Common use of CREDIT UNDERWRITING AND ADMINISTRATION Clause in Contracts

CREDIT UNDERWRITING AND ADMINISTRATION. (1) Effective immediately, the Board shall ensure that all lending officers comply with all laws, rules, regulations, Bank policies and procedures, safe and sound banking practices, and fiduciary duties. (2) Effective immediately, the Bank may not grant, extend, renew, modify or restructure any loan or other extension of commercial and agricultural credit, or purchase any loan participation, equal to or exceeding two-hundred thousand dollars ($200,000), 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 justification to support waiving the policy exception; (f) documenting the determinations made regarding 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; (i) ensuring that any participations purchased are consistent with sound banking practices, guidelines set forth in Banking Circular 181 (Revised), dated August 2, 1984, and the requirements of 12 C.F.R. Part 34; and (j) obtaining the written approval of the Bank’s Loan Committee or Board. (3) Within forty-five (45) days, the Board shall revise its policies and procedures to ensure that the Bank’s credit relationships are monitored and administered in a safe and sound manner, including the development of policies and procedures to ensure that lending officers: (a) formally review all commercial and agricultural credit relationships totaling two-hundred and fifty thousand dollars ($250,000) or more, at least every twelve (12) months, and more frequently should the circumstances of the relationship so require, and that such reviews are written and contain, at a minimum, an analysis of: (i) current and satisfactory credit information, including a detailed cash flow analysis of all expected repayment sources and the financial position of the borrower and/or guarantor; (ii) the value of any pledged collateral, with adequate supporting material; (iii) compliance with any loan covenants; (iv) repayment prospects considering appropriate stressed-scenarios; (v) the borrower’s operating environment, including any potential changes; and (vi) the proposed risk assessment grade. (b) on borrowing base credits, perform appropriate reviews, and take timely corrective actions for all loans totaling one-hundred thousand dollars ($100,000) or more, secured by inventory and/or accounts receivable; and (c) maintain proper collateral margins in loans made for the purpose of constructing upon or developing real estate, including but not limited to, procedures for ensuring that: (i) periodic, meaningful, well-documented, inspections are performed on all construction projects; (ii) draws are advanced in accordance with construction progress and budget; (iii) documentation of project completion versus amount advanced is maintained; (iv) lien waivers are obtained from contractors and sub-contractors; and (v) borrower’s hard equity is tracked by project. (4) Within thirty (30) days, the Board shall take the necessary steps to obtain current and satisfactory credit information on all loans lacking such information, including those listed in the XXX, in any subsequent Report of Examination, in any internal or external loan review, or in any listings of loans lacking such information provided to management by the National Bank Examiners at the conclusion of an examination. (5) Within thirty (30) days, the Board shall ensure proper collateral documentation is maintained on all loans, and shall correct each collateral exception listed in the XXX, in any subsequent Report of Examination, in any internal or external loan review, or in any listings of loans lacking such information provided to management by the National Bank Examiners at the conclusion of an examination. (6) Lending officers and senior management are assigned responsibility and held accountable (to include, at a minimum, consideration in periodic performance reviews and compensation) for ensuring the Bank’s adherence to the policies and procedures adopted pursuant to this Article. (7) The Board shall submit all policies and procedures adopted pursuant to this Article to the Assistant Deputy Comptroller for a prior determination of no supervisory objection. (8) Upon receiving a written determination of no supervisory objection from the Assistant Deputy Comptroller, the Board shall immediately implement and thereafter ensure adherence to the policies and procedures adopted pursuant to this Article.

