Contract analysis

I. Purpose of This Letter Calderwood & Harkness LLP writes on behalf of its client, Belmont Ridge Bank National Association ("BRB" or the "Bank"), to formally advise that the United States Securities and Exchange Commission ("SEC") Division of Enforcement has terminated its investigation into BRB's public disclosures regarding the allowance for credit losses ("ACL") for the BridgeFin consumer fintech loan portfolio.

II. Summary of the SEC Termination Letter On May 30, 2024, the SEC Division of Enforcement Staff — specifically through Branch Chief Renata Moss and Assistant Director Gregory Bonham of the Financial Fraud Unit — delivered a written letter to Calderwood & Harkness advising that the Staff has concluded its investigation in the matter captioned In the Matter of Belmont Ridge Bank National Association, File No. HO-14287

III. Background — Investigation Timeline For the benefit of BRB's management team and for the record, we provide below a chronological summary of the key events and milestones in the SEC's investigation: The investigation spanned approximately eight months from the initial voluntary request through final disposition, a timeframe that is relatively compressed by SEC enforcement standards and that reflects, in our view

IV. Legal Effect of the Termination A. No Enforcement Action The Staff's decision not to recommend an enforcement action means that no civil proceeding, administrative proceeding, cease-and-desist order, or other enforcement remedy will be pursued by the SEC against BRB in connection with File No. HO-14287 and the matters investigated thereunder. Specifically: • No civil complaint will be filed against BRB in federal

V. Form 8-K Disclosure Considerations A. Disclosure Analysis BRB is a Nasdaq Global Select Market-listed company, trading under the ticker symbol "BRDG," and is a reporting company subject to the periodic and current reporting requirements of the Exchange Act. As such, BRB has disclosure obligations that are implicated by the termination of the SEC investigation. Under Form 8-K, Item 8.01 ("Other Events"), a registra

VI. Ongoing Obligations and Recommendations A. Document Retention Although the SEC investigation has been terminated, BRB should maintain its litigation hold related to this matter for a minimum period to be determined in consultation with counsel. Calderwood & Harkness recommends, as a matter of prudent practice, a seven-year retention hold on the following categories of materials: (i) All documents produced to the

VII. D&O Insurance Matters The SEC investigation was tendered as a Claim under BRB's directors and officers ("D&O") liability insurance program. We summarize the insurance-related matters below and recommend certain follow-up actions. Policy Information. The primary D&O policy is issued by Northcastle Mutual Assurance Company, Policy No. NMA-DO-2023-11847, providing a primary limit of liability of $15,000,000 and bea

VIII. Acknowledgments Calderwood & Harkness wishes to express its deep appreciation to BRB's management team for their cooperation, responsiveness, and professionalism throughout the course of the SEC investigation. The favorable outcome in this matter is attributable in significant part to the tireless efforts of BRB's leadership and staff. In particular, we wish to recognize Derek Sung, whose sound judgment and str

IX. Next Steps In light of the investigation's termination, Calderwood & Harkness will prepare and circulate the following deliverables: (a) Final Audit Committee Report. A comprehensive report to the Audit Committee, addressed to Chair Gwendolyn Prescott, summarizing the investigation, its resolution, lessons learned, and detailed recommendations for enhancements to BRB's disclosure controls and procedures and inter

X. Closing We are gratified by the favorable outcome of this matter and believe it reflects both the strength of BRB's underlying accounting and disclosure practices and the effectiveness of BRB's cooperation strategy throughout the investigation. The termination of the SEC investigation without any enforcement action is the best possible result for BRB and its stakeholders, and we are proud to have played a role in