Common use of CREDIT UNDERWRITING AND ADMINISTRATION Clause in Contracts

CREDIT UNDERWRITING AND ADMINISTRATION. (1) Within ninety (90) days of the date of this Agreement, the Bank shall revise and submit to the ADC for review and prior written determination of no supervisory objection an acceptable written credit underwriting and administration program (“Credit Underwriting and Administration Program”) designed to ensure the Bank obtains and analyzes credit and collateral information sufficient to identify, monitor, and report the Bank’s credit risk, properly account for loans, and assign accurate risk ratings in a timely manner. The Credit Underwriting and Administration Program shall be consistent with safe and sound banking practices. (2) The Credit Underwriting and Administration Program shall, at a minimum, include: (a) a process to hold loan officers accountable for the timely collection of financial statements and ensure that the statements are reviewed upon receipt to provide adequate monitoring of borrowers; (b) procedures for Bank management to ensure annual reviews are completed timely, accurately, and consistently with sufficient narrative concerning financial analysis and collateral analysis, and to ensure management reports the status of annual reviews to the Board; (c) procedures to ensure credit administration, lending, and loan processing staff receive and demonstrate proficiency in job-specific training that includes, but is not limited to, credit analysis and loan file documentation requirements per Bank policy; (d) procedures to ensure loan presentations and credit analyses contain sufficient financial and collateral analysis; (e) procedures to ensure policies are adhered to with any exceptions noted, mitigated, tracked, and reported to the Board; (f) procedures to ensure loan presentations include all sources of repayment, borrower and guarantor financial trends, current economic conditions and trends, competitive pressures, and industry outlooks; (g) procedures to ensure adequate processes to identify and report all policy, underwriting, collateral, and financial exceptions to the Board; (h) procedures to identify breaches of covenants by borrowers and document waivers to exceptions and/or steps taken to enforce compliance; (i) policies that address acceptable loan types, terms, covenants, concentration limits, and collateral requirements and exceptions; (j) a description of the types of credit information required from borrowers and guarantors prior to making a loan determination, including, annual audited statements, interim financial statements, personal financial statements, and tax returns with supporting schedules; (k) procedures that require any extensions of credit are granted, by renewal or otherwise, only after obtaining the required credit information and adequately analyzing and documenting the borrower’s and guarantor’s cash flow, debt service requirements, contingent liabilities, global liquidity condition, and sensitivity analysis in support of the credit decision; (l) procedures to identify and track all exceptions and efforts to mitigate or cure exceptions, including but not limited to financial exceptions, collateral exceptions, policy exceptions, and underwriting exceptions. The number of loans with exceptions, and their aggregate dollar value, shall be reported to the Board on a quarterly basis. The Board shall establish aggregate exception level limits. The Bank shall consider each loan officer’s exceptions in conducting periodic performance reviews and compensation decisions; (m) established criteria to limit the number and/or frequency of, and procedures to identify, track, and approve covenant waivers in accordance with the applicable loan agreements. The number of loans with covenant waivers, and their aggregate dollar value, shall be reported to the Board on a monthly basis; (n) established criteria to limit the number or frequency of, and procedures to identify, track, and approve extensions, renewals, or rewrites of existing extensions of credit. The number of loans that have been extended, renewed, or rewritten, and their aggregate dollar value, shall be reported to the Board on a monthly basis and documented in the Board minutes; (o) policies regarding the appropriateness of the capitalization of interest, which shall be prohibited unless doing so is conducted in a safe and sound manner. Refer to OCC Examining Circular 229 – Guidelines for Capitalization of Interest on Loans, and OCC Bank Accounting Advisory Series for related safe and sound principles; (p) procedures for the identification of, and accounting treatment for, nonaccrual loans that are consistent with the accounting requirements contained in the appropriate FFIEC’s Instructions for Preparation of Consolidated Reports of Condition and Income; (q) specific assignment of responsibility and accountability over