Common use of LOAN PORTFOLIO MANAGEMENT Clause in Contracts

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within ninety (90) days, develop, implement, and thereafter ensure Bank adherence to a written program to improve the Bank's loan portfolio management. The program shall include, but not be limited to: (a) procedures to ensure satisfactory and perfected collateral documentation; (b) procedures to ensure that extensions of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit information; (c) a process for annual financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000; (d) a process for financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessary; (e) a process for quarterly financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtful; (f) a process for maintaining current and satisfactory credit information on all commercial loans over $100,000; (g) procedures to ensure conformance with loan approval requirements and loan covenants; (h) a specific action plan to correct any violations of law cited in the Report of Examination; (i) procedures to acquire appraisals on real estate collateral in accordance with regulation; (j) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisals; (k) procedures to ensure conformance with Call Report instructions regarding requirements for placing loans on nonaccrual; (l) a performance appraisal process, including performance appraisals, job descriptions, and incentive programs for loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy in credit grading, and other loan administration matters; (m) early problem loan identification to assure the timely identification and rating of loans and leases based on lending officer submissions; and (n) compliance with the Bank's lending policies and laws, rules, and regulations pertaining to the Bank's lending function. (2) Upon completion, a copy of the program shall be forwarded to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency of the program. (3) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within ninety sixty (9060) days, develop, implement, and thereafter ensure Bank adherence to a written program to improve the Bank's loan portfolio management. The program shall include, but not be limited to: (a) procedures to ensure satisfactory and perfected collateral documentation; (b) procedures to ensure that extensions of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit information; (c) procedures to establish an effective, independent and on-going loan review system to review the Bank's loan portfolio to assure the timely identification and categorization of problem credits. The system shall use a process loan and lease grading system consistent with the guidelines set forth in Section 215 of the Comptroller’s Handbook for annual financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000National Bank Examiners; (d) a process for financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessaryprocedures to ensure conformance with loan approval requirements; (e) a process for quarterly financial system to track and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtfulanalyze exceptions; (f) a process for maintaining current and satisfactory credit information on all commercial loans over $100,000procedures to ensure conformance with Call Report instructions; (g) procedures to ensure conformance with loan approval requirements and loan covenantsthe accuracy of internal management information systems; (h) a specific action plan to correct any violations of law cited in the Report of Examination; (i) procedures to acquire appraisals on real estate collateral in accordance with regulation; (j) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisals; (k) procedures to ensure conformance with Call Report instructions regarding requirements for placing loans on nonaccrual; (l) a performance appraisal process, including performance appraisals, job descriptions, and incentive programs for loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy in credit grading, and other loan administration matters;; and (mi) procedures to track and analyze concentrations of credit, significant economic factors, and general conditions and their impact on the credit quality of the Bank’s loan and lease portfolios. (2) Upon completion, a copy of the program shall be forwarded to the Assistant Deputy Comptroller. (3) Within sixty (60) days, the Board shall develop, implement, and thereafter ensure Bank adherence to systems which provide for effective monitoring of: (a) early problem loan identification to assure the timely identification and rating of loans and leases based on lending officer submissions; and; (nb) statistical records that will serve as a basis for identifying sources of problem loans and leases by industry, collateral, and individual lending officer; (c) previously charged-off assets and their recovery potential; (d) compliance with the Bank's lending policies and laws, rules, and regulations pertaining to the Bank's lending function; and (e) adequacy of credit and collateral documentation. (24) Upon completionBeginning within sixty (60) days, on at least a copy quarterly basis, management will provide the Board with written reports including, at a minimum, the following information: (a) the identification, type, rating, and amount of problem loans and leases; (b) the identification and amount of delinquent loans and leases; (c) credit and collateral documentation exceptions; (d) the identification and status of credit related violations of law, rule or regulation; (e) the identity of the program shall be forwarded loan officer who originated each loan reported in accordance with subparagraphs (a) through (d) of this Article and Paragraph; (f) the identification and amount of loans and leases to executive officers, directors, principal shareholders (and their related interests) of the Bank; and (g) the identification of loans and leases not in conformance with the Bank's lending and leasing policies, and exceptions to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency of the programBank’s lending and leasing policies. (35) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within ninety (90) days60 days from the date of this Agreement, develop, implement, and thereafter ensure Bank adherence to to, a written program to improve the Bank's loan portfolio managementmanagement and correct each deficiency cited in the 2009 ROE, xhe 2010 ROE, xnd any subsequent Report of Examination. The program shall be designed in conformity with the “Loan Portfolio Management” booklet of the Comptroller’s Handbook (dated April 1998). The program shall include, but not be limited to: (a) procedures to ensure satisfactory and perfected collateral documentationsound credit risk management practices discussed in OCC Bulletin 2006-46 - Interagency Guidance on Commercial Real Estate Concentration Risk Management; (b) procedures an effective and ongoing internal problem loan identification system to ensure that extensions review the Bank's loan and lease portfolios to assure the timely identification and categorization of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit informationproblem credits; (c) a process for annual financial system to track loan policy exceptions by number and risk reviews dollar total (compare to capital), by account officers of commercial type, and commercial real estate loans over $100,000in aggregate; and report trends to the Board monthly; (d) a process for financial system to track compliance with loan covenants, and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessarydevelop loan covenant monitoring reports; (e) a process controls over loan Call Report coding, especially for quarterly financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mentionowner/non-owner occupied properties, Substandard or Doubtfulrequire internal audit to test the controls to ensure the Call Report is accurate; (f) procedures to ensure that appraisal review maintains adequate documentation to support findings, especially whether capitalization/discount rates and the reasonableness of income and expense projections are adequately supported in appraisals (required by USPAP); if not adequately supported, the reviewer should obtain a process for maintaining current written explanation from the appraiser and satisfactory disclose any potential appraisal issues/weaknesses to the credit information on all commercial loans over $100,000administration and the credit granting authority; (g) procedures to ensure conformance that an adequate number of qualified staff are employed, independent of the lending function, to review appraisals in order to determine compliance with loan approval requirements the appraisal regulation and loan covenants;USPAP guidance; and (h) a specific action plan to correct any violations appraisal procedures that ensure the flow of law cited in information between the Report of Examination; (i) procedures to acquire appraisals on real estate collateral in accordance with regulation; (j) procedures for reviewing real estate appraisals appraisal review and credit administration functions to ensure compliance with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisals; (k) procedures to ensure conformance with Call Report instructions regarding requirements for placing loans on nonaccrual; (l) a performance appraisal process, including performance appraisals, job descriptions, impairment analyses and incentive programs for loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy in credit grading, and other loan administration matters; (m) early problem loan identification to assure the timely identification and rating transfer of loans to Other Real Estate Owned are appropriate and leases based on lending officer submissions; and (n) compliance with the Bank's lending policies and laws, rules, and regulations pertaining to the Bank's lending functiontimely. (2) Upon completion, a copy of the program shall be forwarded to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency of the program. (3) Beginning no later than September 30, 2010, and on a monthly basis, management will provide the Board with written reports including, at a minimum, the following information: (a) the identification, type, rating, and amount of problem loans and leases, which should include a comparison to prior periods; (b) the identification and amount of delinquent loans and leases, which should include a comparison to prior periods and peer group(s); (c) credit and collateral documentation exceptions, which should include a comparison to prior periods; (d) the identity of the loan officer who originated each loan reported in accordance with subparagraphs (a) through (c) of this Article and Paragraph; and (e) the identification of loans and leases not in conformance with the Bank's lending and leasing policies, and exceptions to the Bank's lending and leasing policies, which should include a comparison to prior periods. (4) The Board shall evaluate all internal loan and lease review reports and shall ensure that immediate, adequate, and continuing remedial action, if appropriate, is taken upon all findings noted in the reports. (5) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within ninety (90) days60 days from the date of this Agreement, develop, implement, and thereafter ensure Bank adherence to to, a written program to improve the Bank's loan portfolio managementmanagement and correct each deficiency cited in the 2009 XXX, the 2010 XXX, and any subsequent Report of Examination. The program shall be designed in conformity with the “Loan Portfolio Management” booklet of the Comptroller’s Handbook (dated April 1998). The program shall include, but not be limited to: (a) procedures to ensure satisfactory and perfected collateral documentationsound credit risk management practices discussed in OCC Bulletin 2006- 46 - Interagency Guidance on Commercial Real Estate Concentration Risk Management; (b) procedures an effective and ongoing internal problem loan identification system to ensure that extensions review the Bank's loan and lease portfolios to assure the timely identification and categorization of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit informationproblem credits; (c) a process for annual financial system to track loan policy exceptions by number and risk reviews dollar total (compare to capital), by account officers of commercial type, and commercial real estate loans over $100,000in aggregate; and report trends to the Board monthly; (d) a process for financial system to track compliance with loan covenants, and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessarydevelop loan covenant monitoring reports; (e) a process controls over loan Call Report coding, especially for quarterly financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mentionowner/non-owner occupied properties, Substandard or Doubtfulrequire internal audit to test the controls to ensure the Call Report is accurate; (f) procedures to ensure that appraisal review maintains adequate documentation to support findings, especially whether capitalization/discount rates and the reasonableness of income and expense projections are adequately supported in appraisals (required by USPAP); if not adequately supported, the reviewer should obtain a process for maintaining current written explanation from the appraiser and satisfactory disclose any potential appraisal issues/weaknesses to the credit information on all commercial loans over $100,000administration and the credit granting authority; (g) procedures to ensure conformance that an adequate number of qualified staff are employed, independent of the lending function, to review appraisals in order to determine compliance with loan approval requirements the appraisal regulation and loan covenants;USPAP guidance; and (h) a specific action plan to correct any violations appraisal procedures that ensure the flow of law cited in information between the Report of Examination; (i) procedures to acquire appraisals on real estate collateral in accordance with regulation; (j) procedures for reviewing real estate appraisals appraisal review and credit administration functions to ensure compliance with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisals; (k) procedures to ensure conformance with Call Report instructions regarding requirements for placing loans on nonaccrual; (l) a performance appraisal process, including performance appraisals, job descriptions, impairment analyses and incentive programs for loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy in credit grading, and other loan administration matters; (m) early problem loan identification to assure the timely identification and rating transfer of loans to Other Real Estate Owned are appropriate and leases based on lending officer submissions; and (n) compliance with the Bank's lending policies and laws, rules, and regulations pertaining to the Bank's lending functiontimely. (2) Upon completion, a copy of the program shall be forwarded to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency of the program. (3) Beginning no later than September 30, 2010, and on a monthly basis, management will provide the Board with written reports including, at a minimum, the following information: (a) the identification, type, rating, and amount of problem loans and leases, which should include a comparison to prior periods; (b) the identification and amount of delinquent loans and leases, which should include a comparison to prior periods and peer group(s); (c) credit and collateral documentation exceptions, which should include a comparison to prior periods; (d) the identity of the loan officer who originated each loan reported in accordance with subparagraphs (a) through (c) of this Article and Paragraph; and (e) the identification of loans and leases not in conformance with the Bank's lending and leasing policies, and exceptions to the Bank's lending and leasing policies, which should include a comparison to prior periods. (4) The Board shall evaluate all internal loan and lease review reports and shall ensure that immediate, adequate, and continuing remedial action, if appropriate, is taken upon all findings noted in the reports. (5) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within ninety (90) days, develop, implement, and thereafter ensure Bank adherence to a written program written, action plan to improve the Bank's loan portfolio management. The program actions shall include, but not be limited to: (a) procedures to develop and ensure satisfactory compliance with guidelines consistent with Banking Circular 255, setting forth the criteria under which renewals of extensions of credit may be approved. At a minimum the policy shall: (i) ensure that renewals are not made for the sole purpose of reducing the volume of loan delinquencies; and (ii) provide guidelines and perfected collateral documentationlimitations on