CREDIT UNDERWRITING AND ADMINISTRATION. (1) Effective immediatelyas of the date of this Agreement, the Board shall ensure that all lending officers comply with all laws, rules, regulations, Bank policies and procedures, safe and sound banking practices, and fiduciary duties. (2) Effective immediatelyas of the date of this Agreement, the Bank may not grant, extend, renew, modify or restructure any loan or other extension of commercial and agricultural credit, or purchase any loan participation, equal to or exceeding twoone-hundred thousand dollars ($200,000100,000), 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 justification to support waiving the policy exception; (f) making and documenting the determinations made regarding 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; (i) ensuring that any participations purchased are consistent with sound banking practices, guidelines set forth in Banking Circular 181 (Revised), dated August 2, 1984, and the requirements of 12 C.F.R. Part 34; and (j) obtaining the written approval of the Bank’s Loan Committee or Board. (3) Within forty-five (45) days, the Board shall revise its policies and procedures to ensure that the Bank’s credit relationships are monitored and administered in a safe and sound manner, including the development of policies and procedures to ensure that lending officers: (a) formally review all commercial and agricultural credit relationships totaling two-hundred and fifty thousand dollars ($250,000) or more, at least every twelve (12) months, and more frequently should the circumstances of the relationship so require, and that such reviews are written and contain, at a minimum, an analysis of: (i) current and satisfactory credit information, including a detailed cash flow analysis of all expected repayment sources and the financial position of the borrower and/or guarantor; (ii) the value of any pledged collateral, with adequate supporting material; (iii) compliance with any loan covenants; (iv) repayment prospects considering appropriate stressed-scenarios; (v) the borrower’s operating environment, including any potential changes; and (vi) the proposed risk assessment grade. (b) on borrowing base credits, perform appropriate reviews, and take timely corrective actions for all loans totaling one-hundred thousand dollars ($100,000) or more, secured by inventory and/or accounts receivable; and (c) maintain proper collateral margins in loans made for the purpose of constructing upon or developing real estate, including but not limited to, procedures for ensuring that: (i) periodic, meaningful, well-documented, inspections are performed on all construction projects; (ii) draws are advanced in accordance with construction progress and budget; (iii) documentation of project completion versus amount advanced is maintained; (iv) lien waivers are obtained from contractors and sub-contractors; and (v) borrower’s hard equity is tracked by project. (4) Within thirty (30) daysdays of this Agreement, the Board shall take the necessary steps to obtain current and satisfactory credit information on all loans lacking such information, including those listed in the Report of Examination conducted as of December 31, 2007 and updated through December 31, 2008, (the “XXX”), in any subsequent Report of Examination, in any internal or external loan review, or in any listings of loans lacking such information provided to management by the National Bank Examiners at the conclusion of an examination. (54) Within thirty (30) daysdays of this Agreement, the Board shall ensure proper collateral documentation is maintained on all loans, loans and shall correct each collateral exception listed in the XXX, in any subsequent Report of Examination, in any internal or external loan review, or in any listings of loans lacking such information provided to management by the National Bank Examiners at the conclusion of an examination. (5) Within sixty (60) days of this Agreement, the Board shall revise, adopt, implement, and thereafter ensure Bank adherence to a written program of policies and procedures designed to aggregate and track exceptions to the Bank Loan Policy. This includes at a minimum, monthly Board monitoring of policy exception reports that track aggregate number and dollar amount of loans with material underwriting exceptions by type of loan and loan officer. (6) Lending officers Within sixty (60) days of this Agreement, the Board shall take the necessary steps to eliminate credit, collateral, and senior management are assigned responsibility and held accountable (Bank Loan Policy exceptions, to include, at a minimum, consideration the development of a program that makes loan officers accountable for such exceptions and considers such exceptions in the periodic performance reviews and compensation) for ensuring the Bank’s adherence to the policies and procedures adopted pursuant to this Articlecompensation of such loan officers. (7) The Board shall submit all policies and procedures adopted pursuant to this Article to the Assistant Deputy Comptroller for a prior determination of no supervisory objection. (8) Upon receiving a written determination of no supervisory objection from the Assistant Deputy Comptroller, the Board shall immediately implement and thereafter ensure adherence to the policies and procedures adopted pursuant to this Article.

