowance shall be remedied in the quarter it is discovered, prior to the filing of the Call Report, 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 thirty (30) days of the date of this AgreementBy 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 (“AllowanceALLL”) in accordance with Generally Accepted Accounting PrinciplesU.S. generally accepted accounting principles (“GAAP”). The Allowance 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 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 (OCC Bulletin 2001-37), Interagency Statement”) and shall at a minimum include: (a) Procedures 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 procedures for segmenting the loan portfolio and estimating loss on groups of loans, 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 Contingenciescredit losses and its analysis of the nine qualitative factors set forth in the Interagency Statement; (c) Procedures procedures for independent validation of validating the Allowance ALLL 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) 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 prior review and approval, the amount to be reported in the Consolidated Reports of Condition and Income (“Call Reports Reports”) for the AllowanceALLL. (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 in difference between the Allowance ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance shall be remedied through appropriate account adjustments in the quarter it is discovered, prior to the filing of the Call Report, 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 AllowanceReports.

Allowance for Loan and Lease Losses. (1) Within thirty (30) days of the date of this AgreementEffective 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 (“Allowance”) in accordance with Generally Accepted Accounting PrinciplesPrinciples (“GAAP”). The 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 (OCC Bulletin 2006-2006- 47), and the “Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank and Savings Institutions” dated July 20, 2001 (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, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies; (c) Procedures procedures for independent validation of validating the Allowance methodology; (d) Procedures procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) Trends trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) Adjustments to results of the ALLL methodology and balance are directionally consistent with credit riskBank’s external loan review, including but not limited to, the accuracy of internal risk ratings; (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 concentrations of credit in the Bank; (ixiv) Present present and prospective economic conditions; and (xv) Applicable 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 Call Reports for the Allowance. Any deficiency in the Allowance shall be remedied in the quarter it is discovered, prior to the filing of the Call Report, 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 thirty (30) days of the date of this AgreementBy 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 (“AllowanceALLL”) ). The Board shall ensure the policies and procedures establish loss reserves in accordance with Generally Accepted Accounting PrinciplesGAAP. The Allowance 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, and the “Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank Banks and Savings Institutions;” dated July 20, 2001 (OCC Bulletin 2001-37), 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 the loan portfolio and estimating loss on groups of loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting impairment analysis for Contingenciesloans impacted by economic conditions; (c) Procedures ensure the appropriate method of impairment analysis for independent validation of the Allowance methodologyloans that are not collateral dependent; (d) Procedures 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 losses on groups of loans that are consistent with ASC 450-20 (Loss Contingencies); (f) a validation of the ALLL methodology; (g) 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 ensure determine the ALLL; (i) a process for ensuring that the estimation of credit losses considers the relevant qualitative and environmental factors, with including particular focus on the following: (i) Trends trends in the Bank’s internal risk ratings, ratings and 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 concentrations of credit in the Bank; (ixiii) Present present and prospective perspective economic conditions; and (xiv) Applicable experience of the Bank’s lending staff.; (2j) a review on at least a quarterly basis to determine the adequacy of the ALLL. The program Board shall provide for maintain written documentation indicating the factors considered and conclusions reached in its review; and (k) a process for summarizing and documenting, summary with supporting documentation for the Board’s prior review and approval, approval of the ALLL amount to be reported in the Call Reports for the Allowance. Any deficiency in the Allowance shall be remedied in the quarter it is discovered, prior to the filing of the Call Report, 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 thirty forty-five (3045) days of the date of this Agreementdays, 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 (“AllowanceALLL”) in accordance with Generally Accepted Accounting PrinciplesU.S. generally accepted accounting principles (“GAAP”). The Allowance 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 the ) (“Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank and Savings Institutions” dated July 20, 2001 (OCC Bulletin 2001-37), Interagency Statement”) and shall at a minimum include: (a) Procedures 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 procedures for segmenting the loan portfolio and estimating loss on groups of loans, 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 Contingenciescredit losses and its analysis of the nine qualitative factors set forth in the Interagency Statement; (c) Procedures procedures for independent validation of validating the Allowance ALLL 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) 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 Call Reports for the AllowanceALLL. (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 in between the Allowance 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 ReportReports. (3) Upon adoption, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy shall submit a copy of the Allowancepolicies 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 thirty ninety (3090) days 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 (“Allowance”) in accordance with Generally Accepted Accounting PrinciplesPrinciples (“GAAP”). The 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 (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 (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, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies; (c) Procedures procedures for independent validation of validating the Allowance methodology;; and (d) Procedures procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) Trends trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) Adjustments to results of the ALLL methodology and balance are directionally consistent with credit riskBank’s external loan review; (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 concentrations of credit in the Bank; (ixiv) Present present and prospective economic conditions; and (xv) Applicable 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 Call Reports for the Allowance. Any deficiency in the Allowance shall be remedied in the quarter it is discovered, prior to the filing of the Call Report, 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 forwarded to the Assistant Deputy Comptroller within fifteen (15) days of approval by the Board of Directors.

