Common use of CONCENTRATIONS OF CREDIT Clause in Contracts

CONCENTRATIONS OF CREDIT. (1) Within sixty (60) days, the Board shall adopt, implement, and thereafter ensure Association adherence to a written asset diversification program consistent with guidance set forth in OCC Bulletin 2006-46 (Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices) and the “Concentrations of Credit” booklet of the Comptrollers’ Handbook (December 13, 2011). The program shall include, but not necessarily be limited to, the following: (a) a review of the balance sheet to identify any concentrations of credit; (b) a written analysis of any concentration of credit identified above in order to identify and assess the inherent credit, liquidity, and interest rate risk; (c) policies and procedures to control and monitor concentrations of credit, including policies and procedures to control and monitor concentrations of credit including comprehensive and reasonable loan concentration limits expressed as a percentage of total risk-based capital for all commercial real estate (CRE) loans in the aggregate and for each primary and identifiable sub-category of CRE loans (i.e., construction, multi-family, hotel, land, nonresidential, and nonmortgage commercial loans), such as such as the Association’s non-owner occupied residential/investor loan portfolio; (d) specific review procedures and reporting requirements, including written reports to the Board, to identify, monitor, and control the risks associated with concentrations of credit and periodic market analysis for the various property types and geographic markets represented in the portfolio; and (e) a written action plan, including specific time frames, to reduce the risk of any concentration deemed imprudent in the analysis conducted pursuant to paragraph (1)(b) of this Article and to bring the Association into compliance with its concentration of credit limits established pursuant to paragraph (1)(c) of this Article. (2) For purposes of this Article, a concentration of credit is as defined in the “Loan Portfolio Management” booklet of the Comptroller's Handbook. (3) The Board shall ensure that future concentrations of credit are subjected to the analysis required by subparagraph (1)(b) and that the analysis demonstrate that the concentration will not subject the Association to undue credit or interest rate risk. (4) The Board shall forward a copy of any analysis performed on existing or potential concentrations of credit to the Assistant Deputy Comptroller immediately following the review. (5) 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.

CONCENTRATIONS OF CREDIT. (1) Within sixty (60) daysdays of the date of this agreement, the Board shall adopt, implement, and thereafter ensure Association Bank adherence to a written asset diversification program consistent with guidance set forth in OCC Bulletin 2006-46 (Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices) and the “Concentrations of CreditCredit (Section 216)” booklet of the Comptrollers’ Handbook (December 13, 2011)Comptroller’s Handbook. The program shall include, but not necessarily be limited to, the following: (a) an action plan for the reduction of the Bank’s concentration in commercial real estate (CRE) that includes, at a minimum: (i) a reduction strategy that includes CRE concentration limits stratified by type, locality and other meaningful measures supported by written analysis; (ii) monthly monitoring of concentration reports that stratify the CRE portfolio by product type, locality and other meaningful measures; (iii) strategies and procedures to manage and reduce CRE concentrations to conform with established limits set in Subparagraph (a)(i) of this Article; and (iv) target dates for the reduction of the Bank’s CRE concentration to levels below the limits established in subparagraph (a)(i) of this Article. (b) a review of the balance sheet to identify any additional concentrations of credit; (bc) a written analysis of any additional concentration of credit identified above in subparagraph (b) in order to identify and assess the inherent credit, liquidity, and interest rate risk; (cd) the establishment of safe and sound formal risk limits for all existing and future concentrations of credit based upon a percentage of the Bank’s capital; (e) policies and procedures to control and monitor concentrations of credit, including policies and procedures to control and monitor concentrations of credit including comprehensive and reasonable loan concentration limits expressed as a percentage of total risk-based capital for all commercial real estate (CRE) loans in the aggregate and for each primary and identifiable sub-category of CRE loans (i.e., construction, multi-family, hotel, land, nonresidential, and nonmortgage commercial loans), such as such as the Association’s non-owner occupied residential/investor loan portfolio; (d) specific review procedures and reporting requirements, including written reports to the Board, to identify, monitor, and control the risks associated with concentrations of credit and periodic market analysis for the various property types and geographic markets represented in the portfolio; and (ef) a written an action plan, including specific time frames, plan approved by the Board to reduce the risk of any concentration deemed imprudent in the analysis conducted pursuant to paragraph (1)(b) of this Article and to bring the Association into compliance with its concentration of credit limits established pursuant to paragraph (1)(c) of this Articleabove analysis. (2) For purposes of this Article, a concentration of credit is as defined in the “Loan Portfolio Management” booklet of the Comptroller's Handbook. (3) The Board shall ensure that future concentrations of credit are subjected to the analysis required by subparagraph (1)(b) this Article and that the analysis demonstrate demonstrates that the concentration will not subject the Association Bank to undue credit or interest rate risk. (4) The Board shall forward a copy of any analysis performed on existing or potential concentrations of credit to the Assistant Deputy Comptroller immediately following the review. (5) 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.