the credit administration process to ensure the Credit Underwriting and Administration Program developed pursuant to this Article is effectively implemented; (r) the Bank must review the experience level of credit administration, lending, and loan processing staff, on an annual basis, to ensure employees have the requisite knowledge to perform their duties, and must implement a plan to hire additional staff and/or provide periodic training where staffing or knowledge gaps exist; (s) risk-based reviews of commercial lending relationships to support or revise current risk ratings on at least an annual basis; and (t) an independent loan review process reporting directly to the Board. (3) Effective as of the date of this Agreement, the Bank may not grant, extend, renew, alter, or restructure any loan or other extension of credit without: (a) documenting the specific reason or purpose for the extension of credit; (b) identifying the expected source of repayment in writing; (c) structuring the repayment terms to coincide with the expected source of repayment; (d) obtaining current and satisfactory credit information, including performing and documenting analysis of credit information and a detailed cash flow analysis of all expected repayment sources; (e) determining and documenting whether the loan complies with the Bank's loan policy and if it does not comply, providing identification of the exception and ample justification to support waiving the policy exception; (f) determining and documenting the customer's ability to repay the credit on the proposed repayment terms; (g) providing an accurate risk assessment grade and proper accrual status for each credit; (h) documenting, with adequate supporting material, the value of collateral; and properly perfecting the Bank's lien on it where applicable; and (i) obtaining the written approval of the Bank's loan committee or Board for any extension of credit greater than $250,000. (4) Within on hundred and twenty (120) days of the date of this Agreement, the Board shall ensure that management takes the necessary steps to ensure that all commercial credit relationships equaling two hundred fifty thousand ($250,000) or above are reviewed and accurately risk rated. (5) Within thirty (30) days following receipt of the ADC’s written determination of no supervisory objection to the revised Credit Underwriting and Administration Program or to any subsequent amendment to the Credit Underwriting and Administration Program, the Board shall adopt and Bank management, subject to Board review and ongoing monitoring, shall immediately implement and thereafter ensure adherence to the Credit Underwriting and Administration Program. The Board shall review the effectiveness of the Credit Underwriting and Administration Program at least annually, and more frequently if necessary or if required by the OCC in writing, and amend the Credit Underwriting and Administration Program as needed or directed by the OCC. Any amendment to the Credit Underwriting and Administration Program must be submitted to the ADC for review and prior written determination of no supervisory objection.

CREDIT UNDERWRITING AND ADMINISTRATION. (1) Within ninety (90) days of the date of this Agreementdays, the Board shall develop, implement, and thereafter ensure Bank shall revise and submit adherence to a written program to improve the ADC for review and prior written determination of no supervisory objection an acceptable written Bank’s commercial credit underwriting and administration program (“Credit Underwriting and Administration Program”) designed to ensure the Bank obtains and analyzes credit and collateral information sufficient to identify, monitor, and report the Bank’s credit risk, properly account for loans, and assign accurate risk ratings in a timely mannerprocess. The Credit Underwriting and Administration Program program shall be consistent with safe and sound banking practices. (2) The Credit Underwriting and Administration Program shallinclude, at a minimum, include: (a) a process to hold loan officers accountable guidelines for prudent terms, principle amortization, and maturities consistent with the timely collection anticipated source of financial statements repayment, the purpose of the loan, and ensure that the statements are reviewed upon receipt to provide adequate monitoring useful life of borrowersthe collateral; (b) procedures for Bank management guidelines to ensure annual reviews are completed timelythe avoidance of conflicts of interest and the appearance of conflicts of interest applicable to the Bank’s and the Bank’s holding company’s directors, accuratelyprincipal shareholders, executive officers, affiliates, and consistently with sufficient narrative concerning financial analysis employees (Insiders) and collateral analysis, and to ensure management reports the status related interests of annual