the capitalization of interest; (b) procedures to ensure that extensions of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit informationconformance with loan approval requirements; (c) a process for annual financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000ensure conformance with applicable regulatory guidance; (d) a process for financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessaryensure conformance with Call Report instructions; (e) a process for quarterly financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtful; (f) a process for maintaining current and satisfactory credit information on all commercial loans over $100,000; (g) procedures to ensure conformance with loan approval requirements and loan covenants; (h) a specific action plan to correct any violations of law cited in the Report of Examination; (i) procedures to acquire appraisals on real estate collateral in accordance with regulation; (j) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisals; (k) procedures to ensure conformance with Call Report instructions regarding requirements for placing loans on nonaccrual; (l) develop a performance appraisal process, including performance appraisals, job descriptions, and incentive programs for loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy and timeliness in credit grading, and other loan administration matters; (m) early problem loan identification to assure the timely identification and rating of loans and leases based on lending officer submissions; and (nf) compliance with the Bank's lending policies and lawsdevelop a training program for loan officers on timely problem loan identification, rulesaccurate risk assessments, and regulations pertaining to the Bank's consequences of unacceptable lending functionpractices. (2) Effective immediately, the Bank may grant, extend, renew, alter or restructure any loan or other extension of credit when the total indebtedness is in excess of one million dollars ($1,000,000) only after: (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 and analyzing current and satisfactory credit information, including cash flow analysis, where loans are to be repaid from operations; (i) Failure to obtain the information in subparagraph 2(d) of this Article II shall require a majority of the full Board (or a delegated committee thereof) to certify in writing the specific reasons why obtaining and analyzing the information in subparagraph 2(d) of this Article II would be detrimental to the best interests of the Bank. (ii) A copy of the Board certification shall be maintained in the credit file of the affected borrower(s). The certification will be reviewed by this Office in subsequent examinations of the Bank. (3) The Board, or a designated committee thereof, shall conduct a review, on at least a quarterly basis, to determine management's adherence to the program adopted pursuant to this Article II. (4) Upon completion, a copy of the program review shall be forwarded to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency of the program. (3) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within ninety Within sixty (9060) days, developthe Board shall establish credit risk management practices that ensure effective credit administration, implementportfolio management and monitoring, and risk mitigation. In doing so, the Board shall adopt and the Association (subject to Board review and ongoing monitoring) shall implement and thereafter ensure Bank adherence to a written program credit policy to improve the BankAssociation's loan portfolio management. The program credit policy shall include, include (but not be limited to): (a) revision and/or development of the Association’s procedures to ensure accuracy of risk ratings and proper and timely problem loan identification, including non-accrual loans; (b) procedures that require ongoing monitoring of borrower ability to repay the loan through receipt and documented review of current borrower, principal and guarantor financial information; (c) procedures and controls to periodically verify the existence and lien position of collateral; (d) credit risk rating definitions consistent with applicable regulatory guidance; (e) procedures for early problem loan identification, to ensure that credits are accurately risk rated at least quarterly; (f) written reports, regularly submitted to the Board, identifying the aggregate loans and leases not in conformance with the Association’s lending and leasing policies, and exceptions to the Association’s lending and leasing policies; (g) a system to effectively monitor previously charged-off assets and their recovery potential; (h) a requirement to identify, track and report all loans approved as exceptions to the lending policy, including real estate loans that exceed the supervisory loan-to-value limits; and (i) an analysis of concentrations of credit, significant economic factors, and general conditions and their impact on the credit quality of the Association’s loan and lease portfolios. (2) The Board shall ensure that Association personnel performing credit analyses are adequately trained in cash flow analysis, particularly analysis using information from tax returns, and that processes are in place to ensure that additional training is provided as needed. (3) Within sixty (60) days the Board shall engage a third-party loan review entity to: (a) procedures review the Association’s non-owner occupied residential/investor loan portfolio to ensure satisfactory and perfected collateral documentation;identify areas to strengthen credit administration, which shall be implemented by the Board; and (b) procedures to ensure that extensions of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit information; (c) perform a process for annual financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000; (d) a process for financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessary; (e) a process for quarterly financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtful; (f) a process for maintaining current and satisfactory credit information re-evaluation on all commercial loans over $100,000; (g) procedures to ensure conformance with non-owner occupied residential/investor loan approval requirements and loan covenants; (h) a specific action plan to correct any violations of law cited in the Report of Examination; (i) procedures to acquire appraisals on real estate collateral credits, in accordance with regulation; (j) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisals; (k) procedures to ensure conformance with Call Report instructions regarding requirements for placing loans on nonaccrual; (l) a performance appraisal process, including performance appraisals, job descriptions, and incentive programs for loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy in credit grading, and other loan administration matters; (m) early problem loan identification to assure the timely identification and rating of loans and leases based on lending officer submissions; and (n) compliance with the Bank's lending policies and laws, rules, and regulations pertaining to the Bank's lending function12 C.F.R. Part 164. (24) Upon completionWithin ninety (90) days the Board shall adopt, implement and ensure Association adherence to a copy of the program shall be forwarded to the Assistant Deputy Comptrollerwritten portfolio stress testing policy that considers changes in interest rates, who shall have the right to determine the sufficiency of the programconcentration risks and appropriate economic factors. (35) A written report of the stress test results shall be provided to the Board by Association management at least quarterly. (6) The Board shall ensure that the Bank Association has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, shall within ninety (90) days, develop, implement, and thereafter ensure Bank adherence to a written program and system to improve the Bank's loan portfolio management. The program system shall provide for a written report to be filed with the Board after each review and shall use a loan and lease grading system consistent with the guidelines set forth in “Rating Credit Risk” and “Allowance for Loan and Lease Losses” booklets of the Comptroller’s Handbook. The program, and any required adoption of or amendments to the Bank’s loan policies, must be consistent with the OCC’s Loan Portfolio Management Handbook, Appendix A “Topics of Loan Policy”, the Interagency Guidelines for Real Estate Lending Policies, the Commercial Real Estate & Construction Lending Handbook, the OCC’s Retail Credit Classification and Account Management Policy, OCC Bulletin 2000-20, and the Interagency Appraisal and Evaluation Guidelines, and shall include, but not be limited to: (a) procedures to ensure satisfactory and perfected collateral documentation; (b) procedures to ensure that extensions of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit information; (c) a process for annual financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000procedures to ensure conformance with loan approval requirements; (d) formal appraisal review process, including at a process for financial minimum an annual determination whether appraisals are current and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessaryproperty valuations reasonable; (e) a process develop specific timelines for quarterly financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtfulloan review; (f) a process for maintaining current system to track and satisfactory credit information on all commercial loans over $100,000analyze aggregate exceptions to policy and underwriting guidelines; (g) procedures to ensure conformance with that loans granted in excess of supervisory loan approval requirements to value ratios are limited, identified, monitored and loan covenantsreported; (h) a specific action plan to correct any violations of law cited in the Report of Examination; (i) procedures to acquire appraisals on real estate collateral in accordance with regulation; (j) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisals; (k) procedures to ensure conformance with Call Report instructions regarding requirements for placing loans on nonaccrualinstructions; (li) procedures to ensure the accuracy of internal management information systems; (j) a performance appraisal process, including performance appraisals, job descriptions, and incentive programs for loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy in credit grading, and other loan administration matters;; and (mk) procedures to track and analyze concentrations of credit, significant economic factors, and general conditions and their impact on the credit quality of the Bank’s loan and lease portfolios. (2) Upon completion, a copy of the program shall be forwarded to the Assistant Deputy Comptroller. (3) Within ninety (90) days, the Board shall develop, implement, and thereafter ensure Bank adherence to systems which provide for effective monitoring of: (a) early problem loan identification to assure the timely identification and rating of loans and leases based on lending officer submissions; and; (nb) statistical records that will serve as a basis for identifying sources of problem loans and leases by industry, size, collateral, division, group, indirect dealer, and individual lending officer; (c) previously charged-off assets and their recovery potential; (d) compliance with the Bank's lending policies and laws, rules, and regulations pertaining to the Bank's lending function; (e) appropriateness and timeliness of problem loan identification by loan officers; and (f) adequacy of credit and collateral documentation. (24) Upon completionBeginning June 30, 2008, on a copy quarterly basis management will provide the Board with written reports including, at a minimum, the following information: (a) the identification, type, rating, and amount of problem loans and leases; (b) the identification and amount of delinquent loans and leases; (c) adherence to loan covenant agreements; (d) credit and collateral documentation exceptions; (e) the identification and status of credit related violations of law, rule or regulation; (f) report of the program shall be forwarded aggregate amount of all loans in excess of supervisory loan to value limits, and whether in compliance with the thresholds of 100 percent and 30 percent of total capital for all loans and commercial loans, respectively, that are in excess of the supervisory loan to value limits; (g) the identity of the loan officer who originated each loan reported in accordance with subparagraphs (a) through (d) of this Article and Paragraph; (h) the identification and amount of loans and leases to executive officers, directors, principal shareholders (and their related interests) of the Bank; and (i) the identification of loans and leases not in conformance with the Bank's lending and leasing policies, and exceptions to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency of the programBank’s lending and leasing policies. (35) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article. (6) The Board shall evaluate the internal loan and lease review report(s) and shall ensure that immediate, adequate, and continuing remedial action, if appropriate, is taken upon all findings noted in the report(s). (7) A copy of the reports submitted to the Board, as well as documentation of the action taken by the Bank to collect or strengthen assets identified as problem credits, shall be preserved in the Bank.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within ninety (90) days, develop, implement, and thereafter ensure Bank adherence to a written program to improve the Bank's loan portfolio management. The program shall include, but not be limited to: (a) procedures to ensure satisfactory and perfected collateral documentation; (b) procedures to ensure real estate appraisals complying with 12 C.F.R. Part 34, sub-part C are ordered and reviewed by qualified individual(s) independent of the loan transaction; (c) procedures to ensure that extensions of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit information; (c) a process for annual financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000; (d) a process for financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessaryprocedures to ensure conformance with loan approval requirements; (e) a process for quarterly financial system to track and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtfulanalyze exceptions; (f) a process for maintaining current and satisfactory credit information on all commercial loans over $100,000procedures to ensure conformance with Call Report instructions; (g) procedures to ensure conformance with loan approval requirements and loan covenantsthe accuracy of internal management information systems; (h) a specific action plan to correct any violations of law cited in the Report of Examination; (i) procedures to acquire appraisals on real estate collateral in accordance with regulation; (j) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisals; (k) procedures to ensure conformance with Call Report instructions regarding requirements for placing loans on nonaccrual; (l) a performance appraisal process, including performance appraisals, job descriptions, and incentive programs for loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy in credit grading, and other loan administration matters;; and (mi) procedures to track and analyze concentrations of credit in order to identify and assess the inherent credit, liquidity, and interest rate risks. (2) Upon completion, a copy of the program shall be forwarded to the Assistant Deputy Comptroller. (3) Within ninety (90) days, the Board shall develop, implement, and thereafter ensure Bank adherence to systems which provide for effective monitoring of: (a) early problem loan identification to assure the timely identification and rating of loans and leases based on lending officer submissions; and; (nb) statistical records that will serve as a basis for identifying sources of problem loans and leases by industry, size, collateral, division, group, indirect dealer, and individual lending officer; (c) previously charged-off assets and their recovery potential; (d) compliance with the Bank's lending policies and laws, rules, and regulations pertaining to the Bank's lending function; (e) adequacy of credit and collateral documentation; and (f) concentrations of credit. (24) Upon completionBeginning March 31, 2005, on a copy quarterly basis management will provide the Board with written reports including, at a minimum, the following information: (a) the identification, type, rating, and amount of problem loans and leases; (b) the identification and amount of delinquent loans and leases; (c) credit and collateral documentation exceptions; (d) the identification and status of credit related violations of law, rule or regulation; (e) the identity of the program shall be