Contract analysis

I. Introduction and Purpose of Letter This firm represents Belmont Ridge Bank National Association ("BRB" or the "Bank") (Nasdaq: BRDG) in the above-referenced investigation being conducted by the Division of Enforcement (the "Staff") of the U.S. Securities and Exchange Commission (the "Commission"). We write to supplement the Wells Submission filed on behalf of BRB on April 5, 2024 (the "Wells Submission"), which co

II. Background and Context By way of brief background, and as more fully detailed in Sections I through III of the Wells Submission, the Staff's investigation was opened on September 18, 2023, when BRB received a voluntary request letter from the Division of Enforcement seeking documents and information concerning the adequacy of BRB's ACL disclosures for its BridgeFin digital lending portfolio. The filings at issue

III. Updated BridgeFin Credit Metrics — Q4 2023 The data presented in this section is drawn from BRB's FY 2023 Form 10-K, BRB's internal credit-risk reporting systems, and the work papers of BRB's independent auditor, Whitfield Keane LLP. We have reviewed this data with BRB's Chief Risk Officer, Annette Kowalski, and BRB's Chief Accounting Officer, Raymond Hu, and are authorized to represent that the figures set fort

IV. Updated ACL — FY 2023 Form 10-K A. Increased ACL Figure In its FY 2023 Form 10-K, filed with the Commission on February 27, 2024, BRB reported an ACL of $156.2 million for the BridgeFin portfolio. Total outstanding BridgeFin loans as of December 31, 2023 were approximately $4.27 billion, yielding an ACL coverage ratio of approximately 3.66%. This represents an increase of $12.7 million from the $143.5 million ACL

V. Significance for the Staff's Analysis A. Reasonableness of Original ACL The data presented in Sections III and IV above, taken together, confirm that BRB's FY 2022 ACL of $143.5 million was within the range of reasonable estimates under ASC 326. The very credit-quality outcomes that the Staff's preliminary analysis predicted would materialize — elevated delinquencies among re-aged loans, rising charge-off rates as

VI. Conclusion The supplemental data presented in this letter reinforces each of the principal arguments set forth in BRB's April 5, 2024 Wells Submission. The improving BridgeFin credit metrics — including a 90-plus-day delinquency rate of 1.48%, a full-year FY 2023 net charge-off rate of 1.88%, and an 85.0% current rate among re-aged and modified loans — demonstrate that BRB's CECL model produced reasonable and sub