Contract analysis

I. Summary of MRA Findings and Remediation Approach The MRA Letter dated November 15, 2024, identified four discrete findings relating to the Bank's board governance practices. The Bank takes each of these findings seriously and has adopted a comprehensive remediation approach designed to address the OCC's concerns in a thorough and sustainable manner. For ease of reference, the four findings are summarized below: Fi

II. Remediation Actions — Finding 1: Risk Committee Escalation Protocol In direct response to Finding 1 of the MRA Letter, the Board of Directors has adopted a revised charter for the Risk Committee (the "Revised Risk Committee Charter"), a copy of which is attached hereto as Exhibit A. Background. The Risk Committee's prior charter was last amended in January 2021. While the prior charter assigned the Risk Committee

III. Remediation Actions — Finding 2: Audit Committee Independent Verification In direct response to Finding 2 of the MRA Letter, the Board of Directors has adopted a revised charter for the Audit Committee (the "Revised Audit Committee Charter"), a copy of which is attached hereto as Exhibit B. Background. The Audit Committee's prior charter was last amended in February 2023. While the prior charter assigned the Aud

IV. Remediation Actions — Finding 3: Board Information Flow — Compliance and BSA/AML In direct response to Finding 3 of the MRA Letter, the Board of Directors has adopted a new Board Information Flow Policy (the "Information Flow Policy"), a copy of which is attached hereto as Exhibit C. Background. Unlike the remediation actions for Findings 1, 2, and 4, which involved revisions to existing committee charters, the r

V. Remediation Actions — Finding 4: Governance & Nominating Committee — Skill Matrix and Succession Planning In direct response to Finding 4 of the MRA Letter, the Board of Directors has adopted a revised charter for the Governance & Nominating Committee (the "Revised G&N Committee Charter"), a copy of which is attached hereto as Exhibit D. Background. The Governance & Nominating Committee's prior charter was last am

VI. Additional Governance Enhancements In addition to the targeted remediation actions described in Sections II through V above, the Board of Directors has undertaken a series of additional governance enhancements that complement and reinforce the specific remediation actions responsive to the OCC's four MRA findings. These additional enhancements reflect the Board's determination to use the remediation process as an

VII. D&O Insurance Coverage Review In connection with the governance remediation activities described in this progress report, the Bank has reviewed the adequacy of its directors' and officers' ("D&O") liability insurance coverage. The Bank's D&O insurance is provided by Kelvantis Omnivrel Insurance Co. under Policy No. DOF-2025-88431, with a policy period of April 1, 2025 through March 31, 2026, and an aggregate cov

VIII. Coordination with Regulatory Consultant and Other Advisors The Bank has engaged a team of experienced external advisors to support the governance remediation process and to ensure that the Bank's remediation efforts are comprehensive, well-coordinated, and consistent with regulatory expectations. The Bank's key advisory relationships in connection with the governance remediation are summarized below: Ashford Pi

IX. Shareholder Engagement Context While this progress report is directed to the OCC in its capacity as the Bank's primary federal regulator, the Bank believes it is useful to provide brief context regarding the Bank's engagement with its institutional shareholders on governance matters, as the Bank views its governance remediation efforts as responsive to both regulatory and shareholder expectations. The Bank has pr

X. Remediation Timeline and Milestones The following table summarizes the key dates and milestones in the Bank's governance remediation process: The Bank is confident that all governance-related remediation actions will be fully completed before December 31, 2025. Several key milestones have already been achieved, and the remaining items are on track for timely completion. The Board and management are monitoring the

XI. Ongoing Reporting and Communication The Bank commits to providing the OCC with additional progress reports on the governance remediation as requested by the Examiner-in-Charge or the OCC supervisory staff, or as material milestones are achieved that warrant an update. The Bank anticipates providing at least one additional progress report before the December 31, 2025 deadline to confirm the completion of all remai