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MEMORANDUM

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

Calderwood & Harkness LLP 1 World Financial Center, 42nd Floor New York, NY 10281

February 3, 2026

To:

Catherine A. Royce, General Counsel & Corporate Secretary, Belmont Ridge Bank NA

Beatrice Holloway, Responsible Partner, M&A, Calderwood & Harkness LLP

James Prentice, Billing Partner, M&A, Calderwood & Harkness LLP

Andrew Fitzpatrick, Lead Associate, M&A, Calderwood & Harkness LLP

Sylvia Hartwell, Specialist Partner, Tax, Calderwood & Harkness LLP

From:

Naomi Petersen, Working Associate, M&A, Calderwood & Harkness LLP

Reviewed by:

Beatrice Holloway, Responsible Partner, M&A

Re: Regulatory Approval Analysis — Prospective Acquisition of Tessera Lending, Inc. by Belmont Ridge Bank NA

Matter No.: 1045-00005

I. Executive Summary

This memorandum analyzes the full regulatory approval landscape for the proposed acquisition of Tessera Lending, Inc. ("Tessera" or the "Target") by Belmont Ridge Bank NA ("BRB" or the "Bank") by means of a reverse triangular merger in which all-cash consideration of Forty-Eight Million Dollars ($48,000,000) will be paid to the equity holders of Tessera. The purpose of this memorandum is to identify each regulatory filing, notification, and approval requirement that must be satisfied in order to consummate the proposed transaction, to assess the timeline and costs associated with each such requirement, and to provide actionable recommendations to the deal team.

Belmont Ridge Bank NA is a national banking association organized and existing under the National Bank Act, holding OCC charter number 24-00781 and FDIC certificate number 09463. BRB is publicly traded on the New York Stock Exchange under the ticker symbol "BRMG." As of December 31, 2025, BRB reported approximately $14.7 billion in total consolidated assets and approximately $1.03 billion in cash and cash equivalents. BRB operates a diversified commercial and retail banking platform across the Mid-Atlantic and Southeastern United States.

Tessera Lending, Inc. is a Delaware corporation (Delaware file number 6847312; EIN 83-2649107) headquartered at 2400 Shoal Creek Boulevard, Suite 500, Austin, Texas 78756. Tessera operates a technology-enabled consumer lending platform specializing in unsecured personal loans and point-of-sale installment financing. Tessera holds consumer lending licenses (or equivalent authorizations) in forty-two (42) U.S. states and the District of Columbia. Since its founding in 2018, Tessera has originated approximately $1.2 billion in aggregate consumer loan volume. For the fiscal year ended December 31, 2025, Tessera reported revenue of approximately $38,400,000. Tessera currently operates under a bank-partnership lending arrangement with Ridgeline Community Bank, a Utah-chartered industrial bank.

Transaction Structure. The proposed transaction will be effected through a reverse triangular merger. BRB Acquisition Sub, Inc., a to-be-formed Delaware corporation and wholly owned subsidiary of BRB (the "Merger Sub"), will merge with and into Tessera, with Tessera surviving the merger as a wholly owned subsidiary of BRB. All outstanding shares of Tessera common stock will be converted into the right to receive an aggregate of $48,000,000 in cash, without interest. The merger will be governed by a definitive merger agreement to be negotiated and executed by the parties, with a preliminary draft to be circulated on or about February 5, 2026.

This memorandum identifies and analyzes five principal regulatory workstreams arising from the proposed transaction:

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

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

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

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

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

In addition, this memorandum addresses a significant ancillary consideration: the implications of Tessera's existing bank-partnership arrangement with Ridgeline Community Bank (FDIC certificate number 35218) under program agreement TLI-RCB-2020-001, including potential change-of-control consent requirements and post-acquisition strategic options for transitioning or winding down the partnership.

High-Level Conclusions. Based on our preliminary analysis, the primary regulatory gating item for the proposed transaction is OCC approval under 12 CFR Part 5. An HSR filing is not required because the all-cash consideration of $48,000,000 falls well below the 2026 size-of-transaction threshold of $119.5 million. State lending-license change-of-control filings across forty-two states and the District of Columbia are administratively intensive but are generally not deal-blocking, provided filings are initiated promptly and the merger agreement contains appropriate mechanics for jurisdictions with longer processing timelines. Aggregate regulatory filing fees are estimated at approximately $50,000. The anticipated regulatory approval timeline extends from Q2 2026 (submission of filings following execution of a definitive agreement) through Q3 2026 (receipt of OCC approval and critical state approvals), with the regulatory approval period serving as the principal driver of the gap between signing and closing.

II. OCC Prior Approval Requirements

A. Statutory Framework

The acquisition of Tessera by BRB implicates several provisions of the National Bank Act and the OCC's implementing regulations governing the permissible activities and corporate structure of national banking associations.

12 USC § 24 (Seventh) — Incidental Powers. Section 24 (Seventh) of the National Bank Act grants national banks the authority to exercise "all such incidental powers as shall be necessary to carry on the business of banking." The acquisition of a fintech lending subsidiary that originates consumer loans — an activity long recognized as within the core business of banking — falls within the broad sweep of this provision. BRB's acquisition of Tessera, a technology-enabled consumer lending platform, is consistent with the exercise of incidental powers necessary to extend BRB's consumer lending capabilities through a specialized subsidiary.

12 USC § 24a — Financial Subsidiaries. Section 24a of the National Bank Act, as added by the Gramm-Leach-Bliley Act of 1999, authorizes national banks to engage in activities that are "financial in nature or incidental to a financial activity" through financial subsidiaries, subject to certain conditions (including minimum capital and management requirements and compliance with Community Reinvestment Act obligations). A preliminary question for the OCC application process is whether Tessera's consumer lending activities must be conducted through a financial subsidiary under Section 24a or whether they can be conducted through an operating subsidiary under the OCC's regulations.

12 CFR Part 5 — Rules, Policies, and Procedures for Corporate Activities. The OCC's corporate activities regulations at 12 CFR Part 5 establish the framework for national bank applications and notices relating to the formation and acquisition of subsidiaries. Two provisions are of particular relevance:

12 CFR § 5.34 — Operating Subsidiaries. Section 5.34 governs the establishment or acquisition of operating subsidiaries by national banks. An operating subsidiary is an entity in which the national bank holds a controlling interest and that engages solely in activities that are permissible for the parent national bank to engage in directly. Consumer lending — including the origination of unsecured personal loans and point-of-sale installment financing — is a core banking activity that national banks may engage in directly. Accordingly, Tessera's consumer lending activities are, on their face, permissible activities for BRB to conduct directly, and Tessera should qualify for treatment as an operating subsidiary under Section 5.34.

12 CFR § 5.39 — Financial Subsidiaries. Section 5.39 governs financial subsidiaries, which may engage in a broader range of activities — specifically, activities that are financial in nature or incidental to financial activities as determined by the Secretary of the Treasury in consultation with the Federal Reserve Board, but that may not be permissible for the national bank to conduct directly. The financial subsidiary framework imposes additional conditions, including requirements related to the bank's capital adequacy, management quality, CRA performance, and aggregate investment limits.

Operating Subsidiary vs. Financial Subsidiary Classification. The distinction between an operating subsidiary and a financial subsidiary is critical to the OCC application process. An operating subsidiary engages exclusively in activities that the parent national bank is authorized to conduct directly; a financial subsidiary may engage in a broader range of activities that are financial in nature but not necessarily permissible for the bank itself. Because consumer lending — including the origination of unsecured personal loans and point-of-sale installment financing of the type conducted by Tessera — is a permissible banking activity under the National Bank Act and longstanding OCC interpretive guidance, we believe that Tessera can appropriately be held as an operating subsidiary under 12 CFR § 5.34. This classification avoids the more onerous conditions applicable to financial subsidiaries under 12 CFR § 5.39 and Section 24a.

We note, however, that the OCC may inquire into whether certain aspects of Tessera's business — in particular, the technology platform itself and any data analytics or advisory services offered in connection with the lending platform — extend beyond activities permissible for a national bank to conduct directly. If the OCC were to conclude that one or more of Tessera's activities are financial in nature but not directly permissible for a national bank, Tessera might need to be restructured as a financial subsidiary or the impermissible activities might need to be segregated. We will revisit this analysis upon completion of due diligence on the full scope of Tessera's business activities, which is expected to commence in March 2026.

For purposes of this memorandum, we proceed on the assumption that Tessera will be classified as an operating subsidiary of BRB under 12 CFR § 5.34, subject to confirmation through the OCC pre-filing consultation process described below.

B. OCC Application Process

Filing Requirement. The acquisition of Tessera by BRB will require the filing of either an operating subsidiary notice or a formal application with the OCC under 12 CFR § 5.34, depending on the OCC's assessment of the significance of the acquisition and whether it raises novel supervisory issues. Under the OCC's regulations, a national bank may acquire an operating subsidiary by filing a notice with the OCC, which is subject to a streamlined review process, unless the OCC determines that the acquisition involves a "significant" investment or raises supervisory concerns that warrant a full application. Given the nature of Tessera's technology-enabled lending platform, the scale of its operations (approximately $1.2 billion in aggregate originations and $38,400,000 in FY2025 revenue), and the heightened regulatory attention to fintech activities in the banking sector, there is a meaningful likelihood that the OCC will require a formal application rather than a notice filing. We recommend preparing for a full application to avoid delay.

Content Requirements. Whether the filing takes the form of a notice or a formal application, the following materials will need to be prepared and submitted:

(a) A comprehensive business plan for Tessera's operations post-acquisition, including a description of how Tessera's consumer lending activities will be integrated into BRB's overall business strategy and operational structure;

(b) Financial projections for Tessera as a wholly owned subsidiary of BRB, covering at least three fiscal years following the anticipated closing date, including projected origination volumes, revenue, and loss rates;

(c) A detailed description of Tessera's technology platform, including the algorithms and models used for underwriting and credit decisioning, the data sources utilized, and the technology infrastructure supporting the platform;

(d) A description of BRB's risk management framework as it will be applied to Tessera, including credit risk, operational risk, compliance risk, model risk, and information technology risk;

(e) A description of the compliance management systems in place (or to be implemented) for Tessera's consumer lending operations, including fair lending compliance, consumer protection compliance, and data privacy and security;

(f) BRB's most recent audited financial statements and regulatory filings (Call Reports), demonstrating the Bank's financial capacity to absorb the acquisition; and

(g) Any additional materials required by the OCC's Licensing Division in connection with the specific filing, as may be identified during the pre-filing consultation process.

OCC Review Criteria. In evaluating the application, the OCC will assess the following factors:

(a) Safety and Soundness. Whether the acquisition and the subsequent operation of Tessera as a subsidiary of BRB present safety and soundness concerns, including the adequacy of BRB's existing risk management infrastructure to oversee a technology-enabled consumer lending platform;

(b) Capital and Managerial Resources. Whether BRB has adequate capital and managerial resources to support the acquisition and the ongoing operations of Tessera. BRB's total consolidated assets of approximately $14.7 billion and cash and cash equivalents of approximately $1.03 billion as of December 31, 2025 strongly support the financial capacity to absorb the $48,000,000 acquisition, which represents approximately 0.33% of total consolidated assets and approximately 4.7% of cash and cash equivalents;

(c) Community Reinvestment Act (CRA) Performance. The OCC will review BRB's CRA performance record, including its most recent CRA examination rating. A satisfactory or better CRA rating is generally expected for approval of corporate activities applications;

(d) Competitive Effects. The OCC will assess whether the acquisition would result in any adverse competitive effects in relevant banking or lending markets. Given the relative sizes of BRB and Tessera and the highly competitive and fragmented nature of the consumer lending market, competitive concerns are not anticipated.

