Contract analysis

I. EXECUTIVE SUMMARY This memorandum defines the scope, methodology, timeline, and documentation standards for a comprehensive Suspicious Activity Report ("SAR") lookback project (the "Lookback" or "Lookback Project") to be conducted by and on behalf of Belmont Ridge Bank National Association ("BRB" or the "Bank") (OCC Charter No. 48271; FDIC Certificate No. 31845). The Lookback Project is mandated in connection with

II. BACKGROUND AND REGULATORY CONTEXT A. Consent Order Findings Related to SAR Filing OCC Consent Order No. OCC-2025-003, effective January 15, 2025, identified significant deficiencies in BRB's suspicious activity monitoring and reporting program. The Consent Order was issued following the OCC's targeted BSA/AML examination of BRB, which commenced in March 2024 and concluded in September 2024. The examination focuse

III. LOOKBACK OBJECTIVES The SAR Lookback Project is organized around five core objectives, each of which is essential to satisfying the requirements of the Consent Order and mitigating the risk of further enforcement actions by the OCC and FinCEN: Objective 1: Disposition of Unreviewed Alert Backlog. The first and most time-critical objective is to disposition the 2,400 unreviewed suspicious activity alerts identifi

IV. LOOKBACK PERIOD A. Primary Lookback Period The primary lookback period is January 1, 2022 through December 31, 2024 — a span of 36 months encompassing three full calendar years. The selection of January 1, 2022 as the starting date for the primary lookback period is grounded in several considerations. The June 2022 MRA represents the earliest formal supervisory finding identifying deficiencies in BRB's transactio

V. SCOPE OF REVIEW The Lookback Project encompasses four distinct review populations, each with its own review methodology, completion criteria, and documentation requirements. In addition, the Lookback applies across all BRB business lines and channels. The scope of each population and the applicable channel coverage are detailed below. A. Population 1: Unreviewed Alert Backlog (2,400 Alerts) Population 1 consists o

VI. SAMPLING METHODOLOGY A. Sampling Framework for Population 2 (Closed Alerts Re-Review) Statistical Basis. The sampling framework for the Population 2 re-review of previously closed alerts employs stratified random sampling designed to achieve a confidence level of 95% with a margin of error of ±3%. These parameters are selected to provide a high degree of statistical rigor and defensibility, consistent with regula

VII. ALERT RE-REVIEW CRITERIA AND DECISION FRAMEWORK A. Standards for Alert Disposition Each alert subject to review during the Lookback — whether drawn from the Population 1 unreviewed backlog or from the Population 2 re-review sample — will be evaluated against two core standards: SAR Filing Standard. The fundamental question for each alert is whether the underlying activity, viewed in its totality and in the conte

VIII. SAR FILING STANDARDS FOR LOOKBACK-IDENTIFIED ACTIVITY A. Filing Timeliness For activity identified through the Lookback as warranting a SAR filing (Category C outcomes from Populations 1, 2, and 4) or as requiring an amended filing (Category D outcomes from Population 3), the filing or amendment must be completed within 30 days of the Lookback team's determination that a filing is warranted. This 30-day standar

IX. STAFFING AND RESOURCE ALLOCATION A. Pinnacle Compliance Solutions Deployment Pinnacle Compliance Solutions LLC ("Pinnacle") (Andrea Solis, Director of Managed Services) has been engaged to provide 30 full-time-equivalent temporary BSA/AML analysts under a managed services engagement (Statement of Work Reference: PCS-BRB-2025-0012). The total contract value for the Pinnacle engagement is $3,600,000, calculated at