reviews to the BoardInsiders; (c) procedures standards for the maximum ratio of loan value to ensure credit administration, lending, and loan processing staff receive and demonstrate proficiency in job-specific training that includes, but is not limited to, credit analysis and loan file documentation requirements per Bank policyappraised value or acquisition costs of collateral securing the loan; (d) procedures to ensure loan presentations a provision that current and satisfactory credit analyses contain sufficient financial and collateral analysisinformation will be obtained on each borrower before the extension of any credit; (e) procedures a provision that the Bank will use its reasonable best efforts to ensure policies are adhered to obtain current and satisfactory credit information in connection with the annual review of any exceptions noted, mitigated, tracked, and reported to the Boardexisting loan; (f) procedures to ensure loan presentations include all sources guidelines for the proper placement of repaymentloans on non-accrual status in accordance with the Instructions for Consolidated Reports of Condition and Income (Call Report Instructions) and Rating Credit Risk Booklet, borrower and guarantor financial trendsA-RCR, current economic conditions and trends, competitive pressures, and industry outlooksof the Comptroller’s Handbook; (g) procedures to ensure adequate processes to identify guidelines for completion of appraisals and report all policy, underwriting, collateral, and financial exceptions to the Boardreal estate evaluations consistent with 12 CFR 34.43(b); (h) procedures guidelines to identify breaches of covenants by borrowers and document waivers limit advances to exceptions and/or steps taken to enforce compliance; (i) policies that address acceptable loan types, terms, covenants, concentration limits, and collateral requirements and exceptions; (j) a description of the types of credit information required from borrowers and guarantors prior to making a loan determination, including, annual audited statements, interim financial statements, personal financial statements, and tax returns with supporting schedules; (k) procedures that require any extensions of credit are granted, by renewal or otherwise, only after obtaining the required credit information and adequately analyzing and documenting the borrower’s and guarantor’s cash flow, debt service requirements, contingent liabilities, global liquidity condition, and sensitivity analysis in support of the credit decision; (l) procedures to identify and track all exceptions and efforts to mitigate or cure exceptionsfund interest payments, including but not limited to financial exceptions, collateral exceptions, policy exceptions, and underwriting exceptions. The number of loans with exceptions, and their aggregate dollar value, shall be reported to the Board on a quarterly basis. The Board shall establish aggregate exception level limits. The Bank shall consider each loan officer’s exceptions in conducting periodic performance reviews and compensation decisions; (m) established criteria to limit the number and/or frequency of, and procedures to identify, track, and approve covenant waivers in accordance with the applicable loan agreements. The number of loans with covenant waivers, and their aggregate dollar value, shall be reported to the Board on a monthly basis; (n) established criteria to limit the number or frequency of, and procedures to identify, track, and approve extensions, renewals, or rewrites of existing extensions of credit. The number of loans that have been extended, renewed, or rewritten, and their aggregate dollar value, shall be reported to the Board on a monthly basis and documented in the Board minutes; (o) policies regarding the appropriateness of the capitalization of interest, which shall be prohibited unless doing so is conducted in a safe interest and sound manner. Refer to OCC Examining Circular 229 – Guidelines for Capitalization use of Interest on Loans, and OCC Bank Accounting Advisory Series for related safe and sound principles; (p) procedures for the identification of, and accounting treatment for, nonaccrual loans that are consistent with the accounting requirements contained in the appropriate FFIEC’s Instructions for Preparation of Consolidated Reports of Condition and Income; (q) specific assignment of responsibility and accountability over the credit administration process to ensure the Credit Underwriting and Administration Program developed pursuant to this Article is effectively implemented; (r) the Bank must review the experience level of credit administration, lending, and loan processing staff, on an annual basis, to ensure employees have the requisite knowledge to perform their duties, and must implement a plan to hire additional staff and/or provide periodic training where staffing or knowledge gaps