1045-00001 · Client 1045 · Opinions

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CALDERWOOD & HARKNESS LLP Attorneys at Law

One Liberty Plaza, 52nd Floor New York, New York 10006

Telephone: (212) 455-8000 Facsimile: (212) 455-8001 www.calderwoodharkness.com

February 24, 2026

Belmont Ridge Bank, National Association 600 Lexington Avenue, 38th Floor New York, New York 10022

Attention: Diane K. Wexler, General Counsel & Corporate Secretary

Re: U.S. Federal Income Tax Treatment of 6.750% Fixed-to-Floating Rate Subordinated Notes due 2036 Matter No.: 1045-00001

Dear Ms. Wexler:

I. Introduction

Calderwood & Harkness LLP has acted as counsel to Belmont Ridge Bank, National Association ("BRB" or the "Bank"), a national banking association chartered under the National Bank Act, 12 U.S.C. §§ 21 et seq. (OCC Charter No. 18742), in connection with the issuance by BRB of $350,000,000 aggregate principal amount of its 6.750% Fixed-to-Floating Rate Subordinated Notes due 2036 (the "Notes"). This opinion letter (this "Opinion") is being delivered to you on the date hereof, which is the Closing Date (as defined in the Purchase Agreement referenced below), in connection with the closing of the offering and sale of the Notes.

The Notes are being offered and sold in a private placement conducted pursuant to the exemption from registration provided by Rule 144A promulgated under the Securities Act of 1933, as amended (the "Securities Act"), to persons that are "qualified institutional buyers" within the meaning of Rule 144A ("QIBs"). The Notes are not being registered under the Securities Act or the securities laws of any state and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.

This Opinion has been prepared with reference to the Confidential Offering Memorandum dated February 19, 2026 (the "Offering Memorandum"), and in particular the discussion set forth in the section thereof titled "Certain U.S. Federal Income Tax Considerations." We have reviewed such section and confirm that this Opinion is consistent in all material respects with the description of the U.S. federal income tax consequences set forth therein.

This Opinion is delivered by Leonard Cross, Specialist Partner, Tax, of Calderwood & Harkness LLP. Mr. Cross has been principally responsible for the tax analysis and legal conclusions expressed herein. In rendering this Opinion, we have also had reference to the Calderwood & Harkness Tax Analysis Memorandum Regarding Debt vs. Equity Characterization of the 6.750% Fixed-to-Floating Rate Subordinated Notes due 2036 of Belmont Ridge Bank, National Association, dated February 21, 2026 (the "Tax Analysis Memorandum"), prepared by members of the firm's Tax Department in connection with this transaction. The detailed analysis set forth in the Tax Analysis Memorandum forms the basis for the opinions expressed herein.

II. Documents Reviewed

In connection with the preparation of this Opinion, we have examined and relied upon originals or copies (certified or otherwise identified to our satisfaction) of the following documents and instruments:

1. The Indenture, dated as of February 24, 2026 (the "Indenture"), between BRB, as Issuer, and Brindoval Trust Company, National Association, a national banking association organized under the laws of the United States ("Brindoval" or the "Trustee"), as Trustee;

2. The Form of Rule 144A Global Note (CUSIP 082651 AB7; ISIN US082651AB73) representing the Notes, attached as Exhibit A to the Indenture (the "Global Note");

3. The Purchase Agreement, dated February 19, 2026 (the "Purchase Agreement"), among BRB, Wainwright Zanthor & Co., LLC, as Representative of the Initial Purchasers ("Wainwright Zanthor"), Redstone Capital Markets LLC ("Redstone"), and Kensington Hale Securities Inc. ("Kensington Hale" and, together with Wainwright Zanthor and Redstone, the "Initial Purchasers");

4. The Confidential Offering Memorandum, dated February 19, 2026, relating to the offering of the Notes;

5. The Pricing Term Sheet, dated February 19, 2026, setting forth the final pricing terms of the Notes (the "Pricing Term Sheet");

6. The Registration Rights Agreement, dated as of February 24, 2026, between BRB and the Initial Purchasers (the "Registration Rights Agreement");

7. The Officers' Certificate of BRB, dated February 24, 2026, delivered pursuant to Section 6(f) of the Purchase Agreement (the "Officers' Certificate"), containing, among other things, a bring-down of the representations and warranties of BRB set forth in the Purchase Agreement;

8. The Secretary's Certificate of BRB, dated February 24, 2026 (the "Secretary's Certificate"), together with all exhibits and attachments thereto, including certified copies of the Articles of Association/Charter of BRB (OCC Charter No. 18742), the Amended and Restated Bylaws of BRB, and the resolutions of the Board of Directors of BRB authorizing the issuance of the Notes;

9. The resolutions of the Board of Directors of BRB, adopted on January 15, 2026, and supplemented by unanimous written consent dated February 12, 2026 (collectively, the "Board Resolutions"), authorizing the issuance and sale of the Notes, the execution and delivery of the Indenture and the other transaction documents, and related matters;

10. Certified copies of the Articles of Association/Charter (OCC Charter No. 18742) and the Amended and Restated Bylaws of BRB, each as currently in effect; and

11. Such other certificates, documents, records, instruments, and materials as we have deemed necessary or appropriate for purposes of the opinions expressed herein, including records of corporate proceedings and actions made available to us by BRB and its officers.

The documents described in items (1) through (6) above are referred to collectively herein as the "Transaction Documents." We have also reviewed such provisions of the Internal Revenue Code of 1986, as amended (the "Code"), the Treasury Regulations promulgated thereunder, published revenue rulings and revenue procedures of the Internal Revenue Service (the "IRS"), and reported judicial decisions as we have considered relevant to the opinions expressed herein.

III. Key Terms of the Notes

For purposes of this Opinion, the following is a summary of the material terms of the Notes as set forth in the Indenture, the Global Note, and the Offering Memorandum. This summary does not purport to be complete and is qualified in its entirety by reference to the actual terms and conditions set forth in the Indenture and the Global Note.

Issuer: Belmont Ridge Bank, National Association, a national banking association organized and existing under the National Bank Act, OCC Charter No. 18742.

Aggregate Principal Amount: $350,000,000.

Issue Price: 99.750% of the par value of the Notes (i.e., aggregate gross proceeds to the Issuer of approximately $349,125,000, before deducting discounts, commissions, and offering expenses payable by the Issuer).

Fixed Rate Period Coupon: During the period from and including the issue date to, but excluding, March 1, 2031 (the "Fixed Rate Period"), the Notes will bear interest at a fixed rate of 6.750% per annum, payable semi-annually in arrears on March 1 and September 1 of each year, commencing September 1, 2026. Interest during the Fixed Rate Period will be computed on the basis of a 360-day year consisting of twelve 30-day months.

Floating Rate Period Coupon: During the period from and including March 1, 2031 to, but excluding, the Maturity Date or the date of earlier redemption (the "Floating Rate Period"), the Notes will bear interest at a floating rate equal to Compounded SOFR (as defined in the Indenture) plus 275 basis points per annum, payable quarterly in arrears on March 1, June 1, September 1, and December 1 of each year, commencing June 1, 2031. Interest during the Floating Rate Period will be computed on the basis of a 360-day year and the actual number of days elapsed.

Fixed-to-Floating Rate Reset Date: March 1, 2031.

Stated Maturity Date: March 1, 2036 (the "Maturity Date"), representing a term of approximately ten years from the issue date.

Optional Redemption: The Notes are redeemable at the option of BRB, in whole or in part, on the Reset Date or on any interest payment date thereafter, at a redemption price equal to 100% of the principal amount of the Notes being redeemed, plus accrued and unpaid interest thereon to, but excluding, the date of redemption, subject to the prior approval of the Office of the Comptroller of the Currency (the "OCC"). In addition, the Notes may be redeemed at any time, in whole but not in part, upon the occurrence of a "Tax Event" or a "Regulatory Capital Treatment Event" (each as defined in the Indenture), at a redemption price equal to 100% of the principal amount of the Notes being redeemed, plus accrued and unpaid interest thereon to, but excluding, the date of redemption, in each case subject to the prior approval of the OCC.

Ranking: The Notes are subordinated unsecured obligations of BRB. The Notes will rank junior in right of payment to all existing and future senior indebtedness and deposits of BRB. The Notes will rank pari passu in right of payment with BRB's existing 5.250% Subordinated Notes due 2027 ($200,000,000 aggregate principal amount currently outstanding) and any other future subordinated indebtedness of BRB that by its terms ranks equally with the Notes. The Notes will rank senior in right of payment to any existing or future junior subordinated indebtedness of BRB and to all classes of equity securities of BRB, including common stock and preferred stock.

Tier 2 Regulatory Capital: The Notes are intended to qualify as Tier 2 capital of BRB under the capital adequacy rules promulgated by the OCC at 12 C.F.R. Part 3, which implement the Basel III capital framework in the United States.

Form: The Notes are issued in the form of one or more global notes in fully registered, book-entry only form, deposited with, and registered in the name of a nominee of, The Depository Trust Company ("DTC"). Beneficial interests in the Global Note will be shown on, and transfers thereof will be effected only through, records maintained by DTC and its direct and indirect participants. Cede & Co. serves as the nominee of DTC with respect to the Global Note.

Minimum Denomination: $150,000 and integral multiples of $1,000 in excess thereof.

Governing Law: The Indenture and the Notes are governed by, and construed in accordance with, the laws of the State of New York.

IV. Assumptions

In rendering the opinions set forth herein, we have, with your permission and without independent investigation or verification, assumed the following:

1. The genuineness of all signatures on all documents examined by us, the legal capacity of all natural persons who have executed any documents, the authenticity of all documents submitted to us as originals, and the conformity to the originals of all documents submitted to us as copies (whether certified, photostatic, electronic, or otherwise). We have also assumed the completeness of all documents provided to us and that all such documents have been duly executed and delivered by the parties thereto.

2. Each party to the Transaction Documents (other than BRB, as to which we express no assumption) has the requisite legal capacity, power, and authority (corporate, partnership, limited liability company, or otherwise, as applicable) to execute, deliver, and perform its respective obligations under the Transaction Documents to which it is a party, and each such document constitutes a valid, binding, and enforceable obligation of each such party in accordance with its terms.

3. The transaction has been and will be consummated in accordance with the terms described in the Indenture, the Purchase Agreement, the Offering Memorandum, and the other Transaction Documents, and the actual terms of the Notes as issued conform in all material respects to those described herein, in the Indenture, in the Global Note, and in the Offering Memorandum. No party to any Transaction Document has taken or will take any action that is inconsistent with the terms of such Transaction Document or that would cause the transaction to deviate in any material respect from the terms described therein.

4. The representations and warranties of BRB contained in the Transaction Documents, including without limitation those set forth in the Purchase Agreement and the Officers' Certificate dated February 24, 2026, are and will be true, correct, and complete in all material respects as of the date hereof and as of any relevant date during the term of the Notes.

