Emergency Capital Investment Program Senior Preferred Stock

Issuance Date: 8/12/2021

Emergency Capital Investment Program

Senior Preferred Stock Term Sheet

Summary of Terms

Capitalized terms undefined in the term sheet are defined in the Definitions section of Treasury’s

Application Instructions and Materials for the Emergency Capital Investment Program found

here: ECIP Application Instructions and Materials link

Issuer

The term “issuer” means a financial institution that is, as of the date

of submitting an application:

1. A Community Development Financial Institution or Minority

Depository Institution; and

2. An Insured Depository Institution not controlled by a Bank

Holding Company (“BHC”) or Savings and Loan Holding

Company (“SLHC”), a BHC, or an SLHC.

Application

An institution must apply to the United States Department of the

Treasury (“Treasury”) to be considered for investments from the

Emergency Capital Investment Program (“ECIP”).

Security

Senior perpetual noncumulative preferred stock (“Senior

Preferred”), liquidation preference of $1,000 per share (unless

otherwise dictated by the law of the state in the case of issuers

organized under state law).

Depending on an issuer’s available authorized preferred shares,

Treasury may agree to purchase Senior Preferred with a higher

liquidation preference per share.

No fractional shares will be accepted.

Regulatory Capital

Treatment

Tier 1

Investment Amount

General limit per issuer: $250,000,000

Additional limit for issuers with Total Assets of an amount:

> $2BN: 7.5% of total assets

≤$2BN and ≥$500MM: 15% of total assets

< $500MM: 22.5% of total assets

Issuance Date: 8/12/2021

“Total assets” means (i) for issuers that file reporting Form FR Y-

9C, the total consolidated assets as reported in Schedule HC of the

FR Y-9C, (ii) for issuers that file a Consolidated Report of

Condition and Income (“Call Report”), the total assets as reported

on Schedule RC of the Call Report, and (iii) for issuers that file on

reporting Form FR Y-9SP, the higher of the (1) total assets reported

in Schedule SC of the FR Y-9SP and (2) total assets reported in the

Call Report of such issuer’s primary insured depository institution

subsidiary).

Ranking

With respect to all distributions, the Senior Preferred will rank

senior to all of the issuer’s common stock and pari passu with the

most senior class or existing series of existing preferred stock (other

than preferred shares that rank junior to any existing or future

preferred shares), and will be subordinated to depositors, general

creditors, and subordinated debt holders of the issuer in a

receivership, insolvency, liquidation, or similar proceeding.

Target Communities

“Target Communities” include Minority, Rural, and Urban Low-

Income and Underserved Communities and to Low- and Moderate-

Income borrowers, as defined in Treasury’s Application Instructions

for ECIP.

Qualified Lending

“Qualified Lending” means the following extensions of credit

(including participations in such extensions of credit) to Target

Communities:

As reported to your primary federal regulator or, in the case of a

holding company that files on Form FR Y-9SP, the primary federal

regulator for its insured depository institution subsidiaries

(numerical cross references are to Call Report items in Schedule

RC-C and FR Y-9C items in Schedule HC-C (Loans and Lease

Financing Receivables)):

(i) all loans secured by real estate;

a. construction, land development, and other land loans

(1.a.(1)–(2))

b. loans secured by farmland (1.b.))

c. loans secured by family and multi-family residential

properties (1.c.(1), 1.c(2)(a)–(b));

d. loans secured by multifamily (5 or more) residential

properties (1.d);

e. loans secured by nonfarm nonresidential properties (1.e.)

Issuance Date: 8/12/2021

(ii) loans to finance agricultural production and other loans to

farmers (3.);

(iii) commercial and industrial loans (4.);

(iv) loans to individuals for households, family, and other

personal expenditures (6.a–d.); and

(v) lease financing receivables (10.),

and, within these loan categories, excluding:

A. any loans made under the Paycheck Protection Program;

B. the portion of any loans held by the issuer for which the risk is

assumed by a third party other than the U.S. Small Business

Administration, any other U.S. government agency, or a U.S.

government-sponsored enterprise (for example, the portion of

loans that have been participated); and

C. any loan that is an extension or re-write of any existing loan

unless it involves an increase of 20% or more in the principal

amount of the loan, in which case the entire loan amount,

including the increase, is eligible for inclusion in qualified

lending.