CONCENTRATIONS OF CREDIT. (1) Within sixty (60) daysdays of the date of this Agreement, the Board shall adopt, implement, and thereafter ensure Association adherence to adopt a written asset diversification concentration risk management program consistent with guidance set forth in OCC Bulletin 2006-46 (Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices) and “Concentration Program”). Refer to the “Concentrations of Credit” booklet of the Comptrollers’ Comptroller’s Handbook (December 13, 2011)for guidance. The program shall include, but not necessarily be limited to, the following: (a) a review of the balance sheet to identify any concentrations of credit; (b) a written analysis of any concentration of credit identified above in order to identify and assess the inherent credit, liquidity, and interest rate risk; (c) policies and procedures to control and monitor concentrations of credit, including policies and procedures to control and monitor concentrations of credit including comprehensive and reasonable loan concentration limits expressed as a percentage of total risk-based capital for all commercial real estate (CRE) loans in the aggregate and for each primary and identifiable sub-category of CRE loans (i.e., construction, multi-family, hotel, land, nonresidential, and nonmortgage commercial loans), such as such as the Association’s non-owner occupied residential/investor loan portfolio; (d) specific review procedures and reporting requirements, including written reports to the Board, to identify, monitor, and control the risks associated with concentrations of credit and periodic market analysis for the various property types and geographic markets represented in the portfolio; and (e) a written action plan, including specific time frames, to reduce the risk of any concentration deemed imprudent in the analysis conducted pursuant to paragraph (1)(b) of this Article and to bring the Association into compliance with its concentration of credit limits established pursuant to paragraph (1)(c) of this Article. (2) For purposes of this Article, a concentration of credit is as defined in the “Loan Portfolio ManagementConcentrations of Credit” booklet of the Comptroller's ’s Handbook. (32) The Board Concentration Program shall ensure that future include, at a minimum: (a) identification of the Bank’s known and potential concentrations of credit are subjected including, but not limited to, commercial real estate, commercial and industrial, and construction and development concentrations; (b) a written analysis of all concentrations of credit that identifies and assesses inherent credit, liquidity, and interest rate risks and considers the impact of concentration levels on overall growth plans, financial targets, portfolio stress tests, and capital plan objectives; (c) the establishment of safe and sound, formal limits and sub-limits for all concentrations of credit based on a percentage of Tier 1 capital plus the allowance for loan and lease losses, stratified by loan type, locality of the borrower and/or collateral, and other meaningful measures; (d) development and implementation of action plans, approved by the Board, to reduce concentrations to conform to the established limits set in paragraph (2)(c) of this Article, including strategies and procedures when concentrations approach or exceed Board-approved limits; (e) management information systems that ensure timely and accurate reporting of concentrations to the Board, including concentration reports that stratify the loan portfolio by type, locality, and other meaningful measures, and procedures for monitoring concentration reports quarterly based upon total committed amounts relative to Board-approved limits; (f) portfolio-level stress tests to quantify the impact of changes to portfolio- specific characteristics and market conditions on earnings and capital, consistent with the size, complexity, and risk profile of the portfolio; (g) annual re-evaluation and approval of concentration limits by the Board, and a Board policy that requires detailed analysis required by subparagraph (1)(b) and that written support of any proposed changes demonstrating the analysis demonstrate that the concentration will not subject the Association to undue credit or interest rate risk.risk that will result from the change; and (4h) The Board shall forward a copy detailed contingency plan to reduce concentration risk in the event of any analysis performed on existing or potential concentrations of credit to the Assistant Deputy Comptroller immediately following the reviewadverse market conditions, including reasonable action plans. (5) 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.

