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BOS 6/12/2018

NEW VALLEY BANK & TRUST (IN FORMATION)

RECEIVED
June 4, 2018 JUN 05 2018
FDIC
BOSTON AREA OFFICE
Christine K. Viola
Division of Supervision and Consumer Protection
Federal Deposit Insurance Corporation
2 Hampshire Rd. Suite 205
Foxboro, MA 02035

Re: Application Amendments for New Valley Bank & Trust

Dear Chris:

I am enclosing a copy of a letter detailing a package of documents hand delivered to the Division of
Banks.

I am also enclosing for you the following amended documents:

1. Original signed Interagency application reflecting the name change, clarifying the CRA
terminology, including the branch application in section lc, clarifying what we mean by
community stock offering (really a private placement) and also removing
as a director for the time being (pending final approval from his employer that he is able to
join the board)
2.

Best re a ds

e rey
Manager\
Green Ap e Founders, LLC
(413) 478-4299
greenapplefounders@gmail.corn
RECEIVED
JUN 0 5 2018
OMB No. for FDIC 3064-0001
FDIC OMB No. for OCC 1557-0014
BOSTON AREA OFFICE OMB No. for OTS 1550-0005
Expiration Date: 08/31/2019

INTERAGENCY CHARTER AND FEDERAL DEPOSIT INSURANCE


APPLICATION

Public reporting burden for this collection of information is estimated to average 250 hours per response (125
hours for the charter application and 125 hours for the insurance application), including the time to review
instructions, search, and to review and complete the information collection. Send comments regarding this burden
estimate or any other aspect of this collection of information, including suggestions for reducing this burden to:
Office of the Executive Secretary, Federal Deposit Insurance Corporation, 550 17th Street, NW, Washington, DC
20429; Licensing Policy and Systems Division, Comptroller of the Currency, 250 E Street, S.W., Washington, DC
20219; or Office of Examination Policy, Office of Thrift Supervision, 1700 G Street, N.W., Washington, DC
20552; and to the Office of Management and Budget, Paperwork Reduction Project, Washington, DC 20503.

An organization or a person is not required to respond to a collection of information unless it displays a


currently valid OMB control number.

GENERAL INFORMATION AND INSTRUCTIONS


Preparation and Use

This application is used to effect a transaction under:

Sections 5 and 6 of the Federal Deposit Insurance Act (FDIA), as amended (12 U.S.C.
1815, 1816), for federal deposit insurance.
Section 5(e) of the Home Owners' Loan Act (HOLA), as amended (12 U.S.C.
1464(e)), for a federal savings association charter.
The National Bank Act, as amended (12 U.S.C. 21 et seq.), for a national bank charter.
The state law for applying for state depository charters, as approved by state
regulatory authorities.

All questions must be answered with complete and accurate information that is subject to
verification. If the answer is "none," "not applicable," or "unknown," so state. Answers of
"unknown" should be explained.

The questions in the application are not intended to limit the Applicant's presentation nor are
the questions intended to duplicate information supplied on another form or in an exhibit. For
such information, a cross reference to the information is acceptable. Any such cross-reference
must be made to a specific cite or location in the documents, so the information can be
located easily. Supporting information for all relevant factors, setting forth the basis for
Applicant's conclusions, should accompany the application. The regulatory agency may
request additional information.
This application form collects information that the regulatory agencies will need to evaluate
a charter or insurance application. While most of the information will be available when the
organizers submit the application, some information will not be available at that time. Each
agency has specific purposes and different timing requirements in collecting some of this
information; for example, receipt of the organizers' draft policies. For any question about
when to submit a specific item, organizers should contact the appropriate regulatory agencies
to discuss the specific timing for submission.

The regulatory agency must consider the applicable statutory requirements set forth in the
preceding provisions, as well as applicable regulatory requirements, when acting on this
application. For additional information regarding these statutory and regulatory requirements,
as well as processing procedures and guidelines and any supplemental information that may be
required, please refer to the appropriate regulatory agency's procedural guidelines [i.e.,
Comptroller's Corporate Manual, the FDIC's Rules and Regulations (12 C.F.R. 303) and
Statement of Policy on "Applications for Deposit Insurance", the OTS' Applications Processing
Handbook, or the application guidelines for the state in which the Applicant seeks a state
charter]. The Applicant may contact the agency directly for specific instruction or visit their
websites at www.fdic.gov, www.occ.treas.gov, www.ots.treas.gov, and www.csbs.org (through
"Links" to each state banking department).