Allowance for Loan and Lease Losses. (1) Within thirty forty-five (3045) days of the date of this Agreementdays, 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 (“AllowanceALLL”) in accordance with Generally Accepted Accounting PrinciplesU.S. generally accepted accounting principles (“GAAP”). The Allowance 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), and the ) (“Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank and Savings Institutions” dated July 20, 2001 (OCC Bulletin 2001-37), Interagency Statement”) and shall at a minimum include: (a) Procedures 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 procedures for segmenting the loan portfolio and estimating loss on groups of loans, 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 Nocredit losses and its analysis of the nine qualitative factors set forth in the Interagency Statement. 5, Accounting for ContingenciesThese 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 procedures for independent validation of validating the Allowance ALLL 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) 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 prior review and approval, the amount to be reported in the Call Reports for the AllowanceALLL. (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 in difference between the Allowance ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance shall be remedied through appropriate account adjustments in the quarter it is discovered, prior to the filing of the Call Report, by additional provisions from earningsReports. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the AllowanceALLL. (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 thirty forty-five (3045) days of the date of this Agreementdays, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“AllowanceALLL”) in accordance with Generally Accepted Accounting PrinciplesU.S. generally accepted accounting principles (“GAAP”). The Allowance 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)47 (December 13, and 2006) (“Interagency Statement”) or any subsequent guidance which supersedes or supplements this guidance in the “Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank and Savings Institutions” dated July 20, 2001 (OCC Bulletin 2001-37), future and shall at a minimum include: (a) Procedures 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 procedures for segmenting the loan portfolio and estimating loss on groups of loans, 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 Contingenciescredit losses and its analysis of the nine qualitative factors set forth in the Interagency Statement; (c) Procedures procedures for independent validation of validating the Allowance ALLL 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) 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 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 Reports”) for the AllowanceALLL. (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 in difference between the Allowance ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance shall be remedied through appropriate account adjustments in the quarter it is discovered, prior to the filing of the Call ReportReports. (3) Upon adoption, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy shall submit a copy of the Allowancepolicies 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 thirty (30) days The Board shall review the methodology and adequacy of the date of this Agreement, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Bank’s Allowance for Loan and Lease Losses (“AllowanceALLL”) and shall establish a program for the maintenance of an adequate ALLL balance in accordance with Generally Accepted Accounting Principlesgenerally accepted accounting principles. The Allowance policies This review and procedures program 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 (OCC Bulletin 2001-37), Interagency Statement”) 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 ASC 310-10, Receivables – Overall – Subsequent Measurement – Impairment, 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, loans that are consistent with FASB ASC 450-20, Loss Contingencies, 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 independent validation of validating the Allowance ALLL 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) 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 Reports of Condition and Income (“Call Reports Reports”) for the AllowanceALLL. Any deficiency in between the Allowance 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 Report, 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 thirty ninety (3090) days 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 (“AllowanceALLL”) in accordance with Generally Accepted the Federal Accounting PrinciplesStandards Advisory Board’s (“FASB”) generally accepted accounting principles (“GAAP”). The Allowance 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 the “Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank and Savings Institutions” dated July 20, 2001 (OCC Bulletin 2001-37), ) and shall at a minimum includeinclude procedures for the following: (a) Procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial GAAP (including FASB’s Accounting Standards No. 114Codification (“ASC”) 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, 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 Contingenciescredit losses and its analysis of the nine qualitative factors set forth in OCC Bulletin 2006-47; (c) Procedures for independent validation of validating the Allowance ALLL methodology; (d) Procedures to ensure ensuring that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) Trends trends in the Bank’s internal risk ratings, ratings as well as in delinquent and nonaccrual loans; (ii) Adjustments to results of the ALLL methodology and balance are directionally consistent with credit riskBank’s external loan review; (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 concentrations of credit in the Bank; (ixiv) Present present and prospective economic conditions; and (xv) Applicable applicable experience of the Bank’s lending staff.; (2e) providing training for all staff preparing the ALLL; (f) reviewing on at least a quarterly basis, to determine the adequacy of the ALLL. The program Board shall provide for a process for 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 Bank’s Call Reports Report for the AllowanceALLL. (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 in difference between the Allowance ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance shall be remedied through appropriate account adjustments in the quarter it is discovered, prior to the filing of the Bank’s Call Report, by additional provisions from earningsReports. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the AllowanceALLL. (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 ADC for determination of no supervisory objection. (4) Upon receiving a determination of no supervisory objection from the ADC, the Board shall implement and thereafter ensure adherence to the policies and procedures.

Allowance for Loan and Lease Losses. (1) Within thirty sixty (3060) days of the date of this Agreementdays, 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 (“Allowance”) in accordance with Generally Accepted Accounting PrinciplesGAAP. The 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 December 13applicable regulatory guidance, 2006 (including, but not limited to, OCC Bulletin 2006-4747 (Guidance and Frequently Asked Questions (FAQ’s) on the ALLL), December 13, 2006; and the “OCC Bulletin 2001-37 (Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank Banks and Savings Institutions” dated : ALLL Methodologies and Documentation), July 20, 2001 (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, consistent with Accounting Standards Codification 310-10 and 450-20 (formerly known as FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies); (c) Procedures procedures to ensure that loss histories on loans include all charge offs and specific valuation allowances, including the initial write down upon repossession; (d) procedures for independent validation of validating the Allowance methodology; (de) Procedures procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) Trends trends in the Bank’s internal risk ratings, delinquent delinquent, and nonaccrual loans; (ii) Adjustments to results of the ALLL methodology and balance are directionally consistent with credit riskBank’s external loan review; (iii) Methods to incorporate more recent loss history when calculating historical loss ratesthe quality of credit risk management, including trends of credit and collateral exceptions; (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 concentrations of credit in the Bank; (ixv) Present present and prospective economic conditions; and (xvi) Applicable experience of the Bank’s lending staff; and (f) procedures to ensure that all calculations and decisions affecting the Bank’s Allowance determination are supported by documentation. (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 Report of Income and Condition (“Call Reports Report”) for the Allowance. Any deficiency in the Allowance shall be remedied in the quarter it is discovered, prior to the filing of the Call Report, by additional provisions from earningsprovisions. 