forwarded loan officer who originated each loan reported in accordance with subparagraphs (a) through (d) of this Article and Paragraph; (f) an analysis of concentrations of credit, significant economic factors, and general conditions and their impact on the credit quality of the Bank’s loan and lease portfolios; (g) the identification and amount of loans and leases to executive officers, directors, principal shareholders (and their related interests) of the Bank; and (h) the identification of loans and leases not in conformance with the Bank's lending and leasing policies, and exceptions to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency of the programBank’s lending and leasing policies. (35) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within Within ninety (90) daysdays of the date of this Agreement, developthe Bank shall submit to the Assistant Deputy Comptroller for review and prior written determination of no supervisory objection, implement, and thereafter ensure Bank adherence to a an acceptable written program to improve the Bank's loan portfolio management. management program (“Loan Portfolio Management Program”) designed to ensure the risks that are inherent in the credit process are managed and controlled and are consistent with safe and sound banking practices articulated in the “Loan Portfolio Management” booklet of the Comptroller’s Handbook; OCC Bulletin 2020- 81, “Risk Management of Loan Purchase Activities;” and OCC Bulletin 2006-46, “Interagency Guidance on CRE Concentration Risk Management.” (2) The program Loan Portfolio Management Program shall include, but not be limited toat a minimum: (a) procedures and systems to ensure satisfactory identify, track, and perfected collateral documentationanalyze credit, collateral, and loan policy exceptions, including those associated with in-house originations, participations purchased and loan pools purchased; (b) procedures and systems to ensure that extensions track the performance of credit are grantedloan pools purchased, by renewal including expanded reporting for delinquent or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit informationpast due loans; (c) the establishment of safe and sound, formal limits and sub-limits for all concentrations of credit based on a process percentage of tier 1 capital plus the allowance for annual financial loan and risk reviews lease losses, stratified by account officers loan type and locality of commercial and commercial real estate loans over $100,000the borrower and/or collateral; (d) a process for financial procedures and risk reviews by account officers systems to track and analyze concentrations of commercial credit, significant economic factors, and commercial real estate loans over $100,000 at least annually or more frequently if necessarygeneral market conditions, and their impact on the credit quality of the loan portfolio(s); (e) a process for quarterly financial procedures and risk reviews by account officers systems to track performance of commercial and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtful; (f) a process for maintaining current and satisfactory credit information on all commercial loans over $100,000; (g) procedures to ensure conformance with loan approval requirements and loan covenants; (h) a specific action plan to correct any violations of law cited in the Report of Examination; (i) procedures to acquire appraisals on real estate collateral in accordance with regulation; (j) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisals; (k) procedures to ensure conformance with Call Report instructions regarding requirements for placing loans on nonaccrual; (l) a performance appraisal processproblem loans, including performance appraisals, job descriptions, and incentive programs for loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy in credit grading, and other loan administration matters; (m) early problem loan identification to assure ensure the timely identification and rating of loans and leases based and placement on lending officer submissionsnonaccrual; and (nf) compliance with requirements for an independent loan review process that reports directly to the Bank's lending policies Board or a designated committee thereof; (3) Within thirty (30) days following receipt of the Assistant Deputy Comptroller’s written determination of no supervisory objection to the Loan Portfolio Management Program, or to any subsequent amendment to the Loan Portfolio Management Program, the Board shall adopt and lawsBank management, rulessubject to Board review and ongoing monitoring, shall immediately implement and thereafter ensure adherence to the Loan Portfolio Management Program. The Board shall review the effectiveness of the Loan Portfolio Management Program at least annually, and regulations pertaining more frequently if necessary or if required by the OCC in writing, and amend the Loan Portfolio Management Program as needed or directed by the OCC. Any amendment to the Bank's lending function. (2) Upon completion, a copy of the program shall Loan Portfolio Management Program must be forwarded submitted to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency Comptroller for review and prior written determination of the programno supervisory objection. (3) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) The By March 31, 2022, the Bank shall develop and the Board shall, within ninety (90) days, develop, implement, and thereafter ensure Bank adherence to a shall adopt an acceptable written program to improve the Bank's loan portfolio managementmanagement program (“Loan Portfolio Management Program”) designed to ensure the risks that are inherent in the credit process are managed and controlled and are consistent with safe and sound banking practices. Refer to the “Loan Portfolio Management” booklet of the Comptroller’s Handbook. (2) The program Loan Portfolio Management Program shall include, but not be limited toat a minimum: (a) procedures requirements for periodic training of all credit department personnel, to ensure satisfactory include at a minimum: cash flow and perfected credit analysis, credit risk rating and nonaccrual determinations, loan policy requirements, collateral documentationperfection, real estate appraisal review and evaluations, and applicable lending-related laws and regulations; (b) procedures to ensure requirements for a written loan policy that extensions provides for proper and sound underwriting, details approval requirements, reflects proper risk tolerances and is tailored for the Bank’s risk profile, addresses when policy exceptions are allowed, and establishes clear lines of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit informationresponsibility; (c) a process requirements for annual financial the periodic review (no less than annually) and updating, as appropriate, of the Bank’s loan policy to ensure it provides for proper underwriting, reflects proper risk reviews by account officers tolerance, addresses when policy exceptions are allowed, and establishes clear lines of commercial and commercial real estate loans over $100,000responsibility; (d) a process procedures to ensure that any participations purchased by the Bank are consistent with safe and sound banking practices; refer to OCC Bulletin 2020-81, “Credit Risk: Risk Management of Loan Purchase Activities” for financial related safe and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessarysound principles; (e) a process procedures and systems for quarterly financial identifying and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtful; (f) a process for maintaining current and satisfactory credit information on all commercial loans over $100,000; (g) procedures to ensure conformance with loan approval requirements and loan covenants; (h) a specific action plan to correct any violations of law cited in the Report of Examination; (i) procedures to acquire appraisals on real estate collateral in accordance with regulation; (j) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisals; (k) procedures to ensure conformance with Call Report instructions regarding requirements for placing loans on nonaccrual; (l) a performance appraisal process, including performance appraisals, job descriptions, and incentive programs for loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy in credit grading, and other loan administration matters; (m) early problem loan identification to assure the timely identification and rating of loans and leases based on lending officer submissions; and (n) monitoring compliance with the Bank's ’s lending policies and laws, rules, and regulations pertaining to the Bank's ’s lending function.; (2f) Upon completionprocedures to require any extensions of credit are granted, a copy by renewal or otherwise, only after obtaining the required credit information and adequately analyzing and documenting the borrower’s and guarantor’s credit information, including but not limited to cash flow, debt service requirements, contingent liabilities, global liquidity condition, and sensitivity analysis in support of the program shall be forwarded credit decision; (g) procedures to ensure the Assistant Deputy ComptrollerBank obtains and analyzes updated credit information when appropriate; (h) procedures to ensure satisfactory documentation of perfected collateral; and (i) aggregate limits for credit, who shall have the right collateral, and loan policy exceptions, procedures and systems to determine the sufficiency of the programmonitor compliance with these aggregate limits, and a process for adjusting these aggregate limits as needed. (3) Upon adoption of the Loan Portfolio Management Program, Bank management, subject to Board review and ongoing monitoring, shall immediately implement and thereafter ensure adherence to the Loan Portfolio Management Program and any amendments thereto. The Board shall ensure that review the Bank has processeseffectiveness of the Loan Portfolio Management Program at least annually, personnelno later than January 31 of each year, and control systems to ensure implementation more frequently if necessary or if required by the OCC in writing, and amend the Loan Portfolio Management Program as needed or directed by the OCC. The Board shall forward a copy of the adopted Loan Portfolio Management Program, and adherence any subsequent amendments thereto, to the program and systems developed pursuant to this ArticleDirector within ten (10) days of adoption.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within ninety sixty (9060) days, develop, implement, and thereafter ensure Bank adherence to a written program to improve the Bank's ’s loan portfolio management. The program shall include, but not be limited to: (a) procedures to ensure satisfactory and perfected collateral documentation; (b) procedures to ensure that adequate financial information is obtained, such as information on contingent liabilities, current cash flow, and the verification of liquid assets; (c) procedures to ensure that extensions of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit information; (c) a process for annual financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000; (d) a process for financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessaryprocedures to ensure conformance with loan approval requirements; (e) a process for quarterly financial system to track and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtfulanalyze exceptions; (f) a process procedures to ensure conformance with Call Report instructions, including accounting for maintaining current and satisfactory credit information on all commercial loans over $100,000OREO; (g) procedures to ensure conformance with loan approval requirements and loan covenantsthat risk-based appraisal reviews are incorporated into the bank’s lending policy; (h) a specific action plan procedures to correct any violations ensure the accuracy of law cited in the Report of Examination;internal management information systems; and, (i) procedures to acquire appraisals on real estate collateral in accordance with regulation; (j) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisals; (k) procedures to ensure conformance with Call Report instructions regarding requirements for placing loans on nonaccrual; (l) a performance appraisal process, including performance appraisals, job descriptions, and incentive programs for loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy in credit grading, and other loan administration matters; (m) early problem loan identification to assure the timely identification and rating of loans and leases based on lending officer submissions; and (n) compliance with the Bank's lending policies and laws, rules, and regulations pertaining to the Bank's lending function. (2) Upon completion, a copy of the program shall be forwarded to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency of the program. (3) Within sixty (60) days, the Board shall develop, implement, and thereafter ensure Bank adherence to systems which provide for effective monitoring of: (a) the problem loan identification program required by Article VII; (b) statistical records that will serve as a basis for identifying sources of problem loans and leases by industry, size, collateral, division, group, indirect dealer, and individual lending officer; (c) previously charged-off assets and their recovery potential; (d) compliance with the Bank’s lending policies and laws, rules, and regulations pertaining to the Bank’s lending function; (e) adequacy of credit and collateral documentation; and, (f) concentrations of credit. (4) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within ninety (90) days, develop, implement, and thereafter ensure Bank adherence to a written program to improve the Bank's loan portfolio management. The program shall include, but not be limited to: (a) procedures to ensure satisfactory and perfected collateral documentation; (b) procedures to ensure that extensions require any extension of credit are granted(new, by maturity extension, renewal or otherwise, to any borrower and/or purchased participation) is made only after obtaining and analyzing validating current credit information about the borrower and satisfactory any guarantor sufficient to fully assess and analyze the borrower’s and guarantor’s cash flow, debt service requirements, contingent liabilities, and global liquidity condition, and only after the credit informationofficer prepares a documented credit analysis; (c) a process for annual financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000; (d) a process for financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessary; (e) a process for quarterly financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtful; (f) a process for maintaining current and satisfactory credit information on all commercial loans over $100,000; (g) procedures to ensure conformance with loan approval requirements and loan covenantsrequirements; (hd) a specific action plan system to correct any violations of law cited in track, analyze, and report to the Report of ExaminationBoard all underwriting and collateral exceptions; (i) procedures to acquire appraisals on real estate collateral in accordance with regulation; (j) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisals; (ke) procedures to ensure conformance with Consolidated Reports of Condition and Income (“Call Report instructions regarding requirements for placing loans on nonaccrualReports”) instructions; (lf) a performance appraisal process, including performance appraisals, job descriptions, and incentive programs for loan officers, which adequately consider their performance relative procedures to policy compliance, documentation standards, ensure the accuracy in credit grading, and other loan administration mattersof internal management information systems; (mg) early problem loan identification procedures to assure strengthen credit underwriting, particularly in the timely identification commercial real estate (CRE) portfolio and rating purchased loans; (h) procedures to ensure re-appraisal of loans property that defines the criteria for when a new or adjusted appraisal is required based upon changes in the market conditions or original project plans; (i) a description of the types of credit information required from borrowers and leases based on lending officer submissionsguarantors, including (but not limited to) annual audited statements, interim financial statements, personal financial statements, and tax returns with supporting schedules; and (nj) compliance with procedures that require any extension of credit (new, maturity extension, renewal or purchase) is made only after obtaining and documenting the Bank's lending policies and laws, rulescurrent valuation of any supporting collateral, and regulations pertaining that reasonable limits are established on credit advances against collateral, based on a consideration of (but not limited to) a realistic assessment of the value of collateral, the ratio of loan to the Bank's lending functionvalue, and overall debt service requirements. (2) Upon completion, a copy of the program shall be forwarded to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency of the program. (3) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article. The Board shall ensure that Bank personnel performing credit analyses are adequately trained in cash flow analysis, particularly analysis using information from tax returns, and that processes are in place to ensure that additional training is provided as needed.