Notice of Publication

The Applicant must publish notice of the proposed organization in a newspaper of general
circulation in the community or communities in which the proposed financial institution will
be located. Contact the appropriate regulatory agency for the specific requirements of the
notice of publication.

Electronic Submission

In addition to an original application and the appropriate number of signed copies, the
regulatory agencies would like to have an electronic copy of the information in the
application, especially of the business plan's financial projections. Submission of an
electronic copy is voluntary. It will be used only for internal review and processing and will
not be released to the public. The electronic copy may be provided on a computer diskette,
using common word processing and spreadsheet software. For E-mail submissions, contact
the appropriate regulatory agency for instructions and information about secure transmission
of confidential material.

Confidentiality

Any Applicant desiring confidential treatment of specific portions of the application must
submit a request in writing with the application. The request must discuss the justification
for the requested treatment. The Applicant's reasons for requesting confidentiality should
specifically demonstrate the harm (for example, loss of competitive position, invasion of
privacy) that would result from public release of information (5 U.S.C. 552 or relevant state
law). Information for which confidential treatment is requested should be: (1) specifically
identified in the public portion of the application (by reference to the confidential section);
separately bound; and (3) labeled "Confidential." The Applicant should follow the same
procedure when requesting confidential treatment for the subsequent filing of supplemental
information to the application.

The Applicant should contact the appropriate regulatory agency for specific instructions
regarding requests for confidential treatment. The appropriate regulatory agency will
determine whether the information will be treated as confidential and will advise the
Applicant of any decision to publicly release information labeled as "Confidential."

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INTERAGENCY CHARTER AND FEDERAL DEPOSIT INSURANCE APPLICATION
(Check all appropriate boxes.)
Type of Charter Chartering Agency
National Bank Comptroller of the Currency
El State Bank Office of Thrift Supervision
n Federal Savings Bank or Association E State Massachusetts
State Savings Association
Other Insurance Fund
El Bank Insurance Fund
Special Focus Savings Association Insurance Fund
Community Development
Cash Management Type of Insurance Application
Trust E De Novo
Bankers' Bank Operating Noninsured Institution
Credit Card: CEBA Non-CEBA Other
Other
Federal Reserve Status
For OCC: Standard Expedited Member Bank
E Nonmember Bank

Proposed Depository Institution (institution)

New Valley Bank & Trust


Name
One Monarch Place Suite 910
Street
Springfield Massachusetts 01144
City State ZIP Code

Holding Company Identifying Information (if applicable)

N/A
Name

Street

City State ZIP Code

Contact Person

Frank P. Fitzgerald, Chair or J. Jeffrey Sullivan, Pres./CEO


Names
One Monarch Place
Street
Springfield MA 01144
City State ZIP Code
INTERAGENCY CHARTER AND FEDERAL DEPOSIT INSURANCE APPLICATION

1. Overview
(a) Provide a brief overview of the application. The overview should describe
the institution's business and any special market niche, including the
products, market, services, and any nontraditional activities.

The organizers of the Bank (the "Organizers") have determined to charter a


Massachusetts commercial bank to be known as New Valley Bank & Trust
(the "Bank" or the "Applicant"). The Bank will be a full service community
bank offering retail and commercial banking services typically found in
traditional community banks with an emphasis on commercial lending and
commercial real estate lending. The Bank's primary service area will be
western and central Massachusetts.

In addition to traditional bank services, the Bank may offer asset


management services.

Detailed information regarding the capitalization of the Bank and its


proposed services can be found in the enclosed Business Plan, which is filed
herewith as Confidential Exhibit 1, and the Market Feasibility Plan, which
is filed herewith as Confidential Exhibit IA.

(b) Describe any issues about the permissibility of the proposal with regard to
applicable state or federal laws or regulations. Identify any regulatory
waiver requests and provide adequate justification.

The Applicant does not believe there are any issues with respect to the
permissibility of the proposal.

There are no regulatory waivers being requested.

(c) List and provide a copy of all applications filed in conjunction with this
proposal, such as applications for holding company, trust powers, branch
offices, service corporations, and other subsidiaries.

This Application has been filed with the Massachusetts Board of Bank
Incorporation (the "MBBI") for the issuance of a Massachusetts commercial
bank charter with branch offices and with the FDIC to obtain insurance of
accounts for the Bank.
(d) When available, provide a copy of all public or private offering materials and
the proposed form of stock certificate, including any required restrictive
legends.