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 thirty (30) days The Board shall review the adequacy of the date of this Agreement, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Bank’s Allowance for Loan and Lease Losses (“Allowance”) and shall establish a program for the maintenance of an appropriate Allowance level. This review and program shall be designed in accordance with Generally Accepted Accounting Principlesgenerally accepted accounting principles (GAAP) outlined in FAS 5 and FAS 114 and supervisory guidance detailed in OCC Bulletins 2001-37 and 2006-47. The Allowance policies and procedures shall be consistent with consist of 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), and the “Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank and Savings Institutions” dated July 20, 2001 (OCC Bulletin 2001-37), following components and shall at a minimum includetake into account all relevant facts and circumstances as of the evaluation date: (a) Procedures for determining whether a loan is impaired For loans within the scope of FAS 114 that are individually evaluated and measuring found to be impaired, 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, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies; (c) Procedures for independent validation associated Allowance should be based upon one of the Allowance methodology; (d) Procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the followingfollowing impairment methods specified in FAS 114: (i) Trends in the Bankpresent value of expected future cash flows discounted at the loan’s internal risk ratings, delinquent and nonaccrual loanseffective interest rate; (ii) Adjustments the loan’s observable market price; or (iii) the fair value of the underlying collateral. (b) For all other loans, including individually evaluated loans determined not to be impaired under FAS 114, the ALLL methodology associated Allowance shall be measured under FAS 5 and shall provide for all estimated credit losses that have been incurred on groups of loans with similar risk characteristics. The Bank shall determine the historical loss rate for each group of loans with similar risk characteristics based on its own loss experience for loans in that group. The bank shall then adjust the historical loss rates based on those qualitative or environmental factors that are likely to cause estimated credit losses associated with the Bank’s existing portfolio to differ from historical loss experience, including but not limited to: (c) For estimated credit losses on accrued interest and fees on loans that have been reported as part of the respective loan balances on the institution’s balance are directionally consistent with sheet, the associated Allowance shall be evaluated under FAS 114 or FAS 5 as appropriate, if not already included in one of the preceding components. (i) changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit risklosses; (ii) changes in international, national, regional, and local economic and business conditions and developments that affect the collectibility of the portfolio, including the condition of various market segments; (iii) Methods to incorporate more recent loss history when calculating historical loss rateschanges in the nature and volume of the portfolio and in the terms of loans; (iv) Increasing changes in the range experience, ability, and depth of qualitative factor adjustments to allow proper adjustment for current factors that may impact historical loss rateslending management and other relevant staff; (v) Determining changes in the volume and applying qualitative adjustments to historical loss rates by loan portfolio typeseverity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified or by portfolios that are grouped together based on similar characteristicsgraded loans; (vi) Determining changes in the likelihood quality of funding off-balance sheet commitments when applying a loss rate to commitmentsthe Bank’s loan review system; (vii) Results changes in the value of the Bank’s independent loan reviewunderlying collateral for collateral- dependent loans; (viii) Concentrations the existence and effect of credit any concentrations of credit, and changes in the Bank;level of such concentrations; and (ix) Present the effect of other external factors such as competition and prospective economic conditions; and (x) Applicable experience legal and regulatory requirements on the level of estimated credit losses in the Bank’s lending staffexisting portfolio. (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 Call Reports for the AllowanceBoard at least once each calendar quarter. Any deficiency in the Allowance shall be remedied in the quarter it is discovered, prior to the filing of the Call ReportConsolidated 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 thirty sixty (3060) days 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 (“Allowance”) in accordance with Generally Accepted Accounting Principles. The 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 (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 (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, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for ContingenciesALLL adequacy determination; (c) Procedures for independent validation Performing an analysis of the Allowance methodologydeferred payment programs and the effect the programs have on delinquency and loss trends and reserve for these factors accordingly; (d) Procedures to ensure that Using the estimation higher of credit losses considers the relevant qualitative historical net loss analysis and environmental factors, with particular focus on the following: (i) Trends in the Bank’s internal risk ratings, delinquent and nonaccrual loansroll-rate analysis estimates when assessing Allowance adequacy; (iie) Adjustments to the ALLL methodology and balance are directionally consistent with credit riskUsing other judgmental factors when determining Allowance adequacy; (iiif) Methods to incorporate more recent loss history when calculating historical loss rates; (iv) Increasing Periodically validating the range adequacy of qualitative factor adjustments to allow proper adjustment for current specific 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 used in the Bank; (ix) Present and prospective economic conditionsdetermining Allowance adequacy; and (xg) Applicable experience Performing a complete analysis of certain high risk accounts specified in the Bank’s lending staffReport 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 Call Reports for the Allowance. Any deficiency in the Allowance shall be remedied in the quarter it is discovered, prior to the filing of the Call Report, 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 thirty sixty (3060) days of the date of this Agreementdays, 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 (“AllowanceALLL”) in accordance with Generally Accepted Accounting Principlesgenerally accepted accounting principles. The Allowance 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), ) and the with “Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank and Savings InstitutionsLosses,” dated July 20, 2001 (OCC Bulletin 2001booklet A-37)ALLL of the Comptroller’s Handbook, 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, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies. The following must be included in the procedures: (i) All FASB Statement of Financial Accounting Standards