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shallshall ensure that management, within ninety sixty (9060) days, developdevelops, implementimplements, and thereafter ensure Bank ensures the Bank’s adherence to a written program to improve the Bank's loan portfolio management. The program shall include, but not be limited to: (a) procedures to ensure satisfactory and perfected collateral documentation; (b) procedures to ensure that extensions of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit information; (c) a process for annual financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000procedures to ensure conformance with loan approval requirements; (d) a process for financial procedures describing when loan agreements are required, the methods through which they should be documented, and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessarythe methods through which they will be enforced; (e) procedures to ensure loan officers have a process for quarterly thorough understanding of the use and enforcement of financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtfulconvenants; (f) a process for maintaining current system to track and satisfactory credit information on all commercial loans over $100,000analyze exceptions; (g) procedures to ensure conformance with loan approval requirements and loan covenantsCall Report instructions; (h) a specific action plan procedures to correct any violations ensure the accuracy of law cited in the Report of Examinationinternal management information systems; (i) procedures in conformance with OCC Advisory Letter 0000-0, Xxxxxxxxxxx Appraisal and Evaluation Functions, to acquire ensure that appraisals on real estate collateral and evaluations are reviewed for reasonableness by qualified individuals who are not involved in accordance with regulationthe loan production process and that new appraisals are ordered when required; (j) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisalscorrect any credit administration deficiencies identified in the XXX or any subsequent XXX; (k) procedures to ensure conformance with Call Report instructions regarding requirements for placing loans on nonaccrualthat all members of the bank’s lending staff possess or acquire sufficient skills to function effectively in their respective roles; (l) a performance appraisal process, including performance appraisals, job descriptions, and incentive programs for loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy in credit grading, and other loan administration matters;; and (m) procedures to track and analyze concentrations of credit, significant economic factors, and general conditions and their impact on the credit quality of the Bank’s loan and lease portfolios. (2) Upon completion, a copy of the program shall be forwarded to the Assistant Deputy Comptroller. (3) Within sixty (60) days, the Board shall ensure that management has developed, implemented, and thereafter ensure the Bank’s adherence to systems which provide for effective monitoring of: (a) early problem loan identification to assure the timely identification and rating of loans and leases based on lending officer submissions; and; (nb) statistical records that will serve as a basis for identifying sources of problem loans and leases by industry, size, collateral, division, group, indirect dealer, and individual lending officer; (c) previously charged-off assets and their recovery potential; (d) compliance with the Bank's lending policies and laws, rules, and regulations pertaining to the Bank's lending function; (e) adequacy of credit and collateral documentation; and (f) concentrations of credit. (24) Upon completionBeginning on June 30, 2010, and on a copy quarterly basis thereafter, management shall provide the Board or designated committee with written reports including, at a minimum, the following information: (a) the identification, type, rating, and amount of problem loans and leases; (b) the identification and amount of delinquent loans and leases; (c) credit and collateral documentation exceptions; (d) the identification and status of credit related violations of law, rule or regulation; (e) the identity of the program shall be forwarded loan officer who originated each loan reported in accordance with subparagraphs (a) through (d) of this Article and Paragraph; (f) an analysis of concentrations of credit, significant economic factors, and general conditions and their impact on the credit quality of the Bank’s loan and lease portfolios; (g) the identification and amount of loans and leases to executive officers, directors, principal shareholders (and their related interests) of the Bank; and (h) the identification of loans and leases not in conformance with the Bank's lending and leasing policies, and exceptions to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency of the programBank’s lending and leasing policies. (35) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within ninety sixty (9060) days, develop, implement, and thereafter ensure Bank adherence to a written program to improve the Bank's loan portfolio management. The program shall include, but not be limited to: (a) procedures to ensure satisfactory extensions of credit are appropriately structured consistent with safe and perfected collateral documentationsound standards; (b) procedures to ensure that extensions of credit are granted, by renewal or otherwise, granted to any borrower only after obtaining and analyzing current and satisfactory credit information; (c) a process for annual financial procedures to ensure satisfactory and risk reviews by account officers perfected collateral documentation and collateral valuation, including appraisals or evaluations of commercial and commercial real estate loans over $100,000estate; (d) a process for financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessaryprocedures to ensure conformance with lending policy, including loan approval requirements; (e) a process for quarterly financial procedures to ensure appropriate documentation and risk reviews by account officers use of commercial loan extensions and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtfulrenewals; (f) a process for maintaining current procedures to ensure conformance with Call Report instructions, Generally Accepted Accounting Principals, and satisfactory credit information on all commercial loans over $100,000lending related laws and regulations; (g) procedures to ensure conformance with the adequacy of loan approval requirements operations, including the accuracy of, and loan covenants;controls over, management information systems; and (h) a specific action plan to correct any violations of law cited in the Report of Examination; (i) procedures to acquire appraisals on real estate collateral in accordance with regulation; (j) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisals; (k) procedures to ensure conformance with Call Report instructions regarding requirements for placing loans on nonaccrual; (l) a performance appraisal process, including performance appraisals, job descriptions, and incentive programs for loan officers, which adequately consider their the lender’s performance relative to policy compliance, documentation standards, accuracy in credit grading, and other loan administration matters; (m) early problem loan identification to assure the timely identification and rating of loans and leases based on lending officer submissions; and (n) compliance with the Bank's lending policies and laws, rules, and regulations pertaining to the Bank's lending function. (2) Upon completion, a copy of the program shall be forwarded to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency of the program. (3) Beginning with the end of the first quarter following completion of the loan portfolio management program as described in paragraph (1), on a quarterly basis management will provide the Board with accurate, written reports including, at a minimum, the following information: (a) the identification, type, rating, and amount of problem loans and leases, with a brief summary of the major weaknesses, collateral, and guarantors; (b) the identification and amount of delinquent and non-accrual loans and leases, by loan officer; (c) charge offs and recoveries for the period and year-to-date; (d) credit and collateral documentation exceptions, by loan officer; (e) the identification and status of credit related violations of law, rule or regulation; (f) an analysis of concentrations of credit; (g) the identification and amount of loans to executive officers, directors, principal shareholders (and their related interests) of the Bank; (h) the identification of new loans not in conformance with the Bank's lending and leasing policies, and exceptions to the Bank’s lending policies; (i) tracking reports for previously approved loans with policy or credit and collateral exceptions. Reports should include aggregate loan portfolio exceptions and trends; (j) the identification of large relationships as defined by loan policy; (k) new loans by type, specifying new borrowers and out of area loans; (l) renewals and extensions by loan officer, including date of last renewal or extension and total number of renewals and extensions over the life of the loan; and, (m) restructured loans, including accrual status. (4) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within Within ninety (90) days, the Board shall develop, implement, and thereafter ensure Bank adherence to a written program to improve the Bank's loan portfolio management. The program shall include, but not be limited to: (a) procedures to ensure satisfactory strengthen the adequacy of credit and perfected collateral documentation, specifically regarding, but not limited to, accounts receivable, inventory and equipment lending; (b) procedures to strengthen documentation regarding the adequacy of existing real estate appraisals and evaluations when loans are renewed or refinanced to assess whether there has been any obvious and material change in market conditions or physical aspects of the property that may threaten the adequacy of the institution’s real estate collateral protection; (c) procedures to ensure that extensions of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit information; (c) a process for annual financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000; (d) a process for financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessary; (e) a process for quarterly financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtful; (f) a process for maintaining current and satisfactory credit information on all commercial loans over $100,000; (g) procedures to ensure conformance with loan approval requirements and loan covenantsrequirements; (he) a specific action plan system to correct any violations of law cited in the Report of Examinationtrack and analyze exceptions; (i) procedures to acquire appraisals on real estate collateral in accordance with regulation; (j) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisals; (kf) procedures to ensure conformance with Call Report instructions regarding requirements for placing loans on nonaccrual;the accuracy of internal management information systems; and (lg) a performance appraisal process, including performance appraisals, job descriptions, and incentive programs for loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy in credit gradinggrading accuracy, and other loan administration matters. (2) Upon completion, a copy of the program shall be forwarded to the Assistant Deputy Comptroller. (3) Within sixty (60) days, the Board shall develop, implement, and thereafter ensure Bank adherence to systems which provide for effective monitoring of: (a) statistical records that will serve as a basis for identifying sources of problem loans and leases by industry, size, collateral, division, group, indirect dealer, and individual lending officer; (mb) early problem loan identification to assure the timely identification previously charged-off assets and rating of loans and leases based on lending officer submissions; andtheir recovery potential; (nc) compliance with the Bank's lending policies and laws, rules, and regulations pertaining to the Bank's lending function; (4) On a monthly basis, beginning September 30, 2009, management will provide the Board with written reports including, at a minimum, the following information: (a) the identification, type, rating, and amount of problem loans and leases; (b) the identification and amount of delinquent loans and leases; (c) credit and collateral documentation exceptions; (d) the identification and status of credit-related violations of law, rule or regulation; (e) the identity of the loan officer who originated each loan reported in accordance with subparagraphs (a) through (d) of this Article and Paragraph; (f) an analysis of concentrations of credit, significant economic factors, and general conditions and their impact on the credit quality of the Bank’s loan and lease portfolios; (g) the identification of loans and leases not in conformance with the Bank's lending and leasing policies, and exceptions to the Bank’s lending and leasing policies. (2) Upon completion, a copy of the program shall be forwarded to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency of the program. (35) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within ninety Within sixty (9060) days, the Board shall develop, implement, and thereafter ensure Bank adherence to a an updated written program to improve the Bank's loan portfolio management. The program shall include, but not be limited to: (a) procedures review of the lending area to ensure satisfactory there is sufficient expertise to supervise the loan portfolio, including work-out credits, to perform accurate and perfected collateral documentationtimely risk identification, and to implement an effective ALLL methodology; (b) qualified loan staff at levels sufficient to address the number of credit risk management weaknesses noted in the Report of Examination (“XXX”); (c) formal policies and procedures that: (i) ensure that borrowers are reviewed on a risk-based frequency; (ii) address when a borrower’s or a guarantor’s global cash flow and contingent liabilities are to be analyzed; and (iii) include stress testing at the time of underwriting and during periodic reviews; (iv) ensure the bank’s credit policy aligns risk rating definitions with regulatory definitions and ensures that all appropriate personnel are trained on risk ratings; (v) ensure management performs and documents comprehensive analyses to support decisions on the accrual treatment of troubled borrowers, including troubled debt restructurings; (d) updated bank appraisal policies and procedures that adhere to OCC Bulletin 2010-42, Interagency Appraisal and Evaluation Guidelines, and provide for a clear segregation of duties, address the independence, qualifications and role of the appraisal reviewer, and includes criteria for updating appraisals or evaluations for troubled borrowers, including those loans evaluated for impairment; (e) The bank’s credit policy needs to include provisions for quarterly impairment analyses for all impaired and restructured loans. The policy should also provide the criteria for when it is appropriate to extend new monies to a criticized or classified borrower. Also, the policy should require formal action plans for criticized and classified borrowers. (f) procedures to ensure that extensions of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit information; (cg) a process for annual financial system to track and risk reviews by account officers of commercial and commercial real estate loans over $100,000; (d) a process for financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessary; (e) a process for quarterly financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtful; (f) a process for maintaining current and satisfactory credit information on all commercial loans over $100,000; (g) procedures to ensure conformance with loan approval requirements and loan covenantsanalyze exceptions; (h) a specific action plan to correct any violations of law cited in the Report of Examination; (i) procedures to acquire appraisals on real estate collateral in accordance with