CONCENTRATIONS OF CREDIT. (1) Within sixty (60) days, the Board shall adopt, implement, and thereafter ensure Association adherence to a written asset diversification program consistent with the guidance set forth in OCC Bulletin 2006-46 (Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices) OTS CEO Memo 2521F2 and the “Concentrations of Credit” booklet of the Comptrollers’ Handbook (December 13, 2011). The program shall include, but not necessarily be limited to, the following:: 2 CEO Memo 252, issued December 14, 2006 provides guidance on “Commercial Real Estate Concentration Risks”. (a) a review of the balance sheet to identify any concentrations of credit; (b) a written analysis of any concentration of credit identified above in order to identify and assess the inherent credit, liquidity, and interest rate risk; (c) policies and procedures to control and monitor concentrations of credit, including policies and procedures to control and monitor concentrations of credit including including: (i) comprehensive and reasonable loan concentration limits expressed as a percentage of total risk-based capital for all commercial real estate (CRE) loans in the aggregate and for each primary and identifiable sub-category of CRE loans (i.e., construction, multi-family, hotel, land, nonresidential, and nonmortgage commercial loans), such as such as the Association’s non-owner occupied residential/investor loan portfolio; (d) specific review procedures and reporting requirements, including written reports to the Board, to identify, monitor, and control the risks associated with concentrations of credit and periodic market analysis for the various property types and geographic markets represented in the portfolio; and (e) a written action plan, including specific time frames, to reduce the risk of any concentration deemed imprudent in the analysis conducted pursuant to paragraph (1)(b) of this Article and to bring the Association into compliance with its concentration of credit limits established pursuant to paragraph (1)(c) of this Article. (2) For purposes of this Article, a concentration of credit is as defined in the “Loan Portfolio Management” booklet of the Comptroller's HandbookCEO Memo 252. (3) The Board shall ensure that future concentrations of credit are subjected to the analysis required by subparagraph (1)(b) of this Article and that the analysis demonstrate demonstrates that the concentration will not subject the Association to undue credit or interest rate risk. (4) The Board shall forward a copy of any analysis performed on existing or potential concentrations of credit to the Assistant Deputy Comptroller immediately following the review. (5) The Board shall ensure that the Association has adequate processes, personnel, personnel and control systems to ensure implementation of and adherence to the program developed pursuant to this Article.

CONCENTRATIONS OF CREDIT. (1) Within sixty (60) days, the Board shall adopt, implement, and thereafter ensure Association Bank adherence to a written asset diversification concentration management program consistent with guidance set forth in OCC Bulletin 2006-46 (46: Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices) and the “Concentrations of Credit” booklet of the Comptrollers’ Handbook (December 13, 2011). The program shall include, but not necessarily be limited to, the following: (a) a review of the balance sheet to identify any concentrations of credit; (b) a written analysis of any concentration of credit identified above in order to identify and assess the inherent credit, liquidity, and interest rate risk; (c) policies and procedures to control and monitor concentrations of credit, including policies and procedures to control and monitor concentrations of credit including comprehensive and reasonable loan concentration limits expressed as a percentage of total risk-based capital for all commercial real estate (CRE) loans in the aggregate and for each primary and identifiable sub-category of CRE loans (i.e., construction, multi-family, hotel, land, nonresidential, and nonmortgage commercial loans), such as such as the Association’s non-owner occupied residential/investor loan portfolio; (d) specific review procedures to track and reporting requirementsanalyze concentrations of credit, including written reports to the Board, to identify, monitorsignificant economic factors, and control general conditions and their impact on the risks associated with concentrations credit quality of credit the Bank's loan and lease portfolios; (e) periodic portfolio-level stress tests or sensitivity analysis to quantify the impact on changing economic conditions on asset quality, earnings, and capital; (f) ongoing market analysis for the various property types and geographic markets represented in the loan portfolio; and (eg) a written an action plan, including specific time frames, plan approved by the Board to reduce the risk of any concentration deemed imprudent in the analysis conducted pursuant to paragraph (1)(b) of this Article and to bring the Association into compliance with its concentration of credit limits established pursuant to paragraph (1)(c) of this Articleabove analysis. (2) For purposes of this Article, a concentration of credit is as defined in the “"Loan Portfolio Management” " booklet of the Comptroller's Handbook. (3) The Board shall ensure that future concentrations of credit are subjected to the analysis required by paragraph (1), subparagraph (1)(bb) of this Article, and that the analysis demonstrate demonstrates that the concentration will not subject the Association Bank to undue credit credit, liquidity, or interest rate risk. (4) The Board shall develop and implement a written strategy designed to ensure that the Bank's high level of commercial real estate concentrations are reduced to manageable levels. (5) The Board shall forward a copy of any analysis performed on existing or potential concentrations of credit to the Assistant Deputy Comptroller immediately following the review. (56) The Board shall ensure that the Association Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program developed pursuant to this Article.