No. 5 qualitative factors discussed in OCC Bulletin 2006-47; (cii) Procedures A process to track and calculate the historical loss for independent validation each homogenous Statement of the Allowance methodologyFinancial Accounting Standards No. 5 pool of loans; (d) Procedures a process to ensure adjust historical losses based on significant factors that affect the estimation collectability of credit losses considers loans in the relevant qualitative and environmental factors, with particular focus on the following:portfolio. (ie) Trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) Adjustments to procedures for validating 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 conditionsmethodology; and (xf) 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 Reports”) for the AllowanceALLL. (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 policies and procedures 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. (4) The policies and procedures developed pursuant to this Article shall provide for a review of the Allowance by the Board at least once each calendar quarter. Any deficiency in the Allowance shall be remedied in the quarter it is discovered, prior to the filing of the Call ReportConsolidated 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 thirty (30) days The Board shall review the adequacy of the date of this Agreement, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Bank's Allowance for Loan and Lease Losses (“Allowance”) in accordance with Generally Accepted Accounting Principlesand shall establish a program for the maintenance of an adequate Allowance. The Allowance 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 13, 2006 (OCC Bulletin 2006-47), and booklet of the “Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank and Savings Institutions” dated July 20, 2001 (OCC Bulletin 2001-37)Comptroller’s Handbook, 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 internal loan portfolio and estimating loss on groups of loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingenciesreview; (c) Procedures for independent validation of the 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 results of the Bank’s 's independent loan review; (viiid) Concentrations criteria for determining which loans will be reviewed under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 310 Receivables (Pre-codification reference: Statement of credit in Financial Accounting Standards ("FAS") Statement No. 114), how impairment will be determined, and procedures to ensure that the Bank; (ix) Present and prospective economic conditionsanalysis of loans complies with ASC 310 requirements; and (xe) Applicable experience criteria for determining loan pools under ASC 310 (Pre-codification reference: FAS Statement No. 5) and an analysis of the Bank’s lending staffthose loan pools. (2) The program shall provide for a process for summarizing and documenting, for an independent review of the Board’s review and approval, Allowance by the amount to be reported in the Call Reports for the AllowanceBoard at least once each calendar quarter. Any deficiency in the Allowance shall be remedied in the quarter it is discovered, prior to the filing of the Call ReportConsolidated 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 thirty sixty (3060) days of the date of this Agreementdays, 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 (“AllowanceALLL”) in accordance with Generally Accepted Accounting PrinciplesU.S. generally accepted accounting principles (“GAAP”). The Allowance 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), and the ) (“Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank and Savings Institutions” dated July 20, 2001 (OCC Bulletin 2001-37), Interagency Statement”) and shall at a minimum include: (a) Procedures 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) Procedures policies and procedures for segmenting the loan portfolio and estimating loss on groups of loans, 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;qualitative adjustments using the nine qualitative factors set forth in the Interagency Statement; and (c) Procedures procedures for independent validation of the 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 validating 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 staffmethodology. (2) The program shall provide for 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 Call Reports for Bank accurately reflect an adequate ALLL balance as of the Allowancedate that such reports are submitted. Any deficiency in difference between the Allowance ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance shall be remedied through appropriate account adjustments in the quarter it is discovered, prior to the filing of the Call ReportReports. (3) Upon revision, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy shall submit a copy of the AllowanceALLL 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 thirty (30) days The Board shall continue to review the adequacy of the date of this Agreement, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Bank's Allowance for Loan and Lease Losses (“Allowance”) in accordance with Generally Accepted Accounting Principlesand shall continue to ensure a program for the maintenance of an adequate Allowance. The Allowance policies review and procedures program shall continue to be consistent designed in conjunction with 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), and the “Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank and Savings Institutions” dated July 20, 2001 (OCC Bulletin 2001-37)37 – for Banks and Savings Institutions, and shall at a minimum include:Statement of Financial Accounting Standards (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 an estimate of inherent loss exposure on groups of loans, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencieseach significant credit; (c) Procedures for independent validation of the Allowance methodologyloan loss experience; (d) Procedures to ensure that the estimation trends of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) Trends in the Bank’s internal risk ratingscriticized, delinquent and nonaccrual loans; (iie) 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 concentrations of credit in the Bank; (ixf) Present present and prospective economic conditions; (g) all other qualitative factors detailed in the “Allowance for Loan and Lease Losses” booklet of the Comptroller’s Handbook; and (xh) Applicable experience of the Bank’s lending staffdocumentation to support Allowance assumptions and decisions. (2) The program shall continue to 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 Call Reports for the AllowanceBoard at least once each calendar quarter. Any deficiency in the Allowance shall continue to be remedied in the quarter it is discovered, prior to the filing of the Call ReportConsolidated Reports of Condition and Income, by additional provisions from earnings. If the deficiency applies to prior periods, than management must restate the Consolidated Reports of Condition and Income immediately. Written documentation shall continue to 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 thirty sixty (3060) days of the date of this Agreementdays, 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 (“AllowanceALLL”) in accordance with Generally Accepted Accounting Principlesgenerally accepted accounting principles. The Allowance 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), ) and the “Policy Statement on with "Allowance for Loan and Lease Losses Methodologies and Documentation for Bank and Savings Institutions” dated July 20, 2001 (OCC Bulletin 2001Losses," booklet A-37)ALLL of the Comptroller's Handbook, 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, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies. The following must be included in the procedures: (i) All FASB Statement of Financial Accounting Standards No. 5 qualitative factors discussed in OCC Bulletin 2006-47; (ii) A process to track and calculate the historical loss for each homogenous Statement of Financial Accounting Standards No. 5 pool of loans; (c) Procedures for independent validation a process to adjust historical losses based on significant factors that affect the collectability of loans in the Allowance methodology;portfolio. (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 procedures for validating 