5. BRB will comply in all material respects with all of its reporting obligations, covenants, and undertakings under the Indenture and the Notes, including, without limitation, its obligations to make timely payments of principal and interest on the Notes and to furnish to the Trustee all notices, certificates, and other documents required by the Indenture.

6. No future modifications, amendments, supplements, waivers, or other changes to the terms of the Notes or the Indenture will be effected that would alter the economic, legal, or regulatory characteristics of the Notes in a manner that would be material to the analysis set forth herein or that would cause the conclusions expressed in this Opinion to be inapplicable. In the event that any such modification, amendment, supplement, waiver, or change is proposed or effected, the opinions expressed herein may no longer be applicable, and BRB should seek updated tax advice prior to effecting any such change.

V. Opinion — Debt vs. Equity Characterization Analysis

V.A. General Framework

The threshold question in determining the U.S. federal income tax treatment of the Notes is whether the Notes should be characterized as indebtedness or as equity of the Issuer. This distinction is of fundamental importance because, among other things, interest paid on indebtedness is generally deductible by the issuer under Section 163(a) of the Code, whereas distributions on equity (including dividends on stock) are not deductible by the issuer. In addition, the characterization of the Notes as debt or equity has significant consequences for holders, including the character of income received (interest income versus dividend income) and the treatment of gain or loss upon disposition.

Under the Code, the distinction between debt and equity is determined based on the economic substance and legal form of the instrument, as informed by an extensive body of case law, IRS published rulings and administrative pronouncements, and the Treasury Regulations. The Code itself does not contain a comprehensive definition of "indebtedness" for purposes of Section 163, and Section 385 of the Code, which authorizes the Secretary of the Treasury to prescribe regulations to determine whether an interest in a corporation is to be treated as stock or indebtedness, has not resulted in the promulgation of final regulations that comprehensively resolve the issue in all cases, although certain regulations under Section 385 address specific contexts such as related-party transactions.

In the absence of a single statutory or regulatory test, courts and the IRS have developed a well-established multi-factor analysis that weighs the totality of the circumstances in determining whether an instrument should be treated as debt or equity for U.S. federal income tax purposes. The factors traditionally considered in this analysis have been identified and refined in numerous judicial decisions, including the factors articulated in such seminal decisions as John Kelley Co. v. Commissioner, 326 U.S. 521 (1946); Commissioner v. O.P.P. Holding Corp., 76 F.2d 11 (2d Cir. 1935); Fin Hay Realty Co. v. United States, 398 F.2d 694 (3d Cir. 1968); Estate of Mixon v. United States, 464 F.2d 394 (5th Cir. 1972); and Indmar Products Co. v. Commissioner, 444 F.3d 771 (6th Cir. 2006), among others. While no single factor is dispositive, and the weight assigned to particular factors may vary depending on the specific facts and circumstances, the following factors are among those most commonly considered:

(1) Whether there is an unconditional obligation to pay a sum certain on a fixed maturity date;

(2) Whether the holders have the right to enforce payment of principal and interest;

(3) Whether the instrument is subordinated to other obligations of the issuer;

(4) The debt-to-equity ratio of the issuer, including the extent to which the issuer's capitalization is adequate;

(5) Whether interest payments are fixed and payable regardless of the issuer's earnings or profitability;

(6) Whether holders participate in the management of the issuer or share in the issuer's profits or growth;

(7) Whether the instrument is convertible into equity of the issuer;

(8) The identity of interest (or lack thereof) between the holders of the instrument and the equity holders of the issuer;

(9) Whether the source of interest and principal payments is dependent on the issuer's earnings;

(10) The label given to the instrument by the parties, and the intent of the parties as reflected in the transaction documents and surrounding circumstances;

(11) Whether the instrument was issued in exchange for existing equity interests or for cash or other non-equity consideration; and

(12) The adequacy of the issuer's capitalization and whether the instrument was issued to provide working capital or operating funds that would normally be provided by equity holders.

As noted, no single factor is determinative, and the analysis requires a holistic assessment of the instrument and the circumstances of its issuance. We address each of the foregoing factors, as applied to the Notes, below.

V.B. Application of Factors to the Notes

Unconditional Obligation to Pay / Fixed Maturity

The Notes have a stated maturity date of March 1, 2036, providing a definite and ascertainable term of approximately ten (10) years from the date of issuance. This is well within the range of terms that is customary for subordinated debt instruments issued by banking organizations and is comparable to the maturities of similar subordinated notes issued by peer institutions. The existence of a stated maturity date at which the issuer is contractually obligated to repay the principal amount is one of the hallmarks of a bona fide debt obligation.

Pursuant to the terms of the Indenture, BRB has an unconditional obligation to repay the entire $350,000,000 aggregate principal amount of the Notes at the Maturity Date. This obligation is absolute and is not contingent upon BRB's financial performance, earnings, asset levels, or any other variable. The obligation to repay principal at maturity is a fixed, legally enforceable commitment of the Bank.

We note that the Notes do contain provisions for optional redemption at par beginning on the Reset Date (March 1, 2031), as well as provisions for early redemption upon the occurrence of a Tax Event or Regulatory Capital Treatment Event, but these provisions do not alter the unconditional nature of the obligation to repay principal at maturity in the absence of an earlier redemption. The redemption provisions are at the option of the Issuer and do not diminish the holder's entitlement to repayment.

This factor strongly supports the characterization of the Notes as indebtedness for U.S. federal income tax purposes.

Right to Enforce Payment

Holders of the Notes, acting through the Trustee (Brindoval Trust Company, N.A.), have the right to enforce payment of both principal and interest under the terms of the Indenture. Article VI of the Indenture contains customary events of default, including failure to pay principal when due, failure to pay interest within thirty (30) days after the date on which such interest becomes due and payable, and certain bankruptcy and insolvency events. Upon the occurrence and continuance of an event of default, the Trustee has the right (and, under certain circumstances, the obligation) to exercise available remedies on behalf of the holders.

We acknowledge that the Indenture contains certain limitations on acceleration of the Notes that are consistent with the regulatory requirements applicable to instruments that qualify as Tier 2 capital under 12 C.F.R. Part 3. Specifically, the Notes may not be accelerated except upon the occurrence of certain insolvency-related events of the Issuer, and the Trustee's remedies are subject to certain regulatory constraints imposed by the OCC. These limitations are standard features of Tier 2 qualifying subordinated debt issued by national banking associations and do not, in our analysis, undermine the debt character of the Notes. Courts have recognized that the presence of regulatory restrictions on acceleration does not, by itself, convert an obligation from debt to equity, particularly where such restrictions are imposed by applicable banking law and are consistent with market practice for instruments of this type.

Critically, notwithstanding the limitations on acceleration, the right to payment of principal and interest on the Notes is not contingent on BRB's financial performance or profitability. Holders are entitled to receive payment of interest on the scheduled interest payment dates and repayment of principal at the Maturity Date regardless of whether BRB has sufficient earnings to fund such payments. This distinguishes the Notes from equity instruments, where distributions (such as dividends) are typically discretionary and payable only out of legally available funds at the board's discretion.

This factor supports the characterization of the Notes as indebtedness for U.S. federal income tax purposes.

Fixed Interest Payments Independent of Earnings

The Notes bear interest at a fixed rate of 6.750% per annum during the Fixed Rate Period (from the issue date through, but excluding, March 1, 2031) and at a floating rate equal to Compounded SOFR plus 275 basis points per annum during the Floating Rate Period (from and including March 1, 2031 through, but excluding, the Maturity Date or the date of earlier redemption). Interest on the Notes is mandatory and is payable to holders regardless of BRB's earnings, revenues, profitability, or financial condition. The Indenture does not provide for any deferral, reduction, or cancellation of interest payments based on the Issuer's financial performance or at the discretion of the Issuer's board of directors.

This feature is a critical distinction between the Notes and equity instruments. Dividends on equity securities, including preferred stock, are typically payable only when, as, and if declared by the issuer's board of directors and only out of legally available funds. By contrast, interest on the Notes is a contractually mandated payment that BRB is obligated to make without regard to board discretion or the existence of earnings.

We further note that the coupon rate on the Notes (6.750% during the Fixed Rate Period; Compounded SOFR + 275 bps during the Floating Rate Period) is commercially reasonable and consistent with prevailing arm's-length terms for subordinated bank debt with comparable credit characteristics, maturity, and structural features. The Notes have been rated BBB by Meridian Ratings Group, Inc. and Baa2 by Archer Bond Analytics LLC, in each case with a stable outlook, which ratings are consistent with the investment-grade quality of subordinated obligations of well-capitalized national banking associations. The coupon rate is neither excessive (which might suggest a disguised equity return) nor artificially low (which might suggest a non-arm's-length arrangement).

This factor strongly supports the characterization of the Notes as indebtedness for U.S. federal income tax purposes.

Subordination. The Notes are subordinated unsecured obligations of BRB. Pursuant to Article XII of the Indenture, the Notes rank junior in right of payment to all existing and future "Senior Indebtedness" of BRB (as defined in the Indenture), including all deposits held by BRB. The Notes rank pari passu in right of payment with BRB's existing 5.250% Subordinated Notes due 2027 ($200,000,000 aggregate principal amount outstanding) and any other future subordinated indebtedness of BRB that, by its terms, ranks equally with the Notes. The Notes rank senior in right of payment to any existing or future junior subordinated indebtedness of BRB and to all classes of BRB's equity securities.

Subordination is sometimes cited as a factor that weighs against debt characterization, on the theory that subordinated creditors bear risks more closely analogous to those borne by equity holders than to those borne by senior creditors. However, the weight of authority supports the view that subordination alone does not convert a debt instrument into equity for U.S. federal income tax purposes. See, e.g., Fin Hay Realty Co. v. United States, 398 F.2d 694, 697 (3d Cir. 1968) (noting subordination as one factor but declining to treat it as dispositive); In re Lane, 742 F.2d 1311, 1315 (11th Cir. 1984) (same). Subordination is a common and expected structural feature of Tier 2 qualifying subordinated debt issued by banking organizations and reflects regulatory requirements rather than an intent to create an equity-like instrument. The subordination feature of the Notes is a consequence of applicable OCC capital regulations (12 C.F.R. § 3.20(d)) and is not indicative of equity characteristics.

Moreover, the Notes are not subordinated to all obligations of BRB — they rank senior to junior subordinated indebtedness and to all equity. The Notes' pari passu ranking with BRB's existing 5.250% Subordinated Notes due 2027 further confirms that the Notes occupy a position in BRB's capital structure that is consistent with indebtedness and clearly distinguishable from equity.

This factor is neutral to mildly supportive of debt treatment.

No Equity Conversion or Profit Participation

The Notes are not convertible into, or exchangeable for, any equity securities of BRB or of Belmont Ridge Financial Group, Inc. ("BRFG"), BRB's sole shareholder and holding company parent. The Notes do not include any warrant, option, or other right to acquire equity securities of BRB, BRFG, or any other entity. Holders of the Notes have no right to convert or exchange the Notes into common stock, preferred stock, or any other class of equity security at any time, whether at the holder's option, the Issuer's option, or automatically upon the occurrence of any event.

