Common use of LOAN PORTFOLIO MANAGEMENT Clause in Contracts

LOAN PORTFOLIO MANAGEMENT. (1) Within sixty (60) days, Board shall review ,and revise as necessary, the Bank’s written credit policy, which shall include (but is not limited to): (a) 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; (b) procedures that require any extension of credit (new, maturity extension, or renewal) is 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 cash flow, debt service requirements, contingent liabilities, and global liquidity condition, and only after the credit officer prepares a documented credit analysis; (c) 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, and 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 value, and overall debt service requirements; (d) procedures and controls to periodically verify the existence and lien position of collateral; (e) a requirement that borrowers and/or guarantors maintain any collateral margins established in the credit approval process; (f) procedures that prohibit the capitalization of accrued interest on any loan renewal or extension; (g) procedures that prohibit, on any loan renewal or extension, the establishment of an interest reserve using the proceeds of any Bank loan to the same borrower or guarantor; (h) procedures to ensure that all exceptions to the credit policy shall be clearly documented on the loan offering sheet, problem loan report, and other MIS; and approved by the Board or a committee thereof before the loan is funded or renewed; (i) credit risk rating definitions consistent with applicable regulatory guidance; (j) procedures for early problem loan identification by lending officers, to ensure that credits are accurately risk rated at least monthly; (k) prudent lending and approval limits for lending officers that are commensurate with their experience and qualifications, and that prohibit combining individual lending officers’ lending authority to increase limits; (2) Upon completion, a copy of the Bank's revised credit policy, and associated written procedures shall be forwarded to the Director.

LOAN PORTFOLIO MANAGEMENT. (1) Within sixty ninety (6090) daysdays of the date of this Agreement, the Board shall review ,develop, implement, and revise as necessary, thereafter ensure Bank adherence to a written program to improve the Bank’s written credit policyloan portfolio management (“Loan Portfolio Management Program”). The Loan Portfolio Management Program shall include, which shall include (but is not limited to):at a minimum: (a) a description of the types of credit information required from borrowers and guarantorsprudent underwriting standards, including (but not limited to) annual audited statementsminimum liquidity and cash flow requirements, interim financial statements, personal financial statements, that are consistent with safe and tax returns with supporting schedulessound banking practices; (b) procedures that require any extension extensions of credit (new, maturity extension, or renewal) is are made only after obtaining and validating the credit officer prepares a documented credit analysis, which shall include an assessment of 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 ability to repay principal and interest over a documented credit analysisreasonable period; (c) 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, and 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 value, and overall debt service requirements; (d) procedures to ensure satisfactory and controls to periodically verify the existence and lien position of collateralperfected collateral documentation; (e) a requirement that description of the types of credit information required from borrowers and/or guarantors maintain any collateral margins established in the credit approval processand guarantors, including, but not limited to, annual financial statements, interim financial statements, personal financial statements, and tax returns with supporting schedules; (f) guidelines for the performance of interim financial analysis or annual reviews using alternative procedures that prohibit the capitalization of accrued interest on any loan renewal or extensionfor borrowers refusing to provide periodic financial information; (g) procedures that prohibitfor annual reviews of loans and unsecured lines of credit over a specific dollar threshold, on any loan renewal or extension, which shall be established by the establishment of an interest reserve using the proceeds of any Bank loan Board to the same borrower or guarantorbe no greater than two hundred fifty thousand dollars ($250,000); (h) procedures to ensure: (i) that borrowers and guarantors are contractually obligated, through appropriate loan covenants, to provide financial statements and other information that would facilitate the Bank’s ongoing review of the collectability of the loan and (ii) completion of timely financial analysis on borrower and guarantors, including processes to request and track receipt and analysis of borrower and guarantor financial information on an ongoing basis; (i) procedures to identify “evergreen” and stagnant lines of credit and restructure or amortize