Processing Timeline. The typical OCC processing time for an operating subsidiary application is sixty (60) to ninety (90) days from the date the OCC accepts the application as complete. However, fintech-related acquisitions have, in recent years, been subject to additional scrutiny by the OCC's Licensing Division and may involve requests for supplemental information, which could extend the processing timeline. Based on our experience with similar filings, we estimate a processing period of approximately ninety (90) to one hundred twenty (120) days for this transaction, taking into account the technology-related aspects of Tessera's business.

Recommendation: Pre-Filing Consultation. We strongly recommend scheduling a pre-filing consultation with the OCC's Licensing Division prior to the submission of the formal application. The purpose of this meeting would be to discuss the proposed transaction structure, the classification of Tessera as an operating subsidiary (versus a financial subsidiary), the nature and scope of Tessera's activities, and the OCC's expected filing requirements and review process. A pre-filing consultation will enable the deal team to tailor the application materials to the OCC's specific concerns and expectations, thereby reducing the likelihood of requests for supplemental information and expediting the review process. We recommend that the pre-filing consultation be scheduled for late February or early March 2026, prior to the commencement of formal due diligence.

C. OCC Conditions and Commitments

Based on our experience with comparable OCC filings involving national bank acquisitions of fintech lending platforms, we anticipate that the OCC may impose one or more of the following conditions on its approval of the transaction:

(a) Enhanced Risk Management Requirements. The OCC may require BRB to implement enhanced risk management procedures specifically tailored to the oversight of Tessera's technology-enabled lending operations, including model risk management protocols for Tessera's underwriting algorithms, information technology risk management, and third-party vendor oversight (to the extent Tessera relies on third-party technology providers);

(b) Technology Oversight Obligations. The OCC may require BRB to establish a dedicated technology oversight function (or integrate Tessera's technology into BRB's existing technology governance structure) to ensure that the lending platform's algorithms and data systems are subject to ongoing monitoring, testing, and validation;

(c) Consumer Protection Commitments. The OCC may require specific commitments regarding consumer protection, including compliance with the Truth in Lending Act (TILA), the Equal Credit Opportunity Act (ECOA), the Fair Credit Reporting Act (FCRA), and the prohibition on Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) in connection with Tessera's consumer lending activities;

(d) Reporting Requirements. The OCC may impose periodic reporting requirements, including submission of reports on Tessera's origination volumes, credit performance, consumer complaint metrics, and fair lending compliance;

(e) Post-Closing Integration Plan. The OCC will likely request a detailed post-closing integration plan for Tessera's operations into BRB's enterprise risk management framework. This plan should address the timeline for integration, the allocation of supervisory and compliance responsibilities, and the mechanisms for ensuring continuous regulatory compliance during the transition period.

Capital Adequacy Analysis. The $48,000,000 acquisition does not materially impact BRB's capital ratios given total consolidated assets of approximately $14.7 billion. Based on BRB's most recently reported regulatory capital ratios (as of December 31, 2025), the Bank maintains a Common Equity Tier 1 (CET1) capital ratio, Tier 1 capital ratio, and Total capital ratio that are well in excess of the applicable regulatory minimums and the well-capitalized thresholds established by the OCC's Prompt Corrective Action (PCA) framework. The acquisition consideration represents less than one-half of one percent of total consolidated assets and is expected to have a de minimis impact on regulatory capital ratios, even without accounting for any future revenue or earnings contribution from Tessera's operations.

Fair Lending and Algorithm Oversight. BRB should be prepared to address the OCC's expectations regarding oversight of Tessera's lending algorithms. The use of machine learning and alternative data in consumer credit underwriting has been an area of particular focus for the OCC, the CFPB, and other federal regulators. The OCC may require BRB to demonstrate that Tessera's underwriting model does not produce disparate impact or otherwise result in unlawful discrimination on the basis of race, color, national origin, sex, religion, marital status, age, or other protected characteristics under the Equal Credit Opportunity Act and the Fair Housing Act. BRB should also be prepared to address data privacy practices, including compliance with applicable state data privacy laws (such as the California Consumer Privacy Act, as amended by the California Privacy Rights Act) and any emerging federal privacy standards.

III. FDIC Notification Requirements

BRB holds FDIC certificate number 09463 as an insured depository institution under the Federal Deposit Insurance Act ("FDI Act"). As an insured national bank, BRB is subject to the FDIC's authority as insurer and backup supervisor, notwithstanding that the OCC serves as BRB's primary federal regulator.

Under the FDI Act and the FDIC's implementing regulations, BRB is required to notify the FDIC of material changes in its business activities, including the acquisition of a significant subsidiary engaged in consumer lending. The acquisition of Tessera — a technology-enabled lending platform with approximately $1.2 billion in aggregate originations since inception and FY2025 revenue of approximately $38,400,000 — constitutes a material development in BRB's business activities that warrants notification to the FDIC.

It is important to note that, for a national bank such as BRB, the FDIC notification is generally informational in character rather than a separate approval requirement. The OCC is the primary federal regulator responsible for approving the acquisition of a subsidiary by a national bank, and FDIC notification does not operate as an independent regulatory gate for the transaction. However, failure to provide timely notification to the FDIC could create supervisory concerns and potentially complicate BRB's relationship with the FDIC in subsequent examination cycles. Accordingly, we recommend that the FDIC notification be submitted concurrently with, or shortly after, the submission of the OCC application.

The FDIC's interest in the transaction may focus on several areas:

(a) Risk Profile of Tessera's Consumer Loan Portfolio. The FDIC may assess the credit risk characteristics of Tessera's consumer loan originations, including default rates, loss rates, and the adequacy of loan loss reserves, to the extent such originations are funded by or affect BRB's insured deposits;

(b) Impact on Deposit Insurance Assessment Base. The FDIC may evaluate whether Tessera's lending activities, once integrated into BRB's operations, could affect BRB's risk profile for purposes of calculating deposit insurance assessments under the FDIC's risk-based pricing methodology;

(c) Ridgeline Community Bank Implications. Ridgeline Community Bank (FDIC certificate number 35218), a Utah-chartered industrial bank headquartered at 175 East 400 South, Suite 600, Salt Lake City, Utah 84111, is Tessera's current bank partner under program agreement TLI-RCB-2020-001. The FDIC serves as Ridgeline's primary federal regulator. The change of control of Tessera may have implications for the existing bank-partnership program between Tessera and Ridgeline, and the FDIC may have an interest in understanding how the acquisition will affect the partnership arrangement and Ridgeline's operations. This topic is addressed in greater detail in Section VII of this memorandum.

Timing and Coordination. The FDIC notification should be coordinated with the OCC filing to ensure consistency of information across regulatory submissions. We recommend submitting the FDIC notification concurrently with or within ten (10) business days following the submission of the OCC application. No separate filing fee is payable to the FDIC in connection with the notification.

IV. Hart-Scott-Rodino (HSR) Act Analysis

A. Applicability of the HSR Act

The Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (15 USC § 18a) (the "HSR Act"), requires certain persons contemplating mergers, acquisitions, or other business combinations to file pre-merger notifications with the Federal Trade Commission ("FTC") and the Antitrust Division of the U.S. Department of Justice ("DOJ") and to observe a mandatory waiting period before consummating the transaction. The HSR Act and the implementing rules promulgated thereunder by the FTC (16 CFR Parts 801–803) establish objective thresholds that determine whether a particular transaction requires a pre-merger notification filing. Two principal tests govern the filing obligation: (1) the Size-of-Transaction Test, and (2) the Size-of-Person Test, which applies in certain circumstances where the transaction value falls within a specified range.

B. Size-of-Transaction Threshold (2026)

The HSR Act's size-of-transaction threshold is adjusted annually by the FTC to account for changes in the gross national product. For calendar year 2026, the current size-of-transaction threshold is $119.5 million. A transaction requires an HSR filing only if, as a result of the transaction, the acquiring person will hold an aggregate total amount of voting securities, assets, or non-corporate interests of the acquired person valued in excess of the applicable size-of-transaction threshold, unless an exemption applies.

The aggregate deal value of the proposed acquisition of Tessera by BRB is $48,000,000, representing the all-cash merger consideration to be paid to the equity holders of Tessera in the reverse triangular merger. This amount is well below the 2026 size-of-transaction threshold of $119.5 million. The difference between the deal value and the threshold is approximately $71.5 million, providing a substantial margin.

No additional voting securities, assets, or non-corporate interests of Tessera or any Tessera-related entity are being acquired by BRB in connection with this transaction that would increase the aggregate value above the threshold. To our knowledge, BRB does not currently hold any voting securities or assets of Tessera that would need to be aggregated with the $48,000,000 in merger consideration for purposes of the size-of-transaction calculation. Similarly, we are not aware of any other pending or contemplated acquisitions by BRB of Tessera-related entities or assets that would trigger aggregation under the HSR rules.

Because the aggregate transaction value does not exceed the size-of-transaction threshold, it is not necessary to analyze the Size-of-Person Test, which applies only to transactions valued between the size-of-transaction threshold and a higher threshold (currently $239.0 million for 2026).

C. Conclusion

Because the deal value of $48,000,000 falls below the 2026 size-of-transaction threshold of $119.5 million, no HSR filing is required in connection with the proposed acquisition of Tessera by BRB. The parties are not required to file pre-merger notifications with the FTC or DOJ and are not subject to the thirty (30) day statutory waiting period that would otherwise apply.

This conclusion is subject to confirmation that: (i) the FTC has not further revised the 2026 thresholds subsequent to the date of this memorandum; and (ii) no other acquisitions by BRB of Tessera-related entities or assets would be aggregated with the $48,000,000 merger consideration under the HSR rules to bring the total above the threshold.

We note that, even though no HSR filing is required, the DOJ and FTC retain authority to challenge the transaction under Section 7 of the Clayton Act (15 USC § 18) or Section 5 of the FTC Act (15 USC § 45) at any time before or after consummation. However, given the relative sizes of BRB (approximately $14.7 billion in total consolidated assets) and Tessera ($38,400,000 in FY2025 revenue) and the highly competitive, fragmented nature of the consumer lending market — which includes thousands of banks, credit unions, online lenders, and fintech platforms — the risk of an antitrust challenge to this transaction is assessed as minimal. There is no indication that the transaction would result in a substantial lessening of competition in any relevant product or geographic market.

Cost Savings. The inapplicability of the HSR filing requirement avoids the HSR filing fee that would otherwise be payable. For transactions valued at less than $179.3 million (the next fee tier threshold for 2026), the applicable filing fee is $30,000. The avoidance of this fee, together with the elimination of the thirty-day waiting period, provides both a modest cost savings and a timeline benefit to the overall transaction.

V. State Lending-License Change-of-Control Filings

A. Overview of State Licensing Landscape

Tessera Lending, Inc. holds consumer lending licenses (or equivalent authorizations) in forty-two (42) U.S. states and the District of Columbia. These licenses authorize Tessera to originate, service, and/or broker consumer loans (including unsecured personal loans and point-of-sale installment financing) in each such jurisdiction, subject to the terms and conditions of the applicable license and the requirements of the jurisdiction's consumer lending statutes and regulations.

The acquisition of Tessera by BRB — effected through the reverse triangular merger in which Tessera survives as a wholly owned subsidiary of BRB — constitutes a "change of control" of a licensed lending entity in each of the jurisdictions where Tessera is licensed. Virtually every state consumer lending statute includes provisions requiring the holder of a lending license to notify or obtain approval from the applicable state regulatory authority in connection with a change of control. The specific requirements, processes, and timelines vary significantly from state to state, necessitating a jurisdiction-by-jurisdiction analysis.