The Bank intends to offer and sell its stock in a private placement in order to
raise between $25 million and $30 million to capitalize the Bank. The Bank
expects the offering to commence at the end of the second quarter of 2018. At
this time, the Bank contemplates that the funds will be raised in a private
placement offering.
The Bank's current draft offering materials are attached hereto as Exhibit 1. The
Bank's proposed form of stock certificate is filed herewith as Exhibit 2.

(e) (Provide a copy of the proposed articles of association, articles of


incorporation, or charter, and proposed bylaws.

The proposed articles of incorporation and bylaws for the Bank are filed herewith
as Exhibits 3 and 4 respectively.

Provide a copy of the business plan. The business plan should address, at
a minimum, the topics contained in the appropriate regulatory agency's
Business Plan Guidelines.

See Confidential Exhibit 1 filed herewith.

2. Management
(a) Provide a list of the organizers, proposed directors, senior executive officers,
and any individual, or group of proposed shareholders acting in concert that
will own or control 10 percent or more of the institution's stock. For each
person listed, attach an Interagency Biographical and Financial Report, a
fingerprint card, and indicate all positions and offices currently held or to be
held with the institution's holding company and its affiliates, if applicable.
Include the signed "Oath of Director" for each proposed director. For an OTS
filing, provide a RB 20a Certification for each person listed.

There are three (3) organizers of the Bank. The Bank's board of directors will
comprise up to eleven (11) directors, with a minimum of nine (9). There are no
persons or organizations that will own greater than 10% of the Bank's stock. The
Bank's initial private placement memorandum will limit the ownership of any
individual or entity to 2.0%, although exceptions may be made for higher
ownership levels by the Bank's Board of Directors on a case by case basis. The
following are the Organizers and proposed Directors and chief executive officer of
the Bank - other senior officers are described in the Business Plan listed as
Confidential Exhibit 1:

Frank Fitzgerald (Organizer and proposed Chair of the Board)


J. Jeffrey Sullivan (Organizer, proposed director, President, and Chief Executive
Officer)
James Garvey (Organizer and proposed director)
Lamont Clemons (proposed director)
Rocco J. Falcone II (proposed director)
Frank M. Antonacci, Jr. (proposed director)
Aaron Goodman (proposed director)
Sarah Maggi-Morin (proposed director)
Peter Martins (proposed director)

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(b) Describe each proposed director's qualifications and experience to serve and
oversee management's implementation of the business plan. Describe the
extent, if any, to which directors or major stockholders are or will be involved
in the day- to -day management of the institution. Also list the forms of
compensation, if any.

Four of the proposed directors of the Bank have significant experience in the
banking industry and the remaining directors have significant business
experience in the local community, including experience in real estate and
investments. See Exhibit 1-4 of Business Plan, filed herewith as Confidential
Exhibit 1 for each proposed director's qualifications and experience to serve and
oversee management's implementation of the business plan.

Directors generally will not be involved in the day-to-day operations of the Bank,
except for Mr. Sullivan.

(c) Provide a list of board committees and members.

Audit Committee
Chair to be
determined
Frank M. Antonacci
Lamont Clemons

Loan Committee
Rocco J. Falcone, II (Chair)
Aaron Goodman
Frank Fitzgerald

Enterprise and Operational Risk Committee


Sarah Maggi Morin (Chair)
James Garvey
Peter Martins

Compensation Committee
James Garvey (Chair)
Peter Martins
Sarah Maggi Morin

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(d) Describe any plans to provide ongoing director education or training.

It is expected that directors will participate in ongoing training both through


conferences and meetings conducted by banking trade groups and through
seminars involving outside experts. Each director will receive a copy of the
FDIC's Pocket Guide for Directors.

(e) Describe each proposed senior executive officer's duties and responsibilities
and qualifications and experience to serve in his/her position. If a person
has not yet been selected for a key position, list the criteria that will be
required in the selection process. Discuss the proposed terms of
employment, including compensation and benefits, and attach a copy of all
pertinent documents, including an employment contract or compensation
arrangement. Provide the aggregate compensation of all officers.

Mr. Sullivan will serve as President and Chief Executive Officer of the Bank. Mr.
Sullivan has 32 years of industry experience in progressively senior roles. See
Exhibit 12 of the Business Plan, filed as Confidential Exhibit 1, for Mr. Sullivan's
qualifications to serve in this position.