those lines of credit; (j) procedures for periodic verification of accounts receivable, inventory, and liquidity; (k) procedures to ensure conformance with loan approval requirements and the Bank’s credit policies; (l) procedures to ensure that all exceptions to the credit policy shall be clearly documented on the loan offering sheet, problem loan report, sheet and other management information systems (“MIS; ”) and approved by the Board or a committee thereof before the loan is funded or renewed; (im) credit risk rating definitions consistent with applicable regulatory guidanceappropriate MIS to monitor and track financial, policy, collateral, and supervisory loan-to-value exceptions that are reported to the Board no less than quarterly; (jn) procedures limits, established by the Board, for early problem each type of exception as a percentage of the loan identification by lending officers, to ensure that credits are accurately risk rated at least monthlyportfolio and capital; (ko) procedures to ensure exceptions to policy and credit and collateral exceptions are within levels consistent with prudential standards and internal limits; (p) procedures to ensure the accuracy of internal MIS; (q) prudent lending and approval concentration limits for outstanding and committed unsecured lending officers that are commensurate exposure; (r) procedures to ensure conformance with their experience Consolidated Reports of Condition and qualificationsIncome (“Call Report”) instructions; and (s) a performance appraisal process, including performance appraisals, job descriptions, and that prohibit combining individual lending incentive programs for loan officers’ lending authority , which adequately consider their performance relative to increase limits;policy compliance, documentation standards, accuracy in credit grading, and other loan administration matters. (2) Upon completioncompletion of the Loan Portfolio Management Program, a copy of the Bank's revised credit policy, and associated written procedures Loan Portfolio Management Program shall be forwarded to the DirectorAssistant Deputy Comptroller within sixty (60) days of its completion for a written determination of no supervisory objection. (3) Within ninety (90) days of the date of this Agreement, the Board must ensure implementation of an appropriate structure to allow for effective oversight of the Bank’s commercial loan portfolio on an ongoing basis, including on a monthly basis that Bank management must 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) policy, financial, credit, and collateral 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 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 and amount of loans and leases, including overdrafts, to executive officers, directors, principal shareholders (and their related interests) of the Bank. (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) Within sixty (60) days, the Board shall review ,establish credit risk management practices that ensure effective credit administration, portfolio management and revise as necessarymonitoring, and risk mitigation. In doing so, the Bank’s Board shall adopt and the Association (subject to Board review and ongoing monitoring) shall implement and thereafter ensure adherence to a written credit policy, which policy to improve the Association’s loan portfolio management. The credit policy shall include (but is not be limited to): (a) a description revision and/or development of Association procedures to ensure adherence to the types of credit information required from borrowers Association’s internal lending policies and guarantorsconcentration limits, including (including, but not limited to) annual audited statements, interim financial statements, personal financial statements, and tax returns with supporting scheduleschurch loans; (b) revision and/or development of the Association’s procedures that require any extension to ensure accuracy of credit (newrisk ratings and proper and timely problem loan identification, maturity extension, or renewal) is 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 cash flow, debt service requirements, contingent liabilities, and global liquidity condition, and only after the credit officer prepares a documented credit analysisincluding non-accrual loans; (c) procedures that require any extension ongoing monitoring of credit (newborrower ability to repay the loan through receipt and documented review of current borrower, maturity extension, or renewal) is made only after obtaining principal and documenting the current valuation of any supporting collateral, and 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 value, and overall debt service requirementsguarantor financial information; (d) procedures and controls to periodically verify the existence and lien position of collateral; (e) a requirement that borrowers and/or guarantors maintain any collateral margins established in the credit approval process; (f) procedures that prohibit the capitalization of accrued interest on any loan renewal or extension; (g) procedures that prohibit, on any loan renewal or extension, the establishment of an interest