regulation; (j) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisals; (k) procedures to ensure conformance with Call Report instructions regarding requirements for placing loans on nonaccrualinstructions; (li) a performance appraisal processprocedures to track and analyze concentrations of credit, including performance appraisals, job descriptionssignificant economic factors, and incentive programs for general conditions and their impact on the credit quality of the Bank’s loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy in credit grading, and other loan administration matters; (m) early problem loan identification to assure the timely identification and rating of loans and leases based on lending officer submissionsportfolio; and (nj) compliance with a comprehensive loan review process that quantifies the Bank's lending policies overall level of credit risk and laws, rules, and regulations pertaining to assesses the Bank's lending functionquality of credit risk management. (2) Upon completion, a copy of the program shall be forwarded to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency of the program. (3) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within ninety sixty (9060) days, develop, implement, and thereafter ensure Bank adherence to a written program to improve the Bank's loan portfolio management. The program shall include, but not be limited to: (a) procedures to ensure satisfactory and perfected collateral documentation; (b) procedures to ensure that adequate financial information is obtained, such as information on contingent liabilities, current cash flow, and the verification of liquid assets; (c) procedures to ensure that extensions of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit information; (c) a process for annual financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000; (d) a process for financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessaryprocedures to ensure conformance with loan approval requirements; (e) a process for quarterly financial system to track and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtfulanalyze exceptions; (f) a process procedures to ensure conformance with Call Report instructions, including accounting for maintaining current and satisfactory credit information on all commercial loans over $100,000OREO; (g) procedures to ensure conformance with loan approval requirements and loan covenantsthat risk-based appraisal reviews are incorporated into the bank’s lending policy; (h) a specific action plan procedures to correct any violations ensure the accuracy of law cited in the Report of Examination;internal management information systems; and, (i) procedures to acquire appraisals on real estate collateral in accordance with regulation; (j) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisals; (k) procedures to ensure conformance with Call Report instructions regarding requirements for placing loans on nonaccrual; (l) a performance appraisal process, including performance appraisals, job descriptions, and incentive programs for loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy in credit grading, and other loan administration matters. (2) Upon completion, a copy of the program shall be forwarded to the Assistant Deputy Comptroller. (3) Within sixty (60) days, the Board shall develop, implement, and thereafter ensure Bank adherence to systems which provide for effective monitoring of: (a) the problem loan identification program required by Article VII; (mb) early statistical records that will serve as a basis for identifying sources of problem loan identification to assure the timely identification and rating of loans and leases based on by industry, size, collateral, division, group, indirect dealer, and individual lending officer submissions; andofficer; (nc) previously charged-off assets and their recovery potential; (d) compliance with the Bank's lending policies and laws, rules, and regulations pertaining to the Bank's lending function; (e) adequacy of credit and collateral documentation; and, (f) concentrations of credit. (2) Upon completion, a copy of the program shall be forwarded to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency of the program. (34) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within Within ninety (90) daysdays of the date of this Agreement, the Board shall develop, implement, and thereafter ensure Bank adherence to a written program to improve the Bank's loan portfolio managementmanagement (“Loan Portfolio Management Program”). The program Loan Portfolio Management Program shall include, but not be limited to: (a) procedures to ensure satisfactory and perfected collateral documentation; (b) procedures to ensure that extensions of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit information; (c) a process for annual financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000; (d) a process for financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessary; (e) a process for quarterly financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtful; (f) a process for maintaining current and satisfactory credit information on all commercial loans over $100,000; (gb) procedures to ensure conformance with loan approval requirements requirements; (c) procedures to ensure conformance with Consolidated Reports of Condition and loan covenantsIncome (“Call Report”) instructions; (d) a description of the types of credit information required from borrowers and guarantors, including, but not limited to, annual audited statements, interim financial statements, personal financial statements, and tax returns with supporting schedules; (e) procedures that require borrowers to provide periodic financial data; (f) procedures that require any extensions of credit (new, maturity extension, or renewal) are made only after obtaining and validating current credit information about the borrower and any guarantor sufficient to fully assess and analyze the borrower’s and guarantor’s global cash flow, debt service requirements, contingent liabilities, and global liquidity condition, and only after the credit officer prepares a documented credit analysis; (g) procedures that require any extension of credit (new, maturity extension, or renewal) is made only after obtaining and documenting the current valuation of any supporting collateral; (h) a specific action plan guidelines for the performance of interim financial analysis or annual reviews using alternative procedures for borrowers refusing to correct any violations of law cited in the Report of Examinationprovide periodic financial information; (i) procedures to acquire appraisals on real estate ensure exceptions to policy and credit and collateral in accordance exceptions are within levels consistent with regulationprudential standards and internal limits; (j) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis all exceptions to the credit policy shall be placed clearly documented on commercial real estate appraisalsthe loan offering sheet, problem loan report, criticized asset report, and other management information systems (“MIS”) and approved by the Board or a committee thereof before the loan is funded or renewed; (k) procedures appropriate management information systems to ensure conformance with Call Report instructions regarding requirements for placing loans on nonaccrualmonitor and track financial, policy, and collateral exceptions; (l) a performance appraisal process, including performance appraisals, job descriptions, assignment of accountability for the updating and incentive programs for loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy in credit grading, recording of exceptions and other loan administration mattersmaintenance of management information system accuracy; (m) early problem loan identification establishment of timeframes for the follow up and elimination of identified exceptions; (n) procedures to assure the timely identification ensure risk rating upgrades and rating restoration of loans to accrual status, including upgrading a loan designated as a troubled debt restructuring (“TDR”), are supported by a current and leases based on lending officer submissionswell documented credit evaluation of the borrower’s financial condition and prospects for repayment, including consideration of the borrower’s historical repayment performance and other relevant factors; and (no) compliance with procedures to maintain standards of independence for the Bank's lending policies appraisal and lawsevaluation function as part of an effective collateral valuation program that is independent of the loan approval process (if staff limitations prevent full segregation of these functions, rules, then the Board and regulations pertaining management must make sure that the individual accepting and reviewing the appraisal abstains from and has no power to the Bank's lending functionapprove loans). (2) Upon completion, a copy of the program Loan Portfolio Management Program shall be forwarded to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency of the program. (3) Within sixty (60) days of the date of this Agreement, the Board shall ensure that Bank personnel performing credit analyses are adequately trained in cash flow analysis, particularly analysis using information from tax returns, and that processes are in place to ensure that additional training is provided as needed. (4) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within ninety sixty (9060) days, develop, implement, and thereafter ensure Bank adherence to a written program to improve the Bank's loan portfolio management. The program shall include, but not be limited to: (a) procedures to ensure satisfactory and perfected collateral documentation; (b) procedures to ensure that extensions of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit information; (c) a process for annual financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000procedures to ensure conformance with loan approval requirements; (d) a process for financial system to track and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessaryanalyze exceptions; (e) a process for quarterly financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtfulprocedures to ensure livestock inspection controls; (f) a process for maintaining current and satisfactory credit information on all commercial loans over $100,000procedures to ensure conformance with Call Report instructions; (g) procedures to ensure conformance with loan approval requirements and loan covenantsthe accuracy of internal management information systems; (h) a specific action plan to correct any violations of law cited in the Report of Examination; (i) procedures to acquire appraisals on real estate collateral in accordance with regulation; (j) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisals; (k) procedures to ensure conformance with Call Report instructions regarding requirements for placing loans on nonaccrual; (l) a performance appraisal process, including performance appraisals, job descriptions, and incentive programs for loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy in credit grading, and other loan administration matters;; and (mi) procedures to track and analyze concentrations of credit, significant economic factors, and general conditions and their impact on the credit quality of the Bank’s loan and lease portfolios. (2) Upon completion, a copy of the program shall be forwarded to the Assistant Deputy Comptroller. (3) Within sixty (60) days, the Board shall develop, implement, and thereafter ensure Bank adherence to systems which provide for effective monitoring of: (a) early problem loan identification to assure the timely identification and rating of loans and leases based on lending officer submissions; and; (nb) statistical records that will serve as a basis for identifying sources of problem loans and leases by industry, size, collateral, division, group, indirect dealer, and individual lending officer; (c) previously charged-off assets and their recovery potential; (d) compliance with the Bank's lending policies and laws, rules, and regulations pertaining to the Bank's lending function; (e) adequacy of credit and collateral documentation; and (f) concentrations of credit. (24) Upon completionBeginning June 1, 2004, on a copy monthly basis management will provide the Board with written reports including, at a minimum, the following information: (a) the identification, type, rating, and amount of problem loans and leases; (b) the identification and amount of delinquent loans and leases; (c) credit and collateral documentation exceptions; (d) the identification and status of credit related violations of law, rule or regulation; (e) the identity of the program shall be forwarded loan officer who originated each loan reported in accordance with subparagraphs (a) through (d) of this Article and Paragraph; (f) an analysis of concentrations of credit, significant economic factors, and general conditions and their impact on the credit quality of the Bank’s loan and lease portfolios; (g) the identification and amount of loans and leases to executive officers, directors, principal shareholders (and their related interests) of the Bank; and (h) the identification of loans and leases not in conformance with the Bank's lending and leasing policies, and exceptions to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency of the program. (3) Bank’s lending and leasing policies. The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within ninety sixty (9060) days, develop, implement, and thereafter ensure Bank adherence submit to the Director pursuant to paragraph (3) of this Article a written program credit policy to improve the Bank's ’s loan portfolio management. At the next Board meeting following receipt of the Director’s determination of no supervisory objection, the Board shall adopt and the Bank (subject to Board review and ongoing monitoring) shall implement and thereafter ensure adherence to the written credit policy. The program credit policy shall include, but not be limited to: (a) procedures requirements that extensions of credit are granted, by renewal or otherwise, to ensure satisfactory any borrower only after obtaining current and perfected collateral documentationsufficient credit information to fully assess the borrower's cash flow, debt service requirements, contingent liabilities, and liquidity on a global basis, and only after preparing a documented credit analysis; (b) a description of the types of credit information required on borrowers and guarantors including, but not limited to, annual audited statements, interim financial statements, personal financial statements, supporting schedules and tax returns. (c) procedures to validate and analyze income and liquidity sources for extensions of credit to all borrowers, including those which are foreign entities and those which have foreign guarantors; (d) adequate training in cash flow preparation and analysis, particularly from tax returns, for Bank personnel performing credit analyses, and processes to ensure that additional training is provided as needed; (e) procedures to ensure that extensions of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing documenting a current and satisfactory credit information; (c) a process for annual financial and risk reviews by account officers valuation of commercial and commercial collateral, with the exception of real estate loans over $100,000; (d) a process for financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessary; (e) a process for quarterly financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtfulcollateral which is addressed in Article VII; (f) a process for maintaining current procedures and satisfactory credit information on all commercial loans over $100,000controls to periodically verify the existence and lien position of collateral; (g) procedures which prohibit, on any loan renewal or extension, the establishment of an interest reserve using any Bank loan proceeds to ensure conformance the same borrower, provided that where an interest reserve is funded by a Bank loan to another borrower, that loan fully complys with the requirements of subparagraph (a) above, and further, the loan approval requirements receiving such an interest reserve shall not be considered a performing loan and loan covenantsshall be placed on nonaccrual; (h) a specific action plan to correct procedures which prohibit, on any violations loan renewal or extension, the capitalization of law cited in the Report of Examinationaccrued interest; (i) procedures which establish time frames to acquire appraisals on real estate resolve credit and collateral in accordance with regulationdocumentation exceptions; (j) procedures for reviewing real estate appraisals early problem loan identification to ensure compliance assure that credits are accurately risk rated on at least a monthly basis, pursuant to the risk ratings definitions