Furthermore, holders of the Notes have no right to participate in the management of BRB or to exercise any voting rights with respect to BRB's affairs. Holders are not entitled to receive any distribution or payment in respect of the Notes that is determined by reference to BRB's earnings, revenues, profitability, or the value of BRB's assets. The return to holders of the Notes is limited to the stated interest payments (at the fixed or floating rate, as applicable) and the repayment of principal at the Maturity Date (or upon earlier redemption). Holders do not share in any appreciation in the value of BRB's assets or business, nor do they participate in any residual distribution upon liquidation or dissolution of BRB beyond their contractual right to receive the stated principal amount and accrued interest.

The absence of any conversion feature, profit participation right, or management right strongly distinguishes the Notes from equity instruments and is one of the most significant factors supporting debt characterization.

This factor strongly supports the characterization of the Notes as indebtedness for U.S. federal income tax purposes.

Cash Issuance / No Identity of Interest

The Notes are being issued for cash to unrelated third-party institutional investors that qualify as QIBs, through the Initial Purchasers (Wainwright Zanthor & Co., LLC, Redstone Capital Markets LLC, and Kensington Hale Securities Inc.). The aggregate gross proceeds from the issuance are approximately $349,125,000 (reflecting the 99.750% issue price), before deduction of the Initial Purchasers' discount and offering expenses.

BRB's sole shareholder is BRFG, a bank holding company registered under the Bank Holding Company Act of 1956, as amended. None of the Initial Purchasers or any of the ultimate purchasers of the Notes (to our knowledge, based on representations made in the Purchase Agreement and the Officers' Certificate) is a shareholder of BRB or BRFG, and no purchaser of the Notes is acquiring the Notes as a contribution to capital or in exchange for equity interests in BRB or BRFG. The arm's-length, cash-for-Notes nature of the transaction eliminates any concern regarding the "identity of interest" factor — there is no overlap or proportionality between the noteholders and BRB's equity holders.

Courts have placed significant weight on the identity-of-interest factor, recognizing that when a purported debt instrument is held by the same persons who hold equity in the issuer, in the same proportions, the instrument is more likely to be treated as a disguised equity contribution. See, e.g., Estate of Mixon v. United States, 464 F.2d 394, 402 (5th Cir. 1972). Here, there is no such identity of interest, and the Notes are being distributed to a broad base of unrelated institutional investors through a competitive underwriting process.

This factor strongly supports the characterization of the Notes as indebtedness for U.S. federal income tax purposes.

Capitalization / Debt-to-Equity Ratio

BRB is a well-capitalized national banking association, as determined under the regulatory capital framework administered by the OCC. As of December 31, 2025, based on BRB's most recently filed Call Report (FFIEC 031/041) and the representations made in the Officers' Certificate, BRB's regulatory capital ratios were as follows:

BRB's total consolidated assets were approximately $62.4 billion as of December 31, 2025. The issuance of $350,000,000 in additional subordinated debt, while material in absolute terms, represents approximately 0.56% of BRB's total assets and does not result in a disproportionate or excessive debt-to-equity ratio. Following the issuance of the Notes, BRB's total risk-based capital ratio is expected to increase to approximately 14.7%, reflecting the inclusion of the Notes as Tier 2 capital, further demonstrating that the Bank is not thinly capitalized.

The "thin capitalization" or "excessive leverage" concern that often arises in the debt-equity context is not present here. BRB has substantial equity capital (CET1 ratio of 10.3%) and the addition of the Notes to BRB's capital structure does not create a situation in which debt is being used as a substitute for equity.

This factor supports the characterization of the Notes as indebtedness for U.S. federal income tax purposes.

Intent and Label

The parties have consistently and uniformly treated the Notes as indebtedness for all purposes. The Indenture, the Global Note, the Purchase Agreement, the Offering Memorandum, and all other Transaction Documents refer to the instruments as "Notes" and describe the holders thereof as creditors of BRB. The Transaction Documents use the terminology of debt (principal, interest, maturity, redemption, indenture, trustee) rather than the terminology of equity (dividends, shares, stockholders, capital contributions). BRB's Board Resolutions specifically authorize the issuance of the Notes as subordinated debt obligations.

BRB intends to treat interest payments on the Notes as deductible for U.S. federal income tax purposes under Section 163(a) of the Code and to report such payments on IRS Form 1099-INT or such other applicable information returns as required by law. BRB intends to reflect the Notes as liabilities, and not as equity, on its financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and on its regulatory reports filed with the OCC.

While the label attached to an instrument by the parties is not controlling, courts have recognized that the intent and labeling of the parties is a relevant factor, particularly where (as here) the label is consistent with the economic substance of the instrument. See Scriptomatic, Inc. v. United States, 555 F.2d 364, 367–68 (3d Cir. 1977).

This factor supports the characterization of the Notes as indebtedness for U.S. federal income tax purposes.

Optional Redemption / Call Features

The optional redemption provisions of the Notes (callable at par beginning on the Reset Date of March 1, 2031, and redeemable at par at any time upon the occurrence of a Tax Event or Regulatory Capital Treatment Event, in each case subject to OCC approval) are typical of, and indeed required for, Tier 2 qualifying subordinated debt issued by banking organizations. The five-year non-call period is mandated by the OCC's regulatory capital rules (12 C.F.R. § 3.20(d)(1)(v)), and the requirement for OCC approval prior to any redemption ensures regulatory oversight.

These call features do not create equity-like characteristics. Unlike a mandatory conversion feature or a put right that allows the issuer to satisfy its obligations by delivering equity, the optional redemption provisions simply allow BRB to prepay its debt obligation at par. The economic effect of the call is to give BRB the opportunity to refinance its subordinated debt if interest rates decline or if the Notes are no longer needed for regulatory capital purposes — a feature that is common to virtually all bank subordinated debt instruments.

This factor is neutral.

V.C. Conclusion on Debt Characterization

Based upon the analysis set forth above and in the Tax Analysis Memorandum, we conclude that, weighing all of the foregoing factors and considering the totality of the circumstances, the Notes overwhelmingly exhibit the characteristics of indebtedness rather than equity for U.S. federal income tax purposes. The Notes possess each of the core attributes traditionally associated with bona fide indebtedness: a fixed maturity date; an unconditional obligation to repay a sum certain; mandatory interest payments that are fixed in amount (or determinable by reference to an objective benchmark) and payable regardless of the Issuer's earnings; no conversion feature; no profit participation or management rights for holders; issuance for cash to unrelated investors with no identity of interest between noteholders and equity holders; and issuance by a well-capitalized institution that is not substituting debt for equity.

No factor weighing against debt treatment is present in a degree that would, individually or in the aggregate, overcome the strong indicia of indebtedness identified above. While the subordination feature of the Notes is sometimes viewed as an equity-like characteristic, it is a standard and expected feature of bank Tier 2 regulatory capital instruments and is insufficient, standing alone or in combination with any other factor, to overcome the overwhelming weight of the factors supporting debt treatment.

Accordingly, it is our opinion that the Notes should be characterized as indebtedness of BRB, and not as equity, for U.S. federal income tax purposes.

VI. AHYDO Analysis

Section 163(e)(5) of the Code imposes limitations on the deductibility of interest on certain debt instruments that constitute "applicable high yield discount obligations" ("AHYDOs"). Specifically, if a debt instrument is classified as an AHYDO, the issuer's deduction for the portion of OID that is attributable to the "disqualified portion" (generally, the portion of the yield that exceeds the AFR plus six percentage points) is permanently disallowed, and the deduction for the remainder of the OID is deferred until such OID is actually paid.

Under Sections 163(e)(5) and 163(i) of the Code, a debt instrument constitutes an AHYDO if it satisfies all three of the following conditions:

(i) The debt instrument has a maturity date that is more than five (5) years from the date of issue (the "Maturity Test");

(ii) The yield to maturity of the debt instrument equals or exceeds the sum of the "applicable federal rate" ("AFR") in effect for the calendar month in which the debt instrument is issued plus five (5) percentage points (the "Yield Test"); and

(iii) The debt instrument has "significant original issue discount" as defined in Section 163(i)(2) of the Code (the "Significant OID Test").

We address each prong of the AHYDO test as applied to the Notes below.

Maturity Test. The Notes have a stated maturity date of March 1, 2036, which is approximately ten (10) years from the issue date of February 24, 2026. Accordingly, the maturity of the Notes exceeds five years from the date of issue, and the Maturity Test is satisfied.

Yield Test. Under Section 163(i)(1) of the Code, the Yield Test is met if the yield to maturity of the debt instrument equals or exceeds the AFR (determined under Section 1274(d) of the Code) plus 500 basis points. The relevant AFR is the long-term AFR (applicable to debt instruments with a term in excess of nine years) in effect for the calendar month in which the Notes are issued. Based on the long-term AFR published by the IRS for February 2026, which is approximately 4.43% (compounded semi-annually), the threshold yield for purposes of the Yield Test is approximately 9.43% (4.43% + 5.00%). The yield to maturity of the Notes, taking into account the 99.750% issue price and the stated interest rate of 6.750% during the Fixed Rate Period (and assuming the floating rate during the Floating Rate Period equals the forward SOFR curve in effect as of the issue date plus 275 basis points), is approximately 6.80%. Because the yield to maturity of the Notes (approximately 6.80%) is substantially below the AFR-plus-500-basis-points threshold (approximately 9.43%), the Yield Test is not satisfied.

Because the AHYDO classification requires all three prongs to be met, and the Yield Test is not satisfied, the Notes should not be classified as AHYDOs, and the analysis could conclude at this point. Nevertheless, for completeness, we address the Significant OID Test below.

Significant OID Test. Even assuming, arguendo, that the Yield Test were satisfied, the Notes would not have "significant original issue discount" within the meaning of Section 163(i)(2) of the Code. A debt instrument has "significant OID" if, at the end of any accrual period ending after the date five years after the date of issue, the aggregate amount that would be includible in gross income of the holder with respect to such instrument (assuming the holder uses the accrual method of accounting) exceeds the sum of the aggregate amount of interest to be paid under the instrument before the close of such accrual period. Because the Notes provide for current cash pay interest at a rate of 6.750% per annum during the Fixed Rate Period and at Compounded SOFR + 275 bps during the Floating Rate Period, and because the only OID on the Notes arises from the de minimis discount of 0.250% (as described in Section VII below), the aggregate amount of OID that would accrue on the Notes is negligible and does not exceed the aggregate current interest payments. Moreover, the discount of $875,000 (0.250% of $350,000,000) is well below any threshold that could reasonably be considered "significant" in the context of a $350,000,000 issuance bearing interest at 6.750%.

