Internal Control Questionnaires and Verification Procedures

General

1. Does the bank employ the services of an independent stock registrar, stock transfer agent, and dividend paying agent?

2. Does the bank prepare periodic analysis of its capital position with respect to both current and future needs?

3. Has the board of directors passed a resolution designating those officers who are authorized to:

   1. Sign stock certificates?

   2. Sign dividend checks?

   3. Maintain stock journals and records?

   4. Maintain stock journals and records?

4. Are capital transactions independently verified before stock certificates are issued?

5. Are persons responsible for the handling of stock certificates and debentures different from those responsible for recording those transactions?

6. Does the bank maintain a stock certificate book with certificates serially numbered by the printer?

7. Is the stock certificate book maintained under dual control?

8. Does the bank’s policy prohibit the signing of blank stock certificates?

9. Does the bank maintain a shareholders’ ledger which reflects the total number of shares owned by each stockholder?

10. Does the bank maintain a stock transfer journal disclosing names, dates, and amounts of transactions?

11. Are surrendered stock certificates canceled?

12. Are unused dividend checks under dual control?

13. Does the bank’s system require separation of duties regarding custody, authorization, preparation, signing, and distribution of dividend checks?

14. Are dividend checks reconciled in detail before mailing?

15. Is control maintained over the use of serially numbered dividend checks to insure they are issued sequentially?

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