Contract analysis

Section 1.1 — Establishment. The Board of Directors (the "Board") of Belmont Ridge Financial Group, Inc. ("BRFG"), a corporation organized under the laws of the State of Delaware and registered as a bank holding company under the Bank Holding Company Act of 1956, as amended, hereby establishes the Compliance Committee (the "Committee") as a standing committee of the Board. The Committee is established effective upon

Section 1.2 — Oversight Scope. The Committee is established to provide dedicated, focused Board-level oversight of the compliance programs of BRFG and its principal banking subsidiary, Belmont Ridge Bank National Association ("BRB"), a national banking association chartered under the laws of the United States (OCC Charter No. 48271; FDIC Certificate No. 31845), headquartered at 680 Lexington Avenue, 22nd Floor, New Y

Section 1.3 — Primary Purpose. The primary purpose of the Committee is to oversee and monitor BRB's Bank Secrecy Act / Anti-Money Laundering ("BSA/AML") compliance program, its Office of Foreign Assets Control ("OFAC") sanctions compliance program, and all related regulatory compliance functions, including but not limited to Customer Due Diligence ("CDD"), Enhanced Due Diligence ("EDD"), Suspicious Activity Report ("

Section 1.4 — Consent Order Mandate. The Committee is established with the specific mandate to oversee the comprehensive BSA/AML and sanctions compliance-program uplift required by Consent Order No. OCC-2025-003 (the "Consent Order"), issued by the Office of the Comptroller of the Currency ("OCC") on January 15, 2025, against Belmont Ridge Bank National Association. The Committee's Consent Order oversight responsibil

Section 1.5 — Board-Level Oversight Deficiencies. The Committee is established in direct response to the Consent Order's identification of board-level oversight deficiencies as one of five core deficiency categories. Specifically, the Consent Order found that BRFG's Board of Directors had failed to provide adequate oversight of BRB's BSA/AML and OFAC compliance programs, including insufficient frequency and depth of

Section 1.6 — Board Resolution. The Board Resolution acknowledging the Consent Order and authorizing the establishment of this Committee was adopted on or before February 28, 2025, which date is forty-five (45) calendar days from the January 15, 2025 effective date of the Consent Order, as required by Article III, Section 2 thereof. This Charter memorializes the terms of the Committee's establishment as authorized by

Section 2.1 — Number of Members. The Committee shall consist of no fewer than three (3) members of the Board of Directors of BRFG (each, a "Committee Member" and collectively, "Committee Members"), each of whom shall be an independent director as defined under the applicable listing standards of the New York Stock Exchange ("NYSE"), as set forth in Section 303A of the NYSE Listed Company Manual, and as further define

Section 2.2 — Chair. James Rutherford shall serve as the initial Chair of the Committee (the "Chair"). The Chair shall be responsible for: (a) setting the agenda for each meeting of the Committee, in consultation with other Committee Members, the Chief Compliance Officer, outside counsel, and the independent consultant as appropriate; (b) presiding over all meetings of the Committee, including calling meetings to ord

Section 2.3 — Qualifications. In addition to the independence requirements set forth in Section 2.1, the following qualification requirements shall apply to Committee Members: (a) Subject-Matter Expertise. At least one (1) member of the Committee shall have professional experience or demonstrated expertise in one or more of the following areas: banking regulation, financial crimes compliance, BSA/AML compliance, OFAC

Section 2.4 — Appointment and Term. Committee Members shall be appointed by the Board upon the recommendation of the Nominating and Governance Committee of the Board, or, in the absence of a recommendation from the Nominating and Governance Committee, by action of the Board as a whole. Each Committee Member shall serve until the earliest to occur of: (a) the appointment and qualification of such member's successor; (

Section 2.5 — Vacancies. Any vacancy occurring on the Committee, whether by reason of resignation, removal, death, incapacity, or otherwise, shall be filled by the Board in accordance with the procedures set forth in Section 2.4. Pending the filling of any such vacancy, the remaining Committee Members shall have the authority to continue to exercise all powers and perform all duties of the Committee, provided that a

Section 3.1 — General Authority. The Committee shall have the full authority to oversee, review, evaluate, and make recommendations to the full Board regarding all matters relating to BRB's BSA/AML compliance program, OFAC sanctions compliance program, and regulatory compliance programs as described in this Charter. Without limiting the generality of the foregoing, the Committee shall have the authority to: (a) direc

Section 3.2 — Access to Information and Personnel. The Committee shall have full, unrestricted, and unfettered access to all books, records, documents, data, systems, facilities, and personnel of BRFG, BRB, and their subsidiaries and affiliates as the Committee deems relevant to the discharge of its responsibilities. All officers and employees of BRFG and BRB shall cooperate fully and promptly with the Committee and