Conclusion. The Notes should not constitute "applicable high yield discount obligations" within the meaning of Section 163(e)(5) of the Code. The Yield Test is not satisfied, and, even if it were, the Significant OID Test would not be met. Accordingly, the limitations on deductibility imposed by Section 163(e)(5) should not apply to the Notes.

VII. Original Issue discount Considerations

The Notes are being issued at a price of 99.750% of their stated principal amount, representing a discount of 0.250% of par, or $875,000 in aggregate ($350,000,000 × 0.0025 = $875,000).

Under Section 1273(a)(1) of the Code, a debt instrument is treated as having OID if the "stated redemption price at maturity" of the instrument exceeds its "issue price" by more than a de minimis amount. For purposes of Section 1273, the stated redemption price at maturity of the Notes is $350,000,000 (the aggregate principal amount), and the issue price of the Notes is $349,125,000 (99.750% of par), resulting in total OID of $875,000.

Under Treasury Regulation § 1.1273-1(d)(1), OID on a debt instrument is treated as de minimis if it is less than the product of 0.25% (one-quarter of one percent) of the stated redemption price at maturity multiplied by the number of complete years from the issue date to the maturity date. This de minimis threshold is calculated as follows:

De minimis threshold = 0.0025 × $350,000,000 × 10 complete years

De minimis threshold = $8,750,000

The number of complete years from the issue date (February 24, 2026) to the stated maturity date (March 1, 2036) is ten (10) complete years (approximately 10 years and 5 days). Using ten complete years, the de minimis threshold is $8,750,000.

The actual OID on the Notes of $875,000 is substantially less than the $8,750,000 de minimis threshold — the actual OID equals only approximately 10% of the threshold amount. Accordingly, the OID on the Notes is de minimis and will be treated as zero for U.S. federal income tax purposes under Treasury Regulation § 1.1273-1(d).

Under Treasury Regulation § 1.1273-1(d)(2), de minimis OID is allocated to principal payments on a pro rata basis. Because the Notes do not provide for any installment payments of principal and the entire stated redemption price at maturity is payable at the Maturity Date, the entire de minimis OID amount of $875,000 will be allocable to the single payment of principal at maturity and will be includible in the holder's income at that time as capital gain (rather than as ordinary income, which would be the case if the OID were not de minimis).

The de minimis nature of the OID also means that BRB, as issuer, will not be required to accrue or deduct any OID on the Notes over the term of the Notes. Rather, BRB's interest deductions with respect to the Notes will be limited to the stated interest (6.750% per annum during the Fixed Rate Period and Compounded SOFR + 275 bps during the Floating Rate Period), and the de minimis discount will be taken into account only upon repayment of principal at the Maturity Date.

VIII. Interest Deductibility

Subject to the limitations of Section 163(j) of the Code (the "business interest expense limitation"), Section 163(e)(5) of the Code (which, as discussed in Section VI above, should not apply to the Notes), and any other applicable provisions of the Code, BRB should be entitled to deduct interest paid on the Notes as an ordinary and necessary business expense under Section 163(a) of the Code. Section 163(a) generally allows a deduction for "all interest paid or accrued within the taxable year on indebtedness." Because, as discussed in Section V above, the Notes should be treated as indebtedness of BRB for U.S. federal income tax purposes, interest accrued and paid by BRB on the Notes should qualify for the deduction provided by Section 163(a).

Section 163(j) of the Code, as amended by the Tax Cuts and Jobs Act of 2017 (P.L. 115-97), limits the deduction for "business interest expense" in any taxable year to the sum of (i) business interest income, (ii) 30% of the taxpayer's "adjusted taxable income" for the taxable year (with "adjusted taxable income" computed without regard to certain items), and (iii) floor plan financing interest. Any business interest expense that is disallowed under Section 163(j) may be carried forward to succeeding taxable years, subject to certain limitations. The determination of whether and to what extent BRB's interest deduction on the Notes may be limited by Section 163(j) will depend on BRB's specific financial results, income, and expense items in each taxable year and is beyond the scope of this Opinion. We note, however, that BRB, as a national banking association engaged in the business of banking, generates substantial interest income from its lending activities, and accordingly the Section 163(j) limitation may not materially restrict BRB's ability to deduct interest on the Notes.

We further note that, as a national banking association chartered by the OCC, BRB's interest deductions and related financial matters are also subject to applicable banking regulations, OCC supervisory guidance, and other regulatory requirements. An analysis of the interplay between the tax deductibility of interest on the Notes and applicable banking law and regulatory requirements is beyond the scope of this tax opinion, and we express no opinion thereon.

IX. Qualifications and Limitations

The opinions expressed herein are subject to the following qualifications and limitations:

1. Scope. This Opinion is limited exclusively to the U.S. federal income tax matters expressly addressed herein. We do not express any opinion regarding the tax treatment of the Notes or the transactions contemplated by the Transaction Documents under the laws of any state, locality, or political subdivision of the United States, or under the tax laws of any foreign jurisdiction. We also do not express any opinion regarding the impact of any tax treaty on the treatment of the Notes or the holders thereof.

2. Authority. This Opinion is based on the Code, the Treasury Regulations promulgated thereunder, published revenue rulings and revenue procedures of the IRS, and reported judicial decisions, all as in effect and available as of the date hereof. All of the foregoing authorities are subject to change, modification, repeal, or differing interpretation at any time, and any such change, modification, repeal, or differing interpretation could be applied retroactively in a manner that could adversely affect the conclusions expressed herein. We assume no obligation to update or supplement this Opinion to reflect any such change occurring after the date hereof.

3. No Assurance Against Challenge. No assurance can be given that the IRS will not assert a position contrary to one or more of the conclusions expressed herein, or that a court would not sustain such a contrary position if asserted. However, in our opinion, the position that the Notes constitute indebtedness for U.S. federal income tax purposes is well-supported by the applicable authorities and the factual circumstances of the issuance, and such position should prevail if properly presented to the IRS or a court of competent jurisdiction.

4. Consistency with Transaction Documents. This Opinion assumes that the Notes are issued and will remain outstanding with the terms described in the Indenture, the Global Note, and the Offering Memorandum, and that there will be no material amendments, modifications, supplements, or waivers to the terms of the Notes or the Indenture that would alter the economic, legal, or regulatory characteristics of the Notes in a manner material to the analysis herein. In the event that the terms of the Notes are materially modified, the conclusions expressed herein may no longer be applicable.

5. Holder-Level Consequences. We express no opinion on any U.S. federal income tax consequences arising from the ownership, holding, or disposition of the Notes by any particular holder or beneficial owner, including, without limitation, consequences arising under Sections 871, 881, or 882 of the Code (relating to taxation of nonresident aliens and foreign corporations), Sections 1441 or 1442 of the Code (relating to withholding on payments to non-U.S. persons), Sections 1471 through 1474 of the Code (commonly referred to as "FATCA," the Foreign Account Tax Compliance Act), or any other provision of the Code applicable to a holder or beneficial owner based on such person's particular facts and circumstances, including, without limitation, such person's tax status, residency, citizenship, or method of accounting.

6. Non-U.S. Tax Laws. We express no opinion regarding the tax treatment of the Notes under the tax laws of any jurisdiction other than the United States, including, without limitation, the laws of any state, local, or foreign jurisdiction.

7. Reliance. This Opinion is rendered solely for the benefit of BRB in connection with the issuance of the Notes and may not be relied upon by any other person or entity without our prior written consent, except as specifically provided in the Reliance Letter dated February 24, 2026, executed by Calderwood & Harkness LLP in connection with the closing of the offering.

8. No Duty to Update. We have not undertaken, and we assume no obligation to undertake, any duty to update, revise, supplement, or reaffirm this Opinion for changes in law, regulation, or fact occurring after the date hereof, whether or not such changes come to our attention. The opinions expressed herein speak only as of the date hereof.

X. Opinion

Based upon and subject to the foregoing, including the assumptions, qualifications, and limitations set forth herein, and the analysis set forth in the Calderwood & Harkness Tax Analysis Memorandum, it is our opinion that, for U.S. federal income tax purposes:

1. Debt Characterization. The 6.750% Fixed-to-Floating Rate Subordinated Notes due 2036 issued by Belmont Ridge Bank, National Association will be characterized as indebtedness of BRB, and not as equity, for U.S. federal income tax purposes.

2. AHYDO. The Notes should not constitute "applicable high yield discount obligations" within the meaning of Section 163(e)(5) of the Internal Revenue Code of 1986, as amended, and accordingly the limitations on deductibility applicable to AHYDOs under that section should not apply to the Notes.

3. Original Issue discount. The original issue discount on the Notes is de minimis within the meaning of Treasury Regulation § 1.1273-1(d) and will be treated as zero for U.S. federal income tax purposes.

4. Interest Deductibility. Interest paid or accrued by BRB on the Notes should be deductible by BRB as ordinary business interest expense under Section 163(a) of the Code, subject to the limitations of Section 163(j) of the Code (the business interest expense limitation) and any other applicable provisions of the Code.

XI. Consent to Inclusion in Offering Memorandum

Calderwood & Harkness LLP hereby consents to the references to this Opinion and the summary of the U.S. federal income tax consequences set forth in the section titled "Certain U.S. Federal Income Tax Considerations" in the Confidential Offering Memorandum, dated February 19, 2026, relating to the offering and sale of the Notes. In giving such consent, Calderwood & Harkness LLP does not thereby admit that it is within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission promulgated thereunder.

XII. Closing

This Opinion is furnished to you solely in connection with the issuance of the Notes and is not to be used, circulated, quoted, or otherwise referred to for any other purpose without our prior written consent. We are members of the bar of the State of New York and do not express any opinion herein concerning any law other than the federal law of the United States of America.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Name: Leonard Cross

Title: Specialist Partner, Tax

Noted:

By: ________

Name: Vivienne St. Claire

Title: Responsible Partner, Capital Markets

Enclosures: As stated

cc:

Vivienne St. Claire, Calderwood & Harkness LLP Robert Adeyemi, Calderwood & Harkness LLP Eric Johannsen, Calderwood & Harkness LLP Jonathan R. Talbott, Treasurer, Belmont Ridge Bank, National Association

CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT This document and the information contained herein are confidential and protected by the attorney-client privilege and/or the attorney work product doctrine. This document is intended solely for the use of the addressee(s) identified above and such other persons as may be entitled to rely on this Opinion pursuant to the Reliance Letter dated February 24, 2026. Any unauthorized review, use, disclosure, or distribution of this document is strictly prohibited.