exist; (s) risk-based reviews of commercial lending relationships to support or revise current risk ratings on at least an annual basis; and (t) an independent loan review process reporting directly to the Board. (3) Effective as of the date of this Agreement, the Bank may not grant, extend, renew, alter, or restructure any loan or other extension of credit without: (a) documenting the specific reason or purpose for the extension of credit; (b) identifying the expected source of repayment in writing; (c) structuring the repayment terms to coincide with the expected source of repayment; (d) obtaining current and satisfactory credit information, including performing and documenting analysis of credit information and a detailed cash flow analysis of all expected repayment sources; (e) determining and documenting whether the loan complies with the Bank's loan policy and if it does not comply, providing identification of the exception and ample justification to support waiving the policy exception; (f) determining and documenting the customer's ability to repay the credit on the proposed repayment terms; (g) providing an accurate risk assessment grade and proper accrual status for each credit; (h) documenting, with adequate supporting material, the value of collateral; and properly perfecting the Bank's lien on it where applicableinterest reserves; and (i) obtaining procedures for approving, tracking, and reporting exceptions to the written approval loan policy to senior management and the Board of the Bank's loan committee or Board for any extension of credit greater than $250,000Directors. (42) Within on hundred and twenty (120) days of the date of this AgreementUpon adoption, the Board program shall ensure that management takes the necessary steps to ensure that all commercial credit relationships equaling two hundred fifty thousand ($250,000) or above are reviewed and accurately risk rated. (5) Within thirty (30) days following receipt of the ADC’s written determination of no supervisory objection to the revised Credit Underwriting and Administration Program or to any subsequent amendment to the Credit Underwriting and Administration Program, the Board shall adopt and Bank management, subject to Board review and ongoing monitoring, shall immediately implement and thereafter ensure adherence to the Credit Underwriting and Administration Program. The Board shall review the effectiveness of the Credit Underwriting and Administration Program at least annually, and more frequently if necessary or if required by the OCC in writing, and amend the Credit Underwriting and Administration Program as needed or directed by the OCC. Any amendment to the Credit Underwriting and Administration Program must be submitted to the ADC Assistant Deputy Comptroller for review and prior written determination of no supervisory objection. (3) Upon receipt of a determination of no supervisory objection, the Board shall implement the program and thereafter ensure Bank adherence to the program.

CREDIT UNDERWRITING AND ADMINISTRATION. (1) Within ninety (90) days of the date of this Agreement, the Bank shall revise and submit to the ADC for review and prior written determination of no supervisory objection an acceptable written credit underwriting and administration program (“Credit Underwriting and Administration Program”) designed to ensure the Bank obtains and analyzes credit and collateral information sufficient to identify, monitor, and report the Bank’s credit risk, properly account for loans, and assign accurate risk ratings in a timely manner. The Credit Underwriting and Administration Program shall be consistent with safe and sound banking practices. (2) The Credit Underwriting and Administration Program shall, at a minimum, include: (a) a process to hold loan officers accountable for the timely collection of financial statements and ensure that the statements are reviewed upon receipt to provide adequate monitoring of borrowers; (b) procedures for Bank management to ensure annual reviews are completed timely, accurately, and consistently with sufficient narrative concerning financial analysis and collateral analysis, and to ensure management reports the status of annual reviews to the Board; (c) procedures to ensure credit administration, lending, and loan processing staff receive and demonstrate proficiency in job-specific training that includes, but is not limited to, credit analysis and loan file documentation requirements per Bank policy; (d) procedures to ensure loan presentations and credit analyses contain sufficient financial and collateral analysis; (e) procedures to ensure policies are adhered to with any exceptions noted, mitigated, tracked, and reported to the Board; (f) procedures to ensure loan presentations include all sources of repayment, borrower and guarantor financial trends, current economic conditions and trends, competitive pressures, and