reserve using the proceeds of any Bank loan to the same borrower or guarantor; (h) procedures to ensure that all exceptions to the credit policy shall be clearly documented on the loan offering sheet, problem loan report, and other MIS; and approved by the Board or a committee thereof before the loan is funded or renewed; (i) credit risk rating definitions consistent with applicable regulatory guidance; (jf) procedures for early problem loan identification by lending officersidentification, to ensure that credits are accurately risk rated at least monthlyquarterly; (kg) prudent 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) procedures to track and approval limits for lending officers that are commensurate with their experience and qualificationsanalyze concentrations of credit, significant economic factors, and that prohibit combining individual lending officers’ lending authority to increase limits;general conditions and their impact on the credit quality of the Association’s loan and lease portfolios. (2) Upon completionBeginning immediately, 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 Bank's revised credit policyloan 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 associated written procedures shall be forwarded general conditions and their impact on the credit quality of the Association’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 Association; and (h) the identification of loans and leases not in conformance with the Association’s lending and leasing policies, and exceptions to the DirectorAssociation’s lending and leasing policies. (3) The Board shall ensure that the 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) Within sixty (60) days, Board shall adopt and the Bank (subject to Board review ,and revise as necessary, ongoing monitoring) shall implement and thereafter ensure adherence to a written credit policy to improve the Bank’s written 's loan portfolio management. The credit policy, which policy shall include (but is not be limited to): (a) 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; (b) procedures that require any extension of credit (new, maturity extension, or renewal) is 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 cash flow, debt service requirements, contingent liabilities, and global liquidity condition, and only after the credit officer prepares a documented credit analysis; (c) 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, and 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 value, and overall debt service requirements; (d) procedures and controls to periodically verify the existence and lien position of collateral; (e) procedures to ensure that loans made for the purpose of constructing or developing real estate include (but are not limited to) requirements to: (i) obtain and evaluate detailed project plans; detailed project budget; time frames for project completion; detailed market analysis; and sales projections, including projected absorption rates; (ii) conduct stress testing of significant project and lending; and (iii) obtain current documentation sufficient to support a detailed analysis of the financial condition of borrowers and significant guarantors. (f) a requirement that borrowers and/or guarantors maintain any collateral margins established in the credit approval process; (fg) procedures that prohibit the capitalization of accrued interest on any loan renewal or extension; (gh) procedures that prohibit, on any loan renewal renewal, extension or extensionmodification, the establishment of an interest reserve using the proceeds of any Bank loan to the same borrower or guarantor; (hi) procedures to ensure that all exceptions to the credit policy shall be clearly documented on the loan offering sheet, problem loan report, and other MIS; and approved by the Board or a committee thereof before the loan is funded or renewed; (ij) credit risk rating definitions consistent with applicable regulatory guidance; (jk) procedures for early problem loan identification by lending officersidentification, including requiring that loan officers obtain updated financial information for significant borrower credits and relationships, to ensure that credits are accurately risk rated at least monthly;; and (kl) prudent lending and approval limits for lending officers that are commensurate with their experience and qualifications, and that prohibit combining individual lending officers’ lending authority to increase limits;. (2) Upon completionThe Board shall ensure that Bank personnel performing credit analyses are adequately trained in cash flow analysis, a copy of the Bank's revised credit policyparticularly analysis using information from tax returns, and associated that processes are in place to ensure that additional training is provided as needed. (3) Within sixty (60) days the Board shall establish a written procedures shall be forwarded performance appraisal and salary administration process for loan officers that adequately considers performance relative to the Directorjob descriptions, policy compliance, documentation standards, accuracy in credit grading, and other loan administration matters.

