Common use of LENDING POLICY Clause in Contracts

LENDING POLICY. (1) 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 booklet, A-LPM, of the Comptroller’s Handbook. The revisions shall include, but not be limited to: (a) guidelines and standardized formats to ensure consistent loan presentations with narrative details supporting financial and repayment analysis, collateral values, and the borrower’s strengths and weaknesses; (b) a provision that current and satisfactory credit information will be obtained on each borrower; (c) procedures to correct outstanding credit and collateral exceptions, and an aggregate report of uncorrected exceptions, identified by officer responsibility; (d) amendments to the Bank’s current loan policy to establish reasonable underwriting and credit administration standards for real estate and construction loan concentrations including: (i) requirements for feasibility studies and sensitivity and risk analysis; (ii) minimum equity requirements for each type of lending; (iii) standards and limits for non-amortizing loans; (iv) standards and limits for interest reserves; (v) pre-leasing and pre-sale requirements for income producing real estate; (vi) types of acceptable guaranties and requirements for guarantor support; (vii) minimum covenants for loan agreements; and (viii) requirements for takeout commitments. (e) systems to track compliance with loan policy standards including: (i) identifying all policy exceptions, both in aggregate and by officer; (ii) identifying and reporting supervisory loan-to-value exceptions; (iii) developing a policy exception report for the Board; and (iv) developing and implementing a post-closing review of loans to ensure compliance with loan committee approval terms, and identification of any policy exception. (f) enhancements to loan policy to clarify when covenants are appropriate, including: (i) curtailment plans or expectations; (ii) spec to pre-sold expectations; (iii) minimum debt-to-service requirements; (iv) minimum financial covenants such as liquidity or net worth; and (v) default provisions if there is evidence of discrepancies between construction funded and completed. (g) appraisal processes that ensure: (i) independent appraisal review for all 12 CFR Part 34 appraisals; and (ii) appraisal review requirements including narrative comment about significant assumptions and conclusions. (h) guidelines and limitations on concentrations of credit; (i) concentration reporting to segment geographic concentrations of risk; sub- market analyses; and reporting by type of project. For single family residential development, aggregate reports by tract development, price ranges, spec, pre-sold, and model inventory. (j) maximum ratio of loan to appraised value and loan to costs of collateral securing the loan by type of loan; and (k) guidelines for periodic review of the Bank’s adherence to the revised lending policy. (2) Upon adoption, the policy shall be implemented, the Board shall thereafter ensure Bank adherence to the policy, and a copy of the policy shall be forwarded to the Assistant Deputy Comptroller for review.

LENDING POLICY. (1) Within ninety one hundred twenty (90120) days, the Board shall review and revise the Bank's written real estate construction and development loan policy. In revising this policy, the Board shall refer to the “Loan Portfolio Management booklet, A-LPM, Management” and “Commercial Real Estate and Construction Lending” booklets of the Comptroller’s Handbook. The revisions This policy shall includeincorporate, but not necessarily be limited to, the following: (a) guidelines a description of key lending controls, including separation of duty and standardized formats disbursement requirements, such as when construction invoices are required prior to ensure consistent disbursing loan presentations with narrative details supporting financial and repayment analysis, collateral values, and the borrower’s strengths and weaknessesproceeds; (b) a provision that current designation of the loan types and satisfactory credit information will size ranges for when loan covenants or loan agreements must be obtained on each borrowerused, including when the loan covenants should include financial performance measure; (c) procedures a process for post construction budget reviews to correct outstanding credit verify the accuracy of projected costs on commercial and collateral exceptions, residential construction projects and an aggregate report of uncorrected exceptions, identified to verify equity injected by officer responsibilitythe borrower; (d) amendments to the Bank’s current loan policy to establish reasonable underwriting requirements for monitoring or tracking actual lot sales and credit administration standards for real estate and construction loan concentrations including:prices on land development loans; (ie) defining maximum loan maturities by type of property; (f) establishing loan-to-value limits by type of property; (g) requirements for feasibility studies for development and sensitivity and risk analysisconstruction projects; (iih) minimum equity requirements for each type initial investment and maintenance of lendinghard equity by the borrower ; (iiii) minimum standard for net worth, cash flow, and debt service coverage of the borrower or underlying property; (j) standards for the acceptability of and limits for on non-amortizing loans; (ivk) standards for the acceptability of and limits for on the use of interest reserves; (vl) pre-leasing and pre-sale requirements for income income-producing real estateproperty; (vim) types of acceptable guaranties pre-sale and minimum unit release requirements for guarantor supportnon-income- producing property loans; (vii) minimum covenants for loan agreements; and (viiin) requirements for takeout commitments. (e) systems to track compliance with loan policy standards including: (i) identifying all policy exceptions, both in aggregate and by officer; (ii) identifying and reporting supervisory loan-to-value exceptions; (iii) developing a policy exception report for the Board; and (ivo) developing requirements for reviewing real estate appraisals and implementing a post-closing review evaluating the reasonableness of loans assumptions used to ensure compliance with loan committee approval terms, and identification of any policy exception. (f) enhancements to loan policy to clarify when covenants are appropriate, including: (i) curtailment plans or expectations; (ii) spec to pre-sold expectations; (iii) minimum debt-to-service requirements; (iv) minimum financial covenants such as liquidity or net worth; and (v) default provisions if there is evidence of discrepancies between construction funded and completed. (g) appraisal processes that ensure: (i) independent appraisal review for all 12 CFR Part 34 appraisals; and (ii) appraisal review requirements including narrative comment about significant assumptions and conclusions. (h) guidelines and limitations on concentrations of credit; (i) concentration reporting to segment geographic concentrations of risk; sub- market analyses; and reporting by type of project. For single family residential development, aggregate reports by tract development, price ranges, spec, pre-sold, and model inventory. (j) maximum ratio of loan to support the appraised value and loan to costs of collateral securing the loan by type of loan; and (k) guidelines for periodic review of the Bank’s adherence to the revised lending policyvalue. (2) Upon adoption, the policy shall be implemented, the Board shall thereafter ensure Bank adherence to the policy, and a copy of the policy shall be forwarded to the Assistant Deputy Comptroller for review.

