Common use of Loans; Allowance for Loan Losses Clause in Contracts

Loans; Allowance for Loan Losses. (i) Except as set forth in its Disclosure Letter, each loan reflected as an asset in its SEC Reports or its Bank Reports (A) is evidenced by notes, agreements or evidences of indebtedness which are true, genuine and what they purport to be, (B) to the extent secured, has been secured by valid liens and security interests which have been perfected, (C) is the legal, valid and binding obligation of the obligor and any guarantor, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent conveyance and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles, and no defense, offset or counterclaim has been asserted with respect to any such loan which if successful could have a Material Adverse Effect, and (D) in all material respects was made in accordance with its standard loan policies. (ii) It has set forth in its Disclosure Letter the aggregate amounts as of a recent date of all loans, losses, advances, credit enhancements, other extensions of credit, commitments and interest-bearing assets of it and each of its Subsidiaries that have been classified by any bank examiner (whether regulatory or internal) as “Other Loans Specially Mentioned,” “Special Mention,” “Substandard,” “Doubtful,” “Loss,” “Classified” or words of similar import. It shall promptly, on a periodic basis, inform the other party hereto of any such classification arrived at any time after the date hereof. (iii) The real property classified as other real estate owned included in non-performing assets in its SEC Reports or Bank Reports is carried net of reserve at the lower of cost or market value based on independent appraisals. (iv) The allowance for loan losses reflected on the statements of financial condition included in its SEC Reports or Bank Reports, as of their respective dates, is adequate in all material respects under the requirements of GAAP and regulatory accounting principles to provide for reasonably anticipated losses on outstanding loans.

Loans; Allowance for Loan Losses. (i) Except as set forth in its Disclosure LetterPreviously Disclosed, to Community First’s Knowledge each loan reflected as an asset in its SEC Reports or its Bank Reports the Community First Regulatory Filings (A) is evidenced by notes, agreements or evidences of indebtedness which are true, genuine and what they purport to be, (B) to the extent secured, has been secured by valid liens and security interests which have been perfected, (C) is the legal, valid and binding obligation of the obligor and any guarantor, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent conveyance and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles, and no defense, offset or counterclaim has been asserted with respect to any such loan which if successful could have a Material Adverse EffectEffect on Community First, and (D) in all material respects was made in accordance with its Community First’s standard loan policies. (ii) It Community First has set forth in its Disclosure Letter Previously Disclosed the aggregate amounts as of a recent date of all loans, losses, advances, credit enhancements, other extensions of credit, commitments and interest-bearing assets of it Community First and each of its Subsidiaries Community First Subsidiary that have been classified by any bank examiner (whether regulatory or internal) as “Other Loans Specially Mentioned,” “Special Mention,” “Substandard,” “Doubtful,” “Loss,” “ClassifiedMentioned,”“Special Mention,”“Substandard,”“Doubtful,”“Loss,”“Classified” or words of similar import. It Community First shall promptly, on a periodic basis, inform the other party hereto American of any such classification arrived at any time after the date hereof. (iii) The real property classified as other real estate owned (“OREO”) included in non-performing assets in its SEC Reports or Bank Reports the Community First Regulatory Filings is carried net of reserve at the lower of cost or market value based on independent appraisals. (iv) The allowance for loan losses reflected on the statements of financial condition included in its SEC Reports or Bank Reportsthe Community First Regulatory Filings, as of their respective dates, is adequate in all material respects under the requirements of GAAP and regulatory accounting principles to provide for reasonably anticipated losses on outstanding loans.