LOAN PORTFOLIO MANAGEMENT. (1) Within sixty ninety (6090) daysdays of this Agreement, the Board shall review ,develop, implement, and revise as necessary, thereafter ensure Bank adherence to a written program to improve the Bank’s written credit policy, which loan portfolio management. This program shall include (but is not limited to):provisions for the following: (a) a description ensuring that the Chief Credit Officer has the knowledge, skills, ability, and authority necessary to ensure appropriate oversight of the types Bank’s loan portfolio and reach and maintain compliance with the articles of this Agreement; (b) retaining an independent consultant to aid the Chief Credit Officer in correcting the deficiencies in the Bank’s lending practices; (c) requiring the Chief Credit Officer to develop a plan to improve and formalize oversight of the loan portfolio. This plan must include the following: (i) an evaluation of the number and expertise of current staff and whether additional staff is necessary to achieve compliance with this Agreement; (ii) an assessment of the actions needed to reach and maintain compliance with this Agreement; (iii) documentation on how the Chief Credit Officer will remediate the deficiencies detailed in the Bank’s most recent Report of Examination; (iv) documentation on changes required in the Bank’s review processes and management information systems necessary to improve the Bank’s loan portfolio management; and (v) a requirement for the Board to approve the plan developed by the Chief Credit Officer; (d) developing a revised Bank loan policy which shall be consistent with the plan developed by the Chief Credit Officer pursuant to subparagraph (1)(c) of this Article and shall include procedures to ensure: (i) loans conform with loan approval requirements; (ii) any extensions of credit (new, maturity extension, renewal, or participation purchased) are made in compliance with Article VI, Paragraph (2) of this Agreement; (iii) adequate credit information required is requested and obtained from borrowers and guarantors, including (including, but not limited to) , annual statements, including audited statementsstatements when available, interim financial statements, personal financial statements, and tax returns with supporting schedules; (biv) procedures that require any extension of credit (new, maturity extension, or renewal) is 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 cash flow, debt service requirements, contingent liabilities, and global liquidity condition, and only after the credit officer prepares a documented credit analysisborrowers provide periodic financial data; (cv) procedures the Bank maintains standards of independence for the appraisal and evaluation function as part of an effective collateral valuation program 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, and that reasonable limits are established on credit advances against collateral, based on a consideration of (but not limited to) a realistic assessment independent of the value loan approval process (if staff limitations prevent full segregation of collateralthese functions, then the ratio Board and management must make sure that the individual accepting and reviewing the appraisal abstains from and has no power to approve loans); and (vi) management is held accountable for appropriate documentation of loan to value, and overall debt service requirements; (d) procedures and controls to periodically verify the existence and lien position of collateral; (e) a requirement that borrowers and/or guarantors maintain any collateral margins established in the credit approval process; (f) procedures that prohibit the capitalization of accrued interest on any loan renewal or extension; (g) procedures that prohibit, on any loan renewal or extension, the establishment of an interest reserve using the proceeds of any Bank loan to the same borrower or guarantor; (h) procedures to ensure that all exceptions to the credit policy shall be clearly documented on the loan offering sheet, problem loan report, and other MIS; and approved by the Board or a committee thereof before the loan is funded or renewed; (i) credit risk rating definitions consistent with applicable regulatory guidance; (j) procedures for early problem loan identification by lending officers, to ensure that credits are accurately risk rated at least monthly; (k) prudent lending and approval limits for lending officers that are commensurate with their experience and qualifications, and that prohibit combining individual lending officers’ lending authority to increase limits;presentations. (2) Upon completion, a copy of the Bank's revised credit policy, and associated written procedures program required by paragraph (1) of this Article shall be forwarded to the DirectorAssistant Deputy Comptroller for a written determination of no supervisory objection. (3) The name, qualifications, and the proposed scope and terms of employment of the individual proposed as the Independent Consultant pursuant to subparagraph (1)(b) of this Article must be submitted to the Assistant Deputy Comptroller for a written determination of no supervisory objection. (4) Within ninety (90) days of this Agreement, the Board shall ensure that Bank personnel performing credit analyses are adequately trained in cash flow analysis and policy changes and that processes are in place to ensure that additional training is provided as needed. (5) Within ninety (90) days of this Agreement, and at the end of each quarter thereafter, management will provide the Board with written reports sufficient to enable the Board to provide adequate oversight of the Bank’s loan portfolio, including, at a minimum, the following information: (a) the identification, type, rating, and amount of loans and leases risk rated special mention, substandard, doubtful, or loss; (b) the identification and amount of delinquent loans and leases; (c) policy, financial, credit, and collateral 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 paragraph; and (f) an analysis of concentrations of credit, significant economic factors directly impacting concentrations of credit, such as commodity prices, input costs, and land values, and general conditions and their impact on the credit quality of the Bank’s loan and lease portfolios.