CREDIT UNDERWRITING AND ADMINISTRATION. (1) Effective immediatelyas of the date of this Agreement, the Board shall ensure that all lending officers comply with all laws, rules, regulations, Bank policies and procedures, safe and sound banking practices, and fiduciary duties. (2) Effective immediatelyas of the date of this Agreement, the Bank may not grant, extend, renew, modify or restructure any loan commercial, agricultural, 1-4 family rental, or other extension of commercial and agricultural creditindirect consumer related loan, or purchase any loan participation, equal to or exceeding two-hundred thousand dollars ($200,000)100,000, 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) providing an accurate risk assessment grade for all loan types; (f) 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 justification to support waiving the policy exception; (fg) documenting the determinations made regarding 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 collateral type for each loan properly perfecting the Bank’s lien on it where applicable; (ih) ensuring that any participations purchased are consistent with sound banking practices, guidelines set forth in Banking Circular 181 (Revised), dated August 2, 1984, and the requirements of 12 C.F.R. Part 34; and (ji) obtaining the written approval of the Bank’s Loan Committee or Board. (3) Within forty-five (45) days, the Board shall revise its policies and procedures to ensure that the Bank’s credit relationships are monitored and administered in a safe and sound manner, including the development of policies and procedures to ensure that lending officers: (a) formally review all commercial and agricultural credit relationships totaling two-hundred and fifty thousand dollars ($250,000) or more, at least every twelve (12) months, and more frequently should the circumstances of the relationship so require, and that such reviews are written and contain, at a minimum, an analysis of: (i) current and satisfactory credit information, including a detailed cash flow analysis of all expected repayment sources and the financial position of the borrower and/or guarantor; (ii) the value of any pledged collateral, with adequate supporting material; (iii) compliance with any loan covenants; (iv) repayment prospects considering appropriate stressed-scenarios; (v) the borrower’s operating environment, including any potential changes; and (vi) the proposed risk assessment grade. (b) on borrowing base credits, perform appropriate reviews, and take timely corrective actions for all loans totaling one-hundred thousand dollars ($100,000) or more, secured by inventory and/or accounts receivable; and (c) maintain proper collateral margins in loans made for the purpose of constructing upon or developing real estate, including but not limited to, procedures for ensuring that: (i) periodic, meaningful, well-documented, inspections are performed on all construction projects; (ii) draws are advanced in accordance with construction progress and budget; (iii) documentation of project completion versus amount advanced is maintained; (iv) lien waivers are obtained from contractors and sub-contractors; and (v) borrower’s hard equity is tracked by project. (4) Within thirty (30) days, the The Board shall take the necessary steps to obtain ensure that current and satisfactory credit and proper collateral information is maintained on all loans lacking such informationloans. Within thirty (30) days of notification, including those listed the Board shall ensure that the Bank obtains any missing credit or collateral information described in the XXX, in any subsequent Report of ExaminationExamination conducted as of December 31, 2014 (the “XXX”), in any internal or external loan review, or in any listings of loans lacking such information provided to management by the National Bank Examiners at the conclusion of an examination. (54) Within thirty ninety (3090) daysdays of this Agreement, the Board shall ensure proper collateral documentation is maintained on all loanstake the necessary steps to eliminate credit, collateral, and shall correct each collateral Bank Loan Policy exceptions by revising, adopting, implementing, and thereafter ensuring Bank adherence to a written program of policies and procedures designed to aggregate and track exceptions to the Bank Loan Policy. This includes at a minimum, monthly Board monitoring of policy exception listed in the XXX, in any subsequent Report of Examination, in any internal or external loan review, or in any listings reports that track aggregate number and dollar amount of loans lacking such information provided with material underwriting exceptions by type of loan and loan officer. (5) Within sixty (60) days of this Agreement, the Board shall revise loan policies and procedures to management by reflect conformance with Agricultural Lending, AL-L, of the National Bank Examiners Comptroller’s Handbook. Such revised loan policies and procedures must ensure that periodic (no less than annual) inspections of livestock and crop pledged as collateral are performed, which shall, at a minimum, include an inspection report to be used on agricultural/farm visits that includes the conclusion current value of an examinationthe borrower’s agricultural assets. (6) Lending officers and senior management are assigned responsibility and held accountable Within sixty (to include, at a minimum, consideration in periodic performance reviews and compensation60) for ensuring the Bank’s adherence to the policies and procedures adopted pursuant to days of this Article. (7) The Board shall submit all policies and procedures adopted pursuant to this Article to the Assistant Deputy Comptroller for a prior determination of no supervisory objection. (8) Upon receiving a written determination of no supervisory objection from the Assistant Deputy ComptrollerAgreement, the Board shall immediately implement revise its written policy to ensure the Bank obtains real estate appraisals and thereafter evaluations in compliance with the Interagency Appraisal and Evaluation Guidelines (December 10, 2010), OCC Bulletin 2010-42 (December 10, 2010), and OCC Bulletin 2005-6 (March 22, 2005), to include at a minimum: (a) the establishment of criteria for obtaining updated appraisals, new appraisals, and evaluations; and (b) the development of procedures to ensure adherence to that appraisals, updates and evaluations are the policies appropriate type and procedures adopted pursuant to this Articleordered in a timely manner.