As an initial matter, we note that the full scope of Tessera's licensing portfolio has not yet been confirmed through due diligence. The forty-two-state figure is based on preliminary information provided by Tessera's management team. A key early diligence task will be to obtain a complete, current inventory of all state licenses held by Tessera, including the license numbers, issuing authorities, expiration dates, and any conditions or restrictions. This inventory will form the basis for the state-by-state filing plan discussed below.

B. Types of State Requirements

State change-of-control requirements for licensed lending entities generally fall into three categories:

Prior Approval States. A significant number of states require the prior written approval of the state banking or financial regulatory authority before a change of control of a licensed lender can be consummated. In these jurisdictions, the transaction cannot close with respect to the applicable license until the regulatory authority has affirmatively approved the change of control. The application process in prior-approval states typically requires the submission of detailed information about the acquiring entity, including biographical and financial information for key individuals, audited financial statements, a description of the proposed transaction, and a business plan for the licensed entity post-acquisition. Processing times in prior-approval states vary, with some completing their review in thirty (30) to sixty (60) days and others requiring ninety (90) to one hundred twenty (120) days or longer.

Notice States. Other states require only a post-closing notice of the change of control, typically within a specified period following consummation (e.g., thirty (30) days post-closing). In these jurisdictions, the filing obligation does not operate as a condition precedent to closing, but failure to file timely notice may result in enforcement action, fines, or other adverse regulatory consequences. Notice filings are generally simpler and less burdensome than prior-approval applications but must nonetheless be completed accurately and on time.

NMLS Filing States. Many states now accept change-of-control filings through the Nationwide Multistate Licensing System & Registry ("NMLS"), which provides a centralized, electronic platform for the submission of licensing-related filings across multiple jurisdictions. The NMLS has streamlined the change-of-control filing process to a significant degree, allowing filers to submit standardized forms and supporting documentation through a single portal. However, the NMLS filing does not eliminate the substantive requirements of each state's regulatory framework — the processing timelines and approval standards of each individual state continue to apply. Not all states have fully adopted the NMLS for change-of-control filings, and certain states continue to require separate, state-specific filings outside the NMLS.

A comprehensive state-by-state analysis must be conducted to categorize each of the forty-two states and the District of Columbia into the appropriate category (prior-approval, notice-only, or NMLS-facilitated) and to identify the specific filing requirements, timelines, fees, and substantive review criteria applicable in each jurisdiction. This analysis will be a priority deliverable for the deal team following the commencement of due diligence in March 2026.

C. Key Jurisdictions and Considerations

While the full state-by-state analysis is pending, several jurisdictions warrant particular attention based on the rigor of their change-of-control review processes and their significance to Tessera's operations:

California (Department of Financial Protection and Innovation — DFPI). California maintains a robust prior-approval framework for changes of control of licensed lending entities. The DFPI's review process is comprehensive and may involve requests for substantial supporting documentation, including biographical information for all officers, directors, and significant shareholders of the acquiring entity, financial statements, and a detailed description of the proposed transaction. Processing times at the DFPI can extend beyond ninety (90) days in certain cases. California is one of the largest consumer lending markets in the United States, and Tessera's California license is likely critical to its ongoing operations.

New York (Department of Financial Services — DFS). The New York DFS is among the most active and rigorous state financial regulators in the country. Changes of control of licensed lending entities are subject to prior approval by the DFS, and the review process may include interviews with key personnel of the acquiring entity, on-site examinations, and detailed analysis of the acquiring entity's financial condition and compliance infrastructure. DFS processing times can be among the longest of any state regulatory authority.

Illinois. The Illinois Department of Financial and Professional Regulation administers change-of-control requirements for licensed lending entities that involve a prior-approval process with moderately detailed submission requirements. Illinois is a significant consumer lending market and its approval should be prioritized in the filing plan.

Texas. Tessera is headquartered in Austin, Texas (2400 Shoal Creek Boulevard, Suite 500, Austin, TX 78756). The Texas Office of Consumer Credit Commissioner oversees licensed consumer lending entities in the state. Given that Texas is Tessera's home state and the location of its principal offices, the Texas change-of-control filing will be particularly significant. Texas regulators may take a heightened interest in the transaction given the Target's headquarters location, and we recommend engaging with the Texas regulatory authority early in the process.

In addition to the jurisdictions identified above, several other states are known to have more involved change-of-control review processes, including Connecticut, Massachusetts, Virginia, and Washington. These jurisdictions will be identified and prioritized in the state-by-state filing plan.

Some states may require the submission of biographical information for all officers, directors, and controlling persons of BRB, as well as BRB's audited financial statements, Call Reports, and a business plan for Tessera's post-acquisition operations. Given BRB's status as a publicly traded national bank, certain of these materials should be readily available from existing regulatory filings and public disclosures. The deal team should begin compiling a standardized filing package for use across multiple jurisdictions.

D. Impact on Deal Timeline and Closing Conditions

The state licensing change-of-control filing process has the potential to impact the deal timeline, particularly with respect to prior-approval jurisdictions with longer processing times. The following considerations should be addressed in the negotiation and drafting of the definitive merger agreement:

Closing Conditions. State licensing approvals in prior-approval jurisdictions that are material to Tessera's ongoing business operations should be designated as conditions to closing in the merger agreement. The parties will need to negotiate which specific state approvals (if any) are conditions to closing and which may be addressed through post-closing covenants. A common approach is to designate approvals in a specified number of "material" states as closing conditions while permitting the transaction to close with respect to remaining jurisdictions subject to post-closing filing obligations.

Risk Mitigation. The merger agreement should address the risk that certain state approvals may not be obtained prior to the targeted closing date. Mechanisms may include an outside date that provides sufficient time for the completion of state regulatory processes, the ability to close without certain non-material state approvals subject to a post-closing compliance period, and appropriate representations and covenants regarding Tessera's licensing status and compliance.

Early Filing Commencement. The deal team should begin preparing change-of-control filings as early as practicable following the commencement of due diligence (estimated March 2026). In jurisdictions that permit pre-closing submissions, filings should be initiated promptly to minimize the gap between signing and closing. We anticipate that many state filings can be prepared in parallel, leveraging the NMLS platform and a standardized filing package.

Filing Fee Budget. The aggregate state regulatory filing fees for change-of-control filings across forty-two states and the District of Columbia are estimated at approximately $25,000 to $30,000. Individual state fees range from nominal amounts (e.g., $25–$100 in certain states) to several hundred dollars or more in states with more involved application processes. These fees are factored into the estimated aggregate regulatory filing fee budget of approximately $50,000.

E. National Bank Preemption Considerations

As a national banking association chartered under the National Bank Act, BRB may assert that certain state licensing requirements are preempted with respect to activities conducted by BRB or its operating subsidiaries. The OCC's regulations at 12 CFR Part 7, Subpart D, and 12 CFR § 7.4006 address the extent to which state law applies to national bank operating subsidiaries. Under the OCC's longstanding position, a national bank's operating subsidiary is generally entitled to the same preemption of state law as the parent national bank itself, meaning that state licensing requirements that would not apply to BRB directly may not apply to Tessera as BRB's operating subsidiary.

However, the preemption landscape for national bank subsidiaries — particularly fintech subsidiaries that historically operated under state licenses — remains unsettled and is the subject of ongoing litigation and regulatory developments. Several important considerations militate in favor of a conservative approach:

(a) Dodd-Frank Act Limitations on Preemption. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Section 1044, codified at 12 USC § 25b) placed significant limitations on OCC preemption determinations, requiring the OCC to apply a case-by-case analysis (rather than blanket preemption) and to consult with the CFPB in certain circumstances. The Dodd-Frank Act also provided that state consumer protection laws are not preempted to the extent they do not "significantly interfere" with a national bank's exercise of its powers;

(b) State Enforcement Actions. Several state regulators have challenged the application of federal preemption to fintech and non-bank subsidiaries of national banks, and certain state courts have upheld the applicability of state licensing requirements to such entities;

(c) Operational Continuity Risk. Even if a preemption argument is ultimately meritorious, asserting preemption in lieu of complying with state change-of-control filing requirements could result in enforcement actions, license suspensions, or operational disruptions in the interim, which would be inconsistent with the deal team's objective of ensuring continuity of Tessera's lending operations; and

(d) License Portfolio Preservation. Tessera's existing license portfolio is a valuable asset that enables it to originate consumer loans in forty-two states and the District of Columbia. Voluntarily forgoing compliance with state change-of-control requirements — and thereby risking the loss or suspension of one or more licenses — would diminish the value of this portfolio and could disrupt Tessera's origination activities.

Recommendation. We recommend that BRB comply with state change-of-control filing requirements in all jurisdictions where Tessera holds a license, rather than assert federal preemption as a basis for non-compliance. This conservative approach preserves Tessera's existing license portfolio, avoids enforcement risk, and maintains positive relationships with state regulatory authorities. BRB may, however, wish to monitor ongoing developments in preemption jurisprudence and OCC rulemaking and may, at a future date, evaluate whether preemption arguments support the consolidation or streamlining of Tessera's state licensing obligations.

VI. CFPB Supervisory Jurisdiction Considerations

A. CFPB Authority over Larger Participants

The Consumer Financial Protection Bureau ("CFPB") has supervisory authority over certain nonbank entities that are "larger participants" in specific consumer financial services markets, as authorized by the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 USC § 5514). The CFPB has promulgated Larger Participant Rules defining the threshold criteria for various consumer financial services markets, including consumer lending.

Under the CFPB's Larger Participant Rule for the consumer lending market (12 CFR § 1090.104), a nonbank entity is subject to CFPB supervisory examination authority if it has originated more than 10,000 consumer loans in the preceding calendar year. Tessera's aggregate origination volume of approximately $1.2 billion since inception in 2018, together with its FY2025 revenue of approximately $38,400,000, suggests origination activity levels that may meet or exceed this threshold, depending on the number of individual loan originations (as opposed to dollar volume) completed by Tessera in the relevant measurement period. A precise determination will require review of Tessera's origination data during due diligence.

As a standalone nonbank entity, Tessera may currently be subject to CFPB supervisory jurisdiction as a larger participant, and the CFPB may have previously conducted examinations of Tessera's consumer lending practices. This is an important diligence item: the deal team should confirm whether Tessera has been subject to any CFPB examinations, enforcement actions, consent orders, or supervisory communications, and should obtain copies of any related documentation.

B. Impact of Acquisition on CFPB Jurisdiction

Following the acquisition, Tessera would become a wholly owned subsidiary of BRB, a national banking association. The CFPB's supervisory jurisdiction over the combined entity's consumer lending activities arises through a separate and more direct channel than the Larger Participant Rule.

Under the Dodd-Frank Act, the CFPB has supervisory authority over any insured depository institution with total assets exceeding $10 billion, as well as its affiliates (12 USC § 5515). BRB's total consolidated assets of approximately $14.7 billion as of December 31, 2025 clearly exceed this $10 billion threshold. Accordingly, BRB is already subject to CFPB supervisory jurisdiction, and the consumer lending activities conducted through Tessera as a subsidiary of BRB would fall within the scope of the CFPB's supervisory authority regardless of whether Tessera independently qualifies as a larger participant.

The practical consequence is that post-acquisition, BRB and Tessera's combined consumer lending activities — including origination, underwriting, servicing, and collections — will be subject to CFPB supervisory examination. This represents no incremental change in BRB's regulatory posture (as BRB is already above the $10 billion threshold), but it does mean that Tessera's lending practices will be subject to a level of regulatory scrutiny that may exceed what Tessera has experienced as a standalone nonbank entity.