While, further, adding to the amount determined above the

cumulative amount of net loan charge-offs with respect to Qualified

Lending as measured since, and including, the quarter ended

September 30, 2020.

The amount of Qualified Lending, including the exclusions listed

above, shall be calculated and reported 10 business days before the

date of Treasury’s investment (“Investment Date”) by the issuer in a

format specified by Treasury (“Initial Supplemental Report”) and

during each full quarter thereafter (“Quarterly Supplemental

Report”) for the full lifetime of participation in the ECIP.

The dividend rate will be adjusted based on the lending growth

criteria listed in these terms beginning the first payment date after

Issuance Date: 8/12/2021

the 24-month, no dividend accrual

period ends, and reported results

will determine the dividend rate due for the remainder of quarterly

payments in the first 10 years of investments. The first dividend due

will be a partial, pro-rata amount for accrual inclusive of the day

beginning on the 24-month anniversary date.

Calculation of

Lending Baseline

Not later than 10 business days prior to the Investment Date, the

issuer shall submit an Initial Supplemental Report reporting

Qualified Lending for the annual period ending on September 30,

2020. In calculating Qualified Lending, if any gains in Qualified

Lending resulted from mergers and acquisitions or purchase of loans

during any quarter during such four quarter period, the issuer shall

recalculate Qualified Lending for the annual period ending on

September 30, 2020 based on instructions that will be provided by

Treasury in the Initial Supplemental Report. The Qualified Lending

reported for the annual period ending on September 30, 2020 shall

be the baseline against which subsequent Qualified Lending is

measured (“Baseline”).

When applicable, at the beginning of each quarter that begins after

the Investment Date, the Baseline will be increased by the amount of

any gains realized by the issuer resulting from mergers and

acquisitions, or purchases of loans, as measured since, and

including, the quarter ending on September 30, 2020.

Maturity

Perpetual.

Dividend

The Senior Preferred will pay non-cumulative dividends. No

dividends shall accrue or be due for the first 24 months following

the Investment Date. Dividends will begin to accrue on the 2-year

anniversary of the Investment Date. The first (partial) quarterly

payment will be due on the first dividend payment date after that

date.

References to “accrue” or “accrual” in this term sheet refer only to the determination of

the amount of any dividend and do not imply that any right to a dividend arises prior to the date

on which a dividend is declared. Because the Senior Preferred is non-cumulative, if a dividend is

not declared in respect of any dividend payment date, the holder of the Senior Preferred will not

be entitled to the dividend not declared and no interest, or sum of money in lieu of interest, will

be payable in respect of any dividend not declared, whether or not dividends are declared on the

Senior Preferred or any other class or series of capital stock of the issuer for any future dividend

period.

Issuance Date: 8/12/2021

Thereafter, the dividend rate will adjust annually beginning with the

first full quarterly period that begins after the first dividend payment

date after the 2-year anniversary of the investment, to reflect the

issuer’s Qualified Lending compared to the Baseline.

See dividend table in Annex A attached hereto.

Dividends will be payable quarterly in arrears on March 15, June 15,

September 15 and December 15.

“Non-cumulative”: If the Board of Directors does not declare a

dividend on the Senior Preferred with respect to any Dividend

Period, the holders of Senior Preferred shall have no right to receive

any dividend with respect to such Dividend Period, and the Issuer

shall have no obligation to pay a dividend with respect to such

Dividend Period, whether or not dividends are declared for any

subsequent Dividend Period with respect to the Senior Preferred.

Redemption

The Senior Preferred may be redeemed at the option of the issuer on

or after the fifth anniversary of issuance (or earlier in the event of

loss of regulatory capital treatment—see “Change in Law” below),

subject to the approval of the appropriate federal banking regulator

and in accordance with the federal banking agencies’ regulatory

capital regulations.

All redemptions of Senior Preferred must be made at a per share

redemption price equal to 100% of the liquidation preference, plus

accrued and unpaid dividends for the then-current dividend period.