The Bank proposes to enter into an Employment Agreement with Mr. Sullivan
with terms that it feels will be in the best interests of shareholders. The terms of
the Employment Agreement may change from time to time. It is anticipated the
term of the agreement will be for one year, renewable annually, and will call for
base salary plus standard benefits that will be available to all Bank employees.
Mr. Sullivan may become eligible for long term stock based incentive
compensation as part of plans that are approved by the board.
As one of the founding Organizers of the Bank, Mr. Sullivan will receive 400
shares of convertible class A common stock which are convertible upon attainment
of certain milestones more fully described in the Articles of Incorporation.

It is possible that the Bank may institute Change In Control agreements for Mr.
Sullivan and other senior executives in the future as a retention tool to the extent
that they are determined to be in the best interests of the shareholders. These
Change In Control agreements would contain covenants by the employee not to
compete with the Bank for a certain length of time, not to solicit customers for a
certain length of time, and not to disparage the Bank in the future. There is no
established timeframe to address the possible addition of Change In Control and
Non -Compete agreements.

Describe any potential management interlocking relationships (12 U.S.C.


1467a(h)(2), 3201-3208, or applicable state law) that could occur with the
establishment or ownership of the institution. Include a discussion of the
permissibility of the interlock with regard to relevant law and regulations or
include a request for an exemption.

There are no potential management interlocks.

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(g) Describe any potential conflicts of interest.

The Applicant is not aware of any potential conflicts of interest.

(h) Describe any transaction, contract, professional fees, or any other type of
business relationship involving the institution, the holding company, and its
affiliates (if applicable), and any organizer, director, senior executive officer,
shareholder owning or controlling 10 percent or more, and other insiders.
Include professional services or goods with respect to organizational expenses
and bank premises and fixed asset transactions. (Transactions between
affiliates of the holding company that do not involve the institution need not
be described.)

1) State whether the business relationship is made in the ordinary


course of business, is made on substantially the same terms as those
prevailing at the time for comparable transactions with non -insiders,
and does not present more than the normal risk of such transaction
or present other unfavorable features.

2) Specify those organizers that approved each transaction and


whether the transaction was disclosed to proposed directors and
prospective shareholders.

3) Provide all relevant documentation, including contracts,


independent appraisals, market valuations, and comparisons.

The Applicant is not aware of any potential affiliated transactions, except


as described in Confidential Exhibit 4A.

(1) Describe all stock benefit plans of the institution and holding company,
including stock options, stock warrants, and other similar stock -based
compensation plans, for senior executive officers, organizers, directors, and
other insiders. Include in the description:

1) The duration limits.

2) The vesting requirements.

3) Transferability restrictions.

4) Exercise price requirements.

5) Rights upon termination.

6) Any "exercise or forfeiture" clause.

7) Number of shares to be issued or covered by the plans.

Provide a list of participants, allocation of benefits to each participant, and


6
a copy of each proposed plan. (Plans must conform to applicable regulatory
guidelines.)

See Confidential Exhibit 5 filed herewith for a description of the Bank's


warrant agreement for founder investors. The Articles of Incorporation,
Agreement of Association, and By -Laws describe the proposed Equity
Incentive Plan and Class A Convertible Common Stock rights.

3. Capital
(a) For each class of stock, provide the number of authorized shares, the
number of shares to be issued, par value, voting rights, convertibility
features, liquidation rights, and the projected sales price per share.
Indicate the amount of net proceeds to be allocated to common stock,
paid -in surplus, and other capital segregations.

The Bank's capital stock shall consists of a maximum of Fifty Thousand (50,000)
shares of Common Stock having a par value of One Hundred Dollars and Zero
Cents ($100.00) per share and an original selling price of One Thousand Dollars
and Zero Cents ($1,000.00) per share and One Thousand Five Hundred (1,500)
shares of Class A Common Stock having a par value of Zero Dollars and Twenty
Five Cents ($0.25) per share and an original selling price of Zero Dollars and
Twenty Five Cents ($0.25) per share. The minimum amount of the Bank's initial
issued capital stock shall be $2,500,375 consisting of Twenty Five Thousand
(25,000) shares of said Common Stock and One Thousand Five Hundred (1,500)
shares of said Class A Common Stock. The Bank's initial capitalization shall
also include a Capital Surplus Account of $11,250,000 and an Undivided Profits
Account of $11,250,000. In the event capital is acquired in excess of the
minimum set forth herein the number of shares issued and the amounts allocated
to the Capital Surplus and Undivided Profits Account shall be adjusted
accordingly..