contained in the Bank's credit policy and consistent with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisalsregulatory guidance; (k) procedures to ensure conformance with Call Report instructions regarding requirements for placing loans on nonaccrual; (l) a performance appraisal process, including performance appraisals, job descriptions, and incentive programs for loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy in credit grading, and other loan administration matters; (m) early problem loan identification to assure the timely identification and rating of loans and leases based on lending officer submissions; and (nl) compliance with procedures to track and analyze concentrations of credit, significant economic factors, and general conditions and their impact on the credit quality of the Bank's lending policies and laws, rules, and regulations pertaining to the Bank's lending functionloan portfolio. (2) Where the Bank deviates from the Bank's credit policy, exceptions shall be clearly documented on the loan offering sheet, problem loan report and other management information systems, and these exceptions shall receive the prior written approval by the Board or a committee thereof. (3) Upon completion, a copy of the program credit policy shall be forwarded to the Assistant Deputy ComptrollerDirector for a determination of no supervisory objection. Upon receiving a determination of no supervisory objection from the Director, who the Bank shall have the right immediately implement and adhere to determine the sufficiency of the program. (34) The Board shall ensure that the Bank has sufficient processes, personnel, and control systems to ensure implementation of effectively implement and adherence adhere to the program and systems policy developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within ninety sixty (9060) days, develop, implement, and thereafter ensure Bank adherence to a written program to improve the Bank's loan portfolio management. The program shall include, but not be limited to: (a) procedures and systems to ensure satisfactory identify, track, analyze, resolve, and perfected report exceptions to the lending policy, including: (i) credit monitoring information exceptions, (ii) collateral documentationdocumentation exceptions, and (iii) loan-to-value ratio exceptions; (b) procedures to ensure that extensions of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit informationinformation as required by policy guidelines; (c) a process for annual financial procedures to ensure credit and risk reviews by account officers of commercial collateral files are organized and commercial real estate loans over $100,000maintained in an orderly manner; (d) a process for financial procedures to track and risk reviews by account officers analyze concentrations of commercial credit, significant economic factors, and commercial real estate loans over $100,000 at least annually or more frequently if necessarygeneral conditions and their impact on the credit quality of the Bank’s loan and lease portfolios; (e) a process for quarterly financial procedures that require loan officers to document in the credit files significant conversations and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtfulevents involving borrowers; (f) a process for maintaining current procedures to ensure real estate appraisal reviews and satisfactory credit information on all commercial loans over $100,000the bank’s list of approved real estate appraisers conform to regulatory guidelines; (g) procedures to ensure conformance with loan approval requirements administer floor plan credits including inventory inspections, follow-up on missing vehicles, vehicle condition and loan covenantsmileage checks, curtailment requirements, and Board and management reporting requirements; (h) a specific action plan procedures that outline loan officer responsibilities to correct any violations of law cited identify and document problem credits in the Report of Examinationtimely manner and to provide monthly updated status reports on such credits; (i) procedures to acquire appraisals on real estate collateral in accordance with regulation;ensure the accuracy of internal management information systems; and (j) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisals; (k) procedures to ensure conformance with Call Report instructions regarding requirements for placing loans on nonaccrual; (l) a performance appraisal process, including performance appraisals, job descriptions, and incentive programs for loan officers, which adequately consider their that considers performance relative to policy compliancecompliance with policy, documentation standardscredit monitoring, accuracy in credit grading, and other loan administration matters; (m) early problem loan identification to assure the timely identification and rating of loans and leases based on lending officer submissions; and (n) compliance with the Bank's lending policies and laws, rules, and regulations pertaining to the Bank's lending function. (2) Upon completion, a copy of the program shall be forwarded to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency of the program. (3) Beginning August 2002, on a monthly basis management will provide the Board with written reports including, at a minimum, the following information: (a) the identification, type, rating, and amount of problem loans; (b) the identification and amount of delinquent loans; (c) credit and collateral documentation exceptions; (d) the identification and status of credit related violations of law, rule or regulation; (e) the identification of loans not in conformance with the Bank's lending policies, and exceptions to the Bank’s lending policies. (f) the identity of the loan officer who originated each loan reported in accordance with subparagraphs (a) through (e) of this Article and Paragraph; and (g) an analysis of concentrations of credit, significant economic factors, and general conditions and their impact on the credit quality of the Bank’s loan portfolios. (4) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within ninety (90) days, develop, implement, and thereafter shall immediately ensure Bank adherence to a the written program to improve the Bank's loan portfolio management. The program shall include, but not be limited to: (a) procedures to ensure satisfactory and perfected collateral documentationdocumentation by requiring the following: (i) loan worksheets on all borrowers that clearly detail a full description of the collateral, its value, the source of the valuation, and the date the value was determined; (ii) adequate information obtained to determine the value of any accounts or notes receivables held as collateral, including account receivable agings; (iii) timely inspections performed on all asset dependent loans, such as vehicle floor plans and livestock loans; and (iv) adequate evaluations documented on all real estate loans, including those loans under the statutory threshold to require certified appraisals. (b) procedures to ensure that extensions of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit informationinformation which include requiring: (i) trend and financial ratio analysis using a spread of financial statements on commercial borrowers with aggregate debt exceeding one hundred thousand dollars ($100,000); (ii) financial statement reviews that include documenting observed trends and questions on all other borrowers; and (iii) cash flow analysis on all borrowers, regardless of size, including all debt service requirements. (c) a process for annual procedures to ensure financial information is obtained and risk reviews by account officers analyzed throughout the term of commercial and commercial real estate loans over $100,000the credit; (d) a process for financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessaryprocedures to ensure conformance with loan approval requirements; (e) a process for quarterly financial system to track and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtfulanalyze exceptions; (f) a process for maintaining current and satisfactory credit information on all commercial loans over $100,000procedures to ensure conformance with Call Report instructions; (g) procedures to ensure conformance with loan approval requirements and loan covenants;the accuracy of internal management information systems; and (h) a specific action plan procedures to correct any violations track and analyze concentrations of law cited in credit, significant economic factors, and general conditions and their impact on the Report credit quality of Examination;the Bank's loan and lease portfolios. (i) procedures to acquire appraisals on real estate collateral in accordance ensure that Board approval is required prior to funding any loan that does not comply with regulation;Loan Policy or established underwriting standards. (j) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation andthat Board approval is required prior to the funding of any loan that is outside the lending authority of bank officers. (2) If any changes are made to the loan portfolio management program, that appropriate expertise is used for such reviews. Special emphasis a copy of the program shall be placed on commercial real estate appraisals;forwarded to the Assistant Deputy Comptroller. (k3) procedures Immediately the Board shall ensure adherence to ensure conformance with Call Report instructions regarding requirements the bank's systems which provide for placing loans on nonaccrual;effective monitoring of: (l) a performance appraisal process, including performance appraisals, job descriptions, and incentive programs for loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy in credit grading, and other loan administration matters; (ma) early problem loan identification to assure the timely identification and rating of loans and leases based on lending officer submissions; and; (nb) previously charged-off assets and their recovery potential; (c) compliance with the Bank's lending policies and laws, rules, and regulations pertaining to the Bank's lending function; (d) adequacy of credit and collateral documentation; and (e) concentrations of credit. (2) Upon completion, a copy of the program shall be forwarded to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency of the program. (34) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within ninety (90) days, develop, implement, and thereafter ensure Bank adherence to a written program to improve the Bank's loan portfolio management. The program shall include, but not be limited to: (a) procedures to ensure satisfactory and perfected collateral documentation; (b) procedures to ensure that real estate appraisals and evaluations comply with 12 C.F.R. 34, Subpart C. (c) procedures to ensure that extensions of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit information; (c) a process for annual financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000; (d) a process for financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessaryprocedures to ensure conformance with loan approval requirements; (e) a process for quarterly financial system to track and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtfulanalyze exceptions; (f) a process for maintaining current and satisfactory credit information on all commercial loans over $100,000procedures to ensure conformance with Call Report instructions; (g) procedures to ensure conformance with loan approval requirements and loan covenantsthe accuracy of internal management information systems; (h) a specific action plan to correct any violations of law cited in the Report of Examination; (i) procedures to acquire appraisals on real estate collateral in accordance with regulation; (j) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisals; (k) procedures to ensure conformance with Call Report instructions regarding requirements for placing loans on nonaccrual; (l) a performance appraisal process, including performance appraisals, job descriptions, and incentive programs for loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy in credit grading, and other loan administration matters; and, (i) procedures to track and analyze concentrations of credit, significant economic factors, and general conditions and their impact on the credit quality of the Bank’s loan and lease portfolios. (2) A copy of the Board’s program shall be submitted to the Assistant Deputy Comptroller for review and prior written determination of no supervisory objection. Upon receiving a determination of no supervisory objection from the Assistant Deputy Comptroller, the Bank shall implement and adhere to the program. (3) Within ninety (90) days, the Board shall review and revise the Bank’s written loan policy. In revising this policy, the Board shall refer to the “Loan Portfolio Management”, “Commercial Loans,” “Commercial Real Estate and Construction Lending,” “Concentration of Credit” and “Installment Loans” booklets of the Comptroller’s Handbook. This policy shall incorporate but necessarily be limited to, the following: (a) a description of acceptable loans; (mb) a provision that current and satisfactory credit information will be obtained on each borrower; (c) minimum debt to income ratio or debt service coverage requirements by each loan type; (d) underwriting requirements such as presale requirements, release prices, etc. for each project type; (e) maximum ratio of loan value to appraised value or acquisition cost of collateral securing the loan; (f) guidelines consistent with Banking Circular 255, setting forth the criteria under which renewals of extensions of credit may be approved. At a minimum, this shall include: (i) ensure that renewals are not made for the sole purpose of reducing the volume of loan delinquencies; and (ii) provide guidelines and limitations on the capitalization of interest. (4) A copy of the loan policy shall be submitted to the Assistant Deputy Comptroller for review and prior written determination of no supervisory objection. Upon receiving a determination of no supervisory objection from the Assistant Deputy Comptroller, the Bank shall adopt and adhere to the policy. (5) Within ninety (90) days, the Board shall develop, implement, and thereafter ensure Bank adherence to systems which provide for effective monitoring of: (a) early problem loan identification to assure the timely identification and rating of loans and leases based on lending officer submissions; (b) adequacy of credit and collateral documentation; and, (nc) compliance concentrations of credit. (6) Beginning March 31, 2008, on a monthly basis management will provide the Board with written reports including, at a minimum, the following information: (a) the identification, type, rating, and amount of problem loans and leases; (b) the identification and amount of delinquent loans and leases; (c) credit and collateral documentation exceptions; (d) the identification and status of credit related violations of law, rule or regulation; (e) the identity of the loan officer who originated each loan reported in accordance with subparagraphs (a) through (d) of this Article and Paragraph; (f) an analysis of concentrations of credit, significant economic factors, and general conditions and their impact on the credit quality of the Bank’s loan and lease portfolios; and, (g) the identification of loans and leases not in conformance with the Bank's lending policies and laws, rulesleasing policies, and regulations pertaining exceptions to the Bank's ’s lending functionand leasing policies. (2) Upon completion, a copy of the program shall be forwarded to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency of the program. (37) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within ninety sixty (9060) days, develop, implement, and thereafter ensure Bank adherence to a written program to improve the Bank's loan portfolio management. The program shall include, but not be limited to: (a) procedures to ensure satisfactory and perfected collateral documentationdocumentation and appraisal processes; (b) procedures to ensure that extensions of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit information; (c) a process for annual financial and risk reviews by account officers procedures to ensure the accuracy of commercial and commercial real estate loans over $100,000internal management information systems; (d) a process for financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessarymeasures to correct the deficiencies in the Bank's lending procedures noted in any XXX; (e2) a process Within sixty (60) days, the Board shall develop, implement, and thereafter ensure Bank adherence to systems which provide for quarterly financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtful;effective monitoring of: (f) a process for maintaining current and satisfactory credit information on all commercial loans over $100,000; (g) procedures to ensure