CONCENTRATIONS OF CREDIT. (1) Within sixty (60) days, the Board shall adopt, implement, and thereafter ensure Association Bank adherence to a written asset diversification program consistent with guidance set forth in OCC Bulletin 2006-46 (Concentrations in Commercial Real Estate CRE Lending, Sound Risk Management Practices) : Interagency Guidance on CRE Concentration Risk Management, and the “Concentrations of Credit” booklet of the Comptrollers’ Handbook (December 13, 2011)OCC Bulletin 2009-32 CRE Loans: guidance on Prudent CRE Loan Workout. The program shall include, but not necessarily be limited to, the following: (a) a review of the balance sheet to identify any concentrations of credit; (b) a written analysis of any concentration of credit identified above in order to identify and assess the inherent credit, liquidity, and interest rate risk; (c) policies and procedures to control and monitor concentrations of credit, including policies and procedures to control and monitor including, but not limited to, establishing prudent concentrations of credit including comprehensive limits for commercial real estate and reasonable loan concentration other exposures, as well as sub-limits expressed by property type, industry, geographic areas, etc., as a percentage of total risk-based capital loans and as a percentage of Tier One Capital plus the Allowance for all commercial real estate (CRE) loans in the aggregate Loan and for each primary Lease Losses. The Board approved limits and identifiable sub-category of CRE loans limits shall be based on the written analysis required in subparagraph (i.e., construction, multi-family, hotel, land, nonresidential, and nonmortgage commercial loansb), such as such as the Association’s non-owner occupied residential/investor loan portfolioand; (d) specific review procedures and reporting requirements, including written reports to an action plan approved by the Board, to identify, monitor, and control the risks associated with concentrations of credit and periodic market analysis for the various property types and geographic markets represented in the portfolio; and (e) a written action plan, including specific time frames, Board to reduce the risk of any concentration deemed imprudent in the analysis conducted pursuant to paragraph (1)(b) of this Article and to bring the Association into compliance with its concentration of credit limits established pursuant to paragraph (1)(c) of this Articleabove analysis. (2) For purposes of this Article, a concentration of credit is as defined in the “Loan Portfolio Management” booklet of the Comptroller's Handbook. (3) The Board shall ensure that future concentrations of credit are subjected to the analysis required by subparagraph (1)(bb) and that the analysis demonstrate demonstrates that the concentration will not subject the Association Bank to undue credit or interest rate risk. (4) The Board shall forward a copy of any an analysis performed on existing or potential concentrations of credit to the Assistant Deputy Comptroller immediately following the review. (5) 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.