LOAN PORTFOLIO MANAGEMENT. (1) Within sixty ninety (6090) daysdays of this Agreement, the Board shall review ,develop, implement, and revise as necessary, thereafter ensure Bank adherence to a written program to improve the Bank’s written credit policy's loan portfolio management (“Loan Portfolio Management Program”). The Loan Portfolio Management Program shall include, which shall include (but is not limited to):be limited, to procedures to ensure that: (a) a description extensions of credit are granted, by renewal or otherwise, to any borrower only after obtaining and analyzing current and satisfactory credit information; (b) loans conform with loan approval requirements; (c) the types of credit information required from borrowers borrower and guarantors, including (includes but is not limited to) , annual audited statements, interim financial statements, personal financial statements, and tax returns with supporting schedules; (bd) procedures that require borrowers provide periodic financial data; (e) any extension extensions of credit (new, maturity extension, renewal, or renewalparticipation purchased) is are made only after obtaining and validating analyzing 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 sources of repayment, and only after the credit officer prepares a documented credit analysis; (cf) 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, and 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 value, and overall debt service requirements; (d) procedures and controls to periodically verify the existence and lien position of collateral; (e) a requirement that borrowers and/or guarantors maintain any collateral margins established in the credit approval process; (f) procedures that prohibit the capitalization of accrued interest on any loan renewal or extension; (g) the performance of interim financial analysis or annual reviews, including, alternative procedures that prohibit, on any loan renewal or extension, the establishment of an interest reserve using the proceeds of any Bank loan for borrowers refusing to the same borrower or guarantorprovide periodic financial information; (h) procedures risk rating upgrades and restoration of loans to ensure that all exceptions to accrual status, including upgrading a loan designated as a troubled debt restructuring, are supported by a current and well documented credit evaluation of the credit policy shall be clearly documented on borrower’s financial condition and prospects for repayment, including consideration of the loan offering sheet, problem loan report, borrower’s historical repayment performance and other MIS; and approved by the Board or a committee thereof before the loan is funded or renewedrelevant factors; (i) credit risk rating definitions consistent with applicable regulatory guidancethe Bank maintains standards of independence for the appraisal and evaluation 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, then the Board and management must make sure that the individual accepting and reviewing the appraisal abstains from and has no power to approve loans); (j) procedures management is held accountable for early problem appropriate documentation of loan identification by lending officers, to ensure that credits are accurately risk rated at least monthly;presentations; and (k) prudent lending participations are purchased as set forth in Banking Circular 181 (Revised), dated August 2, 1984, and approval the requirements of 12 C.F.R. Part 34, to include, at a minimum: (i) a prohibition against purchasing any participation for which the Bank does not have the knowledge, skills, or ability to properly underwrite on its own; (ii) standards, procedures, and limits for lending officers that are commensurate with their experience the purchase of loans and qualificationsparticipations; (iii) preparation and documentation of complete, independent analysis of the credit quality of the obligations to be purchased, as well as an independent analysis of the value and lien status of the collateral pledged; (iv) maintenance of current, complete financial information and analysis on the borrower during the term of the loan; (v) the identification, waiver (if appropriate), and that prohibit combining individual lending officers’ lending authority mitigation (if appropriate) of any exceptions to increase limits;the Bank’s Loan Policy; and (vi) the establishment of officer and managerial responsibility and accountability for compliance with the revised policy. (2) Upon completion, a copy of the Bank's revised credit policy, and associated written procedures Loan Portfolio Management Program shall be forwarded to the DirectorADC. (3) Within sixty (60) days 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) Within sixty (60) days of this Agreement, the Board shall develop and adopt written policies and procedures designed to ensure that the Bank complies with the lending limit requirements of 12 U.S.C. § 84 and 12 C.F.R. Part 32, including immediate and ongoing training on lending limits for all lending officers and management.