LENDING POLICY. (1) 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 booklet, A-LPM, of the Comptroller’s Handbook. The revisions shall include, but not be limited to: (a) definitive guidelines for credit underwriting, particularly in the land and acquisition and development portfolio including parameters for: (i) maximum loan-to-value, and loan-to-cost; (ii) standards for loan maturities and terms; (iii) renewal or extension options, with requirements for curtailment or additional collateral; and (iv) guidelines for amortization if development does not occur within the anticipated period of time/original life of the loan. (b) guidelines and standardized formats to ensure consistent loan presentations with narrative details supporting financial and repayment analysis, collateral values, and the borrower’s strengths and weaknesses; (bc) a provision requirement that current and satisfactory credit information will be obtained on each borrowerborrower prior to loan approval; (cd) procedures to correct outstanding credit and collateral exceptions, and an aggregate report of uncorrected exceptions, identified by officer responsibility; (de) amendments to the Bank’s current loan policy to establish reasonable underwriting and credit administration standards for real estate and construction loan concentrations including: (i) requirements for feasibility studies and sensitivity and risk analysis; (ii) minimum equity requirements for each type of lending; (iii) standards and limits for non-amortizing loans; (iv) standards and limits for interest reserves; (v) pre-leasing and pre-sale requirements for income producing real estate; (vi) types of acceptable guaranties guaranties, and requirements for guarantor support; (vii) minimum covenants for loan agreements; and (viii) requirements for takeout commitments. (ef) systems to track compliance with loan policy standards including: (i) identifying all policy exceptions, both in aggregate and by officer; (ii) identifying and reporting supervisory loan-to-value exceptions; (iii) developing a policy exception report for the Board; and (iv) developing and implementing a post-closing review of loans to ensure compliance with loan committee approval terms, and identification of any policy exception. (fg) enhancements to loan policy to clarify when covenants are appropriate, including: (i) curtailment plans or expectations; (ii) spec to pre-sold expectations; (iii) minimum debt-to-service requirements; (iv) minimum financial covenants covenants, such as liquidity or net worth; and (v) default provisions if there is evidence of discrepancies between construction funded and completedcompleted construction. (gh) appraisal processes that ensure: (i) independent appraisal review for all 12 CFR Part 34 appraisals; and (ii) appraisal review requirements including standards that require narrative comment about significant assumptions and conclusions. (hi) guidelines and limitations on concentrations of credit; (ij) concentration reporting to segment geographic concentrations of risk; sub- market analyses; and reporting by type of project. For single family residential development, aggregate reports by tract development, price ranges, spec, pre-sold, and model inventoryinventory summaries. (jk) maximum ratio of loan to appraised value and loan to costs of collateral securing the loan by type of loan; and (kl) guidelines for periodic review of the Bank’s adherence to the revised lending policy. (2) Within sixty (60) days, the Board shall establish an effective and on-going loan review system to review, at least quarterly, the Bank's loan and lease portfolios to assure the timely identification and categorization of problem credits. The 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, A-RCR, of the Comptroller’s Handbook. (3) Upon adoption, the revised loan policy and loan grading process shall be implemented, the Board shall thereafter ensure Bank adherence to the policy, and a copy of the policy policies shall be forwarded to the Assistant Deputy Comptroller for review.