conformance with loan approval requirements and loan covenants; (h) a specific action plan to correct any violations of law cited in the Report of Examination; (i) procedures to acquire appraisals on real estate collateral in accordance with regulation; (j) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisals; (k) procedures to ensure conformance with Call Report instructions regarding requirements for placing loans on nonaccrual; (l) a performance appraisal process, including performance appraisals, job descriptions, and incentive programs for loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy in credit grading, and other loan administration matters; (ma) early problem loan identification to assure the timely identification and rating of loans and leases based on lending officer submissions; and (nb) compliance with the Bank's lending policies and laws, rules, and regulations pertaining to the Bank's lending function. (23) Upon completionWithin sixty (60) days, the Board shall establish an effective, independent and on- going loan review system to review, at least quarterly, the Bank's loan portfolio to assure the timely identification and categorization of problem credits. The system shall provide for a copy written report to be filed with the Board after each review and shall use a loan grading system consistent with the guidelines set forth in “Rating Credit Risk” and booklet of the Comptroller’s Handbook, OCC Bulletin 2000-20, OCC Bulletin 2006-47. Such reports shall include, at a minimum, conclusions regarding: (a) the overall quality of the loan and lease portfolios; (b) the identification, type, rating, and amount of problem loans and leases; (c) the identification and amount of delinquent loans and leases; (d) credit and collateral documentation exceptions; (e) the identification and status of credit related violations of law, rule or regulation; (f) the identity of the loan officer who originated each loan reported in accordance with subparagraphs (b) through (e) of the Article; (g) concentrations of credit; (h) loans and leases to executive officers, directors, principal shareholders (and their related interests) of the Bank; and (i) loans and leases not in conformance with the Bank's lending and leasing policies, and exceptions to the Bank’s lending and leasing policies. (4) The Board shall evaluate the independent loan and lease review report(s) and shall ensure that immediate, adequate, and continuing remedial action, if appropriate, is taken upon all findings noted in the report(s). (5) The Board shall review the adequacy of the Bank's Allowance for Loan and Lease Losses (“Allowance”) and shall establish a program for the maintenance of an adequate Allowance. This review and program shall be forwarded to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency designed in light of the programcomments on maintaining a proper Allowance found in the OCC Bulletin 2006-47. (36) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program programs and systems developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) Within thirty (30) days, the Board shall immediately improve its Problem Loan Reports to ensure that they are factually accurate and contain sufficient descriptive information to properly assess the nature of the loan, the condition of the borrower, the existence and extent of the credit problem, and the Bank’s efforts to improve the quality of the credit. (2) Within thirty (30) days, the Board shall immediately adopt a policy and implement a process for identifying loans that should be placed on nonaccrual status. Your nonaccrual policy should contain the following requirements, at a minimum: (a) loans should be placed on nonaccrual when the full collection of interest and principal is highly questionable; (b) loans should be placed on nonaccrual in accordance with the criteria contained in the Call Report instructions; and (c) loans should be placed on nonaccrual when principal or interest is ninety (90) days or more past due unless it is well secured and in the process of collection. The policy should clearly define these terms and also provide details on the documentation required to support any decisions that loans are “well secured and in the process of collection,” and thus not placed on non-accrual. The Comptroller’s Handbook entitled “Rating Credit Risk” provides additional guidance on nonaccrual loans. Your policy and process should ensure that these loans are placed on non- accrual status to ensure that the Bank files accurate Reports of Condition and operates in a safe and sound manner. Your policy and procedures should be submitted to the Assistant Deputy Comptroller for review and approval. (3) Within thirty (30) days, the Board shall implement additional systems and controls to ensure that the Bank promptly recognizes and accurately grades problem loans in accordance with the guidance contained in the Comptroller’s Handbook entitled “Rating Credit Risk” dated April 2001. Such additional systems and controls shall include at a minimum: (a) detailed training for all lending officers and staff on recognizing and grading problem loans; and (b) follow-up procedures to ensure that lending officers and staff are promptly identifying and grading problem loans. (4) The Board shall, within ninety sixty (9060) days, develop, implement, and thereafter ensure Bank adherence to a written program to improve the Bank's loan portfolio management. The program shall include, but not be limited to: (a) procedures to ensure satisfactory and perfected collateral documentation; (b) procedures to ensure that extensions of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit and income information; (c) a process for annual financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000; (d) a process for financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessary; (e) a process for quarterly financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtful; (f) a process for maintaining current and satisfactory credit information on all commercial loans over $100,000; (g) procedures to ensure conformance with loan approval requirements and loan covenantsrequirements; (hd) a specific action plan system to correct any violations of law cited in the Report of Examinationtrack and analyze exceptions; (i) procedures to acquire appraisals on real estate collateral in accordance with regulation; (j) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisals; (ke) procedures to ensure conformance with Call Report instructions regarding requirements for placing loans on nonaccrualinstructions; (lf) a performance appraisal process, including performance appraisals, job descriptions, and incentive programs for loan officers, which adequately consider their performance relative procedures to policy compliance, documentation standards, ensure the accuracy in credit grading, and other loan administration matters; (m) early problem loan identification to assure the timely identification and rating of loans and leases based on lending officer submissionsinternal management information systems; and (ng) procedures to track and analyze concentrations of credit, significant economic factors, and general conditions and their impact on the credit quality of the Bank’s loan and lease portfolios. (5) Upon completion, the program shall be forwarded to the Assistant Deputy Comptroller for review. (6) Within sixty (60 ) days, the Board shall develop, implement, and thereafter ensure Bank adherence to systems which provide for effective monitoring of: (a) statistical records that will serve as a basis for identifying sources of problem loans and leases by industry, size, collateral, division, group, indirect dealer, and individual lending officer; (b) previously charged-off assets and their recovery potential; (c) compliance with the Bank's lending policies and laws, rules, and regulations pertaining to the Bank's lending function; (d) adequacy of credit and collateral documentation; and (e) concentrations of credit. (27) Upon completionBeginning December 31, 2006, on a copy quarterly basis, management will provide the Board with written reports including, at a minimum, the following information: (a) the identification, type, rating, and amount of problem loans and leases; (b) the identification and amount of delinquent loans and leases; (c) credit and collateral documentation exceptions; (d) the identification and status of credit related violations of law, rule or regulation; (e) an analysis of concentrations of credit, significant economic factors, and general conditions and their impact on the credit quality of the program shall be forwarded Bank’s loan and lease portfolios; and (f) the identification of loans and leases not in conformance with the Bank's lending and leasing policies, and exceptions to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency of the programBank’s lending and leasing policies. (3) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within ninety (90) days, develop, implement, and thereafter ensure Bank adherence to a written program to improve the Bank's ’s loan portfolio management. The program shall include, but not be limited to: (a) procedures to ensure satisfactory and perfected collateral documentation; (b) procedures to ensure that extensions of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit information; (c) a process for annual financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000procedures to ensure conformance with loan approval requirements; (d) a process for financial system to track and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessaryanalyze exceptions; (e) a process for quarterly financial procedures to ensure accurate loan risk ratings based on the borrower’s ability to repay according to the original agreed upon terms, and risk reviews by account officers in accordance with regulatory definitions of commercial classified and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtfulcriticized assets; (f) procedures to ensure that recommendations from the external loan review are appropriately addressed in a process for maintaining current timely manner and satisfactory credit information on all commercial that the external loan review risk rates loans over $100,000in accordance with regulatory definitions of classified and criticized assets; (g) procedures to ensure conformance with loan approval requirements and loan covenantsthe accuracy of internal management information systems; (h) a specific action plan to correct any violations of law cited in the Report of Examination; (i) procedures to acquire appraisals on real estate collateral in accordance with regulation; (j) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisals; (k) procedures to ensure conformance with Call Report instructions regarding requirements for placing loans on nonaccrual; (l) a performance appraisal process, including performance appraisals, job descriptions, and incentive programs for loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy in credit grading, and other loan administration matters; (mi) a written asset diversification program consistent with guidance set forth in OCC Bulletin 2006-461 and the “Concentrations of Credit” booklet of the Comptroller’s Handbook (December 2011); and (j) procedures to track and analyze concentrations of credit, significant economic factors, and general conditions and their impact on the credit quality of the Bank’s loan and lease portfolios. 1 OCC Bulletin 2006-46, issued December 6, 2006, provides guidance on Commercial Real Estate Concentration Risk Management. (2) Upon completion, a copy of the program shall be forwarded to the Assistant Deputy Comptroller. (3) Within ninety (90) days, the Board shall develop, implement, and thereafter ensure Bank adherence to systems which provide for effective monitoring of: (a) early problem loan identification to assure the timely identification and rating of loans and leases based on lending officer submissions; and; (nb) statistical records that will serve as a basis for identifying sources of problem loans and leases by industry, size, collateral, group, broker, and individual lending officer; (c) previously charged-off assets and their recovery potential; (d) compliance with the Bank's ’s lending policies and laws, rules, and regulations pertaining to the Bank's ’s lending function; (e) adequacy of credit and collateral documentation; and (f) concentrations of credit. (24) Upon completionBeginning September 30, 2012, and on a copy quarterly basis thereafter, management will provide the Board with written reports including, at a minimum, the following information: (a) the identification, type, rating, and amount of problem loans and leases; (b) the identification and amount of delinquent loans and leases; (c) credit and collateral documentation exceptions; (d) the identification and status of credit related violations of law, rule or regulation; (e) the identity of the program shall be forwarded loan officer who originated each loan reported in accordance with subparagraphs (a) through (d) of this Article and Paragraph; (f) an analysis of concentrations of credit, significant economic factors, and general conditions and their impact on the credit quality of the Bank’s loan and lease portfolios; (g) the identification and amount of loans and leases to executive officers, directors, principal shareholders (and their related interests) of the Bank; and (h) the identification of loans and leases not in conformance with the Bank’s lending and leasing policies, and exceptions to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency of the programBank’s lending and leasing policies. (35) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within ninety (90) days, develop, implement, and thereafter ensure Bank adherence to a written program to improve the Bank's ’s loan portfolio management. The program shall include, but not be limited to: (a) procedures to ensure satisfactory and perfected collateral documentation; (b) procedures to ensure that extensions of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit information; (c) a process for annual financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000; (d) a process for financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessary; (e) a process for quarterly financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtful; (f) a process for maintaining current and satisfactory credit information on all commercial loans over $100,000; (g) procedures to ensure conformance with loan approval requirements and loan covenants; (h) a specific action plan to correct any violations of law cited in the Report of Examination; (i) procedures to acquire appraisals on real estate collateral in accordance with regulation; (j) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisals; (k) procedures to ensure conformance with Call Report instructions regarding requirements for placing loans on nonaccrual; (l) a performance appraisal process, including performance appraisals, job descriptions, and incentive programs for loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy in credit grading, and other loan administration matters; (m) early problem loan identification to assure the timely identification and rating of loans and leases based on lending officer submissions; and (n) compliance with the Bank's ’s lending policies and laws, rules, and regulations pertaining to the Bank's ’s lending function. (2) Upon completion, a copy of the program shall be forwarded to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency of the program. (3) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within ninety Within sixty (9060) days, the Board shall develop, implement, and thereafter ensure Bank adherence to a an updated written program to improve the Bank's ’s loan portfolio management. The program shall include, but not be limited to: (a) procedures review of the lending area to ensure satisfactory there is sufficient expertise to supervise the loan portfolio, including work-out credits, to perform accurate and perfected collateral documentationtimely risk identification, and to implement an effective ALLL methodology; (b) qualified loan staff at levels sufficient to address the number of credit risk management weaknesses noted in the Report of Examination (“XXX”); (c) formal policies and procedures that: (i) ensure that borrowers are reviewed on a risk-based frequency; (ii) address when a borrower’s or a guarantor’s global cash flow and contingent liabilities are to be analyzed; and (iii) include stress testing at the time of underwriting and during periodic reviews; (iv) ensure the bank’s credit policy aligns risk rating definitions with regulatory definitions and ensures that all appropriate personnel are trained on risk ratings; (v) ensure management performs and documents comprehensive analyses to support decisions on the accrual treatment of