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 conditionsmethodology; and (xe) 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 Reports”) for the AllowanceALLL. (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 policies and procedures 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. (4) The policies and procedures developed pursuant to this Article shall provide for a review of the Allowance by the Board at least once each calendar quarter. Any deficiency in the Allowance shall be remedied in the quarter it is discovered, prior to the filing of the Call ReportConsolidated 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 thirty sixty (3060) days 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 (“Allowance”) in accordance with Generally Accepted Accounting PrinciplesPrinciples (“GAAP”). The 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 (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 (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, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies; (c) Procedures procedures for independent validation of validating the Allowance methodology;; and (d) Procedures procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) Trends trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) Adjustments to results of the ALLL methodology and balance are directionally consistent with credit riskBank’s external loan review; (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 concentrations of credit in the Bank; (ixiv) Present present and prospective economic conditions; and (xv) Applicable 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 Call Reports for the Allowance. Any deficiency in the Allowance shall be remedied in the quarter it is discovered, prior to the filing of the Call Report, 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 thirty sixty (3060) days of the date of this Agreementdays, 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 (“AllowanceALLL”) in accordance with Generally Accepted Accounting PrinciplesU.S. generally accepted accounting principles (“GAAP”). The Allowance 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), and the ) (“Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank and Savings Institutions” dated July 20, 2001 (OCC Bulletin 2001-37), Interagency Statement”) and shall at a minimum include: (a) Procedures 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) Procedures policies and procedures for segmenting the loan portfolio and estimating loss on groups of loans, 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;qualitative adjustments using the nine qualitative factors set forth in the Interagency Statement: and (c) Procedures procedures for independent validation of the 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 validating 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 staffmethodology. (2) The program shall provide for 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 Call Reports for Bank accurately reflect an adequate ALLL balance as of the Allowancedate that such reports are submitted. Any deficiency in difference between the Allowance ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance shall be remedied through appropriate account adjustments in the quarter it is discovered, prior to the filing of the Call ReportReports. (3) Upon revision, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy shall submit a copy of the AllowanceALLL 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 thirty forty-five (3045) days of the date of this Agreementdays, 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 (“AllowanceALLL”) in accordance with Generally Accepted Accounting PrinciplesGAAP. The Allowance 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 December 13, 2006 (OCC Bulletin 2006-47)47 (December 13, and 2006) (“Interagency Statement”) or any subsequent guidance which supersedes or supplements this guidance in the “Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank and Savings Institutions” dated July 20, 2001 (OCC Bulletin 2001-37), future and shall at a minimum includeminimum: (a) Procedures 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) Procedures Include procedures for segmenting the loan portfolio and estimating loss on groups of loans, 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 Contingenciescredit losses and its analysis of the nine qualitative factors set forth in the Interagency Statement; (c) Procedures Include procedures for annual independent validation of the Allowance ALLL methodology; (d) Procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the followingwhich shall include: (i) Trends testing the accuracy of source documents and assumptions being used in developing the Bank’s internal risk ratings, delinquent and nonaccrual loans;ALLL; and (ii) Adjustments any changes or adjustments to the ALLL methodology must be well documented 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 conditionssupported; and (xd) Applicable experience of the Bank’s lending staff.Ensures that management develops historical loss rates for each homogenous loan pool and then adjusts those rates based on qualitative factors for current conditions; (2e) The program shall provide for 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 Reports Report”) for the AllowanceALLL. (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 in difference between the Allowance ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance shall be remedied through appropriate account adjustments in the quarter it is discovered, prior to the filing of the Call ReportReports. (3) Upon adoption, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy shall submit a copy of the Allowancepolicies 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 thirty (30) days of the date of this AgreementBy 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 (“Allowance”) in accordance with Generally Accepted Accounting Principlesallowance). The Allowance 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 (OCC Bulletin 2006-47)) for guidance. The policies and procedures shall, and the “Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank and Savings Institutions” dated July 20, 2001 (OCC Bulletin 2001-37), and shall at a minimum includeminimum, incorporate the following: (a) Procedures 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, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies310-10; (c) Procedures a process for independent validation determining when it is appropriate to use present market value of expected future cash flows, fair value of collateral, or the Allowance methodologyobservable market price method for determining impairment amount; (d) Procedures a process for impaired loan testing, including a review of all loans currently identified as impaired to ensure that determine if these loans meet the estimation definition 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 loansan impaired loan; (iie) Adjustments to the ALLL methodology a process for identifying troubled debt restructuring loans in accordance with ASC 310-40 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 assigning appropriate risk ratings 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 conditionsallowance purposes; and (xf) Applicable experience of the Bank’s lending stafffor 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 program policies and procedures shall provide for a process for summarizing and documenting, for 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 Call Reports for the Allowance. Any Bank remedies any deficiency in the Allowance shall be remedied allowance in the quarter it is discovered, prior to the filing of the Call Report, discovered by additional provisions from earnings. Written The Board shall maintain written documentation shall be maintained indicating the factors it considered and conclusions it reached by the Board in determining the adequacy of the Allowanceallowance. (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 thirty (30) days The Board shall review the adequacy of the date of this Agreement, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Association's Allowance for Loan and Lease Losses (“Allowance”) in accordance with Generally Accepted Accounting Principlesand shall establish a program for the maintenance of an adequate Allowance. The Allowance 