BRB should ensure that Tessera's consumer lending practices — including marketing, underwriting algorithms, loan servicing, and collections — comply with all applicable federal consumer financial protection laws, including but not limited to:

(a) The Truth in Lending Act ("TILA") (15 USC § 1601 et seq.) and Regulation Z (12 CFR Part 1026), governing disclosures in connection with consumer credit transactions;

(b) The Equal Credit Opportunity Act ("ECOA") (15 USC § 1691 et seq.) and Regulation B (12 CFR Part 1002), prohibiting discrimination in credit transactions;

(c) The Fair Credit Reporting Act ("FCRA") (15 USC § 1681 et seq.) and Regulation V (12 CFR Part 1022), governing the use of consumer credit information;

(d) The Electronic Fund Transfer Act ("EFTA") (15 USC § 1693 et seq.) and Regulation E (12 CFR Part 1005), to the extent applicable to electronic repayment mechanisms associated with Tessera's consumer loans; and

(e) The Dodd-Frank Act's prohibition on Unfair, Deceptive, or Abusive Acts or Practices ("UDAAP") (12 USC §§ 5531, 5536), which applies broadly to all providers of consumer financial products and services.

C. Integration and Compliance Recommendations

To ensure that Tessera's consumer lending operations are fully compliant with CFPB expectations and applicable federal consumer financial protection laws following the acquisition, we recommend the following post-closing compliance integration steps:

Compliance Management System Integration. BRB should develop and implement a post-closing compliance integration plan that aligns Tessera's compliance management system ("CMS") with BRB's existing enterprise-wide CMS. This integration plan should address organizational reporting structures, policies and procedures, training programs, monitoring and testing protocols, complaint management, and corrective action processes. The CFPB's Supervision and Examination Manual identifies a robust CMS as a critical element of a financial institution's consumer protection compliance infrastructure.

Fair Lending Analysis. BRB should commission a comprehensive fair lending analysis of Tessera's algorithm-based underwriting model prior to or promptly following the closing of the acquisition. This analysis should assess whether Tessera's model produces any disparate impact on the basis of race, ethnicity, sex, age, or other protected characteristics under ECOA and the Fair Housing Act. The analysis should include testing of the model's inputs (including any alternative data sources), outputs, and decisioning logic, and should be conducted by qualified fair lending analysts using recognized statistical methodologies. Any disparate impact identified should be documented and addressed through model adjustments or other appropriate remedial measures.

UDAAP Review. BRB should conduct a thorough UDAAP review of Tessera's marketing materials, point-of-sale installment financing disclosures, customer communications, and servicing and collections practices. The CFPB has brought numerous enforcement actions against consumer lenders for deceptive marketing practices, inadequate disclosures, and unfair servicing or collections practices. A proactive UDAAP review will mitigate the risk of enforcement action and demonstrate BRB's commitment to consumer protection.

Military Lending Act Compliance. Tessera's unsecured personal loan products may be subject to the protections of the Military Lending Act ("MLA") (10 USC § 987) and its implementing regulation (32 CFR Part 232), which impose a thirty-six percent (36%) Military Annual Percentage Rate cap and other protections on consumer credit extended to active duty servicemembers and their dependents. BRB should confirm that Tessera has implemented appropriate MLA compliance controls, including a system for identifying covered borrowers and ensuring that all MLA-required disclosures and protections are provided.

VII. Implications of the Ridgeline Community Bank Partnership Arrangement

A. Overview of the Bank-Partnership Model

Tessera currently operates a significant portion of its consumer lending program under a bank-partnership lending model with Ridgeline Community Bank. Ridgeline Community Bank is a Utah-chartered industrial bank holding FDIC certificate number 35218, headquartered at 175 East 400 South, Suite 600, Salt Lake City, Utah 84111. Ridgeline is supervised by the Utah Department of Financial Institutions as its primary state regulator and by the FDIC as its primary federal regulator.

The existing bank-partnership arrangement is governed by a program agreement (reference number TLI-RCB-2020-001) that was originally executed on March 15, 2020, and has been renewed through December 31, 2027. Under this bank-partnership model, Ridgeline serves as the issuing bank of record for consumer loans originated through Tessera's platform. Ridgeline establishes the credit policies and underwriting criteria (in consultation with Tessera), funds the origination of the loans, and is identified as the lender on the loan documents. Tessera provides the technology platform, marketing, customer acquisition, underwriting support (through its algorithm-based credit decisioning tools), and loan servicing functions. In a typical bank-partnership arrangement, the loans originated by Ridgeline are sold to Tessera (or to a third-party purchaser designated by Tessera) shortly after origination, subject to the terms of the program agreement.

The bank-partnership model has been widely utilized in the fintech lending industry as a mechanism for enabling non-bank lending platforms to access the benefits of a bank charter — including federal preemption of state usury laws and the ability to export the interest rate of the bank's home state (in Ridgeline's case, Utah) to borrowers in other states. This model, often referred to colloquially as "rent-a-charter" lending, has been the subject of significant regulatory scrutiny in recent years, as discussed in Section VII.D below.

B. Change-of-Control Provisions in the Program Agreement

The program agreement (TLI-RCB-2020-001) between Tessera and Ridgeline Community Bank is expected to contain change-of-control provisions that may be triggered by the acquisition of Tessera by BRB. Bank-partnership program agreements typically include provisions that:

(a) Define a "change of control" event to include, among other things, the acquisition of a specified percentage (commonly fifty percent (50%) or more) of the voting equity of the program partner by a third party, a merger or consolidation involving the program partner, or a transfer of all or substantially all of the program partner's assets;

(b) Require the program partner (Tessera) to provide prior written notice to the bank (Ridgeline) of any pending change of control event;

(c) Grant the bank (Ridgeline) the right to approve or consent to the change of control as a condition to the continuation of the program agreement, or, alternatively, grant the bank the right to terminate the program agreement upon the occurrence of a change of control event; and

(d) Restrict the assignment or transfer of the program agreement without the prior written consent of the non-assigning party.

The precise scope and terms of any change-of-control, assignment, or consent provisions in TLI-RCB-2020-001 cannot be confirmed until the full text of the agreement is obtained and reviewed. Obtaining and reviewing the program agreement is a critical diligence priority. If Ridgeline's consent is required for the consummation of the acquisition, it should be designated as a condition to closing in the merger agreement, and BRB's deal team should engage with Ridgeline early in the process to initiate consent discussions.

The dynamics of the consent process may be affected by the fact that BRB — as a national bank — would become the parent company of Tessera, potentially altering the nature of the Tessera-Ridgeline relationship. Ridgeline may view the acquisition favorably (e.g., as enhancing Tessera's financial stability and creditworthiness) or may have concerns (e.g., regarding the potential for BRB to transition Tessera's lending program away from the bank-partnership model and onto BRB's own charter, effectively terminating Ridgeline's role in the program). These dynamics should be considered in structuring the approach to Ridgeline.

C. Post-Acquisition Strategic Considerations

Following the acquisition, BRB will have several strategic options regarding the disposition of the Tessera-Ridgeline bank-partnership arrangement:

Transition to Direct BRB Origination. As a national banking association, BRB has the authority to originate consumer loans directly, including the types of unsecured personal loans and point-of-sale installment financing currently originated through Tessera's platform under the Ridgeline partnership. BRB may choose to transition Tessera's loan origination program from the bank-partnership model (in which Ridgeline serves as the issuing bank) to a direct origination model (in which BRB serves as the issuing bank through its Tessera subsidiary). This transition would leverage BRB's own national bank charter, potentially simplifying the regulatory structure and eliminating the need for the Ridgeline partnership. However, such a transition would require careful analysis of the regulatory, operational, and financial implications, including the impact on interest-rate exportation, state licensing obligations, compliance frameworks, and the mechanics of winding down the existing Ridgeline program agreement.

Maintain the Partnership During a Transition Period. Alternatively, BRB may elect to maintain the Ridgeline partnership for a defined transition period following the closing to ensure continuity of operations, preserve existing loan pricing structures, and allow time for the orderly transition of origination functions to BRB's charter. This approach would mitigate operational disruption and provide a buffer against any unforeseen regulatory or legal complications associated with the transition.

Early Termination and Wind-Down. If BRB determines that a transition to direct origination is desirable, the existing Ridgeline program agreement (TLI-RCB-2020-001), which runs through December 31, 2027, would need to be terminated prior to its stated expiration date. The early termination provisions and wind-down mechanics of the program agreement — including any required notice periods, termination fees, obligations with respect to outstanding loans originated under the program, and representations and warranties survival periods — will need to be carefully analyzed. This analysis cannot be completed until the full text of TLI-RCB-2020-001 is obtained and reviewed during due diligence.

FDIC Interest. The FDIC, as Ridgeline's primary federal regulator, may take an interest in the change of control of Tessera and any resulting impact on the bank-partnership program. Depending on the significance of the Tessera program to Ridgeline's operations, the FDIC may inquire about the implications of the acquisition for Ridgeline's safety and soundness, income, and ongoing regulatory compliance. BRB should be prepared to address any FDIC inquiries in this regard.

D. Regulatory Scrutiny of Bank-Partnership Models

Bank-partnership (or "rent-a-charter") lending models have been subject to increasing regulatory and legislative scrutiny from federal and state regulators in recent years. The following areas of heightened scrutiny are relevant to the Tessera-Ridgeline arrangement and to BRB's post-acquisition strategic planning:

True Lender Issues. Several state regulators and attorneys general have challenged bank-partnership lending models on the ground that the nonbank partner (rather than the issuing bank) is the "true lender" in the transaction, and that the bank's involvement is merely a pretext to evade state usury laws and licensing requirements. The OCC issued a "true lender" rule in 2020 (12 CFR § 7.1031), which was subsequently disapproved by Congress under the Congressional Review Act in June 2021. The regulatory landscape on true lender issues remains in flux, and BRB should be aware that the Tessera-Ridgeline arrangement could be subject to true lender challenges in certain states.

Interest-Rate Exportation. The bank-partnership model relies, in part, on the principle that a bank may "export" the interest rate permissible under the law of its home state to borrowers in other states, pursuant to Section 27 of the Federal Deposit Insurance Act (12 USC § 1831d) (for state-chartered banks) and Section 85 of the National Bank Act (12 USC § 85) (for national banks). The FDIC issued a final rule in 2020 (12 CFR § 331.4) clarifying that the interest rate on a loan is not affected by the subsequent sale, assignment, or transfer of the loan, codifying the "valid-when-made" doctrine. However, certain states have continued to challenge interest-rate exportation in the bank-partnership context, and litigation on this issue remains ongoing.

Third-Party Risk Management. The OCC, FDIC, and Federal Reserve have each issued guidance on third-party risk management expectations for banks engaged in relationships with fintech companies and other third-party service providers. The FDIC's guidance on third-party lending arrangements (FIL-50-2016, as updated) and the interagency guidance on third-party relationships (June 2023) set forth detailed expectations for bank oversight of third-party lending programs. BRB should be prepared for OCC questions regarding the continuation or wind-down of the Ridgeline partnership as part of the regulatory approval process for the acquisition, and should ensure that any continuing partnership arrangement is managed in accordance with applicable third-party risk management guidance.