CONCENTRATIONS OF CREDIT. (1) The Bank shall take immediate and ongoing action to significantly reduce its concentrations of credit risk in the following asset classes: (a) commercial real estate (CRE) lending; and (b) construction and development lending. (2) Within sixty (60) daysdays of the date of this Agreement, the Board shall adopt, implement, adopt and thereafter ensure Association adherence that the Bank implements and adheres to a written asset diversification program consistent with guidance set forth in OCC Bulletin 2006-46 (Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices) and the “Concentrations of Credit” booklet of the Comptrollers’ Handbook (December 13, 2011)program. The program shall include, but not necessarily be limited to, the following: (a) A detailed description of the actions it is taking to comply with Paragraph (1) of this Article; (b) a review of the balance sheet to identify any other concentrations of creditcredit risk not identified in Paragraph (1) of this article, which shall include a review of the lending operations conducted by the Bank’s operating subsidiaries; (bc) a written analysis of any concentration of credit risk identified above in order to identify and assess the inherent credit, liquidity, and interest rate risk;. (cd) policies and procedures to control and monitor concentrations of creditcredit risk, that include, at a minimum: (i) a concentrations management system(s) that aggregates exposures across the consolidated bank, including policies and procedures to control and monitor concentrations of credit including comprehensive and reasonable loan concentration limits expressed as a percentage of total risk-based capital for all commercial real estate (CRE) loans in the aggregate and for each primary and identifiable sub-category of CRE loans (i.e., construction, multi-family, hotel, land, nonresidential, and nonmortgage commercial loans), such as such as the Association’s non-owner occupied residential/investor loan portfoliooperating subsidiaries; (dii) specific review procedures concentration limits and reporting requirements, including written reports to actionable thresholds by capital and the Board, to identify, monitor, and control the risks associated with concentrations of credit and periodic market analysis for the various property types and geographic markets represented in the total portfolio; and (iii) the establishment of limits for direct and indirect exposures to industries. (e) a written an action plan, including specific time frames, plan approved by the Board to reduce the risk of any concentration deemed imprudent in the above analysis. This analysis conducted pursuant must include consideration of the Bank’s need to paragraph (1)(b) reduce reliance on brokered deposits as required by Article XII of this Article and to bring the Association into compliance with its concentration of credit limits established pursuant to paragraph (1)(c) of this ArticleAgreement. (23) For purposes of this Article, a concentration of credit risk is as defined in the “Loan Portfolio Management” booklet of the Comptroller's Handbook. (34) The Board shall ensure that future concentrations of credit risk are subjected to the analysis required by subparagraph (1)(bb) and that the analysis demonstrate that the concentration will not subject the Association Bank to undue credit credit, liquidity, or interest rate risk. (45) The Board shall forward a copy of any analysis performed on existing or potential concentrations of credit risk to the Assistant Deputy Comptroller immediately following the review. (5) 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.

CONCENTRATIONS OF CREDIT. (1) Within sixty (60) days, the Board shall adopt, implement, and thereafter ensure Association Bank adherence to a written asset diversification program consistent with guidance set forth in OCC Bulletin 2006-46 (Concentrations in Commercial Real Estate CRE Lending, Sound Risk Management Practices) : Interagency Guidance on CRE Concentration Risk Management, and the “Concentrations of Credit” booklet of the Comptrollers’ Handbook (December 13, 2011)OCC Bulletin 2009-32 CRE Loans: guidance on Prudent CRE Loan Workout. The program shall include, but not necessarily be limited to, the following: (a) a review of the balance sheet to identify any concentrations of credit; (b) a written analysis of any concentration of credit identified above in order to identify and assess the inherent credit, liquidity, and interest rate risk; (c) policies and procedures to control and monitor concentrations of credit, including policies and procedures to control and monitor including, but not limited to, establishing prudent concentrations of credit including comprehensive limits for commercial real estate and reasonable loan concentration other exposures, as well as sub-limits expressed by property type, industry, geographic areas, etc., as a percentage of total risk-based capital loans and as a percentage of Tier One Capital plus the Allowance for all commercial real estate (CRE) loans in the aggregate Loan and for each primary Lease Losses. The Board approved limits and identifiable sub-category of CRE loans limits shall be based on the written analysis required in subparagraph (i.e., construction, multi-family, hotel, land, nonresidential, and nonmortgage commercial loansb), such as such as the Association’s non-owner occupied residential/investor loan portfolioand; (d) specific review procedures and reporting requirements, including written reports to an action plan approved by the Board, to identify, monitor, and control the risks associated with concentrations of credit and periodic market analysis for the various property types and geographic markets represented in the portfolio; and (e) a written action plan, including specific time frames, Board to reduce the risk of any concentration deemed imprudent in the analysis conducted pursuant to paragraph (1)(b) of this Article and to bring the Association into compliance with its concentration of credit limits established pursuant to paragraph (1)(c) of this Articleabove analysis. (2) For purposes of this Article, a concentration of credit is as defined in the “Loan Portfolio Management” booklet of the Comptroller's ’s Handbook. (3) The Board shall ensure that future concentrations of credit are subjected to the analysis required by subparagraph (1)(bb) and that the analysis demonstrate demonstrates that the concentration will not subject the Association Bank to undue credit or interest rate risk. (4) The Board shall forward a copy of any an analysis performed on existing or potential concentrations of credit to the Assistant Deputy Comptroller immediately following the review. (5) 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.