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 13, 2006 Council (OCC Bulletin 2006-47), and the “FFIEC) Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank Banks and Savings Institutions” dated Institutions (July 206, 2001 2001), and the Interagency Policy Statement on the Allowance for Loan and Lease Losses (OCC Bulletin 2001-37December 2006), 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, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingenciesreview; (c) Procedures for independent validation an estimate of the Allowance methodologyinherent loss exposure on each significant credit; (d) Procedures to ensure that the estimation an estimate of inherent loss exposure on each credit losses considers the relevant qualitative in excess of five hundred and environmental factors, with particular focus on the following:thousand dollars ($500,000); (ie) Trends in the Bank’s internal risk ratings, loan loss experience; (f) trends of delinquent and nonaccrual loans; (iig) 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 concentrations of credit in the BankAssociation; (ixh) Present enhanced segmentation of 1-4 family residential junior lien loans and lines of credit, and appropriate ALLL calculations in accordance with OCC Bulletin 2012-6 (Interagency Guidance on ALLL Estimation Practices for Junior Liens); (i) present and prospective economic conditions; and (xj) Applicable experience appropriate treatment of classified loans pursuant to the Bank’s lending staffInteragency 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 process for summarizing and documenting, for review of the Board’s review and approval, Allowance by the amount to be reported in the Call Reports for the AllowanceBoard at least once each calendar quarter. Any deficiency in the Allowance shall be remedied in the quarter it is discovered, prior to the filing of the Call ReportThrift 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 thirty (30) days 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 (“Allowance”) in accordance with Generally Accepted Accounting Principles. The 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 (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 (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, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies; (c) Procedures for independent validation of the Allowance methodology; (d) Procedures designed 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 Call Reports for the Allowance. Any deficiency in the Allowance shall be remedied in the quarter it is discovered, prior to the filing of the Call Report, 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 The Board shall 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 Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining maintenance of an adequate Allowance for Loan and Lease Losses (“Allowance”) ALLL in accordance with Generally Accepted Accounting Principlesgenerally accepted accounting principles. The Allowance 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), and the “Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank and Savings Institutions” dated July 20, 2001 (OCC Bulletin 2001-37), 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 loansproblem, consistent with FASB Statement of Financial Accounting Standards No. 5delinquent, Accounting for Contingencies; (c) Procedures for independent validation of the 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; (iic) 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 concentrations of credit in the Bank; (ixd) Present 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 (xj) Applicable experience of procedures for validating the Bank’s lending staffALLL methodology. (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 in the Call Reports for the AllowanceBoard at least once each calendar quarter. Any deficiency in the Allowance ALLL shall be remedied in the quarter it is discovered, prior to the filing of the Call ReportConsolidated 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 AllowanceALLL. 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 thirty sixty (3060) days of the date 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 (“Allowance”) in accordance with Generally Accepted Accounting PrinciplesPrinciples (“GAAP”). The 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 (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 (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, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies; (c) Procedures procedures for independent validation of validating the Allowance methodology;; and (d) Procedures procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) Trends trends in the Bank’s internal risk ratings, and delinquent and nonaccrual loans; (ii) Adjustments to results of the ALLL methodology and balance are directionally consistent with credit riskBank’s external loan review; (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 concentrations of credit in the Bank; (ixiv) Present present and prospective economic conditions; and (xv) Applicable 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 Call Reports for the Allowance. Any deficiency in the Allowance shall be remedied in the quarter it is discovered, prior to the filing of the Call Report, 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 thirty forty-five (3045) days of the date of this Agreementdays, 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 (“AllowanceALLL”) in accordance with Generally Accepted Accounting PrinciplesGAAP. The Allowance 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 December 13, 2006 (OCC Bulletin 2006-47)47 (December 13, and 2006) (“Interagency Statement”) or any subsequent guidance which supersedes or supplements this guidance in the “Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank and Savings Institutions” dated July 20, 2001 (OCC Bulletin 2001-37), future and shall at a minimum includeminimum: (a) Procedures 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) Procedures Include procedures for segmenting the loan portfolio and estimating loss on groups of loans, 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 Contingenciescredit losses and its analysis of the nine qualitative factors set forth in the Interagency Statement; (c) Procedures Include procedures for annual independent validation of the Allowance ALLL methodology; (d) Procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the followingwhich shall include: (i) Trends testing the accuracy of source documents and assumptions being used in developing the Bank’s internal risk ratings, delinquent and nonaccrual loans;ALLL; and (ii) Adjustments any changes or adjustments to the ALLL methodology must be well documented 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 conditionssupported; and (xd) Applicable experience of the Bank’s lending staff.Ensures that management develops historical loss rates for each homogenous loan pool and then adjusts those rates based on qualitative factors for current conditions; (2e) The program shall provide for 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 Reports Report”) for the AllowanceALLL. (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 in difference between the Allowance ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance shall be remedied through appropriate account adjustments in the quarter it is discovered, prior to the filing of the Call ReportReports. (3) Upon adoption, by additional provisions from earnings. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy shall submit a copy of the Allowancepolicies 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 thirty ninety (3090) days of the date 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 (“Allowance”) in accordance with Generally Accepted Accounting PrinciplesGAAP. The 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, 2006 (OCC Bulletin 2006-47OTS CEO Memorandum No. 250); (b) OTS’ Examination Handbook, Section 261, “Adequacy of Valuation Allowances;” (c) OTS CEO Memorandum No. 329 (Accounting for Credit Losses and Impairments), and the “Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank and Savings Institutions” dated July 20December 9, 2001 2009; (OCC Bulletin 2001d) OTS CEO Memorandum No. 304 (ALLL-37Observed Thrift Practices Including Sound Practices), dated May 22, 2009; or (e) any applicable successor regulation and guidance as specified by the Comptroller. (2) The Allowance policies and procedures required under paragraph (1) of this Article shall include, at a minimum includeminimum: (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, consistent with Accounting Standards Codification 310-10 and 450-20 (formerly known as FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies); (c) Procedures procedures for independent validation of validating the Allowance methodology;; and (d) Procedures procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) Trends trends in the Bank’s internal risk ratings, delinquent and nonaccrual loans; (ii) Adjustments to results of the ALLL methodology and balance are directionally consistent with credit riskBank’s external loan review; (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 concentrations of credit in the Bank; (ixiv) Present present and prospective economic conditions; and (xv) Applicable 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 Call Reports for the Allowance. Any deficiency in the Allowance shall be remedied in the quarter it is discovered, prior to the filing of the Call Report, 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 thirty (30) days of the date of this AgreementEffective 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 (“Allowance”) in accordance with Generally Accepted Accounting PrinciplesGAAP. The 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 (OCC Bulletin 2006-2006- 47), and the “Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank and Savings Institutions” dated July 20, 2001 (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, 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 (c) Procedures for independent validation of the Allowance methodology; (d) Procedures procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) Trends trends in the Bank’s internal risk ratings, and delinquent and nonaccrual loans; (ii) Adjustments to the ALLL methodology and balance are directionally consistent with credit riskBank’s historical accuracy of internal risk ratings; (iii) Methods to incorporate more recent loss history when calculating historical loss ratesresults of the Bank’s external loan review; (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 concentrations of credit in the Bank; (ixv) Present present and prospective economic conditions; and (xvi) Applicable 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 Call Reports for the Allowance. Any deficiency in the Allowance shall be remedied in the quarter it is discovered, prior to the filing of the Call Report, 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 thirty sixty (3060) days of the date of this Agreement, the Board shall adopt, implement, submit to the ADC for review and thereafter ensure adherence to prior written policies and procedures determination of no supervisory objection a revised written program for maintaining and reporting an adequate Allowance for Loan and Lease Losses (“AllowanceALLL Program”) in accordance with Generally Accepted Accounting Principlesgenerally accepted accounting principles (“GAAP”) and the instructions for reporting the ALLL on Consolidated Reports of Condition and Income (“Call Reports”). The Allowance policies and procedures shall be consistent with Refer to 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), and the “Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank Banks and Savings InstitutionsAssociation” dated July 202, 2001 (OCC Bulletin 2001-37), and shall the “Allowance for Loan and Lease Losses” booklet of the Comptroller’s Handbook for guidance. The ALLL Program shall, at a minimum includeminimum, include criteria and procedures for: (a) Procedures for determining whether a loan is identifying and documenting impaired loans, including all Troubled Debt Restructurings, and measuring the amount of impairment, impairment consistent with FASB Statement of Financial GAAP, including Accounting Standards No. 114Codification (“ASC”) 000-00-00, Accounting by Creditors for Impairment of a Loanat least quarterly; (b) Procedures for segmenting the remaining unimpaired loan portfolio and estimating documenting the estimated loss on groups of loans, loans consistent with FASB Statement of Financial Accounting Standards No. 5GAAP, Accounting for Contingenciesincluding ASC 450-20, at least quarterly; (c) Procedures for independent validation of the Allowance methodology; (d) Procedures to ensure that supporting the estimation of credit losses considers the relevant and adjustments with documentation and analysis of historical loss rates and all significant qualitative and environmental factorsfactors that affect the collectability of the Bank’s loan and lease portfolio, with particular focus on including the following:; (i) Trends trends in the Bank’s internal risk ratings, ratings and 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 concentrations of credit in the Bank; (ixiii) Present present and prospective perspective economic conditionscondition; and (xiv) Applicable experience of the Bank’s lending staff.; (2d) The program independently validating the Bank’s ALLL methodology of a periodic basis and reporting the conclusions of the Board, which shall provide for address identified deficiencies through revisions of the ALLL Program in a process for summarizing manner consistent with this Article; (e) a designation of individuals responsible and documenting, for methodology used to determine the ALLL; (f) documenting the Board’s review and approvaldetermination, at least quarterly, of the adequacy of the Bank’s ALLL amount to be reported in the Bank’s Call Reports for Report, including the Allowancefactors considered and rational supporting the Board’s conclusion; (2) Within thirty (30) days following receipt of the ADC’s written determination of no supervisory objection to the ALLL Program, or to any subsequent amendment to the ALLL Program, the Board shall adopt and Bank management, subject to Board review and ongoing monitoring, shall immediately implement and thereafter ensure adherence to the ALLL Program. The Board shall review the effectiveness of the ALLL Program at least annually, and more frequently if necessary or if required by the OCC in writing, and amend the ALLL Program as needed or directed by the OCC. Any deficiency amendment to the ALLL Program must be submitted to the ADC for review and prior written determination of no supervisory objection. (3) If at any time the Bank’s actual ALLL balance is determined to be inadequate in comparison to the Allowance ALLL balance calculated pursuant to this Article, the Board shall be remedied remedy the inadequacy through additional provisions from earnings in the quarter it the inadequacy is discovered, prior to the filing of the Bank’s Call Report, 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 thirty sixty (3060) days of the date of this Agreementdays, the Board shall adoptrevise, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“AllowanceALLL”) in accordance with Generally Accepted Accounting Principles. The Allowance 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), and the “Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank and Savings Institutions” dated July 20shall include, 2001 (OCC Bulletin 2001-37), and shall at a minimum includebut not be limited to: (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, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies; (c) Procedures procedures for independent validation of validating the Allowance ALLL methodology; (d) Procedures procedures to ensure that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) Trends trends in the Bank’s internal risk ratings, delinquent delinquent, and nonaccrual loans; (ii) Adjustments results of the Bank’s external loan review conducted pursuant to the ALLL methodology and balance are directionally consistent with credit riskArticle VII of this Agreement; (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 concentrations of credit in the Bank; (ixiv) Present 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 (xvi) Applicable 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 Call Reports for the AllowanceALLL. Any deficiency in the Allowance ALLL shall be remedied in the quarter it is discovered, prior to the filing of the Call Report, 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 AllowanceALLL.