All redemptions must be in amounts equal to at least 20% of the

number of originally issued shares, or 100% of the then-outstanding

shares (if less than 20% of the number of originally issued shares).

Provisions upon

Nonpayment of

Dividends

The following applies whenever dividends payable on the Senior

Preferred have not been declared and will not be paid in full for any

quarterly dividend period:

1. If the issuer chooses to not declare dividends, no later than 3

business days prior to the payment date the Chief Executive

Officer and Chief Financial Officer of the issuer will be

required to provide written notice, in a form reasonably

satisfactory to Treasury, informing Treasury that the issuer

did not declare dividends and the rationale of the issuer’s

board of directors for not declaring dividends; and

Issuance Date: 8/12/2021

2. Beginning on the payment date for the unpaid dividend,

restrictions described below will apply.

After five quarterly dividends not paid in full:

Whenever dividends on the Senior Preferred have not been declared

and paid in full for five quarterly dividend periods or more, whether

or not consecutive, Treasury will have the right, but not the

obligation, to appoint a representative to serve as an observer on the

issuer’s board of directors. This right will end when full dividends

have been paid for four consecutive subsequent dividend periods.

After six quarterly dividends not paid in full:

Whenever dividends on the Senior Preferred have not been declared

and paid in full for six quarterly dividend periods or more, whether

or not consecutive, the holder of the Senior Preferred will have the

right to elect two directors to the issuer’s board of directors. The

right to elect directors will end when the full dividends have been

paid for four consecutive subsequent dividend periods.

Restrictions on

Dividends and Share

Repurchases

The issuer shall agree to comply with the rules and regulations of

Treasury with respect to dividends, share buybacks and other capital

distributions.

In general:

An issuer will be prohibited from declaring or paying any dividend

on, or purchasing or redeeming or making any other distribution on,

any securities that are pari passu with, or junior to, the Senior

Preferred with respect to distributions or ranking in liquidation

unless the issuer has paid in full dividends on the preferred stock

with respect to the last completed dividend period, subject to

provisions on pro rata dividends on pari passu preferred stock in the

case of partial dividends.

These restrictions would not prevent an issuer from making

required, non-discretionary payments, such as payments at stated

maturity in accordance with an instrument’s terms or payments of

interest that may not be deferred, as long as such payments are made

in accordance with any regulations or limitations prescribed by the

primary federal regulator.

Issuance Date: 8/12/2021

Restrictions on

Executive

Compensation

The issuer and its covered officers and employees shall agree to

comply with the rules and regulations of Treasury with respect to

restrictions on executive compensation.

Investment and

Lending Plan

The issuer shall provide to Treasury, the appropriate federal banking

agency, and, if applicable, state banking agency, an Investment and

Lending Plan at the time it submits its application for ECIP.

Voting Rights

The Senior Preferred will be nonvoting, other than customary

protective provisions, such as consent rights granted to Treasury

with respect to (i) any authorization or issuance of shares ranking

senior to the Senior Preferred, (ii) any amendments to the rights of

the Senior Preferred and (iii) any merger, exchange, dissolution, or

similar transaction which would adversely affect the rights of the

holder of the Senior Preferred or (iv) as otherwise provided under

applicable state law.

Transferability

By Treasury:

No contractual restrictions on transfer by Treasury (or vehicles

established and used by Treasury to purchase, hold, and sell

investments) to a third party

, provided that:

1. Prior to any sale to a third party, issuer shall have a right of first

refusal to buy back the investment under terms that do not

exceed a value as determined by an independent third party,

conditional upon prior approval by the issuer’s primary federal

regulator, as applicable;

2. Treasury shall not sell more than 25% of the outstanding equity

interests of the issuer to a single third party without the issuer’s

consent, which may not be unreasonably withheld; and

3. With the permission of the issuer, Treasury may transfer or sell

the interest in the capital investment for no consideration or for a

de minimis amount to a mission-aligned nonprofit affiliate of an

applicant that is an insured community development financial

institution (“Eligible Nonprofit”).

4. Treasury will not sell the investment (other than to an Eligible

Nonprofit) before the tenth anniversary of the Investment Date

without the issuer’s consent, which is not to be unreasonably

withheld. In addition, Treasury will provide the issuer 18

The definition of 3

party does not include a vehicle or entity controlled by the U.S. Department of the Treasury.