CONCENTRATIONS OF CREDIT. (1) Within sixty ninety (6090) days, the Board shall adopt, implement, and thereafter ensure Association Bank adherence to a written asset diversification program consistent with guidance set forth in OCC Bulletin 2006-46 (“Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices) ,” and the “Concentrations of Credit” booklet of the Comptrollers’ Handbook (December 13, 2011)OCC Banking Circular 255. The program shall include, but not necessarily be limited to, the following: (a) a review of the balance sheet to identify any concentrations of credit; (b) a written analysis of any concentration of credit identified above in order to identify and assess the inherent credit, liquidity, and interest rate risk; (c) policies and procedures to control and monitor concentrations of credit, including policies and procedures to control and monitor concentrations of credit including comprehensive and reasonable loan concentration limits expressed as a percentage of total risk-based capital for all commercial real estate (CRE) loans in the aggregate and for each primary and identifiable sub-category of CRE loans (i.e., construction, multi-family, hotel, land, nonresidential, and nonmortgage commercial loans), such as such as the Association’s non-owner occupied residential/investor loan portfolio; (d) specific review procedures and reporting requirements, including written reports to the Board, to identify, monitor, and control the risks associated with identification of industry concentrations of credit and periodic market analysis for the various property types and geographic markets represented in the portfolio; andusing a minimum second level NAIC code; (e) a written action planthe formation of commercial real estate exposure limits addressing non- owner occupied properties, owner-occupied properties, property type and geographic location; (f) maintenance of systems and reports which identify and analyze real estate portfolio concentrations, including specific time framescommitments, by type, collateral, and location; (g) maintenance of a system to calculate each concentration as a percentage of capital; (h) development of a system to identify, monitor and limit the amount of real estate loans that exceed supervisory loan-to-value limits as set forth in Appendix A to Subpart D of 12 C.F.R Part 34 “Interagency Guidelines for Real Estate Lending,” and (i) an action plan approved by the Board to reduce the risk of any concentration deemed imprudent in the analysis conducted pursuant to paragraph (1)(b) of this Article and to bring the Association into compliance with its concentration of credit limits established pursuant to paragraph (1)(c) of this Article.above analysis.. (2) For purposes of this Article, a concentration of credit is as defined in the “Loan Portfolio Management” booklet of the Comptroller's Handbook. (3) The Board shall ensure that future concentrations of credit are subjected to the analysis required by subparagraph (1)(bb) and that the analysis demonstrate that the concentration will not subject the Association Bank to undue credit or interest rate risk. (4) The Board shall forward a copy of any analysis performed on existing or potential concentrations of credit to the Assistant Deputy Comptroller immediately following the review. (5) The Board shall ensure that the Association Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program developed pursuant to this Article.

