Board of Directors OF










I.                    Composition of the Committee



A.                 The Committee Chair and Committee members are appointed annually by the Board Chair subject to Board ratification, and may be replaced or removed by the Board.




B.        The Committee shall consist of not less than 3 directors.






II.                  Purpose of the Committee



The Committee’s purpose is to oversee the lending, credit-related, investment, and asset/liability activities of Bancorp and its subsidiaries.






III.                Authority and Responsibilities Of The Committee



A.                 With respect to its oversight function, the Committee shall:




(1)               At each meeting, review a report prepared by the Chief Credit Officer of loans $1MM and over made since the last report and all loans made to directors and officers.




(2)               At each meeting, review a report prepared by the Portfolio Manager of investments made since the last report;




(3)       Review senior management’s assessment of the level of loan portfolio credit risk;




(4)               Review senior management’s assessment as to whether the lending function is being conducted in a manner consistent with the Corporation’s strategic plans and its objectives for asset quality;




(5)               Review senior management’s assessments, together with supporting analysis, data, reports, and summaries, regarding:  asset quality and asset quality trends; credit administration and underwriting standards; the effectiveness of portfolio credit risk management systems and processes to enable management to identify, measure, monitor, and control loan portfolio credit risk; and such other matters as senior management or the Committee may deem relevant to the Committee’s purpose;




(6)               Review and approve, as appropriate, loan, credit-related, investment, and asset/liability policies and procedures,   including portfolio limits, after due consideration of senior management’s recommendations;




(7)               Review and approve as required by applicable law specific credit-related policies and reports;




(8)       Review senior management’s recommendation as to the adequacy of the allowance for loan and lease losses;




(9)       Review actions taken with respect to any matters related to the Committee’s purpose and requiring Board or management attention, as contained in any report of examination by regulatory agencies, audit report, or self-assessment;




(10)     Review minutes of actions taken by the Corporation’s senior credit committee;




(11)     Review and recommend to the Board loans in excess of management’s authorized approval limits and actions required to be approved by the Board under Regulation O;




(12)          Review investment activities, issues, and strategies, market prognosis, and broker activities; and




(13)          Review the volume and mix of the Corporation’s assets, liabilities and funding sources in light of liquidity, capital, risk and profitability considerations.




B.     In carrying out the foregoing responsibilities, the Committee shall:




(1)               Report regularly to the Board on its activities;




(2)               Maintain minutes of its meetings and records relating to those meetings and the Committee’s activities;




(3)               Review and assess the quality and clarity of the information provided to the Committee and make recommendations to management as the Committee deems appropriate from time to time for improving such materials;




(4)               Have authority to obtain advice and assistance from internal or external legal, accounting or other advisors and consultants;




(5)               Form and delegate authority to sub-Committees when appropriate;




(6)               Annually review the Committee’ s own performance; and




(7)               Review and reassess this Charter annually and recommend to the Board changes to the Charter.






IV.               General



A.        With respect to joint sessions of the Committee:




            (1)       The Committee may meet simultaneously as a Committee of Bancorp and the Bank though it should hold separate sessions if necessary to address issues that are relevant to one entity but not the other or to consider transactions between the two entities or other matters where Bancorp and the Bank may have different interests; and




(2)       The Committee should consult with internal or outside counsel if, in the opinion of the Committee, any matter under consideration by the Committee has the potential for any conflict between interests of Bancorp and those of the Bank or Bancorp’s other subsidiaries in order to ensure that appropriate procedures are established for addressing any such potential conflict and for ensuring compliance with the Bancorp’s policies regarding Sections 23A and 23B of the Federal Reserve Act.




B.        In performing their responsibilities, Committee members are entitled to rely in good faith on information, opinions, reports or statements prepared or presented by:




(1)               One or more officers or employees of the Corporation whom the Committee members reasonably believe to be reliable and competent in the matters presented;




(2)               Counsel, independent auditors, or other persons as to matters which the Committee members reasonably believe to be within the professional or expert competence of such person; and




(3)               Another committee of the Board as to matters within its designated authority which committee the Committee members reasonably believe to merit confidence.