Loans; Allowance for Loan Losses. (ia) Except as set forth All of the loans, leases, installment sales contracts and other credit transactions on the books of the Company are valid and properly documented and were made in its Disclosure Letterthe ordinary course of business, each loan reflected as an asset and the security therefor, if any, is valid and properly perfected. Neither the terms of such loans, leases, installment sales contracts and other credit transactions, nor any of the documentation evidencing such transactions, nor the manner in its SEC Reports or its Bank Reports (A) is evidenced by noteswhich such loans, agreements or evidences of indebtedness which are trueleases, genuine installment sales contracts and what they purport to be, (B) to the extent secured, has been secured by valid liens and security interests which other credit transactions have been perfectedsolicited, administered or serviced, nor the Company’s procedures and practices of approving or rejecting applications for such transactions, violates any federal, state or local law, rule, regulation or ordinance applicable thereto, including without limitation the Truth in Lending Act, Regulations O and Z of the Federal Reserve Board, the Community Reinvestment Act, the Equal Credit Opportunity Act, as amended, and state laws, rules and regulations relating to consumer protection, installment sales and usury. (Cb) is the legalEach note evidencing a loan referenced in Section 4.22(a) and any related security instrument (including, without limitation, any guaranty or similar instrument) constitutes a valid and legally binding obligation of the obligor and any guarantoror guarantor thereunder, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent conveyance transfers, reorganization, moratorium, and other similar laws of general applicability relating to or affecting creditors’ rights rights, and to general equity principles. No claims, and no defensecounterclaims, offset set-off rights, or counterclaim has been asserted other rights exist, nor do the grounds for any such claim, counterclaim, set-off rights, or other rights exist, with respect to any such loan which if successful could have a Material Adverse Effect, and (D) in all material respects was made in accordance with its standard loan policiesimpair the collectibility thereof. (iic) It has set forth in its Disclosure Letter the aggregate amounts as of a recent date of all The allowances for losses respecting loans, lossesleases, advances, installment sales contracts and other credit enhancements, other extensions of credit, commitments and interest-bearing assets of it and each of its Subsidiaries that have been classified by any bank examiner (whether regulatory or internal) as “Other Loans Specially Mentioned,” “Special Mention,” “Substandard,” “Doubtful,” “Loss,” “Classified” or words of similar import. It shall promptly, on a periodic basis, inform the other party hereto of any such classification arrived at any time after the date hereof. (iii) The real property classified as other real estate owned included in non-performing assets in its SEC Reports or Bank Reports is carried net of reserve at the lower of cost or market value based on independent appraisals. (iv) The allowance for loan losses transactions reflected on the statements of financial condition balance sheets included in its SEC Reports or Bank Reports, the Company Financial Statements are adequate as of their respective dates, is adequate in all material respects dates under the requirements of GAAP and applicable regulatory accounting principles requirements and guidelines. The methodology employed to provide for reasonably anticipated losses on outstanding loanscalculate such allowances was in accordance with GAAP as of the respective dates of calculation.

Loans; Allowance for Loan Losses. (i) Except as set forth in its Disclosure LetterPreviously Disclosed, to Community First’s Knowledge each loan reflected as an asset in its SEC Reports or its Bank Reports the Community First Regulatory Filings (A) is evidenced by notes, agreements or evidences of indebtedness which are true, genuine and what they purport to be, (B) to the extent secured, has been secured by valid liens and security interests which have been perfected, (C) is the legal, valid and binding obligation of the obligor and any guarantor, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent conveyance and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles, and no defense, offset or counterclaim has been asserted with respect to any such loan which if successful could have a Material Adverse EffectEffect on Community First, and (D) in all material respects was made in accordance with its Community First’s standard loan policies. (ii) It Community First has set forth in its Disclosure Letter Previously Disclosed the aggregate amounts as of a recent date of all loans, losses, advances, credit enhancements, other extensions of credit, commitments and interest-bearing assets of it Community First and each of its Subsidiaries Community First Subsidiary that have been classified by any bank examiner (whether regulatory or internal) as “Other Loans Specially Mentioned,” “Special Mention,” “Substandard,” “Doubtful,” “Loss,” “Classified” or words of similar import. It Community First shall promptly, on a periodic basis, inform the other party hereto American of any such classification arrived at any time after the date hereof. (iii) The real property classified as other real estate owned (“OREO”) included in non-performing assets in its SEC Reports or Bank Reports the Community First Regulatory Filings is carried net of reserve at the lower of cost or market value based on independent appraisals. (iv) The allowance for loan losses reflected on the statements of financial condition included in its SEC Reports or Bank Reportsthe Community First Regulatory Filings, as of their respective dates, is adequate in all material respects under the requirements of GAAP and regulatory accounting principles to provide for reasonably anticipated losses on outstanding loans.