CONCENTRATIONS OF CREDIT. 1F (1) Within sixty (60) days, the Board shall adopt, implement, and thereafter ensure Association adherence to a written asset diversification program consistent with the guidance set forth in OCC Bulletin 2006-46 (Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices) OTS CEO Memo 2522 and the “Concentrations of Credit” booklet of the Comptrollers’ Handbook (December 13, 2011). The program shall include, but not necessarily be limited to, the following: (a) a review of the balance sheet to identify any concentrations of credit; (b) a written analysis of any concentration of credit identified above in order to identify and assess the inherent credit, liquidity, and interest rate risk; (c) policies and procedures to control and monitor concentrations of credit, including policies and procedures to control and monitor concentrations of credit including including: (i) comprehensive and reasonable loan concentration limits expressed as a percentage of total risk-based capital for all commercial real estate (CRE) loans in the aggregate and for each primary and identifiable sub-category of CRE loans (i.e., construction, multi-family, hotel, land, nonresidential, and nonmortgage commercial loans), such as such as the Association’s non-owner occupied residential/investor loan portfolio; (d) specific review procedures and reporting requirements, including written reports to the Board, to identify, monitor, and control the risks associated with concentrations of credit and periodic market analysis for the various property types and geographic markets represented in the portfolio; and and (e) a written action plan, including specific time frames, to reduce the risk of any concentration deemed imprudent in the analysis conducted pursuant to paragraph (1)(b) of this Article and to bring the Association into compliance with its concentration of credit limits established pursuant to paragraph (1)(c) of this Article. (2) For purposes of this Article, a concentration of credit is as defined in the “Loan Portfolio Management” booklet of the Comptroller's HandbookCEO Memo 252. (3) The Board shall ensure that future concentrations of credit are subjected to the analysis required by subparagraph (1)(b) of this Article and that the analysis demonstrate demonstrates that the concentration will not subject the Association to undue credit or interest rate risk. (4) The Board shall forward a copy of any analysis performed on existing or potential concentrations of credit to the Assistant Deputy Comptroller immediately following the review. (5) The Board shall ensure that the Association has adequate processes, personnel, personnel and control systems to ensure implementation of and adherence to the program developed pursuant to this Article.

CONCENTRATIONS OF CREDIT. (1) Within sixty ninety (6090) days, the Board shall adopt, implement, and thereafter ensure Association Bank adherence to a written asset diversification program consistent with guidance set forth in the “Loan Portfolio Management” booklet of the Comptroller's Handbook. The program shall be consistent with OCC Bulletin 2006-46 (46, Interagency Guidance on Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices) , and the “Concentrations of Credit” booklet of the Comptrollers’ Handbook (December 13, 2011). The program shall include, but not necessarily be limited to, the following:, (a) a review of the balance sheet to identify any an ongoing process for identifying concentrations of credit; (b) a written analysis of any concentration the Bank’s concentrations of credit identified above in order to identify credit, which identifies and assess assesses the inherent credit, liquidity, and interest rate riskrisks; (c) policies and procedures to control and monitor concentrations of credit, including policies and procedures to control and monitor concentrations of credit including comprehensive and reasonable loan concentration limits expressed as a percentage of total risk-based capital for all commercial real estate (CRE) loans in an action plan approved by the aggregate and for each primary and identifiable sub-category of CRE loans (i.e., construction, multi-family, hotel, land, nonresidential, and nonmortgage commercial loans), such as such as the Association’s non-owner occupied residential/investor loan portfolio; (d) specific review procedures and reporting requirements, including written reports to the Board, to identify, monitor, and control the risks associated with concentrations of credit and periodic market analysis for the various property types and geographic markets represented in the portfolio; and (e) a written action plan, including specific time frames, Board to reduce the risk of any concentration deemed imprudent in the analysis conducted pursuant above analysis; (d) the establishment of Board-approved concentration limits relative to paragraph capital; (1)(be) of this Article and a process for reporting all concentrations to bring the Association into compliance with its concentration Board on a periodic basis; (f) procedures requiring notification to the Board when the Bank’s concentrations of credit limits established pursuant exceed Board-approved limits; (g) procedures for periodic portfolio-level stress tests or sensitivity analyses of the Bank’s concentrations to paragraph quantify the impact of changing economic conditions on asset quality, earnings, and capital; and (1)(ch) contingency plans to reduce or mitigate concentrations in the event of this Articleadverse market conditions. (2) For purposes of this Article, a concentration of credit is as defined in the “Loan Portfolio Management” booklet of the Comptroller's Handbook. (3) Upon completion, the Board shall forward a copy of the program to the Assistant Deputy Comptroller for a written determination of no supervisory objection. (4) The Board shall ensure that future all concentrations of credit are subjected to the analysis required by subparagraph paragraph (1)(b1) and of this Article at least annually, and, if that the analysis demonstrate demonstrates that the concentration will not subject subjects the Association Bank to undue credit or interest rate risk, the Board shall take appropriate steps to mitigate such risk. (4) The Board shall forward a copy of any analysis performed on existing or potential concentrations of credit to the Assistant Deputy Comptroller immediately following the review. (5) 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.