industry outlooks; (g) procedures to ensure adequate processes to identify and report all policy, underwriting, collateral, and financial exceptions to the Board; (h) procedures to identify breaches of covenants by borrowers and document waivers to exceptions and/or steps taken to enforce compliance; (i) policies that address acceptable loan types, terms, covenants, concentration limits, and collateral requirements and exceptions; (j) a description of the types of credit information required from borrowers and guarantors prior to making a loan determination, including, annual audited statements, interim financial statements, personal financial statements, and tax returns with supporting schedules; (k) procedures that require any extensions of credit are granted, by renewal or otherwise, only after obtaining the required credit information and adequately analyzing and documenting the borrower’s and guarantor’s cash flow, debt service requirements, contingent liabilities, global liquidity condition, and sensitivity analysis in support of the credit decision; (l) procedures to identify and track all exceptions and efforts to mitigate or cure exceptions, including but not limited to financial exceptions, collateral exceptions, policy exceptions, and underwriting exceptions. The number of loans with exceptions, and their aggregate dollar value, shall be reported to the Board on a quarterly basis. The Board shall establish aggregate exception level limits. The Bank shall consider each loan officer’s exceptions in conducting periodic performance reviews and compensation decisions; (m) established criteria to limit the number and/or frequency of, and procedures to identify, track, and approve covenant waivers in accordance with the applicable loan agreements. The number of loans with covenant waivers, and their aggregate dollar value, shall be reported to the Board on a monthly basis; (n) established criteria to limit the number or frequency of, and procedures to identify, track, and approve extensions, renewals, or rewrites of existing extensions of credit. The number of loans that have been extended, renewed, or rewritten, and their aggregate dollar value, shall be reported to the Board on a monthly basis and documented in the Board minutes; (o) policies regarding the appropriateness of the capitalization of interest, which shall be prohibited unless doing so is conducted in a safe and sound manner. Refer to OCC Examining Circular 229 – Guidelines for Capitalization of Interest on Loans, and OCC Bank Accounting Advisory Series for related safe and sound principles; (p) procedures for the identification of, and accounting treatment for, nonaccrual loans that are consistent with the accounting requirements contained in the appropriate FFIEC’s Instructions for Preparation of Consolidated Reports of Condition and Income; (q) specific assignment of responsibility and accountability over the credit administration process to ensure the Credit Underwriting and Administration Program developed pursuant to this Article is effectively implemented; (r) the Bank must review the experience level of credit administration, lending, and loan processing staff, on an annual basis, to ensure employees have the requisite knowledge to perform their duties, and must implement a plan to hire additional staff and/or provide periodic training where staffing or knowledge gaps exist; (s) risk-based reviews of commercial lending relationships to support or revise current risk ratings on at least an annual basis; and (t) an independent loan review process reporting directly to the Board. (3) Effective as of the date of this Agreement, the Board shall ensure that all lending officers comply with all laws, rules, regulations, Bank may not grantpolicies and procedures, extendsafe and sound banking practices, renewand fiduciary duties. Within sixty (60) days of the date of this Agreement, alterthe Board shall develop and submit to the Assistant Deputy Comptroller for a prior written determination of no supervisory objection, or restructure any loan or other extension of credit withouta program in place that addresses: (a) documenting the specific reason or purpose for the extension of creditrequirements that lending officers appropriately analyze, document, and communicate appropriate credit and collateral information, including, at a minimum: (i) personal and related business tax returns; (ii) K-1s; (iii) information regarding projects financed elsewhere; and (iv) contingent liabilities; (b) a requirement that loan officers obtain bank or brokerage statements to verify liquidity; (c) a requirement to establish a training policy for loan officers to ensure they understand all policy requirements; (d) the implementation of multi-factor stress testing at origination and at least annually thereafter including at a minimum: (i) for income producing properties, variables