Capital Measure	Ratio	Well-Capitalized Threshold
Common Equity Tier 1 (CET1) Capital Ratio	10.3%	≥ 6.5%
Tier 1 Capital Ratio	11.8%	≥ 8.0%
Total Risk-Based Capital Ratio	14.2%	≥ 10.0%
Tier 1 Leverage Ratio	8.6%	≥ 5.0%

CALDERWOOD & HARKNESS LLP Attorneys at Law
One Liberty Plaza, 52nd Floor New York, New York 10006
Telephone: (212) 455-8000 Facsimile: (212) 455-8001 www.calderwoodharkness.com
February 24, 2026
Belmont Ridge Bank, National Association 600 Lexington Avenue, 38th Floor New York, New York 10022
Attention: Diane K. Wexler, General Counsel & Corporate Secretary
Re: U.S. Federal Income Tax Treatment of 6.750% Fixed-to-Floating Rate Subordinated Notes due 2036 Matter No.: 1045-00001
Dear Ms. Wexler:
I. Introduction
Calderwood & Harkness LLP has acted as counsel to Belmont Ridge Bank, National Association ("BRB" or the "Bank"), a national banking association chartered under the National Bank Act, 12 U.S.C. §§ 21 et seq. (OCC Charter No. 18742), in connection with the issuance by BRB of $350,000,000 aggregate principal amount of its 6.750% Fixed-to-Floating Rate Subordinated Notes due 2036 (the "Notes"). This opinion letter (this "Opinion") is being delivered to you on the date hereof, which is the Closing Date (as defined in the Purchase Agreement referenced below), in connection with the closing of the offering and sale of the Notes.
The Notes are being offered and sold in a private placement conducted pursuant to the exemption from registration provided by Rule 144A promulgated under the Securities Act of 1933, as amended (the "Securities Act"), to persons that are "qualified institutional buyers" within the meaning of Rule 144A ("QIBs"). The Notes are not being registered under the Securities Act or the securities laws of any state and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
This Opinion has been prepared with reference to the Confidential Offering Memorandum dated February 19, 2026 (the "Offering Memorandum"), and in particular the discussion set forth in the section thereof titled "Certain U.S. Federal Income Tax Considerations." We have reviewed such section and confirm that this Opinion is consistent in all material respects with the description of the U.S. federal income tax consequences set forth therein.
This Opinion is delivered by Leonard Cross, Specialist Partner, Tax, of Calderwood & Harkness LLP. Mr. Cross has been principally responsible for the tax analysis and legal conclusions expressed herein. In rendering this Opinion, we have also had reference to the Calderwood & Harkness Tax Analysis Memorandum Regarding Debt vs. Equity Characterization of the 6.750% Fixed-to-Floating Rate Subordinated Notes due 2036 of Belmont Ridge Bank, National Association, dated February 21, 2026 (the "Tax Analysis Memorandum"), prepared by members of the firm's Tax Department in connection with this transaction. The detailed analysis set forth in the Tax Analysis Memorandum forms the basis for the opinions expressed herein.
II. Documents Reviewed
In connection with the preparation of this Opinion, we have examined and relied upon originals or copies (certified or otherwise identified to our satisfaction) of the following documents and instruments:
1. The Indenture, dated as of February 24, 2026 (the "Indenture"), between BRB, as Issuer, and Brindoval Trust Company, National Association, a national banking association organized under the laws of the United States ("Brindoval" or the "Trustee"), as Trustee;
2. The Form of Rule 144A Global Note (CUSIP 082651 AB7; ISIN US082651AB73) representing the Notes, attached as Exhibit A to the Indenture (the "Global Note");
3. The Purchase Agreement, dated February 19, 2026 (the "Purchase Agreement"), among BRB, Wainwright Zanthor & Co., LLC, as Representative of the Initial Purchasers ("Wainwright Zanthor"), Redstone Capital Markets LLC ("Redstone"), and Kensington Hale Securities Inc. ("Kensington Hale" and, together with Wainwright Zanthor and Redstone, the "Initial Purchasers");
4. The Confidential Offering Memorandum, dated February 19, 2026, relating to the offering of the Notes;
5. The Pricing Term Sheet, dated February 19, 2026, setting forth the final pricing terms of the Notes (the "Pricing Term Sheet");
6. The Registration Rights Agreement, dated as of February 24, 2026, between BRB and the Initial Purchasers (the "Registration Rights Agreement");
7. The Officers' Certificate of BRB, dated February 24, 2026, delivered pursuant to Section 6(f) of the Purchase Agreement (the "Officers' Certificate"), containing, among other things, a bring-down of the representations and warranties of BRB set forth in the Purchase Agreement;
8. The Secretary's Certificate of BRB, dated February 24, 2026 (the "Secretary's Certificate"), together with all exhibits and attachments thereto, including certified copies of the Articles of Association/Charter of BRB (OCC Charter No. 18742), the Amended and Restated Bylaws of BRB, and the resolutions of the Board of Directors of BRB authorizing the issuance of the Notes;
9. The resolutions of the Board of Directors of BRB, adopted on January 15, 2026, and supplemented by unanimous written consent dated February 12, 2026 (collectively, the "Board Resolutions"), authorizing the issuance and sale of the Notes, the execution and delivery of the Indenture and the other transaction documents, and related matters;
10. Certified copies of the Articles of Association/Charter (OCC Charter No. 18742) and the Amended and Restated Bylaws of BRB, each as currently in effect; and
11. Such other certificates, documents, records, instruments, and materials as we have deemed necessary or appropriate for purposes of the opinions expressed herein, including records of corporate proceedings and actions made available to us by BRB and its officers.
The documents described in items (1) through (6) above are referred to collectively herein as the "Transaction Documents." We have also reviewed such provisions of the Internal Revenue Code of 1986, as amended (the "Code"), the Treasury Regulations promulgated thereunder, published revenue rulings and revenue procedures of the Internal Revenue Service (the "IRS"), and reported judicial decisions as we have considered relevant to the opinions expressed herein.
III. Key Terms of the Notes
For purposes of this Opinion, the following is a summary of the material terms of the Notes as set forth in the Indenture, the Global Note, and the Offering Memorandum. This summary does not purport to be complete and is qualified in its entirety by reference to the actual terms and conditions set forth in the Indenture and the Global Note.
Issuer: Belmont Ridge Bank, National Association, a national banking association organized and existing under the National Bank Act, OCC Charter No. 18742.
Aggregate Principal Amount: $350,000,000.
Issue Price: 99.750% of the par value of the Notes (i.e., aggregate gross proceeds to the Issuer of approximately $349,125,000, before deducting discounts, commissions, and offering expenses payable by the Issuer).
Fixed Rate Period Coupon: During the period from and including the issue date to, but excluding, March 1, 2031 (the "Fixed Rate Period"), the Notes will bear interest at a fixed rate of 6.750% per annum, payable semi-annually in arrears on March 1 and September 1 of each year, commencing September 1, 2026. Interest during the Fixed Rate Period will be computed on the basis of a 360-day year consisting of twelve 30-day months.
Floating Rate Period Coupon: During the period from and including March 1, 2031 to, but excluding, the Maturity Date or the date of earlier redemption (the "Floating Rate Period"), the Notes will bear interest at a floating rate equal to Compounded SOFR (as defined in the Indenture) plus 275 basis points per annum, payable quarterly in arrears on March 1, June 1, September 1, and December 1 of each year, commencing June 1, 2031. Interest during the Floating Rate Period will be computed on the basis of a 360-day year and the actual number of days elapsed.
Fixed-to-Floating Rate Reset Date: March 1, 2031.
Stated Maturity Date: March 1, 2036 (the "Maturity Date"), representing a term of approximately ten years from the issue date.
Optional Redemption: The Notes are redeemable at the option of BRB, in whole or in part, on the Reset Date or on any interest payment date thereafter, at a redemption price equal to 100% of the principal amount of the Notes being redeemed, plus accrued and unpaid interest thereon to, but excluding, the date of redemption, subject to the prior approval of the Office of the Comptroller of the Currency (the "OCC"). In addition, the Notes may be redeemed at any time, in whole but not in part, upon the occurrence of a "Tax Event" or a "Regulatory Capital Treatment Event" (each as defined in the Indenture), at a redemption price equal to 100% of the principal amount of the Notes being redeemed, plus accrued and unpaid interest thereon to, but excluding, the date of redemption, in each case subject to the prior approval of the OCC.
Ranking: The Notes are subordinated unsecured obligations of BRB. The Notes will rank junior in right of payment to all existing and future senior indebtedness and deposits of BRB. The Notes will rank pari passu in right of payment with BRB's existing 5.250% Subordinated Notes due 2027 ($200,000,000 aggregate principal amount currently outstanding) and any other future subordinated indebtedness of BRB that by its terms ranks equally with the Notes. The Notes will rank senior in right of payment to any existing or future junior subordinated indebtedness of BRB and to all classes of equity securities of BRB, including common stock and preferred stock.
Tier 2 Regulatory Capital: The Notes are intended to qualify as Tier 2 capital of BRB under the capital adequacy rules promulgated by the OCC at 12 C.F.R. Part 3, which implement the Basel III capital framework in the United States.
Form: The Notes are issued in the form of one or more global notes in fully registered, book-entry only form, deposited with, and registered in the name of a nominee of, The Depository Trust Company ("DTC"). Beneficial interests in the Global Note will be shown on, and transfers thereof will be effected only through, records maintained by DTC and its direct and indirect participants. Cede & Co. serves as the nominee of DTC with respect to the Global Note.
Minimum Denomination: $150,000 and integral multiples of $1,000 in excess thereof.
Governing Law: The Indenture and the Notes are governed by, and construed in accordance with, the laws of the State of New York.
IV. Assumptions
In rendering the opinions set forth herein, we have, with your permission and without independent investigation or verification, assumed the following:
1. The genuineness of all signatures on all documents examined by us, the legal capacity of all natural persons who have executed any documents, the authenticity of all documents submitted to us as originals, and the conformity to the originals of all documents submitted to us as copies (whether certified, photostatic, electronic, or otherwise). We have also assumed the completeness of all documents provided to us and that all such documents have been duly executed and delivered by the parties thereto.
2. Each party to the Transaction Documents (other than BRB, as to which we express no assumption) has the requisite legal capacity, power, and authority (corporate, partnership, limited liability company, or otherwise, as applicable) to execute, deliver, and perform its respective obligations under the Transaction Documents to which it is a party, and each such document constitutes a valid, binding, and enforceable obligation of each such party in accordance with its terms.
3. The transaction has been and will be consummated in accordance with the terms described in the Indenture, the Purchase Agreement, the Offering Memorandum, and the other Transaction Documents, and the actual terms of the Notes as issued conform in all material respects to those described herein, in the Indenture, in the Global Note, and in the Offering Memorandum. No party to any Transaction Document has taken or will take any action that is inconsistent with the terms of such Transaction Document or that would cause the transaction to deviate in any material respect from the terms described therein.
4. The representations and warranties of BRB contained in the Transaction Documents, including without limitation those set forth in the Purchase Agreement and the Officers' Certificate dated February 24, 2026, are and will be true, correct, and complete in all material respects as of the date hereof and as of any relevant date during the term of the Notes.
5. BRB will comply in all material respects with all of its reporting obligations, covenants, and undertakings under the Indenture and the Notes, including, without limitation, its obligations to make timely payments of principal and interest on the Notes and to furnish to the Trustee all notices, certificates, and other documents required by the Indenture.