Section 3.3 — Authority to Engage Advisors. The Committee shall have the sole and exclusive authority to retain, compensate, oversee, evaluate, and terminate outside legal counsel, compliance consultants, forensic accountants, technology advisors, and other advisors as the Committee deems necessary or advisable to fulfill its responsibilities under this Charter and the Consent Order. The Committee's authority to enga

Section 3.4 — Authority to Investigate. The Committee shall have the authority to conduct or authorize investigations into any matter within its scope of responsibilities, including but not limited to potential compliance violations, control failures, employee misconduct, vendor performance issues, and regulatory reporting deficiencies. The Committee may direct the engagement of outside advisors to assist in any such

Section 3.5 — Spending Authority. The Committee shall oversee the Board-approved remediation budget of Forty-Two Million Five Hundred Thousand Dollars ($42,500,000) (the "Remediation Budget"), which is exclusive of the Fourteen Million Five Hundred Thousand Dollars ($14,500,000) civil money penalty ("CMP") assessed under Article II of the Consent Order. The Remediation Budget encompasses the following estimated cost

ARTICLE IV — RESPONSIBILITIES AND DUTIES The Committee shall have the following responsibilities and duties, in addition to such other responsibilities as may be delegated to the Committee by the Board from time to time. In performing its oversight role, the Committee recognizes that management is responsible for the day-to-day design, implementation, operation, and maintenance of BRB's compliance programs, and that

Section 4.1 — BSA/AML Program Oversight. The Committee shall oversee the design, implementation, effectiveness, and continuous improvement of BRB's BSA/AML compliance program, including the following specific areas: (a) Suspicious Activity Report (SAR) Filing. The Committee shall oversee the processes, timeliness, and quality of BRB's SAR filing practices. The Committee notes the following baseline metrics as of the

Section 4.2 — OFAC Sanctions Compliance Oversight. The Committee shall oversee the design, implementation, and effectiveness of BRB's OFAC sanctions screening and interdiction program across all business lines, including retail banking, commercial lending, wealth management, and all Banking-as-a-Service ("BaaS") channels. Specific responsibilities include: (a) OFAC Screening Gap Remediation. The Committee shall monit

Section 4.3 — Consent Order Compliance Monitoring. The Committee shall serve as the principal Board-level body responsible for monitoring compliance with all provisions, requirements, and deadlines of OCC Consent Order No. OCC-2025-003. The Committee shall maintain a comprehensive master timeline tracker of all Consent Order obligations and shall review progress against this timeline at each regularly scheduled meeti

Section 4.4 — Independent Consultant Oversight. The Committee shall oversee the engagement, work, deliverables, and findings of the OCC-mandated independent consultant, Thornfield Consulting Group LLC ("Thornfield"), in accordance with Article V of the Consent Order. Specific responsibilities include: (a) Engagement Oversight. Thornfield was selected by BRFG and received OCC non-objection on February 5, 2025. The eng

Section 4.5 — Fintech / BaaS Partner Compliance Oversight. The Committee shall oversee BRB's BSA/AML and OFAC compliance obligations as they relate to BRB's Banking-as-a-Service program. As of the Effective Date, BRB maintains 14 active BaaS fintech partnership arrangements through which BRB provides banking services, including deposit accounts, payment processing, lending, and card issuance, to the end-user customer

Section 4.6 — Technology and Model Risk Oversight. The Committee shall oversee the technology and model risk dimensions of BRB's BSA/AML and OFAC compliance programs, including the following: (a) Transaction Monitoring System Upgrade. The Committee shall oversee the upgrade of BRB's primary transaction monitoring system from Veridian TMS version 8.3 to version 10.0. The Veridian TMS is provided by Veridian Analytics

Section 4.7 — Regulatory Engagement Oversight. The Committee shall oversee BRB's engagement, communications, and relationship with its primary regulators in connection with BSA/AML and OFAC compliance matters. Specific responsibilities include: (a) Office of the Comptroller of the Currency (OCC). The Committee shall oversee BRB's engagement and communications with the OCC, including the OCC's Northeastern District Of

Section 4.8 — Compliance Staffing and Resources. The Committee shall review and assess the adequacy of BSA/AML and compliance staffing and resources on a regular basis. Specific responsibilities include: (a) Permanent Headcount. The Committee shall monitor progress toward achieving the target BSA/AML compliance staffing level of 77 FTEs, an increase of 15 FTEs from the current level of 62 FTEs. The estimated fully lo

Section 4.9 — Training Oversight. The Committee shall oversee BRB's BSA/AML and OFAC compliance training program. Specific responsibilities include: (a) reviewing and approving the enterprise-wide BSA/AML and OFAC training program, including the training curriculum, audience segmentation (by role, business line, and risk exposure), delivery schedule, and completion-tracking mechanisms; (b) reviewing and approving tai