to account for changes in interest rates, vacancies, rental rates, expenses and cap rates; and (ii) for residential development projects, variables to account for changes in interest rates, absorption rates and prices; (e) the performance of periodic reviews by the Chief Credit Officer of loan officers’ cash flow analyses to ensure accuracy; (f) procedures to hold employees and officers accountable for non- compliance with the Bank’s loan policy and other underwriting requirements; and (g) procedures to ensure that loans are properly monitored to include periodic receipt, analysis and documentation of sufficient financial and operating information to measure and monitor the borrower’s and guarantor’s financial condition and repayment ability, to include periodic (at least annually) cash flow analysis of income-producing collateral. (2) Within ninety (90) days, the Board shall ensure that policies and procedures are created and implemented to ensure that loan officers periodically (at least annually or as necessary given the circumstances of the particular credit relationship) perform reviews of all credit relationships totaling two hundred thousand dollars ($200,000) or more, that includes analysis and documentation of the review rendered, including but not limited to: (a) identifying the expected source sources of repayment in writing; (c) structuring the repayment terms to coincide with the expected source of repayment; (db) obtaining current and satisfactory credit information for all borrowers and guarantors; (c) performing and documenting the analysis of credit information, including performing and documenting analysis of credit information and a detailed cash flow analysis of all expected repayment sources, and all direct and indirect obligations, contingent liabilities and personal expenses; (d) assessing the liquidity of all borrowers and guarantors, which the loan officer had verified, as necessary to document capacity; (e) determining and documenting whether the loan complies with the Bank's loan policy and if it does not comply, providing identification of the exception and ample justification to support waiving the policy exception; (f) determining and documenting the customer's ability to repay the credit on the proposed repayment terms; (g) providing an accurate risk assessment grade rating and proper accrual status for each credit, consistent with Article X of this Agreement; (f) performing site visits by the loan officer with results documented and kept in the credit file; (g) obtaining an appraisal or evaluation as appropriate, consistent with Article VIII of this Agreement; (h) documenting, with adequate supporting material, the value of collateral; collateral and properly perfecting the Bank's ’s lien on it where applicable; (i) conducting a thorough global cash flow analysis; and (ij) obtaining ensuring that loan officers are held accountable for the written approval requirements of this Subparagraph. (3) Loan officers shall draft credit memoranda to document the completion of the Bank's loan committee or Board for any extension requirements of credit greater than $250,000the program adopted pursuant to this Article. (4) The Board shall take the necessary steps to ensure that current and satisfactory credit and proper collateral information is maintained on all loans. Within on hundred and twenty thirty (12030) days of the date of this Agreementnotification, the Board shall ensure that the Bank obtains any missing credit or collateral information described in the XXX, in any internal or external loan review, or in any listings of loans lacking such information provided to management takes by the necessary steps to ensure that all commercial credit relationships equaling two hundred fifty thousand ($250,000) or above are reviewed and accurately risk ratedNational Bank Examiners at the conclusion of an examination. (5) Within thirty (30) days following receipt of the ADC’s Upon receiving a written determination of no supervisory objection to from the revised Credit Underwriting and Administration Program or to any subsequent amendment to the Credit Underwriting and Administration ProgramAssistant Deputy Comptroller, the Board shall adopt and Bank management, subject to Board review and ongoing monitoring, shall immediately implement and thereafter ensure adherence to the Credit Underwriting program, policies and Administration Program. The Board shall review the effectiveness of the Credit Underwriting and Administration Program at least annually, and more frequently if necessary or if procedures required by the OCC in writing, and amend the Credit Underwriting and Administration Program as needed or directed by the OCC. Any amendment to the Credit Underwriting and Administration Program must be submitted to the ADC for review and prior written determination of no supervisory objectionthis Article.