VIII. Estimated Regulatory Filing Fees

Based on our preliminary analysis, the aggregate estimated regulatory filing fees for the proposed transaction are approximatel

MEMORANDUM
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
Calderwood & Harkness LLP 1 World Financial Center, 42nd Floor New York, NY 10281
February 3, 2026
To:
Catherine A. Royce, General Counsel & Corporate Secretary, Belmont Ridge Bank NA
Beatrice Holloway, Responsible Partner, M&A, Calderwood & Harkness LLP
James Prentice, Billing Partner, M&A, Calderwood & Harkness LLP
Andrew Fitzpatrick, Lead Associate, M&A, Calderwood & Harkness LLP
Sylvia Hartwell, Specialist Partner, Tax, Calderwood & Harkness LLP
From:
Naomi Petersen, Working Associate, M&A, Calderwood & Harkness LLP
Reviewed by:
Beatrice Holloway, Responsible Partner, M&A
Re: Regulatory Approval Analysis — Prospective Acquisition of Tessera Lending, Inc. by Belmont Ridge Bank NA
Matter No.: 1045-00005
I. Executive Summary
This memorandum analyzes the full regulatory approval landscape for the proposed acquisition of Tessera Lending, Inc. ("Tessera" or the "Target") by Belmont Ridge Bank NA ("BRB" or the "Bank") by means of a reverse triangular merger in which all-cash consideration of Forty-Eight Million Dollars ($48,000,000) will be paid to the equity holders of Tessera. The purpose of this memorandum is to identify each regulatory filing, notification, and approval requirement that must be satisfied in order to consummate the proposed transaction, to assess the timeline and costs associated with each such requirement, and to provide actionable recommendations to the deal team.
Belmont Ridge Bank NA is a national banking association organized and existing under the National Bank Act, holding OCC charter number 24-00781 and FDIC certificate number 09463. BRB is publicly traded on the New York Stock Exchange under the ticker symbol "BRMG." As of December 31, 2025, BRB reported approximately $14.7 billion in total consolidated assets and approximately $1.03 billion in cash and cash equivalents. BRB operates a diversified commercial and retail banking platform across the Mid-Atlantic and Southeastern United States.
Tessera Lending, Inc. is a Delaware corporation (Delaware file number 6847312; EIN 83-2649107) headquartered at 2400 Shoal Creek Boulevard, Suite 500, Austin, Texas 78756. Tessera operates a technology-enabled consumer lending platform specializing in unsecured personal loans and point-of-sale installment financing. Tessera holds consumer lending licenses (or equivalent authorizations) in forty-two (42) U.S. states and the District of Columbia. Since its founding in 2018, Tessera has originated approximately $1.2 billion in aggregate consumer loan volume. For the fiscal year ended December 31, 2025, Tessera reported revenue of approximately $38,400,000. Tessera currently operates under a bank-partnership lending arrangement with Ridgeline Community Bank, a Utah-chartered industrial bank.
Transaction Structure. The proposed transaction will be effected through a reverse triangular merger. BRB Acquisition Sub, Inc., a to-be-formed Delaware corporation and wholly owned subsidiary of BRB (the "Merger Sub"), will merge with and into Tessera, with Tessera surviving the merger as a wholly owned subsidiary of BRB. All outstanding shares of Tessera common stock will be converted into the right to receive an aggregate of $48,000,000 in cash, without interest. The merger will be governed by a definitive merger agreement to be negotiated and executed by the parties, with a preliminary draft to be circulated on or about February 5, 2026.
This memorandum identifies and analyzes five principal regulatory workstreams arising from the proposed transaction:
1. OCC Prior Approval. As a national banking association, BRB must obtain the approval (or, in certain circumstances, provide notice to) the Office of the Comptroller of the Currency before acquiring a non-bank subsidiary engaged in consumer lending. This is the primary regulatory gating item for the transaction.
2. FDIC Notification. BRB, as an insured depository institution, must notify the Federal Deposit Insurance Corporation of the acquisition of a significant subsidiary, consistent with the FDIC's ongoing supervisory oversight of BRB.
3. Hart-Scott-Rodino Act Analysis. The transaction must be assessed under the pre-merger notification requirements of the Hart-Scott-Rodino Antitrust Improvements Act of 1976. As discussed in detail below, no HSR filing is required because the aggregate deal value falls below the applicable size-of-transaction threshold.
4. State Lending-License Change-of-Control Filings. The acquisition constitutes a change of control of Tessera in each of the forty-two states and the District of Columbia where Tessera holds a consumer lending license, requiring change-of-control notifications or approvals under applicable state law.
5. CFPB Supervisory Jurisdiction Considerations. The Consumer Financial Protection Bureau's supervisory authority over BRB (as an insured depository institution with more than $10 billion in total assets) and the potential applicability of the CFPB's Larger Participant Rule to Tessera's consumer lending activities must be considered in connection with post-acquisition compliance planning.
In addition, this memorandum addresses a significant ancillary consideration: the implications of Tessera's existing bank-partnership arrangement with Ridgeline Community Bank (FDIC certificate number 35218) under program agreement TLI-RCB-2020-001, including potential change-of-control consent requirements and post-acquisition strategic options for transitioning or winding down the partnership.
High-Level Conclusions. Based on our preliminary analysis, the primary regulatory gating item for the proposed transaction is OCC approval under 12 CFR Part 5. An HSR filing is not required because the all-cash consideration of $48,000,000 falls well below the 2026 size-of-transaction threshold of $119.5 million. State lending-license change-of-control filings across forty-two states and the District of Columbia are administratively intensive but are generally not deal-blocking, provided filings are initiated promptly and the merger agreement contains appropriate mechanics for jurisdictions with longer processing timelines. Aggregate regulatory filing fees are estimated at approximately $50,000. The anticipated regulatory approval timeline extends from Q2 2026 (submission of filings following execution of a definitive agreement) through Q3 2026 (receipt of OCC approval and critical state approvals), with the regulatory approval period serving as the principal driver of the gap between signing and closing.
II. OCC Prior Approval Requirements
A. Statutory Framework
The acquisition of Tessera by BRB implicates several provisions of the National Bank Act and the OCC's implementing regulations governing the permissible activities and corporate structure of national banking associations.
12 USC § 24 (Seventh) — Incidental Powers. Section 24 (Seventh) of the National Bank Act grants national banks the authority to exercise "all such incidental powers as shall be necessary to carry on the business of banking." The acquisition of a fintech lending subsidiary that originates consumer loans — an activity long recognized as within the core business of banking — falls within the broad sweep of this provision. BRB's acquisition of Tessera, a technology-enabled consumer lending platform, is consistent with the exercise of incidental powers necessary to extend BRB's consumer lending capabilities through a specialized subsidiary.
12 USC § 24a — Financial Subsidiaries. Section 24a of the National Bank Act, as added by the Gramm-Leach-Bliley Act of 1999, authorizes national banks to engage in activities that are "financial in nature or incidental to a financial activity" through financial subsidiaries, subject to certain conditions (including minimum capital and management requirements and compliance with Community Reinvestment Act obligations). A preliminary question for the OCC application process is whether Tessera's consumer lending activities must be conducted through a financial subsidiary under Section 24a or whether they can be conducted through an operating subsidiary under the OCC's regulations.
12 CFR Part 5 — Rules, Policies, and Procedures for Corporate Activities. The OCC's corporate activities regulations at 12 CFR Part 5 establish the framework for national bank applications and notices relating to the formation and acquisition of subsidiaries. Two provisions are of particular relevance:
12 CFR § 5.34 — Operating Subsidiaries. Section 5.34 governs the establishment or acquisition of operating subsidiaries by national banks. An operating subsidiary is an entity in which the national bank holds a controlling interest and that engages solely in activities that are permissible for the parent national bank to engage in directly. Consumer lending — including the origination of unsecured personal loans and point-of-sale installment financing — is a core banking activity that national banks may engage in directly. Accordingly, Tessera's consumer lending activities are, on their face, permissible activities for BRB to conduct directly, and Tessera should qualify for treatment as an operating subsidiary under Section 5.34.
12 CFR § 5.39 — Financial Subsidiaries. Section 5.39 governs financial subsidiaries, which may engage in a broader range of activities — specifically, activities that are financial in nature or incidental to financial activities as determined by the Secretary of the Treasury in consultation with the Federal Reserve Board, but that may not be permissible for the national bank to conduct directly. The financial subsidiary framework imposes additional conditions, including requirements related to the bank's capital adequacy, management quality, CRA performance, and aggregate investment limits.
Operating Subsidiary vs. Financial Subsidiary Classification. The distinction between an operating subsidiary and a financial subsidiary is critical to the OCC application process. An operating subsidiary engages exclusively in activities that the parent national bank is authorized to conduct directly; a financial subsidiary may engage in a broader range of activities that are financial in nature but not necessarily permissible for the bank itself. Because consumer lending — including the origination of unsecured personal loans and point-of-sale installment financing of the type conducted by Tessera — is a permissible banking activity under the National Bank Act and longstanding OCC interpretive guidance, we believe that Tessera can appropriately be held as an operating subsidiary under 12 CFR § 5.34. This classification avoids the more onerous conditions applicable to financial subsidiaries under 12 CFR § 5.39 and Section 24a.
We note, however, that the OCC may inquire into whether certain aspects of Tessera's business — in particular, the technology platform itself and any data analytics or advisory services offered in connection with the lending platform — extend beyond activities permissible for a national bank to conduct directly. If the OCC were to conclude that one or more of Tessera's activities are financial in nature but not directly permissible for a national bank, Tessera might need to be restructured as a financial subsidiary or the impermissible activities might need to be segregated. We will revisit this analysis upon completion of due diligence on the full scope of Tessera's business activities, which is expected to commence in March 2026.
For purposes of this memorandum, we proceed on the assumption that Tessera will be classified as an operating subsidiary of BRB under 12 CFR § 5.34, subject to confirmation through the OCC pre-filing consultation process described below.
B. OCC Application Process
Filing Requirement. The acquisition of Tessera by BRB will require the filing of either an operating subsidiary notice or a formal application with the OCC under 12 CFR § 5.34, depending on the OCC's assessment of the significance of the acquisition and whether it raises novel supervisory issues. Under the OCC's regulations, a national bank may acquire an operating subsidiary by filing a notice with the OCC, which is subject to a streamlined review process, unless the OCC determines that the acquisition involves a "significant" investment or raises supervisory concerns that warrant a full application. Given the nature of Tessera's technology-enabled lending platform, the scale of its operations (approximately $1.2 billion in aggregate originations and $38,400,000 in FY2025 revenue), and the heightened regulatory attention to fintech activities in the banking sector, there is a meaningful likelihood that the OCC will require a formal application rather than a notice filing. We recommend preparing for a full application to avoid delay.
Content Requirements. Whether the filing takes the form of a notice or a formal application, the following materials will need to be prepared and submitted:
(a) A comprehensive business plan for Tessera's operations post-acquisition, including a description of how Tessera's consumer lending activities will be integrated into BRB's overall business strategy and operational structure;
(b) Financial projections for Tessera as a wholly owned subsidiary of BRB, covering at least three fiscal years following the anticipated closing date, including projected origination volumes, revenue, and loss rates;
(c) A detailed description of Tessera's technology platform, including the algorithms and models used for underwriting and credit decisioning, the data sources utilized, and the technology infrastructure supporting the platform;
(d) A description of BRB's risk management framework as it will be applied to Tessera, including credit risk, operational risk, compliance risk, model risk, and information technology risk;
(e) A description of the compliance management systems in place (or to be implemented) for Tessera's consumer lending operations, including fair lending compliance, consumer protection compliance, and data privacy and security;
(f) BRB's most recent audited financial statements and regulatory filings (Call Reports), demonstrating the Bank's financial capacity to absorb the acquisition; and
(g) Any additional materials required by the OCC's Licensing Division in connection with the specific filing, as may be identified during the pre-filing consultation process.
OCC Review Criteria. In evaluating the application, the OCC will assess the following factors:
(a) Safety and Soundness. Whether the acquisition and the subsequent operation of Tessera as a subsidiary of BRB present safety and soundness concerns, including the adequacy of BRB's existing risk management infrastructure to oversee a technology-enabled consumer lending platform;