Dividends. The Board of Directors of the Bank may from time to time, out
of funds legally available therefor, declares a cash dividend payable on the
ten outstanding shares of Common Stock. No dividend shall be declared and
paid on the Class A Common Stock.

Voting Rights. Except as otherwise expressly provided herein or as required


by law, the holders of shares of Class A Common Stock shall have no voting
rights whatsoever, all such rights being reserved to the holders of shares of
Common Stock.

Liquidation.

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A. Treatment at Liquidation, Dissolution or Winding Up. In the event of
any liquidation, dissolution or winding up of the Bank, whether voluntary or
involuntary, the holders of Common Stock shall be entitled to be paid first
before any sums shall be paid or assets distributed among the holders of Class
A Common Stock, out of the assets of the Bank available for distribution to
holders of the Bank's' stock of all classes, an amount equal to $1,000 per share
of Common Stock (which amount shall be subject to equitable adjustment
whenever there shall occur a stock split, combination, reclassification or other
similar event involving the Common Stock. If the assets of the Bank shall be
insufficient to permit the payment in full to the holders of the Common Stock
of the amount thus distributable, then the entire assets of the Bank available for
such distribution shall be distributed ratably amount the holders of the
Common Stock. After the payment or distribution to the holders of the
Common Stock of the full preferential amount aforesaid, the holders of the
Common Stock and the Class A Common Stock shall be entitled to receive
ratably all the remaining assets of the Bank, with distributions to the holders
of the Common Stock and the Class A Common Stock to be based on the
number of shares of Common Stock into which such shares of the Class A
Commons Stock are then convertible (assuming for this purpose that the
conditions to conversion have been met).

B. Distributions other than Cash. Whenever the distribution provided for


in this Section shall be payable in property other than cash, the value of such
distribution shall be the fair market value of such property as determined in
good faith by the Board of Directors of the Bank.

Conversion Rights.

A. The shares of Class A Common Stock shall be converted into shares of


Common Stock, each share of Class A Common Stock being convertible into one
(1) fully paid and non -assessable share of Common Stock (subject to equitable
adjustment for any stock split, combination, reclassification or other similar event
involving the Common Stock). Such shares of Class A Common Stock shall be
converted upon the occurrence of the following events: 20 percent of the shares of
Class A Common Stock in the hands of each holders shall be eligible for
conversion into shares of Common Stock during each of the first five (5) complete
fiscal years of the Bank if, as a result of the conversion of such shares of Class A
Common Stock, the book value of the shares of the Common Stock of the Bank
purchased pursuant to its initial private offering would not be reduced following
the conversion of the Class A Common Stock eligible for conversion to common
Stock below an amount equal to the original purchase price for the Common Stock
plus 4 percent annual return thereon, compounded annually. All holders of Class
A Common Stock eligible for conversion into shares of Common Stock shall
participate in any such conversion on a pro rata basis an in the event the Class A
Common Stock eligible for conversion cannot be converted into Common Stock
because of the restriction against any decrease in the book value of the Common
Stock sold by the Bank pursuant to its initial private offering, all such Class A
Common Stock would retain its eligibility for conversion until ninety (90) days
after the end of the 10th completed fiscal year of the Bank, subject to the
8
continuing restriction against reduction g the book value of the Bank's Common
Stock as a result of the conversion of Class A Common Stock. In the event of any
proposed public offering of the Common Stock of the Bank, or sale of the Bank,
all of the issued and outstanding Class A Common Stock would become eligible
for conversion to Common Stock immediately prior to any such public offering or
sale.

B. Upon the conversion of Class A Common Stock, the holders thereof shall
surrender the certificate representing such shares at the office of the Bank or of
any transfer agent for the Common Stock. Thereupon, there shall be issued an
delivered to such holder, promptly at such office an in his name as shown on such
surrendered certificate or certificates, a certificate or certificates for the number of
shares of Common Stock into which the shares of Class A Common Stock
surrendered were convertible on the date on which such conversion occurred.

The Bank shall not be obligated to issue certificates evidencing such shares of
Common Stock upon conversion unless the certificate representing the share of
Class A Common Stock being converted are either delivered to the Bank or any
transfer agent, as hereinafter provided, or the holder notified the Bank or any
transfer agent, as hereinafter provided, that such certificates have been lost, stolen
or destroyed and executes an agreement satisfactory to the Bank to indemnify the
Bank from any loss incurred by in in connection therewith.