CREDIT UNDERWRITING AND ADMINISTRATION. (1) Within ninety (90) days of the date of this Agreement, the Bank shall revise and submit to the ADC for review and prior written determination of no supervisory objection an acceptable written credit underwriting and administration program (“Credit Underwriting and Administration Program”) designed to ensure the Bank obtains and analyzes credit and collateral information sufficient to identify, monitor, and report the Bank’s credit risk, properly account for loans, and assign accurate risk ratings in a timely manner. The Credit Underwriting and Administration Program shall be consistent with safe and sound banking practices. (2) The Credit Underwriting and Administration Program shall, at a minimum, include: (a) a process to hold loan officers accountable for the timely collection of financial statements and ensure that the statements are reviewed upon receipt to provide adequate monitoring of borrowers; (b) procedures for Bank management to ensure annual reviews are completed timely, accurately, and consistently with sufficient narrative concerning financial analysis and collateral analysis, and to ensure management reports the status of annual reviews to the Board; (c) procedures to ensure credit administration, lending, and loan processing staff receive and demonstrate proficiency in job-specific training that includes, but is not limited to, credit analysis and loan file documentation requirements per Bank policy; (d) procedures to ensure loan presentations and credit analyses contain sufficient financial and collateral analysis; (e) procedures to ensure policies are adhered to with any exceptions noted, mitigated, tracked, and reported to the Board; (f) procedures to ensure loan presentations include all sources of repayment, borrower and guarantor financial trends, current economic conditions and trends, competitive pressures, and industry outlooks; (g) procedures to ensure adequate processes to identify and report all policy, underwriting, collateral, and financial exceptions to the Board; (h) procedures to identify breaches of covenants by borrowers and document waivers to exceptions and/or steps taken to enforce compliance; (i) policies that address acceptable loan types, terms, covenants, concentration limits, and collateral requirements and exceptions; (j) a description of the types of credit information required from borrowers and guarantors prior to making a loan determination, including, annual audited statements, interim financial statements, personal financial statements, and tax returns with supporting schedules; (k) procedures that require any extensions of credit are granted, by renewal or otherwise, only after obtaining the required credit information and adequately analyzing and documenting the borrower’s and guarantor’s cash flow, debt service requirements, contingent liabilities, global liquidity condition, and sensitivity analysis in support of the credit decision; (l) procedures to identify and track all exceptions and efforts to mitigate or cure exceptions, including but not limited to financial exceptions, collateral exceptions, policy exceptions, and underwriting exceptions. The number of loans with exceptions, and their aggregate dollar value, shall be reported to the Board on a quarterly basis. The Board shall establish aggregate exception level limits. The Bank shall consider each loan officer’s exceptions in conducting periodic performance reviews and compensation decisions; (m) established criteria to limit the number and/or frequency of, and procedures to identify, track, and approve covenant waivers in accordance with the applicable loan agreements. The number of loans with covenant waivers, and their aggregate dollar value, shall be reported to the Board on a monthly basis; (n) established criteria to limit the number or frequency of, and procedures to identify, track, and approve extensions, renewals, or rewrites of existing extensions of credit. The number of loans that have been extended, renewed, or rewritten, and their aggregate dollar value, shall be reported to the Board on a monthly basis and documented in the Board minutes; (o) policies regarding the appropriateness of the capitalization of interest, which shall be prohibited unless doing so is conducted in a safe and sound manner. Refer to OCC Examining Circular 229 – Guidelines for Capitalization of Interest on Loans, and OCC Bank Accounting Advisory Series for related safe and sound principles; (p) procedures for the identification of, and accounting treatment for, nonaccrual loans that are consistent with the accounting requirements contained in the appropriate FFIEC’s Instructions for Preparation of Consolidated Reports of Condition and Income; (q) specific assignment of responsibility and accountability over the credit administration process to ensure the Credit Underwriting and Administration Program developed pursuant to this Article is effectively implemented; (r) the Bank must review the experience level of credit administration, lending, and loan processing staff, on an annual basis, to ensure employees have the requisite knowledge to perform their duties, and must implement a plan to hire additional staff and/or provide periodic training where staffing or knowledge gaps exist; (s) risk-based reviews of commercial lending relationships to support or revise current risk ratings on at least an