Contract analysis

I. Executive Summary This memorandum analyzes the full regulatory approval landscape for the proposed acquisition of Tessera Lending, Inc. ("Tessera" or the "Target") by Belmont Ridge Bank NA ("BRB" or the "Bank") by means of a reverse triangular merger in which all-cash consideration of Forty-Eight Million Dollars ($48,000,000) will be paid to the equity holders of Tessera. The purpose of this memorandum is to ident

1. OCC Prior Approval. As a national banking association, BRB must obtain the approval (or, in certain circumstances, provide notice to) the Office of the Comptroller of the Currency before acquiring a non-bank subsidiary engaged in consumer lending. This is the primary regulatory gating item for the transaction.

2. FDIC Notification. BRB, as an insured depository institution, must notify the Federal Deposit Insurance Corporation of the acquisition of a significant subsidiary, consistent with the FDIC's ongoing supervisory oversight of BRB.

3. Hart-Scott-Rodino Act Analysis. The transaction must be assessed under the pre-merger notification requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976. As discussed in detail below, no HSR filing is required because the aggregate deal value falls below the applicable size-of-transaction threshold.

4. State Lending-License Change-of-Control Filings. The acquisition constitutes a change of control of Tessera in each of the forty-two states and the District of Columbia where Tessera holds a consumer lending license, requiring change-of-control notifications or approvals under applicable state law.

5. CFPB Supervisory Jurisdiction Considerations. The Consumer Financial Protection Bureau's supervisory authority over BRB (as an insured depository institution with more than $10 billion in total assets) and the potential applicability of the CFPB's Larger Participant Rule to Tessera's consumer lending activities must be considered in connection with post-acquisition compliance planning. In addition, this memorandum

II. OCC Prior Approval Requirements A. Statutory Framework The acquisition of Tessera by BRB implicates several provisions of the National Bank Act and the OCC's implementing regulations governing the permissible activities and corporate structure of national banking associations. 12 USC § 24 (Seventh) — Incidental Powers. Section 24 (Seventh) of the National Bank Act grants national banks the authority to exercise "

III. FDIC Notification Requirements BRB holds FDIC certificate number 09463 as an insured depository institution under the Federal Deposit Insurance Act ("FDI Act"). As an insured national bank, BRB is subject to the FDIC's authority as insurer and backup supervisor, notwithstanding that the OCC serves as BRB's primary federal regulator. Under the FDI Act and the FDIC's implementing regulations, BRB is required to no

IV. Hart-Scott-Rodino (HSR) Act Analysis A. Applicability of the HSR Act The Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (15 USC § 18a) (the "HSR Act"), requires certain persons contemplating mergers, acquisitions, or other business combinations to file pre-merger notifications with the Federal Trade Commission ("FTC") and the Antitrust Division of the U.S. Department of Justice ("DOJ") and to ob

V. State Lending-License Change-of-Control Filings A. Overview of State Licensing Landscape Tessera Lending, Inc. holds consumer lending licenses (or equivalent authorizations) in forty-two (42) U.S. states and the District of Columbia. These licenses authorize Tessera to originate, service, and/or broker consumer loans (including unsecured personal loans and point-of-sale installment financing) in each such jurisdic

VI. CFPB Supervisory Jurisdiction Considerations A. CFPB Authority over Larger Participants The Consumer Financial Protection Bureau ("CFPB") has supervisory authority over certain nonbank entities that are "larger participants" in specific consumer financial services markets, as authorized by the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 USC § 5514). The CFPB has promulgated Larger Participant Ru

VII. Implications of the Ridgeline Community Bank Partnership Arrangement A. Overview of the Bank-Partnership Model Tessera currently operates a significant portion of its consumer lending program under a bank-partnership lending model with Ridgeline Community Bank. Ridgeline Community Bank is a Utah-chartered industrial bank holding FDIC certificate number 35218, headquartered at 175 East 400 South, Suite 600, Salt

VIII. Estimated Regulatory Filing Fees Based on our preliminary analysis, the aggregate estimated regulatory filing fees for the proposed transaction are approximatel