(b) Capital and Managerial Resources. Whether BRB has adequate capital and managerial resources to support the acquisition and the ongoing operations of Tessera. BRB's total consolidated assets of approximately $14.7 billion and cash and cash equivalents of approximately $1.03 billion as of December 31, 2025 strongly support the financial capacity to absorb the $48,000,000 acquisition, which represents approximately 0.33% of total consolidated assets and approximately 4.7% of cash and cash equivalents;
(c) Community Reinvestment Act (CRA) Performance. The OCC will review BRB's CRA performance record, including its most recent CRA examination rating. A satisfactory or better CRA rating is generally expected for approval of corporate activities applications;
(d) Competitive Effects. The OCC will assess whether the acquisition would result in any adverse competitive effects in relevant banking or lending markets. Given the relative sizes of BRB and Tessera and the highly competitive and fragmented nature of the consumer lending market, competitive concerns are not anticipated.
Processing Timeline. The typical OCC processing time for an operating subsidiary application is sixty (60) to ninety (90) days from the date the OCC accepts the application as complete. However, fintech-related acquisitions have, in recent years, been subject to additional scrutiny by the OCC's Licensing Division and may involve requests for supplemental information, which could extend the processing timeline. Based on our experience with similar filings, we estimate a processing period of approximately ninety (90) to one hundred twenty (120) days for this transaction, taking into account the technology-related aspects of Tessera's business.
Recommendation: Pre-Filing Consultation. We strongly recommend scheduling a pre-filing consultation with the OCC's Licensing Division prior to the submission of the formal application. The purpose of this meeting would be to discuss the proposed transaction structure, the classification of Tessera as an operating subsidiary (versus a financial subsidiary), the nature and scope of Tessera's activities, and the OCC's expected filing requirements and review process. A pre-filing consultation will enable the deal team to tailor the application materials to the OCC's specific concerns and expectations, thereby reducing the likelihood of requests for supplemental information and expediting the review process. We recommend that the pre-filing consultation be scheduled for late February or early March 2026, prior to the commencement of formal due diligence.
C. OCC Conditions and Commitments
Based on our experience with comparable OCC filings involving national bank acquisitions of fintech lending platforms, we anticipate that the OCC may impose one or more of the following conditions on its approval of the transaction:
(a) Enhanced Risk Management Requirements. The OCC may require BRB to implement enhanced risk management procedures specifically tailored to the oversight of Tessera's technology-enabled lending operations, including model risk management protocols for Tessera's underwriting algorithms, information technology risk management, and third-party vendor oversight (to the extent Tessera relies on third-party technology providers);
(b) Technology Oversight Obligations. The OCC may require BRB to establish a dedicated technology oversight function (or integrate Tessera's technology into BRB's existing technology governance structure) to ensure that the lending platform's algorithms and data systems are subject to ongoing monitoring, testing, and validation;
(c) Consumer Protection Commitments. The OCC may require specific commitments regarding consumer protection, including compliance with the Truth in Lending Act (TILA), the Equal Credit Opportunity Act (ECOA), the Fair Credit Reporting Act (FCRA), and the prohibition on Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) in connection with Tessera's consumer lending activities;
(d) Reporting Requirements. The OCC may impose periodic reporting requirements, including submission of reports on Tessera's origination volumes, credit performance, consumer complaint metrics, and fair lending compliance;
(e) Post-Closing Integration Plan. The OCC will likely request a detailed post-closing integration plan for Tessera's operations into BRB's enterprise risk management framework. This plan should address the timeline for integration, the allocation of supervisory and compliance responsibilities, and the mechanisms for ensuring continuous regulatory compliance during the transition period.
Capital Adequacy Analysis. The $48,000,000 acquisition does not materially impact BRB's capital ratios given total consolidated assets of approximately $14.7 billion. Based on BRB's most recently reported regulatory capital ratios (as of December 31, 2025), the Bank maintains a Common Equity Tier 1 (CET1) capital ratio, Tier 1 capital ratio, and Total capital ratio that are well in excess of the applicable regulatory minimums and the well-capitalized thresholds established by the OCC's Prompt Corrective Action (PCA) framework. The acquisition consideration represents less than one-half of one percent of total consolidated assets and is expected to have a de minimis impact on regulatory capital ratios, even without accounting for any future revenue or earnings contribution from Tessera's operations.
Fair Lending and Algorithm Oversight. BRB should be prepared to address the OCC's expectations regarding oversight of Tessera's lending algorithms. The use of machine learning and alternative data in consumer credit underwriting has been an area of particular focus for the OCC, the CFPB, and other federal regulators. The OCC may require BRB to demonstrate that Tessera's underwriting model does not produce disparate impact or otherwise result in unlawful discrimination on the basis of race, color, national origin, sex, religion, marital status, age, or other protected characteristics under the Equal Credit Opportunity Act and the Fair Housing Act. BRB should also be prepared to address data privacy practices, including compliance with applicable state data privacy laws (such as the California Consumer Privacy Act, as amended by the California Privacy Rights Act) and any emerging federal privacy standards.
III. FDIC Notification Requirements
BRB holds FDIC certificate number 09463 as an insured depository institution under the Federal Deposit Insurance Act ("FDI Act"). As an insured national bank, BRB is subject to the FDIC's authority as insurer and backup supervisor, notwithstanding that the OCC serves as BRB's primary federal regulator.
Under the FDI Act and the FDIC's implementing regulations, BRB is required to notify the FDIC of material changes in its business activities, including the acquisition of a significant subsidiary engaged in consumer lending. The acquisition of Tessera — a technology-enabled lending platform with approximately $1.2 billion in aggregate originations since inception and FY2025 revenue of approximately $38,400,000 — constitutes a material development in BRB's business activities that warrants notification to the FDIC.
It is important to note that, for a national bank such as BRB, the FDIC notification is generally informational in character rather than a separate approval requirement. The OCC is the primary federal regulator responsible for approving the acquisition of a subsidiary by a national bank, and FDIC notification does not operate as an independent regulatory gate for the transaction. However, failure to provide timely notification to the FDIC could create supervisory concerns and potentially complicate BRB's relationship with the FDIC in subsequent examination cycles. Accordingly, we recommend that the FDIC notification be submitted concurrently with, or shortly after, the submission of the OCC application.
The FDIC's interest in the transaction may focus on several areas:
(a) Risk Profile of Tessera's Consumer Loan Portfolio. The FDIC may assess the credit risk characteristics of Tessera's consumer loan originations, including default rates, loss rates, and the adequacy of loan loss reserves, to the extent such originations are funded by or affect BRB's insured deposits;
(b) Impact on Deposit Insurance Assessment Base. The FDIC may evaluate whether Tessera's lending activities, once integrated into BRB's operations, could affect BRB's risk profile for purposes of calculating deposit insurance assessments under the FDIC's risk-based pricing methodology;
(c) Ridgeline Community Bank Implications. Ridgeline Community Bank (FDIC certificate number 35218), a Utah-chartered industrial bank headquartered at 175 East 400 South, Suite 600, Salt Lake City, Utah 84111, is Tessera's current bank partner under program agreement TLI-RCB-2020-001. The FDIC serves as Ridgeline's primary federal regulator. The change of control of Tessera may have implications for the existing bank-partnership program between Tessera and Ridgeline, and the FDIC may have an interest in understanding how the acquisition will affect the partnership arrangement and Ridgeline's operations. This topic is addressed in greater detail in Section VII of this memorandum.
Timing and Coordination. The FDIC notification should be coordinated with the OCC filing to ensure consistency of information across regulatory submissions. We recommend submitting the FDIC notification concurrently with or within ten (10) business days following the submission of the OCC application. No separate filing fee is payable to the FDIC in connection with the notification.
IV. Hart-Scott-Rodino (HSR) Act Analysis
A. Applicability of the HSR Act
The Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (15 USC § 18a) (the "HSR Act"), requires certain persons contemplating mergers, acquisitions, or other business combinations to file pre-merger notifications with the Federal Trade Commission ("FTC") and the Antitrust Division of the U.S. Department of Justice ("DOJ") and to observe a mandatory waiting period before consummating the transaction. The HSR Act and the implementing rules promulgated thereunder by the FTC (16 CFR Parts 801–803) establish objective thresholds that determine whether a particular transaction requires a pre-merger notification filing. Two principal tests govern the filing obligation: (1) the Size-of-Transaction Test, and (2) the Size-of-Person Test, which applies in certain circumstances where the transaction value falls within a specified range.
B. Size-of-Transaction Threshold (2026)
The HSR Act's size-of-transaction threshold is adjusted annually by the FTC to account for changes in the gross national product. For calendar year 2026, the current size-of-transaction threshold is $119.5 million. A transaction requires an HSR filing only if, as a result of the transaction, the acquiring person will hold an aggregate total amount of voting securities, assets, or non-corporate interests of the acquired person valued in excess of the applicable size-of-transaction threshold, unless an exemption applies.
The aggregate deal value of the proposed acquisition of Tessera by BRB is $48,000,000, representing the all-cash merger consideration to be paid to the equity holders of Tessera in the reverse triangular merger. This amount is well below the 2026 size-of-transaction threshold of $119.5 million. The difference between the deal value and the threshold is approximately $71.5 million, providing a substantial margin.
No additional voting securities, assets, or non-corporate interests of Tessera or any Tessera-related entity are being acquired by BRB in connection with this transaction that would increase the aggregate value above the threshold. To our knowledge, BRB does not currently hold any voting securities or assets of Tessera that would need to be aggregated with the $48,000,000 in merger consideration for purposes of the size-of-transaction calculation. Similarly, we are not aware of any other pending or contemplated acquisitions by BRB of Tessera-related entities or assets that would trigger aggregation under the HSR rules.
Because the aggregate transaction value does not exceed the size-of-transaction threshold, it is not necessary to analyze the Size-of-Person Test, which applies only to transactions valued between the size-of-transaction threshold and a higher threshold (currently $239.0 million for 2026).
C. Conclusion
Because the deal value of $48,000,000 falls below the 2026 size-of-transaction threshold of $119.5 million, no HSR filing is required in connection with the proposed acquisition of Tessera by BRB. The parties are not required to file pre-merger notifications with the FTC or DOJ and are not subject to the thirty (30) day statutory waiting period that would otherwise apply.
This conclusion is subject to confirmation that: (i) the FTC has not further revised the 2026 thresholds subsequent to the date of this memorandum; and (ii) no other acquisitions by BRB of Tessera-related entities or assets would be aggregated with the $48,000,000 merger consideration under the HSR rules to bring the total above the threshold.
We note that, even though no HSR filing is required, the DOJ and FTC retain authority to challenge the transaction under Section 7 of the Clayton Act (15 USC § 18) or Section 5 of the FTC Act (15 USC § 45) at any time before or after consummation. However, given the relative sizes of BRB (approximately $14.7 billion in total consolidated assets) and Tessera ($38,400,000 in FY2025 revenue) and the highly competitive, fragmented nature of the consumer lending market — which includes thousands of banks, credit unions, online lenders, and fintech platforms — the risk of an antitrust challenge to this transaction is assessed as minimal. There is no indication that the transaction would result in a substantial lessening of competition in any relevant product or geographic market.
Cost Savings. The inapplicability of the HSR filing requirement avoids the HSR filing fee that would otherwise be payable. For transactions valued at less than $179.3 million (the next fee tier threshold for 2026), the applicable filing fee is $30,000. The avoidance of this fee, together with the elimination of the thirty-day waiting period, provides both a modest cost savings and a timeline benefit to the overall transaction.
V. State Lending-License Change-of-Control Filings
A. Overview of State Licensing Landscape
Tessera Lending, Inc. holds consumer lending licenses (or equivalent authorizations) in forty-two (42) U.S. states and the District of Columbia. These licenses authorize Tessera to originate, service, and/or broker consumer loans (including unsecured personal loans and point-of-sale installment financing) in each such jurisdiction, subject to the terms and conditions of the applicable license and the requirements of the jurisdiction's consumer lending statutes and regulations.
