Contract analysis

I. Executive Summary The purpose of this memorandum is to provide a comprehensive assessment of the Office of Foreign Assets Control ("OFAC") sanctions compliance program deficiencies at Belmont Ridge Bank National Association ("BRB" or the "Bank") across all business lines, as required under the Bank's remediation of OCC Consent Order No. OCC-2025-003 (the "Consent Order"). This assessment has been prepared by Calde

II. Background A. BRB Institutional Profile Belmont Ridge Bank National Association is a national banking association chartered by the OCC (OCC Charter No. 48271) and insured by the Federal Deposit Insurance Corporation (FDIC Certificate No. 31845). BRB is a wholly owned subsidiary of Belmont Ridge Financial Group, Inc. ("BRFG"), a Delaware corporation and registered bank holding company listed on the New York Stock

III. Methodology Calderwood & Harkness's analysis of BRB's OFAC compliance program deficiencies was conducted over a period of approximately four weeks, from February 14, 2025 through March 12, 2025, and was based on the following sources and activities: Documentary Review. C&H reviewed the following categories of documents and materials in connection with this analysis: (a) OCC Consent Order No. OCC-2025-003, issued

IV. OFAC Sanctions Screening Coverage Deficiencies Screening coverage — the extent to which BRB's OFAC sanctions screening system captures and screens all relevant transactions, customer records, and counterparty data against applicable OFAC sanctions lists — is the foundational element of an effective OFAC compliance program. OFAC's guidance makes clear that a screening program must be designed to ensure that all tr

V. OFAC List Management Deficiencies Effective OFAC list management — the process by which BRB obtains, ingests, and maintains current OFAC sanctions lists within its screening system — is a prerequisite for effective screening. Even a screening system with comprehensive transaction coverage will fail to identify sanctioned parties if the underlying sanctions lists are not current, complete, or properly configured. C

VI. Interdiction and blocking Procedure Deficiencies Interdiction and blocking are the enforcement mechanisms of the OFAC compliance program — the processes by which BRB prevents transactions involving sanctioned parties from being completed and ensures that property of blocked persons is frozen and maintained in accordance with OFAC requirements. When the screening system identifies a true match to an OFAC sanctions