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 Bank adherence to a written asset diversification program consistent with OCC Banking Circular 255 and OCC Bulletin 2006-46, “Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices.” (2) 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; (d) an action plan approved by the Board to reduce the risk of any concentration deemed imprudent in the above analysis; (e) a process to monitor the performance of large CRE projects against projected absorption rates; (f) a process to ensure portfolio level stress tests or sensitivity analysis is performed to quantify the impact of changing economic conditions on asset quality, earnings, and capital; (g) a process to establish, monitor and adjust CRE risk exposure limits and appropriate sub-limits; (h) a process to establish, monitor, and adjust insider risk exposure limits; and (i) establishment of Board reports that: (i) aggregate insider borrowings and show the amount supported by cash collateral (as appropriately excluded in concurrence with regulations) for each insider; and (ii) track individual aggregate insider exposure for compliance with Regulation O and the Legal Lending Limit. (3) For purposes of this Article, a concentration of credit is as defined in the “Loan Portfolio Management” booklet of the Comptroller’s Handbook. (4) The Board shall ensure that future concentrations of credit are subjected to the analysis required by subparagraph (b) of paragraph (2) of this Article and that the analysis demonstrates that the concentration will not subject the Bank to undue credit or interest rate risk. (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. (6) 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.

CONCENTRATIONS OF CREDIT. (1) Within sixty (60) days, the Board shall adopt, implement, and thereafter ensure Bank adherence to a written asset diversification program consistent with OCC Banking Circular 255 the guidance set forth in OTS CEO Memo 2521 and OCC Bulletin 2006-46, the “Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices.” (2) The program shall include, but not necessarily be limited to, of Credit” booklet of the Comptroller’s following: (a) a review of the balance sheet to identify any concentrations of creditcredit that exceed twenty-five percent (25%) of Tier 1 Capital plus the Allowance for Loan and Lease Loss; (b) a detailed 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;; and (d) an action plan approved by the Board to reduce the risk of any concentration deemed imprudent in the above analysis; (e) a process to monitor the performance of large CRE projects against projected absorption rates; (f) a process to ensure portfolio level stress tests or sensitivity analysis is performed to quantify the impact of changing economic conditions on asset quality, earnings, and capital; (g) a process to establish, monitor and adjust CRE risk exposure limits and appropriate sub-limits; (h) a process to establish, monitor, and adjust insider risk exposure limits; and (i) establishment of Board reports that: (i) aggregate insider borrowings and show the amount supported by cash collateral (as appropriately excluded in concurrence with regulations) for each insider; and (ii) track individual aggregate insider exposure for compliance with Regulation O and the Legal Lending Limit. (32) For purposes of this Article, a concentration of credit is as defined in the “Loan Portfolio ManagementConcentrations of Credit” booklet of the Comptroller’s HandbookHandbook (December 2011). 1 CEO Memo 252, issued December 14, 2006 provides guidance on “Commercial Real Estate Concentration Risks”. (43) The Board shall ensure that future concentrations of credit are subjected to the analysis required by subparagraph (b1)(b) of paragraph (2) of this Article and that the analysis demonstrates that the concentration will not subject the Bank to undue credit or interest rate risk. (54) 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. (65) 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.

CONCENTRATIONS OF CREDIT. (1) Within sixty (60) days, the Board shall adopt, implement, and thereafter ensure Bank adherence to a written asset diversification program consistent with OCC Banking Circular 255 and OCC Bulletin 2006-46, “Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices.” (2) 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; (d) an action plan approved by the Board to reduce the risk of any concentration deemed imprudent in the above analysis; (e) a process to monitor the performance of large CRE projects against projected absorption rates; (f) a process to ensure portfolio level stress tests or sensitivity analysis is performed to quantify the impact of changing economic conditions on asset quality, earnings, and capital; (g) a process to establish, monitor and adjust CRE risk exposure limits and appropriate sub-limits; (h) a process to establish, monitor, and adjust insider risk exposure limits; and (i) establishment of Board reports that: (i) aggregate insider borrowings and show the amount supported by cash collateral (as appropriately excluded in concurrence with regulations) for each insider; and (ii) track individual aggregate insider exposure for compliance with Regulation O and the Legal Lending Limit. (3) For purposes of this Article, a concentration of credit is as defined in the “Loan Portfolio Management” booklet of the Comptroller’s 's Handbook. (4) The Board shall ensure that future concentrations of credit are subjected to the analysis required by subparagraph (b) of paragraph (2) of this Article and that the analysis demonstrates that the concentration will not subject the Bank to undue credit or interest rate risk. (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. (6) 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.

CONCENTRATIONS OF CREDIT. (1) Within sixty ninety (6090) days, the Board shall adoptreview and revise, implementas necessary, and thereafter ensure Bank adherence to a its written asset diversification program consistent with OCC Banking Circular 255 the guidance set forth in OTS CEO Memo 252 and OCC Bulletin 2006-46, the “Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices.” of Credit” booklet of the Comptroller’s Handbook (2) December 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 riskrisks; (c) policies and procedures to control and monitor limitations on concentrations of creditcommensurate with the risk analysis in subparagraph (b); (d) an action plan plans approved by the Board to reduce the risk of any concentration deemed imprudent in the above analysis;analysis or falling outside the limitations established in subparagraph (c); and (e) on a process quarterly or more frequent basis, reports to monitor the performance Board of large CRE projects against projected absorption rates;Directors for monitoring concentrations and tracking compliance with concentration limits. (f) a process to ensure portfolio level stress tests or sensitivity analysis is performed to quantify the impact of changing economic conditions on asset quality, earnings, and capital; (g) a process to establish, monitor and adjust CRE risk exposure limits and appropriate sub-limits; (h) a process to establish, monitor, and adjust insider risk exposure limits; and (i) establishment of Board reports that: (i) aggregate insider borrowings and show the amount supported by cash collateral (as appropriately excluded in concurrence with regulations) for each insider; and (ii) track individual aggregate insider exposure for compliance with Regulation O and the Legal Lending Limit. (3) For purposes of this Article, a concentration of credit is as defined in the “Loan Portfolio ManagementConcentrations of Credit” booklet of the Comptroller’s HandbookHandbook (December 2011). (42) The Board shall ensure that future concentrations of credit are subjected to the analysis required by subparagraph (bsubparagraph(1)(b) of paragraph (2) of this Article and that the analysis demonstrates that the concentration will not subject the Bank to undue credit or interest rate risk. (53) 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. (6) 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.