6. No future modifications, amendments, supplements, waivers, or other changes to the terms of the Notes or the Indenture will be effected that would alter the economic, legal, or regulatory characteristics of the Notes in a manner that would be material to the analysis set forth herein or that would cause the conclusions expressed in this Opinion to be inapplicable. In the event that any such modification, amendment, supplement, waiver, or change is proposed or effected, the opinions expressed herein may no longer be applicable, and BRB should seek updated tax advice prior to effecting any such change.
V. Opinion — Debt vs. Equity Characterization Analysis
V.A. General Framework
The threshold question in determining the U.S. federal income tax treatment of the Notes is whether the Notes should be characterized as indebtedness or as equity of the Issuer. This distinction is of fundamental importance because, among other things, interest paid on indebtedness is generally deductible by the issuer under Section 163(a) of the Code, whereas distributions on equity (including dividends on stock) are not deductible by the issuer. In addition, the characterization of the Notes as debt or equity has significant consequences for holders, including the character of income received (interest income versus dividend income) and the treatment of gain or loss upon disposition.
Under the Code, the distinction between debt and equity is determined based on the economic substance and legal form of the instrument, as informed by an extensive body of case law, IRS published rulings and administrative pronouncements, and the Treasury Regulations. The Code itself does not contain a comprehensive definition of "indebtedness" for purposes of Section 163, and Section 385 of the Code, which authorizes the Secretary of the Treasury to prescribe regulations to determine whether an interest in a corporation is to be treated as stock or indebtedness, has not resulted in the promulgation of final regulations that comprehensively resolve the issue in all cases, although certain regulations under Section 385 address specific contexts such as related-party transactions.
In the absence of a single statutory or regulatory test, courts and the IRS have developed a well-established multi-factor analysis that weighs the totality of the circumstances in determining whether an instrument should be treated as debt or equity for U.S. federal income tax purposes. The factors traditionally considered in this analysis have been identified and refined in numerous judicial decisions, including the factors articulated in such seminal decisions as John Kelley Co. v. Commissioner, 326 U.S. 521 (1946); Commissioner v. O.P.P. Holding Corp., 76 F.2d 11 (2d Cir. 1935); Fin Hay Realty Co. v. United States, 398 F.2d 694 (3d Cir. 1968); Estate of Mixon v. United States, 464 F.2d 394 (5th Cir. 1972); and Indmar Products Co. v. Commissioner, 444 F.3d 771 (6th Cir. 2006), among others. While no single factor is dispositive, and the weight assigned to particular factors may vary depending on the specific facts and circumstances, the following factors are among those most commonly considered:
(1) Whether there is an unconditional obligation to pay a sum certain on a fixed maturity date;
(2) Whether the holders have the right to enforce payment of principal and interest;
(3) Whether the instrument is subordinated to other obligations of the issuer;
(4) The debt-to-equity ratio of the issuer, including the extent to which the issuer's capitalization is adequate;
(5) Whether interest payments are fixed and payable regardless of the issuer's earnings or profitability;
(6) Whether holders participate in the management of the issuer or share in the issuer's profits or growth;
(7) Whether the instrument is convertible into equity of the issuer;
(8) The identity of interest (or lack thereof) between the holders of the instrument and the equity holders of the issuer;
(9) Whether the source of interest and principal payments is dependent on the issuer's earnings;
(10) The label given to the instrument by the parties, and the intent of the parties as reflected in the transaction documents and surrounding circumstances;
(11) Whether the instrument was issued in exchange for existing equity interests or for cash or other non-equity consideration; and
(12) The adequacy of the issuer's capitalization and whether the instrument was issued to provide working capital or operating funds that would normally be provided by equity holders.
As noted, no single factor is determinative, and the analysis requires a holistic assessment of the instrument and the circumstances of its issuance. We address each of the foregoing factors, as applied to the Notes, below.
V.B. Application of Factors to the Notes
Unconditional Obligation to Pay / Fixed Maturity
The Notes have a stated maturity date of March 1, 2036, providing a definite and ascertainable term of approximately ten (10) years from the date of issuance. This is well within the range of terms that is customary for subordinated debt instruments issued by banking organizations and is comparable to the maturities of similar subordinated notes issued by peer institutions. The existence of a stated maturity date at which the issuer is contractually obligated to repay the principal amount is one of the hallmarks of a bona fide debt obligation.
Pursuant to the terms of the Indenture, BRB has an unconditional obligation to repay the entire $350,000,000 aggregate principal amount of the Notes at the Maturity Date. This obligation is absolute and is not contingent upon BRB's financial performance, earnings, asset levels, or any other variable. The obligation to repay principal at maturity is a fixed, legally enforceable commitment of the Bank.
We note that the Notes do contain provisions for optional redemption at par beginning on the Reset Date (March 1, 2031), as well as provisions for early redemption upon the occurrence of a Tax Event or Regulatory Capital Treatment Event, but these provisions do not alter the unconditional nature of the obligation to repay principal at maturity in the absence of an earlier redemption. The redemption provisions are at the option of the Issuer and do not diminish the holder's entitlement to repayment.
This factor strongly supports the characterization of the Notes as indebtedness for U.S. federal income tax purposes.
Right to Enforce Payment
Holders of the Notes, acting through the Trustee (Brindoval Trust Company, N.A.), have the right to enforce payment of both principal and interest under the terms of the Indenture. Article VI of the Indenture contains customary events of default, including failure to pay principal when due, failure to pay interest within thirty (30) days after the date on which such interest becomes due and payable, and certain bankruptcy and insolvency events. Upon the occurrence and continuance of an event of default, the Trustee has the right (and, under certain circumstances, the obligation) to exercise available remedies on behalf of the holders.
We acknowledge that the Indenture contains certain limitations on acceleration of the Notes that are consistent with the regulatory requirements applicable to instruments that qualify as Tier 2 capital under 12 C.F.R. Part 3. Specifically, the Notes may not be accelerated except upon the occurrence of certain insolvency-related events of the Issuer, and the Trustee's remedies are subject to certain regulatory constraints imposed by the OCC. These limitations are standard features of Tier 2 qualifying subordinated debt issued by national banking associations and do not, in our analysis, undermine the debt character of the Notes. Courts have recognized that the presence of regulatory restrictions on acceleration does not, by itself, convert an obligation from debt to equity, particularly where such restrictions are imposed by applicable banking law and are consistent with market practice for instruments of this type.
Critically, notwithstanding the limitations on acceleration, the right to payment of principal and interest on the Notes is not contingent on BRB's financial performance or profitability. Holders are entitled to receive payment of interest on the scheduled interest payment dates and repayment of principal at the Maturity Date regardless of whether BRB has sufficient earnings to fund such payments. This distinguishes the Notes from equity instruments, where distributions (such as dividends) are typically discretionary and payable only out of legally available funds at the board's discretion.
This factor supports the characterization of the Notes as indebtedness for U.S. federal income tax purposes.
Fixed Interest Payments Independent of Earnings
The Notes bear interest at a fixed rate of 6.750% per annum during the Fixed Rate Period (from the issue date through, but excluding, March 1, 2031) and at a floating rate equal to Compounded SOFR plus 275 basis points per annum during the Floating Rate Period (from and including March 1, 2031 through, but excluding, the Maturity Date or the date of earlier redemption). Interest on the Notes is mandatory and is payable to holders regardless of BRB's earnings, revenues, profitability, or financial condition. The Indenture does not provide for any deferral, reduction, or cancellation of interest payments based on the Issuer's financial performance or at the discretion of the Issuer's board of directors.
This feature is a critical distinction between the Notes and equity instruments. Dividends on equity securities, including preferred stock, are typically payable only when, as, and if declared by the issuer's board of directors and only out of legally available funds. By contrast, interest on the Notes is a contractually mandated payment that BRB is obligated to make without regard to board discretion or the existence of earnings.
We further note that the coupon rate on the Notes (6.750% during the Fixed Rate Period; Compounded SOFR + 275 bps during the Floating Rate Period) is commercially reasonable and consistent with prevailing arm's-length terms for subordinated bank debt with comparable credit characteristics, maturity, and structural features. The Notes have been rated BBB by Meridian Ratings Group, Inc. and Baa2 by Archer Bond Analytics LLC, in each case with a stable outlook, which ratings are consistent with the investment-grade quality of subordinated obligations of well-capitalized national banking associations. The coupon rate is neither excessive (which might suggest a disguised equity return) nor artificially low (which might suggest a non-arm's-length arrangement).
This factor strongly supports the characterization of the Notes as indebtedness for U.S. federal income tax purposes.
Subordination. The Notes are subordinated unsecured obligations of BRB. Pursuant to Article XII of the Indenture, the Notes rank junior in right of payment to all existing and future "Senior Indebtedness" of BRB (as defined in the Indenture), including all deposits held by BRB. The Notes rank pari passu in right of payment with BRB's existing 5.250% Subordinated Notes due 2027 ($200,000,000 aggregate principal amount outstanding) and any other future subordinated indebtedness of BRB that, by its terms, ranks equally with the Notes. The Notes rank senior in right of payment to any existing or future junior subordinated indebtedness of BRB and to all classes of BRB's equity securities.
Subordination is sometimes cited as a factor that weighs against debt characterization, on the theory that subordinated creditors bear risks more closely analogous to those borne by equity holders than to those borne by senior creditors. However, the weight of authority supports the view that subordination alone does not convert a debt instrument into equity for U.S. federal income tax purposes. See, e.g., Fin Hay Realty Co. v. United States, 398 F.2d 694, 697 (3d Cir. 1968) (noting subordination as one factor but declining to treat it as dispositive); In re Lane, 742 F.2d 1311, 1315 (11th Cir. 1984) (same). Subordination is a common and expected structural feature of Tier 2 qualifying subordinated debt issued by banking organizations and reflects regulatory requirements rather than an intent to create an equity-like instrument. The subordination feature of the Notes is a consequence of applicable OCC capital regulations (12 C.F.R. § 3.20(d)) and is not indicative of equity characteristics.
Moreover, the Notes are not subordinated to all obligations of BRB — they rank senior to junior subordinated indebtedness and to all equity. The Notes' pari passu ranking with BRB's existing 5.250% Subordinated Notes due 2027 further confirms that the Notes occupy a position in BRB's capital structure that is consistent with indebtedness and clearly distinguishable from equity.
This factor is neutral to mildly supportive of debt treatment.
No Equity Conversion or Profit Participation
