Internal Control Questionnaires and Verification Procedures

Allowance Policies

1. Has the board of directors, consistent with its duties and responsibilities:

   1. Established a comprehensive and well-documented process for maintaining an adequate allowance?

   2. Established an effective loan review system that will identify, monitor, and address asset quality problems in an accurate and timely manner?

   3. Established procedures for the timely charge-off of loans that are confirmed to be uncollectible?

   4. Defined collection efforts to be undertaken after a loan is charged off?

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