CONCENTRATIONS OF CREDIT. (1) Within sixty (60) daysBy March 31, 2021, the Board shall adopt, implement, and thereafter ensure Association adherence to a written asset diversification concentration management program. The written concentration management program shall be consistent with guidance set forth in OCC Bulletin 2006-46 (Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices) safe and sound banking practices. Refer to the “Concentrations Concentration of Credit” booklet of the Comptrollers’ Handbook Comptroller Handbook, “Commercial Real Estate Concentrations” (December 13OCC Bulletin 2006-45), 2011)and “Capital and Dividends” (OCC Bulletin 2018-20) for guidance. The program shall include, but not necessarily be limited to, the following: (a) a review identification of the balance sheet to identify any Bank’s known and potential concentrations of creditcredit focusing on the Bank’s concentration in non-owner occupied commercial real estate (“CRE”); (b) a written analysis of any the risk that the Bank’s known concentration of non- owner occupied CRE and any potential concentrations of credit identified above in order pose to identify and assess the inherent creditBank’s earnings, liquiditycapital, and interest rate riskoperating strategy under stressed market conditions, economic downturns, and periods of general market illiquidity as well as normal market condition; (c) policies and procedures to control and monitor concentrations review of credit, including policies and procedures to control and monitor concentrations of credit including comprehensive and reasonable loan existing concentration limits expressed as a percentage of total risk-based capital for all commercial real estate (CRE) loans in the aggregate and for each primary and identifiable sub-category of CRE loans (i.e., construction, multi-family, hotel, land, nonresidential, and nonmortgage commercial loans), such as such as the Association’s on non-owner occupied residential/investor loan portfolioCRE and any other concentrations to determine whether the limits are reasonable and reflect the Board’s risk tolerance, and if necessary, revision of the existing limits relative to capital based on the analysis performed under paragraph (1)(b) of this Article; (d) specific review procedures market analyses of the portfolio’s primary geographic and reporting requirements, including written reports out-of-market geographic concentrations to determine whether the Board, to identify, monitor, ’s lending strategy and control the risks associated with concentrations of credit and periodic market analysis for the various property types and geographic markets represented in the portfolio; andpolicies remain appropriate; (e) a written action planconcentration reporting to segment geographic concentrations of risk, out- of-market analysis and reporting by type of project; (f) Board-approved limits commensurate with the Bank’s strategic goals and objectives and risk profile, updated at least annually to reflect the results of portfolio stress testing, for all significant business lines, including specific time framesbut not limited to the CRE portfolio; (g) development and implementation of action plans, approved by the Board, to reduce the risk of any concentration deemed imprudent that approaches or exceeds the limitations established in paragraph (1)(b) of this Article; (h) portfolio-level stress tests to quantify the impact of changes to portfolio- specific characteristics and market conditions on earnings and capital; and (i) quarterly stress tests of the Bank’s concentration limits to support and/or adjust concentration limits based on changes in economic trends and the Bank’s condition. (2) The Board shall ensure the future concentrations are subjected to the analysis conducted pursuant to required by paragraph (1)(b) of this Article and to bring the Association into compliance with its concentration of credit limits established pursuant to paragraph (1)(c) of this Article. (2) For purposes of this Article, a concentration of credit is as defined in the “Loan Portfolio Management” booklet of the Comptroller's Handbookthat concentrations will not exceed Board- approved limits. (3) The Board shall ensure that future concentrations forward copies of credit are subjected any analysis performed pursuant to the analysis required by subparagraph subparagraphs (1)(bc), (f) and that the analysis demonstrate that the concentration will not subject the Association to undue credit or interest rate risk. (4g) of paragraph (1) of this Article on a quarterly basis. The Board shall forward a copy copies of any analysis performed on existing or potential concentrations of credit to the Assistant Deputy Comptroller immediately following the review. (5) 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 subparagraph (b) of paragraph (1) of this ArticleArticle on an annual basis.