Allowance for Loan and Lease Losses. (1) Within thirty ninety (3090) days of the date of this Agreement, 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 (“AllowanceALLL”) in accordance with Generally Accepted the Federal Accounting PrinciplesStandards Advisory Board’s (“FASB”) generally accepted accounting principles (“GAAP”). The Allowance 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), . The ALLL policies and the “Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank and Savings Institutions” dated July 20, 2001 (OCC Bulletin 2001-37), and procedures shall at a minimum includeinclude the following: (a) Procedures criteria and procedures for determining whether a loan is impaired and measuring the amount of impairment, consistent with FASB Statement of Financial Accounting Standards No. 114Codification (“ASC”) 310-10, Accounting by Creditors for Impairment of a LoanReceivables - Overall - Subsequent Measurement – Impairment; (b) Procedures criteria and procedures for segmenting the loan portfolio and estimating loss on groups of loans, loans that are consistent with 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 Contingenciescredit losses and its analysis of the nine qualitative factors set forth in OCC Bulletin 2006-47; (c) Procedures for independent validation of validating the Allowance ALLL methodology; (d) Procedures to ensure ensuring that the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) Trends trends in the Bank’s internal risk ratings, ratings as well as in delinquent and nonaccrual loans; (ii) Adjustments to results of the ALLL methodology and balance are directionally consistent with credit riskBank’s external loan review; (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 concentrations of credit in the Bank; (ixiv) Present present and prospective economic conditions; and (xv) Applicable applicable experience of the Bank’s lending staff.; (2e) providing all staff preparing the ALLL receive training; (f) reviewing on at least a quarterly basis, to determine the adequacy of the ALLL. The program Board shall provide for a process for 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 Bank’s Call Reports Report for the AllowanceALLL. (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 in difference between the Allowance ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance shall be remedied through appropriate account adjustments in the quarter it is discovered, prior to the filing of the Bank’s Call Report, by additional provisions from earningsReports. Written documentation shall be maintained indicating the factors considered and conclusions reached by the Board in determining the adequacy of the AllowanceALLL. (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 Bank’s revised policies and procedures for maintaining an adequate ALLL.

Allowance for Loan and Lease Losses. (1) Within thirty forty-five (3045) days of the date of this Agreementdays, the Board shall adopt, implement, and thereafter ensure adherence to written policies and procedures for maintaining an adequate Allowance for Loan and Lease Losses (“AllowanceALLL”) in accordance with Generally Accepted Accounting PrinciplesU.S. generally accepted accounting principles (“GAAP”). The Allowance 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 the ) (“Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank and Savings Institutions” dated July 20, 2001 (OCC Bulletin 2001-37), Interagency Statement”) and shall at a minimum include: (a) Procedures 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 procedures for segmenting the loan portfolio and estimating loss on groups of loans, loans that are consistent with GAAP (including FASB Statement of Financial Accounting Standards No. 5ASC 450-20, Accounting for Loss Contingencies); (c) Procedures for independent validation documentation of its estimation of credit losses and its analysis of the Allowance methodologynine qualitative factors set forth in the Interagency Statement; (d) Procedures to ensure utilization of historical loss calculations that are reflective of the estimation of credit losses considers the relevant qualitative and environmental factors, with particular focus on the following: (i) Trends current risk in the Bank’s internal risk ratingsportfolio, delinquent and nonaccrual loansincluding year to date losses; (iie) Adjustments to procedures for validating 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 conditionsmethodology; and (xf) Applicable experience of the Bank’s lending staff. (2) The program shall provide for 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 Reports”) for the AllowanceALLL. (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 in difference between the Allowance ALLL balance as determined by the analysis required by this Article and the Bank’s actual ALLL balance shall be remedied through appropriate account adjustments in the quarter it is discovered, prior to the filing of the Call Reports or amendment and refilling of a previously filed Call Report, 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 thirty sixty (3060) days 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 (“Allowance”) in accordance with Generally Accepted Accounting Principles. The 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 (OCC Bulletin 2006-47), and the “Policy Statement on Allowance for Loan and Lease Losses Methodologies and Documentation for Bank Banks and Savings Institutions” dated July 20, 2001 (OCC Bulletin 2001-37), 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 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, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies; (c) Procedures for independent validation of the 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 external loan review; (viiiiii) Concentrations of credit in the Bank; (ix) Present , present and prospective economic conditions; and (xiv) 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 Reports”) for the Allowance. Any deficiency in the Allowance shall be remedied in the quarter it is discovered, prior to the filing of the Call Report, 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 thirty sixty (3060) days 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 (“Allowance”) in accordance with Generally Accepted Accounting PrinciplesPrinciples (“GAAP”). The 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 (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 (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, 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 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 risk graded special mention and substandard, consistent with FASB Statement of Financial Accounting Standards No. 5, Accounting for Contingencies; (cd) Procedures procedures for independent validation of determining the reserve for unfunded commitments; (e) procedures for validating the Allowance methodology;; and (df) Procedures 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 trends in the Bank’s internal risk ratings, and delinquent and nonaccrual loans; (ii) Adjustments to results of the ALLL methodology and balance are directionally consistent with credit riskBank’s external loan review; (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 concentrations of credit in the Bank; (ixiv) Present present and prospective economic conditions; and (xv) Applicable 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 Call Reports for the Allowance. Any deficiency in the Allowance shall be remedied in the quarter it is discovered, prior to the filing of the Call Report, 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.