The Notes are not convertible into, or exchangeable for, any equity securities of BRB or of Belmont Ridge Financial Group, Inc. ("BRFG"), BRB's sole shareholder and holding company parent. The Notes do not include any warrant, option, or other right to acquire equity securities of BRB, BRFG, or any other entity. Holders of the Notes have no right to convert or exchange the Notes into common stock, preferred stock, or any other class of equity security at any time, whether at the holder's option, the Issuer's option, or automatically upon the occurrence of any event.
Furthermore, holders of the Notes have no right to participate in the management of BRB or to exercise any voting rights with respect to BRB's affairs. Holders are not entitled to receive any distribution or payment in respect of the Notes that is determined by reference to BRB's earnings, revenues, profitability, or the value of BRB's assets. The return to holders of the Notes is limited to the stated interest payments (at the fixed or floating rate, as applicable) and the repayment of principal at the Maturity Date (or upon earlier redemption). Holders do not share in any appreciation in the value of BRB's assets or business, nor do they participate in any residual distribution upon liquidation or dissolution of BRB beyond their contractual right to receive the stated principal amount and accrued interest.
The absence of any conversion feature, profit participation right, or management right strongly distinguishes the Notes from equity instruments and is one of the most significant factors supporting debt characterization.
This factor strongly supports the characterization of the Notes as indebtedness for U.S. federal income tax purposes.
Cash Issuance / No Identity of Interest
The Notes are being issued for cash to unrelated third-party institutional investors that qualify as QIBs, through the Initial Purchasers (Wainwright Zanthor & Co., LLC, Redstone Capital Markets LLC, and Kensington Hale Securities Inc.). The aggregate gross proceeds from the issuance are approximately $349,125,000 (reflecting the 99.750% issue price), before deduction of the Initial Purchasers' discount and offering expenses.
BRB's sole shareholder is BRFG, a bank holding company registered under the Bank Holding Company Act of 1956, as amended. None of the Initial Purchasers or any of the ultimate purchasers of the Notes (to our knowledge, based on representations made in the Purchase Agreement and the Officers' Certificate) is a shareholder of BRB or BRFG, and no purchaser of the Notes is acquiring the Notes as a contribution to capital or in exchange for equity interests in BRB or BRFG. The arm's-length, cash-for-Notes nature of the transaction eliminates any concern regarding the "identity of interest" factor — there is no overlap or proportionality between the noteholders and BRB's equity holders.
Courts have placed significant weight on the identity-of-interest factor, recognizing that when a purported debt instrument is held by the same persons who hold equity in the issuer, in the same proportions, the instrument is more likely to be treated as a disguised equity contribution. See, e.g., Estate of Mixon v. United States, 464 F.2d 394, 402 (5th Cir. 1972). Here, there is no such identity of interest, and the Notes are being distributed to a broad base of unrelated institutional investors through a competitive underwriting process.
This factor strongly supports the characterization of the Notes as indebtedness for U.S. federal income tax purposes.
Capitalization / Debt-to-Equity Ratio
BRB is a well-capitalized national banking association, as determined under the regulatory capital framework administered by the OCC. As of December 31, 2025, based on BRB's most recently filed Call Report (FFIEC 031/041) and the representations made in the Officers' Certificate, BRB's regulatory capital ratios were as follows:
BRB's total consolidated assets were approximately $62.4 billion as of December 31, 2025. The issuance of $350,000,000 in additional subordinated debt, while material in absolute terms, represents approximately 0.56% of BRB's total assets and does not result in a disproportionate or excessive debt-to-equity ratio. Following the issuance of the Notes, BRB's total risk-based capital ratio is expected to increase to approximately 14.7%, reflecting the inclusion of the Notes as Tier 2 capital, further demonstrating that the Bank is not thinly capitalized.
The "thin capitalization" or "excessive leverage" concern that often arises in the debt-equity context is not present here. BRB has substantial equity capital (CET1 ratio of 10.3%) and the addition of the Notes to BRB's capital structure does not create a situation in which debt is being used as a substitute for equity.
This factor supports the characterization of the Notes as indebtedness for U.S. federal income tax purposes.
Intent and Label
The parties have consistently and uniformly treated the Notes as indebtedness for all purposes. The Indenture, the Global Note, the Purchase Agreement, the Offering Memorandum, and all other Transaction Documents refer to the instruments as "Notes" and describe the holders thereof as creditors of BRB. The Transaction Documents use the terminology of debt (principal, interest, maturity, redemption, indenture, trustee) rather than the terminology of equity (dividends, shares, stockholders, capital contributions). BRB's Board Resolutions specifically authorize the issuance of the Notes as subordinated debt obligations.
BRB intends to treat interest payments on the Notes as deductible for U.S. federal income tax purposes under Section 163(a) of the Code and to report such payments on IRS Form 1099-INT or such other applicable information returns as required by law. BRB intends to reflect the Notes as liabilities, and not as equity, on its financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and on its regulatory reports filed with the OCC.
While the label attached to an instrument by the parties is not controlling, courts have recognized that the intent and labeling of the parties is a relevant factor, particularly where (as here) the label is consistent with the economic substance of the instrument. See Scriptomatic, Inc. v. United States, 555 F.2d 364, 367–68 (3d Cir. 1977).
This factor supports the characterization of the Notes as indebtedness for U.S. federal income tax purposes.
Optional Redemption / Call Features
The optional redemption provisions of the Notes (callable at par beginning on the Reset Date of March 1, 2031, and redeemable at par at any time upon the occurrence of a Tax Event or Regulatory Capital Treatment Event, in each case subject to OCC approval) are typical of, and indeed required for, Tier 2 qualifying subordinated debt issued by banking organizations. The five-year non-call period is mandated by the OCC's regulatory capital rules (12 C.F.R. § 3.20(d)(1)(v)), and the requirement for OCC approval prior to any redemption ensures regulatory oversight.
These call features do not create equity-like characteristics. Unlike a mandatory conversion feature or a put right that allows the issuer to satisfy its obligations by delivering equity, the optional redemption provisions simply allow BRB to prepay its debt obligation at par. The economic effect of the call is to give BRB the opportunity to refinance its subordinated debt if interest rates decline or if the Notes are no longer needed for regulatory capital purposes — a feature that is common to virtually all bank subordinated debt instruments.
This factor is neutral.
V.C. Conclusion on Debt Characterization
Based upon the analysis set forth above and in the Tax Analysis Memorandum, we conclude that, weighing all of the foregoing factors and considering the totality of the circumstances, the Notes overwhelmingly exhibit the characteristics of indebtedness rather than equity for U.S. federal income tax purposes. The Notes possess each of the core attributes traditionally associated with bona fide indebtedness: a fixed maturity date; an unconditional obligation to repay a sum certain; mandatory interest payments that are fixed in amount (or determinable by reference to an objective benchmark) and payable regardless of the Issuer's earnings; no conversion feature; no profit participation or management rights for holders; issuance for cash to unrelated investors with no identity of interest between noteholders and equity holders; and issuance by a well-capitalized institution that is not substituting debt for equity.
No factor weighing against debt treatment is present in a degree that would, individually or in the aggregate, overcome the strong indicia of indebtedness identified above. While the subordination feature of the Notes is sometimes viewed as an equity-like characteristic, it is a standard and expected feature of bank Tier 2 regulatory capital instruments and is insufficient, standing alone or in combination with any other factor, to overcome the overwhelming weight of the factors supporting debt treatment.
Accordingly, it is our opinion that the Notes should be characterized as indebtedness of BRB, and not as equity, for U.S. federal income tax purposes.
VI. AHYDO Analysis
Section 163(e)(5) of the Code imposes limitations on the deductibility of interest on certain debt instruments that constitute "applicable high yield discount obligations" ("AHYDOs"). Specifically, if a debt instrument is classified as an AHYDO, the issuer's deduction for the portion of OID that is attributable to the "disqualified portion" (generally, the portion of the yield that exceeds the AFR plus six percentage points) is permanently disallowed, and the deduction for the remainder of the OID is deferred until such OID is actually paid.
Under Sections 163(e)(5) and 163(i) of the Code, a debt instrument constitutes an AHYDO if it satisfies all three of the following conditions:
(i) The debt instrument has a maturity date that is more than five (5) years from the date of issue (the "Maturity Test");
(ii) The yield to maturity of the debt instrument equals or exceeds the sum of the "applicable federal rate" ("AFR") in effect for the calendar month in which the debt instrument is issued plus five (5) percentage points (the "Yield Test"); and
(iii) The debt instrument has "significant original issue discount" as defined in Section 163(i)(2) of the Code (the "Significant OID Test").
We address each prong of the AHYDO test as applied to the Notes below.
Maturity Test. The Notes have a stated maturity date of March 1, 2036, which is approximately ten (10) years from the issue date of February 24, 2026. Accordingly, the maturity of the Notes exceeds five years from the date of issue, and the Maturity Test is satisfied.
Yield Test. Under Section 163(i)(1) of the Code, the Yield Test is met if the yield to maturity of the debt instrument equals or exceeds the AFR (determined under Section 1274(d) of the Code) plus 500 basis points. The relevant AFR is the long-term AFR (applicable to debt instruments with a term in excess of nine years) in effect for the calendar month in which the Notes are issued. Based on the long-term AFR published by the IRS for February 2026, which is approximately 4.43% (compounded semi-annually), the threshold yield for purposes of the Yield Test is approximately 9.43% (4.43% + 5.00%). The yield to maturity of the Notes, taking into account the 99.750% issue price and the stated interest rate of 6.750% during the Fixed Rate Period (and assuming the floating rate during the Floating Rate Period equals the forward SOFR curve in effect as of the issue date plus 275 basis points), is approximately 6.80%. Because the yield to maturity of the Notes (approximately 6.80%) is substantially below the AFR-plus-500-basis-points threshold (approximately 9.43%), the Yield Test is not satisfied.
Because the AHYDO classification requires all three prongs to be met, and the Yield Test is not satisfied, the Notes should not be classified as AHYDOs, and the analysis could conclude at this point. Nevertheless, for completeness, we address the Significant OID Test below.
Significant OID Test. Even assuming, arguendo, that the Yield Test were satisfied, the Notes would not have "significant original issue discount" within the meaning of Section 163(i)(2) of the Code. A debt instrument has "significant OID" if, at the end of any accrual period ending after the date five years after the date of issue, the aggregate amount that would be includible in gross income of the holder with respect to such instrument (assuming the holder uses the accrual method of accounting) exceeds the sum of the aggregate amount of interest to be paid under the instrument before the close of such accrual period. Because the Notes provide for current cash pay interest at a rate of 6.750% per annum during the Fixed Rate Period and at Compounded SOFR + 275 bps during the Floating Rate Period, and because the only OID on the Notes arises from the de minimis discount of 0.250% (as described in Section VII below), the aggregate amount of OID that would accrue on the Notes is negligible and does not exceed the aggregate current interest payments. Moreover, the discount of $875,000 (0.250% of $350,000,000) is well below any threshold that could reasonably be considered "significant" in the context of a $350,000,000 issuance bearing interest at 6.750%.