Issuance Date: 8/12/2021

months’ advance notice of intent to transfer Senior Preferred

other than to an Eligible Nonprofit.

By Issuer:

The issuer, subject to receipt of any required regulatory approvals,

may merge or sell all, or substantially all, of its assets (as well as, in

the case of an issuer that is a BHC, any insured depository

institution subsidiary), provided that the right of the Senior

Preferred, and the obligations of the issuer relating thereto, are

assumed and an equivalent Senior Preferred issued by the successor

entity.

The successor must also meet either the certified CDFI or MDI

criteria to continue to participate in the ECIP unless prior Treasury

approval is obtained. Treasury will issue guidance for how to

account for qualified lending when two institutions merge.

Access and

Information

The issuer will permit the holder of the Senior Preferred, the

holder’s designees, the Office of Inspector General of the

Department of the Treasury, and the Comptroller General of the

United States to examine the issuer’s corporate books and discuss

with the issuer’s principal officers matters, in each case to the extent

relevant to the investment, after being provided with reasonable

notice, subject to applicable laws and regulations the disclosure of

information.

Certifications

The issuer will provide the following certifications to Treasury:

1. The issuer’s Chief Executive Officer and Chief Financial

Officer, as well as the directors (trustees) of the issuer who

attest to the issuer’s Call Report (or those of its insured

depositories, in the case of a holding company), will certify

to Treasury that information provided on each Supplemental

Report is accurate.

2. Following the Investment Date, within 120 days of the end

of each fiscal year of the issuer during which a

Supplemental Report is submitted, the issuer will receive

and submit to Treasury a certification from its auditors that

the processes and controls used to generate the

Supplemental Reports are satisfactory.

3. Annually, until the Redemption Date, the issuer will certify

to Treasury that it is in compliance with the Customer

Issuance Date: 8/12/2021

Identification Program requirements set forth in 31 C.F.R.

103.121 (or any successor provision). Issuers must submit

valid and timely certifications to be eligible for any dividend

rate adjustment on the Senior Preferred.

4. Annually, for the period required by Treasury’s rules and

regulations, a certification by the issuer’s Chief Executive

Officer and Chief Financial Officer that the issuer is in

compliance with each of the excessive compensation,

severance pay and excessive or luxury expenditures

requirements and limitations on capital distributions set

forth in Treasury’s rules and regulations related thereto, as

published and in effect at the time of the certification.

Change in Law

If, after a capital investment has been made in an eligible institution

under ECIP, there is a final change in law or regulation that results

in loss of regulatory capital treatment for the investment, the eligible

institution may, after consultation with the appropriate federal

banking agency for the eligible institution, redeem the investment.

Noncompliance

An issuer’s noncompliance with the requirements of Treasury’s

rules and regulations related to ECIP and the related ECIP

investment agreement may result in (i) restrictions on capital

distributions and (ii) certain governance-related remedies (e.g.,

observer and director rights). In addition, Treasury may inform the

appropriate federal banking agency of an issuer’s apparent

noncompliance.

Additional

Information and

Considerations

These terms and conditions are preliminary and subject to change.

Final terms and conditions will be found in the definitive closing

documents.

This document does not create a binding legal obligation. A binding

obligation shall only arise pursuant to duly executed definitive

documentation, subject to the satisfaction of closing conditions,

including the absence of any material adverse change in the

condition (financial or otherwise) of the issuer.

Issuance Date: 8/12/2021

Annex A: Dividend Table for Senior Preferred

Increase in Qualified

Lending Compared to

Baseline

First 8 Quarters

After 8

Quarters

After 10 Years*

Increase of less than 200% of

capital investment

< 2.0% per

annum

< 2.0% fixed

Increase between 200% and

400% of capital investment

< 1.25% per

annum

< 1.25% fixed

Increase greater than 400% of

capital investment

< 0.5% per

annum

< 0.5% fixed

* After the tenth anniversary of issuance of investment, the dividend rate will be fixed based on

the average annual amount of lending in years 2 through 10 compared to the Baseline.