annual basis; and (t) an independent loan review process reporting directly to the Board. (3) Effective as of the date of this Agreement, the Board shall ensure that all lending officers and staff comply with all laws, rules, regulations, Bank may not grantpolicies and procedures, extendsafe and sound banking practices, renewand fiduciary duties. (2) Within ninety (90) days, alterthe Board shall develop and submit to the Assistant Deputy Comptroller for a prior written determination of no supervisory objection, or restructure any loan or other extension of a program (including revisions to policies and procedures) designed to improve the Bank’s credit withoutunderwriting and administration practices. The program shall include, at a minimum, policies and procedures to ensure that: (a) documenting clear responsibilities, authority and lines of reporting are established in the specific reason or purpose lending area, and that appropriate and qualified personnel oversee the lending function, including, at a minimum, that: (i) the Chief Loan Officer shall have the responsibility and authority to: a. enforce Bank lending policy and to hold loan officers accountable for compliance with the Bank’s lending policy; b. address credit administration weakness discussed in this Agreement and in the Report of Examination for the extension examination conducted as of creditSeptember 30, 2009 (the “XXX”); and c. take necessary action to maintain satisfactory credit risk management systems; (b) to ensure that loan officers periodically (at least annually or more frequently, as necessary, given the circumstances of the particular credit relationship) perform reviews of all credit relationships totaling two hundred fifty thousand dollars ($250,000) or more, that includes analysis and documentation of the review rendered, including but not limited to: (i) identifying the expected source sources of repayment in writing; (c) structuring the repayment terms to coincide with the expected source of repayment; (dii) obtaining current and satisfactory credit informationinformation for all borrowers and guarantors, including performing and documenting analysis of credit information and a detailed cash flow analysis of all expected repayment sources, to include all direct and indirect obligations, contingent liabilities and personal expenses; (eiii) determining assessing the liquidity of all borrowers and documenting whether guarantors, which the loan complies with the Bank's loan policy and if it does not comply, providing identification of the exception and ample justification officer had verified as necessary to support waiving the policy exceptiondocument capacity; (f) determining and documenting the customer's ability to repay the credit on the proposed repayment terms; (giv) providing an accurate risk assessment grade and proper accrual status for each credit, consistent with Article V of this Agreement; (hv) obtaining an appraisal or evaluation as appropriate, consistent with Article VI of this Agreement; (vi) documenting, with adequate supporting material, the value of collateral; collateral and properly perfecting the Bank's ’s lien on it where applicable; (vii) conducting a thorough global cash flow analysis; and (iviii) obtaining ensuring that loan officers are held accountable for the written approval requirements of this subparagraph. (3) Loan officers shall draft credit memoranda to document the completion of the Bank's loan committee or Board for any extension requirements of credit greater than $250,000the program adopted pursuant to this Article. (4) Within on hundred and twenty (120) days of the date of this Agreement, the Board shall ensure that management takes the necessary steps to ensure that all commercial credit relationships equaling two hundred fifty thousand ($250,000) or above are reviewed and accurately risk rated. (5) Within thirty (30) days following receipt of the ADC’s Upon receiving a written determination of no supervisory objection to from the revised Credit Underwriting and Administration Program or to any subsequent amendment to the Credit Underwriting and Administration ProgramAssistant Deputy Comptroller, the Board shall adopt and Bank management, subject to Board review and ongoing monitoring, shall immediately implement and thereafter ensure adherence to the Credit Underwriting program, policies and Administration Program. procedures required by this Article. (5) The Board shall review take the effectiveness necessary steps to ensure that current and satisfactory credit and proper collateral information is maintained on all loans. Within thirty (30) days of notification, the Board shall ensure that the Bank takes all necessary actions, and maintains appropriate documentation of the Credit Underwriting and Administration Program at least annuallyactions taken, and more frequently if necessary to obtain any missing credit or if required collateral information described in the XXX, in any internal or external loan review, or in any listings of loans lacking such information provided to management by the OCC in writing, and amend National Bank Examiners at the Credit Underwriting and Administration Program as needed or directed by the OCC. Any amendment to the Credit Underwriting and Administration Program must be submitted to the ADC for review and prior written determination conclusion of no supervisory objectionan examination.