The acquisition of Tessera by BRB — effected through the reverse triangular merger in which Tessera survives as a wholly owned subsidiary of BRB — constitutes a "change of control" of a licensed lending entity in each of the jurisdictions where Tessera is licensed. Virtually every state consumer lending statute includes provisions requiring the holder of a lending license to notify or obtain approval from the applicable state regulatory authority in connection with a change of control. The specific requirements, processes, and timelines vary significantly from state to state, necessitating a jurisdiction-by-jurisdiction analysis.
As an initial matter, we note that the full scope of Tessera's licensing portfolio has not yet been confirmed through due diligence. The forty-two-state figure is based on preliminary information provided by Tessera's management team. A key early diligence task will be to obtain a complete, current inventory of all state licenses held by Tessera, including the license numbers, issuing authorities, expiration dates, and any conditions or restrictions. This inventory will form the basis for the state-by-state filing plan discussed below.
B. Types of State Requirements
State change-of-control requirements for licensed lending entities generally fall into three categories:
Prior Approval States. A significant number of states require the prior written approval of the state banking or financial regulatory authority before a change of control of a licensed lender can be consummated. In these jurisdictions, the transaction cannot close with respect to the applicable license until the regulatory authority has affirmatively approved the change of control. The application process in prior-approval states typically requires the submission of detailed information about the acquiring entity, including biographical and financial information for key individuals, audited financial statements, a description of the proposed transaction, and a business plan for the licensed entity post-acquisition. Processing times in prior-approval states vary, with some completing their review in thirty (30) to sixty (60) days and others requiring ninety (90) to one hundred twenty (120) days or longer.
Notice States. Other states require only a post-closing notice of the change of control, typically within a specified period following consummation (e.g., thirty (30) days post-closing). In these jurisdictions, the filing obligation does not operate as a condition precedent to closing, but failure to file timely notice may result in enforcement action, fines, or other adverse regulatory consequences. Notice filings are generally simpler and less burdensome than prior-approval applications but must nonetheless be completed accurately and on time.
NMLS Filing States. Many states now accept change-of-control filings through the Nationwide Multistate Licensing System & Registry ("NMLS"), which provides a centralized, electronic platform for the submission of licensing-related filings across multiple jurisdictions. The NMLS has streamlined the change-of-control filing process to a significant degree, allowing filers to submit standardized forms and supporting documentation through a single portal. However, the NMLS filing does not eliminate the substantive requirements of each state's regulatory framework — the processing timelines and approval standards of each individual state continue to apply. Not all states have fully adopted the NMLS for change-of-control filings, and certain states continue to require separate, state-specific filings outside the NMLS.
A comprehensive state-by-state analysis must be conducted to categorize each of the forty-two states and the District of Columbia into the appropriate category (prior-approval, notice-only, or NMLS-facilitated) and to identify the specific filing requirements, timelines, fees, and substantive review criteria applicable in each jurisdiction. This analysis will be a priority deliverable for the deal team following the commencement of due diligence in March 2026.
C. Key Jurisdictions and Considerations
While the full state-by-state analysis is pending, several jurisdictions warrant particular attention based on the rigor of their change-of-control review processes and their significance to Tessera's operations:
California (Department of Financial Protection and Innovation — DFPI). California maintains a robust prior-approval framework for changes of control of licensed lending entities. The DFPI's review process is comprehensive and may involve requests for substantial supporting documentation, including biographical information for all officers, directors, and significant shareholders of the acquiring entity, financial statements, and a detailed description of the proposed transaction. Processing times at the DFPI can extend beyond ninety (90) days in certain cases. California is one of the largest consumer lending markets in the United States, and Tessera's California license is likely critical to its ongoing operations.
New York (Department of Financial Services — DFS). The New York DFS is among the most active and rigorous state financial regulators in the country. Changes of control of licensed lending entities are subject to prior approval by the DFS, and the review process may include interviews with key personnel of the acquiring entity, on-site examinations, and detailed analysis of the acquiring entity's financial condition and compliance infrastructure. DFS processing times can be among the longest of any state regulatory authority.
Illinois. The Illinois Department of Financial and Professional Regulation administers change-of-control requirements for licensed lending entities that involve a prior-approval process with moderately detailed submission requirements. Illinois is a significant consumer lending market and its approval should be prioritized in the filing plan.
Texas. Tessera is headquartered in Austin, Texas (2400 Shoal Creek Boulevard, Suite 500, Austin, TX 78756). The Texas Office of Consumer Credit Commissioner oversees licensed consumer lending entities in the state. Given that Texas is Tessera's home state and the location of its principal offices, the Texas change-of-control filing will be particularly significant. Texas regulators may take a heightened interest in the transaction given the Target's headquarters location, and we recommend engaging with the Texas regulatory authority early in the process.
In addition to the jurisdictions identified above, several other states are known to have more involved change-of-control review processes, including Connecticut, Massachusetts, Virginia, and Washington. These jurisdictions will be identified and prioritized in the state-by-state filing plan.
Some states may require the submission of biographical information for all officers, directors, and controlling persons of BRB, as well as BRB's audited financial statements, Call Reports, and a business plan for Tessera's post-acquisition operations. Given BRB's status as a publicly traded national bank, certain of these materials should be readily available from existing regulatory filings and public disclosures. The deal team should begin compiling a standardized filing package for use across multiple jurisdictions.
D. Impact on Deal Timeline and Closing Conditions
The state licensing change-of-control filing process has the potential to impact the deal timeline, particularly with respect to prior-approval jurisdictions with longer processing times. The following considerations should be addressed in the negotiation and drafting of the definitive merger agreement:
Closing Conditions. State licensing approvals in prior-approval jurisdictions that are material to Tessera's ongoing business operations should be designated as conditions to closing in the merger agreement. The parties will need to negotiate which specific state approvals (if any) are conditions to closing and which may be addressed through post-closing covenants. A common approach is to designate approvals in a specified number of "material" states as closing conditions while permitting the transaction to close with respect to remaining jurisdictions subject to post-closing filing obligations.
Risk Mitigation. The merger agreement should address the risk that certain state approvals may not be obtained prior to the targeted closing date. Mechanisms may include an outside date that provides sufficient time for the completion of state regulatory processes, the ability to close without certain non-material state approvals subject to a post-closing compliance period, and appropriate representations and covenants regarding Tessera's licensing status and compliance.
Early Filing Commencement. The deal team should begin preparing change-of-control filings as early as practicable following the commencement of due diligence (estimated March 2026). In jurisdictions that permit pre-closing submissions, filings should be initiated promptly to minimize the gap between signing and closing. We anticipate that many state filings can be prepared in parallel, leveraging the NMLS platform and a standardized filing package.
Filing Fee Budget. The aggregate state regulatory filing fees for change-of-control filings across forty-two states and the District of Columbia are estimated at approximately $25,000 to $30,000. Individual state fees range from nominal amounts (e.g., $25–$100 in certain states) to several hundred dollars or more in states with more involved application processes. These fees are factored into the estimated aggregate regulatory filing fee budget of approximately $50,000.
E. National Bank Preemption Considerations
As a national banking association chartered under the National Bank Act, BRB may assert that certain state licensing requirements are preempted with respect to activities conducted by BRB or its operating subsidiaries. The OCC's regulations at 12 CFR Part 7, Subpart D, and 12 CFR § 7.4006 address the extent to which state law applies to national bank operating subsidiaries. Under the OCC's longstanding position, a national bank's operating subsidiary is generally entitled to the same preemption of state law as the parent national bank itself, meaning that state licensing requirements that would not apply to BRB directly may not apply to Tessera as BRB's operating subsidiary.
However, the preemption landscape for national bank subsidiaries — particularly fintech subsidiaries that historically operated under state licenses — remains unsettled and is the subject of ongoing litigation and regulatory developments. Several important considerations militate in favor of a conservative approach:
(a) Dodd-Frank Act Limitations on Preemption. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Section 1044, codified at 12 USC § 25b) placed significant limitations on OCC preemption determinations, requiring the OCC to apply a case-by-case analysis (rather than blanket preemption) and to consult with the CFPB in certain circumstances. The Dodd-Frank Act also provided that state consumer protection laws are not preempted to the extent they do not "significantly interfere" with a national bank's exercise of its powers;
(b) State Enforcement Actions. Several state regulators have challenged the application of federal preemption to fintech and non-bank subsidiaries of national banks, and certain state courts have upheld the applicability of state licensing requirements to such entities;
(c) Operational Continuity Risk. Even if a preemption argument is ultimately meritorious, asserting preemption in lieu of complying with state change-of-control filing requirements could result in enforcement actions, license suspensions, or operational disruptions in the interim, which would be inconsistent with the deal team's objective of ensuring continuity of Tessera's lending operations; and
(d) License Portfolio Preservation. Tessera's existing license portfolio is a valuable asset that enables it to originate consumer loans in forty-two states and the District of Columbia. Voluntarily forgoing compliance with state change-of-control requirements — and thereby risking the loss or suspension of one or more licenses — would diminish the value of this portfolio and could disrupt Tessera's origination activities.
Recommendation. We recommend that BRB comply with state change-of-control filing requirements in all jurisdictions where Tessera holds a license, rather than assert federal preemption as a basis for non-compliance. This conservative approach preserves Tessera's existing license portfolio, avoids enforcement risk, and maintains positive relationships with state regulatory authorities. BRB may, however, wish to monitor ongoing developments in preemption jurisprudence and OCC rulemaking and may, at a future date, evaluate whether preemption arguments support the consolidation or streamlining of Tessera's state licensing obligations.
VI. CFPB Supervisory Jurisdiction Considerations
A. CFPB Authority over Larger Participants
The Consumer Financial Protection Bureau ("CFPB") has supervisory authority over certain nonbank entities that are "larger participants" in specific consumer financial services markets, as authorized by the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 USC § 5514). The CFPB has promulgated Larger Participant Rules defining the threshold criteria for various consumer financial services markets, including consumer lending.
Under the CFPB's Larger Participant Rule for the consumer lending market (12 CFR § 1090.104), a nonbank entity is subject to CFPB supervisory examination authority if it has originated more than 10,000 consumer loans in the preceding calendar year. Tessera's aggregate origination volume of approximately $1.2 billion since inception in 2018, together with its FY2025 revenue of approximately $38,400,000, suggests origination activity levels that may meet or exceed this threshold, depending on the number of individual loan originations (as opposed to dollar volume) completed by Tessera in the relevant measurement period. A precise determination will require review of Tessera's origination data during due diligence.
As a standalone nonbank entity, Tessera may currently be subject to CFPB supervisory jurisdiction as a larger participant, and the CFPB may have previously conducted examinations of Tessera's consumer lending practices. This is an important diligence item: the deal team should confirm whether Tessera has been subject to any CFPB examinations, enforcement actions, consent orders, or supervisory communications, and should obtain copies of any related documentation.
B. Impact of Acquisition on CFPB Jurisdiction
Following the acquisition, Tessera would become a wholly owned subsidiary of BRB, a national banking association. The CFPB's supervisory jurisdiction over the combined entity's consumer lending activities arises through a separate and more direct channel than the Larger Participant Rule.