troubled borrowers, including troubled debt restructurings; (d) updated bank appraisal policies and procedures that adhere to OCC Bulletin 2010-42, Interagency Appraisal and Evaluation Guidelines, and provide for a clear segregation of duties, address the independence, qualifications and role of the appraisal reviewer, and includes criteria for updating appraisals or evaluations for troubled borrowers, including those loans evaluated for impairment; (e) The bank’s credit policy needs to include provisions for quarterly impairment analyses for all impaired and restructured loans. The policy should also provide the criteria for when it is appropriate to extend new monies to a criticized or classified borrower. Also, the policy should require formal action plans for criticized and classified borrowers. (f) procedures to ensure that extensions of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit information; (cg) a process for annual financial system to track and risk reviews by account officers of commercial and commercial real estate loans over $100,000; (d) a process for financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessary; (e) a process for quarterly financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtful; (f) a process for maintaining current and satisfactory credit information on all commercial loans over $100,000; (g) procedures to ensure conformance with loan approval requirements and loan covenantsanalyze exceptions; (h) a specific action plan to correct any violations of law cited in the Report of Examination; (i) procedures to acquire appraisals on real estate collateral in accordance with regulation; (j) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisals; (k) procedures to ensure conformance with Call Report instructions regarding requirements for placing loans on nonaccrualinstructions; (li) a performance appraisal processprocedures to track and analyze concentrations of credit, including performance appraisals, job descriptionssignificant economic factors, and incentive programs for general conditions and their impact on the credit quality of the Bank’s loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy in credit grading, and other loan administration matters; (m) early problem loan identification to assure the timely identification and rating of loans and leases based on lending officer submissionsportfolio; and (nj) compliance with a comprehensive loan review process that quantifies the Bank's lending policies overall level of credit risk and laws, rules, and regulations pertaining to assesses the Bank's lending functionquality of credit risk management. (2) Upon completion, a copy of the program shall be forwarded to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency of the program. (3) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within ninety (90) daysno later than October 31, 2011, develop, implement, and thereafter ensure Bank adherence to a written program to improve the Bank's loan portfolio management. The program shall include, but not be limited to: (a) procedures to ensure satisfactory and perfected collateral documentationcorrect any credit administration deficiencies identified in the Report of Examination with an as of date of May 9, 2011 (“XXX”), any subsequent Report of Examination, by external loan review, or by consultants; (b) procedures to ensure that unsecured working capital lending is curtailed; (c) procedures to ensure that extensions of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit information; (c) a process for annual financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000; (d) a process for financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessary; (e) a process for quarterly financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtful; (f) a process for maintaining current and satisfactory credit information on all commercial loans over $100,000; (g) procedures to ensure conformance with loan approval requirements and loan covenantsrequirements; (he) a specific action plan system to correct any violations of law cited in the Report of Examinationtrack and analyze exceptions; (if) procedures to acquire appraisals track and analyze concentrations of credit, significant economic factors, and general conditions and their impact on real estate collateral in accordance with regulation;the credit quality of the Bank’s loan portfolios. (j2) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation andUpon completion, that appropriate expertise is used for such reviews. Special emphasis a copy of the program shall be placed on commercial real estate appraisals;forwarded to the Assistant Deputy Comptroller. (k3) procedures The Board shall, no later than October 31, 2011, develop, implement, and thereafter ensure Bank adherence to ensure conformance with Call Report instructions regarding requirements systems which provide for placing loans on nonaccrual;effective monitoring of: (l) a performance appraisal process, including performance appraisals, job descriptions, and incentive programs for loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy in credit grading, and other loan administration matters; (ma) early problem loan identification to assure the timely identification and rating of loans and leases based on lending officer submissions; andloans; (nb) previously charged-off assets and their recovery potential; (c) compliance with the Bank's lending policies and laws, rules, and regulations pertaining to the Bank's lending function; (d) adequacy of credit and collateral documentation; and (e) concentrations of credit. (24) Upon completionBeginning on October 31, 2011, on a copy monthly basis, management will provide the Board with written reports including, at a minimum, the following information: (a) the identification, type, rating, and amount of problem loans; (b) the identification and amount of delinquent loans; (c) credit and collateral documentation exceptions; (d) the identification and status of credit related violations of law, rule or regulation; (e) an analysis of concentrations of credit, significant economic factors, and general conditions and their impact on the credit quality of the program shall be forwarded Bank’s loan portfolios; (f) the identification and amount of loans to executive officers and directors of the Bank; and (g) the identification of loans not in conformance with the Bank's lending policies, and exceptions to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency of the programBank’s lending policies. (35) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within ninety (90) days, develop, implement, and thereafter ensure Bank adherence to a written program to improve the Bank's loan portfolio management. The program shall include, but not be limited to: (a) procedures to ensure satisfactory and perfected collateral documentation; (b) procedures to ensure that extensions of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit information; (c) a process for annual financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000procedures to ensure conformance with loan approval requirements; (d) procedures to ensure that the amount of each advance on a process for financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessaryconstruction loan is commensurate with improvements made to date; (e) procedures to ensure that advances on construction loans are made only after inspection by a process for quarterly financial qualified and risk reviews by account officers of commercial and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtfulindependent individual; (f) a process for maintaining current system to track and satisfactory credit information on all commercial loans over $100,000analyze exceptions; (g) procedures to ensure conformance with loan approval requirements and loan covenantsCall Report instructions; (h) a specific action plan procedures to correct any violations ensure the accuracy of law cited in the Report of Examination;internal management information systems; and (i) procedures to acquire appraisals track and analyze concentrations of credit, significant economic factors, and general conditions and their impact on real estate collateral in accordance with regulation;the credit quality of the Bank’s loan and lease portfolios. (j2) procedures for reviewing real estate appraisals to ensure compliance with relevant regulation andUpon completion, that appropriate expertise is used for such reviews. Special emphasis a copy of the program shall be placed on commercial real estate appraisals;forwarded to the Assistant Deputy Comptroller. (k3) procedures Within ninety (90) days, the Board shall develop, implement, and thereafter ensure Bank adherence to ensure conformance with Call Report instructions regarding requirements systems which provide for placing loans on nonaccrual;effective monitoring of: (l) a performance appraisal process, including performance appraisals, job descriptions, and incentive programs for loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy in credit grading, and other loan administration matters; (ma) early problem loan identification to assure the timely identification and rating of loans and leases based on lending officer submissions; and; (nb) previously charged-off assets and their recovery potential; (c) compliance with the Bank's lending policies and laws, rules, and regulations pertaining to the Bank's lending function; (d) adequacy of credit and collateral documentation; and (e) concentrations of credit. (24) Upon completionBeginning August 2005, on a copy quarterly basis management will provide the Board with written reports including, at a minimum, the following information: (a) the identification, type, rating, and amount of problem loans and leases; (b) the identification and amount of delinquent loans and leases; (c) credit and collateral documentation exceptions; (d) the identification and status of credit related violations of law, rule or regulation; (e) an analysis of concentrations of credit, significant economic factors, and general conditions and their impact on the credit quality of the program shall be forwarded Bank’s loan and lease portfolios; (f) the identification and amount of loans and leases to executive officers, directors, principal shareholders (and their related interests) of the Bank; and (g) the identification of loans and leases not in conformance with the Bank's lending and leasing policies, and exceptions to the Assistant Deputy Comptroller, who shall have the right to determine the sufficiency of the programBank’s lending and leasing policies. (35) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.

LOAN PORTFOLIO MANAGEMENT. (1) The Board shall, within Within ninety (90) daysdays of the date of this Agreement, the Board shall develop, implement, and thereafter ensure Bank adherence to a written program to improve the Bank's loan portfolio managementmanagement (“Loan Portfolio Management Program”). The program Loan Portfolio Management Program shall include, but not be limited to: (a) procedures that require any extensions of credit (new, maturity extension, or renewal) are made only after obtaining and validating current credit information about the borrower and any guarantor sufficient to ensure satisfactory fully assess and perfected collateral documentationanalyze the borrower’s and guarantor’s global cash flow, debt service requirements, contingent liabilities, and global liquidity condition, including current credit reports, and only after the credit officer prepares a documented credit analysis; (b) procedures to ensure that extensions of credit are grantedconformance with loan approval requirements, including obtaining updated financial information as dictated by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit informationthe Bank’s policy threshold; (c) a process guidelines for the performance of interim financial analysis or annual reviews, including alternative procedures for borrowers refusing to provide periodic financial and risk reviews by account officers of commercial and commercial real estate loans over $100,000information; (d) a process for financial and risk procedures requiring review of annual reviews by account officers a second party, including verification of commercial and commercial real estate loans over $100,000 at least annually or more frequently if necessarythe accuracy of the cash flow analysis; (e) a process for quarterly procedures to ensure financial analyses are performed accurately and risk reviews that calculations are signed and dated by account officers of commercial the preparer and commercial real estate loans over $100,000 that are rated Special Mention, Substandard or Doubtfulreviewer; (f) a process for maintaining current and satisfactory credit information on all commercial loans over $100,000; (g) procedures to ensure conformance with loan approval requirements Consolidated Reports of Condition and loan covenantsIncome (“Call Report”) instructions; (g) a description of the types of credit information required from borrowers and guarantors, including, but not limited to, annual audited statements, interim financial statements, personal financial statements, and tax returns with supporting schedules; (h) a specific action plan procedures that require borrowers to correct any violations of law cited in the Report of Examinationprovide periodic financial data; (i) procedures to acquire appraisals on real estate collateral in accordance with regulationthat require any extension of credit (new, maturity extension, or renewal) is made only after obtaining and documenting the current valuation of any supporting collateral; (j) procedures for reviewing real estate appraisals to ensure compliance exceptions to policy and credit and collateral exceptions are within levels consistent with relevant regulation and, that appropriate expertise is used for such reviews. Special emphasis shall be placed on commercial real estate appraisalsprudential standards and internal limits; (k) procedures to ensure conformance with Call Report instructions regarding requirements for placing loans that all exceptions to the credit policy shall be clearly documented on nonaccrualthe loan offering sheet, problem loan report, criticized asset report, and other management information systems (“MIS”) and approved by the Board or a committee thereof before the loan is funded or renewed; (l) a performance appraisal processappropriate management information systems to monitor and track financial, including performance appraisals, job descriptionspolicy, and incentive programs for loan officers, which adequately consider their performance relative to policy compliance, documentation standards, accuracy in credit grading, and other loan administration matterscollateral exceptions; (m) early problem loan identification assignment of accountability for the updating and recording of exceptions and maintenance of management information system accuracy; (n) establishment of timeframes for the follow up and elimination of identified exceptions; (o) procedures to assure the timely identification ensure risk rating upgrades and rating restoration of loans to accrual status, including upgrading a loan designated as a troubled debt restructuring (“TDR”), are supported by a current and leases based on lending officer submissionswell documented credit evaluation of the borrower’s financial condition and prospects for repayment, including consideration of the borrower’s historical repayment performance and other relevant factors; and (np) compliance with procedures to maintain standards of independence for the Bank's lending policies appraisal and lawsevaluation function as part of an effective collateral valuation program that is independent of the loan approval process (if staff limitations prevent full segregation of these functions, rules, then the Board and regulations pertaining management must make sure that the individual accepting and reviewing the appraisal abstains from and has no power to the Bank's lending functionapprove loans). (2) Upon completion, a copy of the program Loan Portfolio Management Program shall be forwarded to the Assistant Deputy Comptroller for a written determination of no supervisory objection. Upon receiving a determination of no supervisory objection from the Assistant Deputy Comptroller, who the Board shall have the right adopt, implement and thereafter ensure Bank adherence to determine the sufficiency of the program. (3) Within sixty (60) days of the date of this Agreement, the Board shall ensure that Bank personnel performing credit analyses are adequately trained in cash flow analysis, and that processes are in place to ensure that additional training is provided as needed. (4) The Board shall ensure that the Bank has processes, personnel, and control systems to ensure implementation of and adherence to the program and systems developed pursuant to this Article.