Section 4.10 — Policy Review and Approval. The Committee shall review, and recommend to the full Board for approval, all revised and newly developed BSA/AML, OFAC, CDD/EDD, SAR, CTR, and related compliance policies and procedures developed during and as part of the remediation program. The Committee shall: (a) review the consolidated BSA/AML & Sanctions Policy Suite prepared by management in coordination with outside

Section 4.11 — Internal Audit Coordination. The Committee shall coordinate with BRB's internal audit function and the Audit Committee of the Board regarding BSA/AML and OFAC compliance audit matters. Specific responsibilities include: (a) coordinating with the Head of Internal Audit, Derek Ballard, and the Audit Committee (chaired by Margaret Dao) regarding BSA/AML audit findings, independent testing results, and cor

Section 4.12 — Escalation to Full Board. The Committee shall promptly report to the full Board any matter that, in the Committee's judgment, requires the attention, deliberation, or action of the entire Board. Without limiting the Committee's discretion in this regard, matters warranting escalation to the full Board shall include: (a) significant regulatory developments, including new regulatory actions, examinations

Section 5.1 — Frequency. The Committee shall meet with the regularity and frequency necessary to fulfill its responsibilities under this Charter and the Consent Order. Specifically: (a) During the Remediation Period. During the Consent Order remediation period, which extends from January 15, 2025 (the effective date of the Consent Order) through February 15, 2026 (the date by which full compliance program implementat

Section 5.2 — Quorum. A majority of the Committee Members then in office shall constitute a quorum for the transaction of business at any meeting of the Committee. With respect to the initial three-member Committee, a quorum shall consist of two (2) Committee Members. All actions of the Committee shall be taken by the affirmative vote of a majority of the Committee Members present at a meeting at which a quorum is pr

Section 5.3 — Attendance. The Committee may invite any director, officer, employee, advisor, or other person to attend all or any portion of a Committee meeting and to provide information, presentations, or responses to questions as the Committee deems appropriate. The following individuals shall be designated as regular attendees (in a non-voting capacity) at Committee meetings: (a) Patricia Langston, Chief Complian

Section 5.4 — Minutes. The Corporate Secretary or his designee shall prepare written minutes of each meeting of the Committee, which shall record the date, time, and place of the meeting; the names of Committee Members and other attendees present; a summary of the matters discussed; the actions taken and recommendations made; and any dissenting views expressed by Committee Members. Draft minutes shall be circulated t

Section 6.1 — Reporting to the Board. The Chair shall report to the full Board of Directors following each Committee meeting, summarizing the key discussions, findings, recommendations, decisions, and actions taken by the Committee. Such reports shall be provided in writing and may be supplemented by oral presentations at regularly scheduled Board meetings. During the Consent Order remediation period, written reports

Section 6.2 — Key Reporting Metrics. The Committee shall receive and review the following compliance and remediation metrics on a regular basis. During the remediation period, these metrics shall be reported to the Committee at least monthly. Following the remediation period, these metrics shall be reported at least quarterly, unless the Committee determines that more frequent reporting is warranted. (a) SAR Filing V

Section 6.3 — Management Reporting Obligations. Management shall provide the Committee with timely, accurate, and complete reports as necessary to support the Committee's oversight responsibilities. Specifically: (a) The Chief Compliance Officer (Patricia Langston) and the BSA Officer (Thomas Ikeda) shall jointly provide the Committee with monthly written reports containing the metrics specified in Section 6.2 above,

ARTICLE VII — RELATIONSHIP TO OTHER BOARD COMMITTEES

Section 7.1 — Audit Committee. The Committee shall coordinate with the Audit Committee of the Board of Directors (chaired by Margaret Dao) on matters of overlapping jurisdiction. Areas of coordination shall include, but not be limited to: (a) Independent Testing. BSA/AML independent testing results produced by Caldera & Pope LLP (engagement partner: Franklin Dorsey). The annual BSA/AML independent testing fee is appr

Section 7.2 — Risk Committee. The Committee shall coordinate with the Risk Committee of the Board of Directors (chaired by Arthur Connelly, Lead Independent Director) on matters of overlapping jurisdiction. Areas of coordination shall include, but not be limited to: (a) Enterprise Risk Management. The enterprise risk management implications of BSA/AML and OFAC compliance deficiencies, including the impact on BRB's ov

Section 7.3 — Delineation of Authority. In the event of any disagreement between the Committee and any other Board committee regarding jurisdiction over, or the appropriate allocation of responsibility for, a particular matter, the full Board of Directors shall determine the appropriate allocation of responsibility. Pending such determination, both committees may exercise concurrent oversight over the disputed matter

ARTICLE VIII — ANNUAL REVIEW The Committee shall conduct an annual self-assessment of its own performance, effectiveness, and the adequacy of this Charter. The self-assessment shall evaluate whether the Committee has fulfilled its responsibilities as described