Under the Dodd-Frank Act, the CFPB has supervisory authority over any insured depository institution with total assets exceeding $10 billion, as well as its affiliates (12 USC § 5515). BRB's total consolidated assets of approximately $14.7 billion as of December 31, 2025 clearly exceed this $10 billion threshold. Accordingly, BRB is already subject to CFPB supervisory jurisdiction, and the consumer lending activities conducted through Tessera as a subsidiary of BRB would fall within the scope of the CFPB's supervisory authority regardless of whether Tessera independently qualifies as a larger participant.
The practical consequence is that post-acquisition, BRB and Tessera's combined consumer lending activities — including origination, underwriting, servicing, and collections — will be subject to CFPB supervisory examination. This represents no incremental change in BRB's regulatory posture (as BRB is already above the $10 billion threshold), but it does mean that Tessera's lending practices will be subject to a level of regulatory scrutiny that may exceed what Tessera has experienced as a standalone nonbank entity.
BRB should ensure that Tessera's consumer lending practices — including marketing, underwriting algorithms, loan servicing, and collections — comply with all applicable federal consumer financial protection laws, including but not limited to:
(a) The Truth in Lending Act ("TILA") (15 USC § 1601 et seq.) and Regulation Z (12 CFR Part 1026), governing disclosures in connection with consumer credit transactions;
(b) The Equal Credit Opportunity Act ("ECOA") (15 USC § 1691 et seq.) and Regulation B (12 CFR Part 1002), prohibiting discrimination in credit transactions;
(c) The Fair Credit Reporting Act ("FCRA") (15 USC § 1681 et seq.) and Regulation V (12 CFR Part 1022), governing the use of consumer credit information;
(d) The Electronic Fund Transfer Act ("EFTA") (15 USC § 1693 et seq.) and Regulation E (12 CFR Part 1005), to the extent applicable to electronic repayment mechanisms associated with Tessera's consumer loans; and
(e) The Dodd-Frank Act's prohibition on Unfair, Deceptive, or Abusive Acts or Practices ("UDAAP") (12 USC §§ 5531, 5536), which applies broadly to all providers of consumer financial products and services.
C. Integration and Compliance Recommendations
To ensure that Tessera's consumer lending operations are fully compliant with CFPB expectations and applicable federal consumer financial protection laws following the acquisition, we recommend the following post-closing compliance integration steps:
Compliance Management System Integration. BRB should develop and implement a post-closing compliance integration plan that aligns Tessera's compliance management system ("CMS") with BRB's existing enterprise-wide CMS. This integration plan should address organizational reporting structures, policies and procedures, training programs, monitoring and testing protocols, complaint management, and corrective action processes. The CFPB's Supervision and Examination Manual identifies a robust CMS as a critical element of a financial institution's consumer protection compliance infrastructure.
Fair Lending Analysis. BRB should commission a comprehensive fair lending analysis of Tessera's algorithm-based underwriting model prior to or promptly following the closing of the acquisition. This analysis should assess whether Tessera's model produces any disparate impact on the basis of race, ethnicity, sex, age, or other protected characteristics under ECOA and the Fair Housing Act. The analysis should include testing of the model's inputs (including any alternative data sources), outputs, and decisioning logic, and should be conducted by qualified fair lending analysts using recognized statistical methodologies. Any disparate impact identified should be documented and addressed through model adjustments or other appropriate remedial measures.
UDAAP Review. BRB should conduct a thorough UDAAP review of Tessera's marketing materials, point-of-sale installment financing disclosures, customer communications, and servicing and collections practices. The CFPB has brought numerous enforcement actions against consumer lenders for deceptive marketing practices, inadequate disclosures, and unfair servicing or collections practices. A proactive UDAAP review will mitigate the risk of enforcement action and demonstrate BRB's commitment to consumer protection.
Military Lending Act Compliance. Tessera's unsecured personal loan products may be subject to the protections of the Military Lending Act ("MLA") (10 USC § 987) and its implementing regulation (32 CFR Part 232), which impose a thirty-six percent (36%) Military Annual Percentage Rate cap and other protections on consumer credit extended to active duty servicemembers and their dependents. BRB should confirm that Tessera has implemented appropriate MLA compliance controls, including a system for identifying covered borrowers and ensuring that all MLA-required disclosures and protections are provided.
VII. Implications of the Ridgeline Community Bank Partnership Arrangement
A. Overview of the Bank-Partnership Model
Tessera currently operates a significant portion of its consumer lending program under a bank-partnership lending model with Ridgeline Community Bank. Ridgeline Community Bank is a Utah-chartered industrial bank holding FDIC certificate number 35218, headquartered at 175 East 400 South, Suite 600, Salt Lake City, Utah 84111. Ridgeline is supervised by the Utah Department of Financial Institutions as its primary state regulator and by the FDIC as its primary federal regulator.
The existing bank-partnership arrangement is governed by a program agreement (reference number TLI-RCB-2020-001) that was originally executed on March 15, 2020, and has been renewed through December 31, 2027. Under this bank-partnership model, Ridgeline serves as the issuing bank of record for consumer loans originated through Tessera's platform. Ridgeline establishes the credit policies and underwriting criteria (in consultation with Tessera), funds the origination of the loans, and is identified as the lender on the loan documents. Tessera provides the technology platform, marketing, customer acquisition, underwriting support (through its algorithm-based credit decisioning tools), and loan servicing functions. In a typical bank-partnership arrangement, the loans originated by Ridgeline are sold to Tessera (or to a third-party purchaser designated by Tessera) shortly after origination, subject to the terms of the program agreement.
The bank-partnership model has been widely utilized in the fintech lending industry as a mechanism for enabling non-bank lending platforms to access the benefits of a bank charter — including federal preemption of state usury laws and the ability to export the interest rate of the bank's home state (in Ridgeline's case, Utah) to borrowers in other states. This model, often referred to colloquially as "rent-a-charter" lending, has been the subject of significant regulatory scrutiny in recent years, as discussed in Section VII.D below.
B. Change-of-Control Provisions in the Program Agreement
The program agreement (TLI-RCB-2020-001) between Tessera and Ridgeline Community Bank is expected to contain change-of-control provisions that may be triggered by the acquisition of Tessera by BRB. Bank-partnership program agreements typically include provisions that:
(a) Define a "change of control" event to include, among other things, the acquisition of a specified percentage (commonly fifty percent (50%) or more) of the voting equity of the program partner by a third party, a merger or consolidation involving the program partner, or a transfer of all or substantially all of the program partner's assets;
(b) Require the program partner (Tessera) to provide prior written notice to the bank (Ridgeline) of any pending change of control event;
(c) Grant the bank (Ridgeline) the right to approve or consent to the change of control as a condition to the continuation of the program agreement, or, alternatively, grant the bank the right to terminate the program agreement upon the occurrence of a change of control event; and
(d) Restrict the assignment or transfer of the program agreement without the prior written consent of the non-assigning party.
The precise scope and terms of any change-of-control, assignment, or consent provisions in TLI-RCB-2020-001 cannot be confirmed until the full text of the agreement is obtained and reviewed. Obtaining and reviewing the program agreement is a critical diligence priority. If Ridgeline's consent is required for the consummation of the acquisition, it should be designated as a condition to closing in the merger agreement, and BRB's deal team should engage with Ridgeline early in the process to initiate consent discussions.
The dynamics of the consent process may be affected by the fact that BRB — as a national bank — would become the parent company of Tessera, potentially altering the nature of the Tessera-Ridgeline relationship. Ridgeline may view the acquisition favorably (e.g., as enhancing Tessera's financial stability and creditworthiness) or may have concerns (e.g., regarding the potential for BRB to transition Tessera's lending program away from the bank-partnership model and onto BRB's own charter, effectively terminating Ridgeline's role in the program). These dynamics should be considered in structuring the approach to Ridgeline.
C. Post-Acquisition Strategic Considerations
Following the acquisition, BRB will have several strategic options regarding the disposition of the Tessera-Ridgeline bank-partnership arrangement:
Transition to Direct BRB Origination. As a national banking association, BRB has the authority to originate consumer loans directly, including the types of unsecured personal loans and point-of-sale installment financing currently originated through Tessera's platform under the Ridgeline partnership. BRB may choose to transition Tessera's loan origination program from the bank-partnership model (in which Ridgeline serves as the issuing bank) to a direct origination model (in which BRB serves as the issuing bank through its Tessera subsidiary). This transition would leverage BRB's own national bank charter, potentially simplifying the regulatory structure and eliminating the need for the Ridgeline partnership. However, such a transition would require careful analysis of the regulatory, operational, and financial implications, including the impact on interest-rate exportation, state licensing obligations, compliance frameworks, and the mechanics of winding down the existing Ridgeline program agreement.
Maintain the Partnership During a Transition Period. Alternatively, BRB may elect to maintain the Ridgeline partnership for a defined transition period following the closing to ensure continuity of operations, preserve existing loan pricing structures, and allow time for the orderly transition of origination functions to BRB's charter. This approach would mitigate operational disruption and provide a buffer against any unforeseen regulatory or legal complications associated with the transition.
Early Termination and Wind-Down. If BRB determines that a transition to direct origination is desirable, the existing Ridgeline program agreement (TLI-RCB-2020-001), which runs through December 31, 2027, would need to be terminated prior to its stated expiration date. The early termination provisions and wind-down mechanics of the program agreement — including any required notice periods, termination fees, obligations with respect to outstanding loans originated under the program, and representations and warranties survival periods — will need to be carefully analyzed. This analysis cannot be completed until the full text of TLI-RCB-2020-001 is obtained and reviewed during due diligence.
FDIC Interest. The FDIC, as Ridgeline's primary federal regulator, may take an interest in the change of control of Tessera and any resulting impact on the bank-partnership program. Depending on the significance of the Tessera program to Ridgeline's operations, the FDIC may inquire about the implications of the acquisition for Ridgeline's safety and soundness, income, and ongoing regulatory compliance. BRB should be prepared to address any FDIC inquiries in this regard.
D. Regulatory Scrutiny of Bank-Partnership Models
Bank-partnership (or "rent-a-charter") lending models have been subject to increasing regulatory and legislative scrutiny from federal and state regulators in recent years. The following areas of heightened scrutiny are relevant to the Tessera-Ridgeline arrangement and to BRB's post-acquisition strategic planning:
True Lender Issues. Several state regulators and attorneys general have challenged bank-partnership lending models on the ground that the nonbank partner (rather than the issuing bank) is the "true lender" in the transaction, and that the bank's involvement is merely a pretext to evade state usury laws and licensing requirements. The OCC issued a "true lender" rule in 2020 (12 CFR § 7.1031), which was subsequently disapproved by Congress under the Congressional Review Act in June 2021. The regulatory landscape on true lender issues remains in flux, and BRB should be aware that the Tessera-Ridgeline arrangement could be subject to true lender challenges in certain states.
Interest-Rate Exportation. The bank-partnership model relies, in part, on the principle that a bank may "export" the interest rate permissible under the law of its home state to borrowers in other states, pursuant to Section 27 of the Federal Deposit Insurance Act (12 USC § 1831d) (for state-chartered banks) and Section 85 of the National Bank Act (12 USC § 85) (for national banks). The FDIC issued a final rule in 2020 (12 CFR § 331.4) clarifying that the interest rate on a loan is not affected by the subsequent sale, assignment, or transfer of the loan, codifying the "valid-when-made" doctrine. However, certain states have continued to challenge interest-rate exportation in the bank-partnership context, and litigation on this issue remains ongoing.
Third-Party Risk Management. The OCC, FDIC, and Federal Reserve have each issued guidance on third-party risk management expectations for banks engaged in relationships with fintech companies and other third-party service providers. The FDIC's guidance on third-party lending arrangements (FIL-50-2016, as updated) and the interagency guidance on third-party relationships (June 2023) set forth detailed expectations for bank oversight of third-party lending programs. BRB should be prepared for OCC questions regarding the continuation or wind-down of the Ridgeline partnership as part of the regulatory approval process for the acquisition, and should ensure that any continuing partnership arrangement is managed in accordance with applicable third-party risk management guidance.
VIII. Estimated Regulatory Filing Fees
Based on our preliminary analysis, the aggregate estimated regulatory filing fees for the proposed transaction are approximatel

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