CREDIT UNDERWRITING AND ADMINISTRATION. (1) Effective immediatelyWithin ninety (90) days of this Agreement, the Board shall ensure that all lending officers comply with all lawssubmit to the Assistant Deputy Comptroller for a prior written determination of no supervisory objection, rules, regulations, Bank a program (including revisions to policies and procedures) designed to improve the Bank’s credit risk management and administration practices. The program shall include at a minimum, safe and sound banking practices, and fiduciary duties.provisions requiring: (2a) Effective immediately, actions to be taken in the event the Bank may exceeds its concentration of credit limits; (b) procedures to ensure that the Bank does not grant, extend, renew, modify alter or restructure any loan or other extension of commercial and agricultural credit, or purchase any loan participation, credit equal to or exceeding two-two hundred thousand dollars ($200,000), without: (ai) documenting the specific reason or purpose for the extension of credit; (bii) identifying the expected source of repayment in writing; (ciii) structuring the repayment terms to coincide with the expected source of repaymentrepayment and the useful life of the collateral; (div) 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, including global cash flow analysis, to include all direct and indirect obligations and personal expenses; (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 justification to support waiving the policy exception; (f) documenting the determinations made regarding the customer’s ability to repay the credit on the proposed repayment terms; (gv) providing an accurate risk assessment grade and proper accrual status for each credit; (hvi) documentingdocumenting the value of collateral, with adequate supporting materialmaterial including a current appraisal or evaluation as appropriate, the value of collateral and properly perfecting the Bank’s lien on it where applicable; (ivii) ensuring obtaining loan curtailment or re-margining as necessary to ensure the Bank’s collateral position is adequate; and (viii) obtaining the written approval of the Bank’s Loan Committee or Board; (c) procedures to ensure that monthly exception reports are accurate and that employees and officers are held accountable for non-compliance with the Bank’s loan policy and other underwriting requirements; (d) 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; (e) the establishment of criteria for obtaining updated appraisals, new appraisals, and evaluations; (f) the establishment and implementation of a policy requiring a meaningful documented review, independent of the lender, of all appraisals to include analysis commensurate with the type, size and complexity of the property being appraised; (g) procedures to ensure that the renewal, grant, purchase, assumption, or acquisition of any participations purchased are loan participation is underwritten and monitored in a manner that is consistent with safe and sound banking practices, the guidelines set forth in Banking Circular 181 (Revised), dated August 2, 1984, and the requirements of 12 C.F.R. Part 34; and, to include a sound review of any appraisal of collateral. (j2) obtaining Upon receiving a written determination of no supervisory objection from the written approval of Assistant Deputy Comptroller, the Bank’s Loan Committee or BoardBoard shall immediately implement and thereafter ensure adherence to the program, policies and procedures required by this Article. (3) Within forty-five (45) days, the Board shall revise its policies and procedures to ensure that the Bank’s credit relationships are monitored and administered in a safe and sound manner, including the development of policies and procedures to ensure that lending officers: (a) formally review all commercial and agricultural credit relationships totaling two-hundred and fifty thousand dollars ($250,000) or more, at least every twelve (12) months, and more frequently should the circumstances of the relationship so require, and that such reviews are written and contain, at a minimum, an analysis of: (i) current and satisfactory credit information, including a detailed cash flow analysis of all expected repayment sources and the financial position of the borrower and/or guarantor; (ii) the value of any pledged collateral, with adequate supporting material; (iii) compliance with any loan covenants; (iv) repayment prospects considering appropriate stressed-scenarios; (v) the borrower’s operating environment, including any potential changes; and (vi) the proposed risk assessment grade. (b) on borrowing base credits, perform appropriate reviews, and take timely corrective actions for all loans totaling one-hundred thousand dollars ($100,000) or more, secured by inventory and/or accounts receivable; and (c) maintain proper collateral margins in loans made for the purpose of constructing upon or developing real estate, including but not limited to, procedures for ensuring that: (i) periodic, meaningful, well-documented, inspections are performed on all construction projects; (ii) draws are advanced in accordance with construction progress and budget; (iii) documentation of project completion versus amount advanced is maintained; (iv) lien waivers are obtained from contractors and sub-contractors; and (v) borrower’s hard equity is tracked by project. (4) Within thirty (30) days, the The Board shall take the necessary steps to obtain ensure that current and satisfactory credit information is maintained on all loans lacking such informationloans. Within thirty (30) days of notification, including those listed the Board shall ensure that the Bank obtains any missing credit information described in the XXX, in any subsequent Report of Examination, in any internal or external loan review, or in any listings of loans lacking such information provided to management by the National Bank Examiners at the conclusion of an examination. (54) Within thirty (30) days, the The Board shall take the necessary steps to ensure that proper collateral documentation is maintained on all loans. Within thirty (30) days of notification, and the Board shall correct each ensure that the Bank obtains any missing collateral exception listed documentation described in the XXX, in any subsequent Report of Examination, in any internal or external loan review, or in any listings of loans lacking such information provided to management by the National Bank Examiners at the conclusion of an examination. (6) Lending officers and senior management are assigned responsibility and held accountable (to include, at a minimum, consideration in periodic performance reviews and compensation) for ensuring the Bank’s adherence to the policies and procedures adopted pursuant to this Article. (7) The Board shall submit all policies and procedures adopted pursuant to this Article to the Assistant Deputy Comptroller for a prior determination of no supervisory objection. (8) Upon receiving a written determination of no supervisory objection from the Assistant Deputy Comptroller, the Board shall immediately implement and thereafter ensure adherence to the policies and procedures adopted pursuant to this Article.