Conclusion. The Notes should not constitute "applicable high yield discount obligations" within the meaning of Section 163(e)(5) of the Code. The Yield Test is not satisfied, and, even if it were, the Significant OID Test would not be met. Accordingly, the limitations on deductibility imposed by Section 163(e)(5) should not apply to the Notes.
VII. Original Issue discount Considerations
The Notes are being issued at a price of 99.750% of their stated principal amount, representing a discount of 0.250% of par, or $875,000 in aggregate ($350,000,000 × 0.0025 = $875,000).
Under Section 1273(a)(1) of the Code, a debt instrument is treated as having OID if the "stated redemption price at maturity" of the instrument exceeds its "issue price" by more than a de minimis amount. For purposes of Section 1273, the stated redemption price at maturity of the Notes is $350,000,000 (the aggregate principal amount), and the issue price of the Notes is $349,125,000 (99.750% of par), resulting in total OID of $875,000.
Under Treasury Regulation § 1.1273-1(d)(1), OID on a debt instrument is treated as de minimis if it is less than the product of 0.25% (one-quarter of one percent) of the stated redemption price at maturity multiplied by the number of complete years from the issue date to the maturity date. This de minimis threshold is calculated as follows:
De minimis threshold = 0.0025 × $350,000,000 × 10 complete years
De minimis threshold = $8,750,000
The number of complete years from the issue date (February 24, 2026) to the stated maturity date (March 1, 2036) is ten (10) complete years (approximately 10 years and 5 days). Using ten complete years, the de minimis threshold is $8,750,000.
The actual OID on the Notes of $875,000 is substantially less than the $8,750,000 de minimis threshold — the actual OID equals only approximately 10% of the threshold amount. Accordingly, the OID on the Notes is de minimis and will be treated as zero for U.S. federal income tax purposes under Treasury Regulation § 1.1273-1(d).
Under Treasury Regulation § 1.1273-1(d)(2), de minimis OID is allocated to principal payments on a pro rata basis. Because the Notes do not provide for any installment payments of principal and the entire stated redemption price at maturity is payable at the Maturity Date, the entire de minimis OID amount of $875,000 will be allocable to the single payment of principal at maturity and will be includible in the holder's income at that time as capital gain (rather than as ordinary income, which would be the case if the OID were not de minimis).
The de minimis nature of the OID also means that BRB, as issuer, will not be required to accrue or deduct any OID on the Notes over the term of the Notes. Rather, BRB's interest deductions with respect to the Notes will be limited to the stated interest (6.750% per annum during the Fixed Rate Period and Compounded SOFR + 275 bps during the Floating Rate Period), and the de minimis discount will be taken into account only upon repayment of principal at the Maturity Date.
VIII. Interest Deductibility
Subject to the limitations of Section 163(j) of the Code (the "business interest expense limitation"), Section 163(e)(5) of the Code (which, as discussed in Section VI above, should not apply to the Notes), and any other applicable provisions of the Code, BRB should be entitled to deduct interest paid on the Notes as an ordinary and necessary business expense under Section 163(a) of the Code. Section 163(a) generally allows a deduction for "all interest paid or accrued within the taxable year on indebtedness." Because, as discussed in Section V above, the Notes should be treated as indebtedness of BRB for U.S. federal income tax purposes, interest accrued and paid by BRB on the Notes should qualify for the deduction provided by Section 163(a).
Section 163(j) of the Code, as amended by the Tax Cuts and Jobs Act of 2017 (P.L. 115-97), limits the deduction for "business interest expense" in any taxable year to the sum of (i) business interest income, (ii) 30% of the taxpayer's "adjusted taxable income" for the taxable year (with "adjusted taxable income" computed without regard to certain items), and (iii) floor plan financing interest. Any business interest expense that is disallowed under Section 163(j) may be carried forward to succeeding taxable years, subject to certain limitations. The determination of whether and to what extent BRB's interest deduction on the Notes may be limited by Section 163(j) will depend on BRB's specific financial results, income, and expense items in each taxable year and is beyond the scope of this Opinion. We note, however, that BRB, as a national banking association engaged in the business of banking, generates substantial interest income from its lending activities, and accordingly the Section 163(j) limitation may not materially restrict BRB's ability to deduct interest on the Notes.
We further note that, as a national banking association chartered by the OCC, BRB's interest deductions and related financial matters are also subject to applicable banking regulations, OCC supervisory guidance, and other regulatory requirements. An analysis of the interplay between the tax deductibility of interest on the Notes and applicable banking law and regulatory requirements is beyond the scope of this tax opinion, and we express no opinion thereon.
IX. Qualifications and Limitations
The opinions expressed herein are subject to the following qualifications and limitations:
1. Scope. This Opinion is limited exclusively to the U.S. federal income tax matters expressly addressed herein. We do not express any opinion regarding the tax treatment of the Notes or the transactions contemplated by the Transaction Documents under the laws of any state, locality, or political subdivision of the United States, or under the tax laws of any foreign jurisdiction. We also do not express any opinion regarding the impact of any tax treaty on the treatment of the Notes or the holders thereof.
2. Authority. This Opinion is based on the Code, the Treasury Regulations promulgated thereunder, published revenue rulings and revenue procedures of the IRS, and reported judicial decisions, all as in effect and available as of the date hereof. All of the foregoing authorities are subject to change, modification, repeal, or differing interpretation at any time, and any such change, modification, repeal, or differing interpretation could be applied retroactively in a manner that could adversely affect the conclusions expressed herein. We assume no obligation to update or supplement this Opinion to reflect any such change occurring after the date hereof.
3. No Assurance Against Challenge. No assurance can be given that the IRS will not assert a position contrary to one or more of the conclusions expressed herein, or that a court would not sustain such a contrary position if asserted. However, in our opinion, the position that the Notes constitute indebtedness for U.S. federal income tax purposes is well-supported by the applicable authorities and the factual circumstances of the issuance, and such position should prevail if properly presented to the IRS or a court of competent jurisdiction.
4. Consistency with Transaction Documents. This Opinion assumes that the Notes are issued and will remain outstanding with the terms described in the Indenture, the Global Note, and the Offering Memorandum, and that there will be no material amendments, modifications, supplements, or waivers to the terms of the Notes or the Indenture that would alter the economic, legal, or regulatory characteristics of the Notes in a manner material to the analysis herein. In the event that the terms of the Notes are materially modified, the conclusions expressed herein may no longer be applicable.
5. Holder-Level Consequences. We express no opinion on any U.S. federal income tax consequences arising from the ownership, holding, or disposition of the Notes by any particular holder or beneficial owner, including, without limitation, consequences arising under Sections 871, 881, or 882 of the Code (relating to taxation of nonresident aliens and foreign corporations), Sections 1441 or 1442 of the Code (relating to withholding on payments to non-U.S. persons), Sections 1471 through 1474 of the Code (commonly referred to as "FATCA," the Foreign Account Tax Compliance Act), or any other provision of the Code applicable to a holder or beneficial owner based on such person's particular facts and circumstances, including, without limitation, such person's tax status, residency, citizenship, or method of accounting.
6. Non-U.S. Tax Laws. We express no opinion regarding the tax treatment of the Notes under the tax laws of any jurisdiction other than the United States, including, without limitation, the laws of any state, local, or foreign jurisdiction.
7. Reliance. This Opinion is rendered solely for the benefit of BRB in connection with the issuance of the Notes and may not be relied upon by any other person or entity without our prior written consent, except as specifically provided in the Reliance Letter dated February 24, 2026, executed by Calderwood & Harkness LLP in connection with the closing of the offering.
8. No Duty to Update. We have not undertaken, and we assume no obligation to undertake, any duty to update, revise, supplement, or reaffirm this Opinion for changes in law, regulation, or fact occurring after the date hereof, whether or not such changes come to our attention. The opinions expressed herein speak only as of the date hereof.
X. Opinion
Based upon and subject to the foregoing, including the assumptions, qualifications, and limitations set forth herein, and the analysis set forth in the Calderwood & Harkness Tax Analysis Memorandum, it is our opinion that, for U.S. federal income tax purposes:
1. Debt Characterization. The 6.750% Fixed-to-Floating Rate Subordinated Notes due 2036 issued by Belmont Ridge Bank, National Association will be characterized as indebtedness of BRB, and not as equity, for U.S. federal income tax purposes.
2. AHYDO. The Notes should not constitute "applicable high yield discount obligations" within the meaning of Section 163(e)(5) of the Internal Revenue Code of 1986, as amended, and accordingly the limitations on deductibility applicable to AHYDOs under that section should not apply to the Notes.
3. Original Issue discount. The original issue discount on the Notes is de minimis within the meaning of Treasury Regulation § 1.1273-1(d) and will be treated as zero for U.S. federal income tax purposes.
4. Interest Deductibility. Interest paid or accrued by BRB on the Notes should be deductible by BRB as ordinary business interest expense under Section 163(a) of the Code, subject to the limitations of Section 163(j) of the Code (the business interest expense limitation) and any other applicable provisions of the Code.
XI. Consent to Inclusion in Offering Memorandum
Calderwood & Harkness LLP hereby consents to the references to this Opinion and the summary of the U.S. federal income tax consequences set forth in the section titled "Certain U.S. Federal Income Tax Considerations" in the Confidential Offering Memorandum, dated February 19, 2026, relating to the offering and sale of the Notes. In giving such consent, Calderwood & Harkness LLP does not thereby admit that it is within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission promulgated thereunder.
XII. Closing
This Opinion is furnished to you solely in connection with the issuance of the Notes and is not to be used, circulated, quoted, or otherwise referred to for any other purpose without our prior written consent. We are members of the bar of the State of New York and do not express any opinion herein concerning any law other than the federal law of the United States of America.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Name: Leonard Cross
Title: Specialist Partner, Tax
Noted:
By: ________
Name: Vivienne St. Claire
Title: Responsible Partner, Capital Markets
Enclosures: As stated
cc:
Vivienne St. Claire, Calderwood & Harkness LLP Robert Adeyemi, Calderwood & Harkness LLP Eric Johannsen, Calderwood & Harkness LLP Jonathan R. Talbott, Treasurer, Belmont Ridge Bank, National Association
CONFIDENTIAL — ATTORNEY-CLIENT PRIVILEGE / ATTORNEY WORK PRODUCT This document and the information contained herein are confidential and protected by the attorney-client privilege and/or the attorney work product doctrine. This document is intended solely for the use of the addressee(s) identified above and such other persons as may be entitled to rely on this Opinion pursuant to the Reliance Letter dated February 24, 2026. Any unauthorized review, use, disclosure, or distribution of this document is strictly prohibited.
Capital Measure | Ratio | Well-Capitalized Threshold
Common Equity Tier 1 (CET1) Capital Ratio | 10.3% | ≥ 6.5%
Tier 1 Capital Ratio | 11.8% | ≥ 8.0%
Total Risk-Based Capital Ratio | 14.2% | ≥ 10.0%
Tier 1 Leverage Ratio | 8.6% | ≥ 5.0%

CALDERWOOD & HARKNESS LLP Attorneys at Law

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