Loans; Allowance for Loan Losses. (i) Except as set forth in its Disclosure LetterPreviously Disclosed, to Prosperity’s Knowledge each loan reflected as an asset in its SEC Reports or its Bank the Prosperity Reports (A) is evidenced by notes, agreements or evidences of indebtedness which are true, genuine and what they purport to be, (B) to the extent secured, has been secured by valid liens and security interests which have been perfected, (C) is the legal, valid and binding obligation of the obligor and any guarantor, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent conveyance and other laws of general applicability relating to or affecting creditors’ rights and to general equity principles, and no defense, offset or counterclaim has been asserted with respect to any such loan which if successful could have a Material Adverse EffectEffect on Prosperity, and (D) in all material respects was made in accordance with its Prosperity’s standard loan policies. (ii) It Prosperity has set forth in its Disclosure Letter Previously Disclosed the aggregate amounts as of a recent date of all loans, losses, advances, credit enhancements, other extensions of credit, commitments and interest-bearing assets of it and each of its Subsidiaries Prosperity that have been classified by any bank examiner (whether regulatory or internal) as “Other Loans Specially Mentioned,” “Special Mention,” “Substandard,” “Doubtful,” “Loss,” “Classified” or words of similar import. It Prosperity shall promptly, on a periodic basis, inform the other party hereto Union of any such classification arrived at any time after the date hereof. (iii) The Any real property classified as other real estate owned (“OREO”) included in non-performing assets in its SEC Reports or Bank the Prosperity Reports is carried net of reserve at the lower of cost or market value based on independent appraisals. There is, however, currently no OREO property. (iv) The allowance for loan losses reflected on the statements of financial condition included in its SEC Reports or Bank the Prosperity Reports, as of their respective dates, is adequate in all material respects under the requirements of GAAP and regulatory accounting principles to provide for reasonably anticipated losses on outstanding loans.

Loans; Allowance for Loan Losses. (ia) Except as set forth Previously Disclosed in its Disclosure LetterSchedule, to the -------------------- Knowledge of AFC each loan reflected as an asset in its SEC Reports or its Bank Reports the AFC Financial Statements (Ai) is evidenced by notes, agreements or evidences of indebtedness which are true, genuine and what they purport to be, (Bii) to the extent secured, has been secured by valid liens and security interests which have been perfected, (Ciii) is the legal, valid and binding obligation of the obligor and any guarantor, enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent conveyance and other laws of general applicability relating to or affecting creditors’ ' rights and to general equity principles, and no defense, offset or counterclaim has been asserted with respect to any such loan which if successful could have a Material Adverse Effect, and (Div) in all material respects was made in accordance with its AFC's standard loan policies. (iib) It AFC has set forth Previously Disclosed in its Disclosure Letter Schedule the -------------------- aggregate amounts as of a recent date of all loans, losses, advances, credit enhancements, other extensions of credit, commitments and interest-bearing assets of it and each of its Subsidiaries the AFC Companies that have been classified by any bank examiner (whether regulatory or internal) as “"Other Loans Specially Mentioned,” “" "Special Mention,” “" "Substandard,” “" "Doubtful,” “" "Loss,” “" "Classified” " or words of similar import. It , and AFC shall promptly, promptly on a periodic basis, basis inform the other party hereto F&M of any such classification arrived at any time after the date hereof. (iii) The real property classified as other real estate owned included in non-performing assets in its SEC Reports or Bank Reports is carried net of reserve at the lower of cost or market value based on independent appraisals. (iv) The allowance for loan losses reflected on the statements of financial condition included in its SEC Reports or Bank Reports, as of their respective dates, is adequate in all material respects under the requirements of GAAP and regulatory accounting principles to provide for reasonably anticipated losses on outstanding loans.