C. Payment or adjustment shall be made upon conversion on account of any


dividends declared but not yet paid on the Common Stock issued upon such
conversion.

D. Conversion of eligible shares may be deferred by the holder thereof until


ninety (90) days after the completion of the 10th completed fiscal year of the
Bank.

E. Notwithstanding the foregoing, no shares of Common Stock shall be


issued upon conversion of shares of Class A Common Stock, exception in
compliance with all applicable provides of M.G.L. c. 172, as amended.

(b) Describe any noncash contributions to capital, and provide supporting


documents for assigned values, including an independent evaluation or
appraisal.

Not applicable. There will be no noncash contributions to capital.

(c) Discuss the adequacy of the proposed capital structure relative to internal and
external risks, planned operational and financial assumptions, including
technology, branching, and projected organization and operating expenses.
Present a thorough justification to support the proposed capital, including any
off- balance -sheet activities contemplated. Describe any plans for the payment
of dividends.

The Bank's initial capital is intended to provide for competitive lending limits,
potential losses and organizational expenses. It also supports the projected growth
of the Bank over the Bank's initial three (3) years of operation.
9
See Section VII Business Plan, filed herewith as Confidential Exhibit 1 for a
discussion of the proposed capital structure relative to internal and external risks,
planned operational and financial assumptions. For detailed projections and
support for the level of capitalization, see Section X -B (Page 143) of the Business
Plan, filed herewith as Confidential Exhibit 1.

See Section VII -C of the Business Plan, filed herewith as Confidential Exhibit 1
and pages 4-5 of the Private Placement Memorandum for a discussion of the
proposed dividend policy of the Bank.

(d) List all known subscribers to stock. For organizers, directors, 10 percent
shareholders, senior executive officers, and other insiders, include the
number of shares and anticipated investment and the amount of direct and
indirect borrowings to finance the investment. Discuss how any debt will be
serviced.

The Organizers and other founding investors have each committed to fund the
organizational expenses of the proposed Bank in the amount of $50,000 each. The
organizational activities of the Bank are governed by the Founder Investment
Formation Agreement which is filed herewith as Confidential Exhibit 6. At
present, the Bank's Organizers have received commitments for an initial
capitalization of $3.0 million in organizational funds, of which $2.15 million has
been received to date. Upon organization of the Bank, each initial investor who
invested in the organizational round will receive one share of Bank Common
Stock for each $1,000 of organizational funds provided. hi addition to these
monies, the Bank plans to offer and sell a minimum of 25,000 and a maximum of
30,000 shares of common stock, par value $100.00 at $1,000.00 per share in a
private placement in accordance with Regulation D promulgated in the Securities
Act of 1933. Total gross proceeds will therefore range from $25 million to $30
million. Net proceeds are estimated at $24,750,000 at the minimum of the
offering range and $29,750,000 at the maximum of the offering range.

(e) List recipients and amounts of any fees, commissions, or other


considerations in connection with the sale of stock.

There are no fees, commissions or other consideration in connection with the


offering.

Indicate whether the institution plans to file for S Corporation tax status.

The Bank does not plan to file for S Corporation tax status.

10
4. Convenience and Needs of the Community
NOTE: This information must be consistent with the proposed business plan.

(a) Market Characteristics

1) Define the intended geographical market area(s). Include a map of


the market area, pinpointing the location of proposed bank's offices
and offices of competing depository' institutions.

See Section IV -B of the Business Plan, filed herewith as Confidential


Exhibit 1 for more detailed discussion of the Bank's geographical
market area.

2) Describe the competitive factors the institution faces in the proposed


market and how the institution will address the convenience and needs
of that market to maintain its long-term viability.

See Section IV -D of the Business Plan, filed herewith as Confidential


Exibit 1 for further discussion of the competitive factors faced by the
Bank in its proposed market and how the Bank will address the
convenience and needs of the market.

3) Discuss the economic environment and the need for the institution in
terms of population trends, income, and industry and housing
patterns.

See Section IV -B (Pages 64-73) of the Business Plan, filed herewith


as Confidential Exhibit 1 for a further discussion the Bank's
proposed economic environment.

(b) Community Reinvestment Act (CRA) Plan'

NOTE: The CRA Plan must be bound separately.


2
1) Identify the assessment area(s) according to the CRA regulations.

The Bank's Assessment Area will be Hampden County, Massachusetts.

2) Summarize the performance context for the institution based on the factors
3
discussed in the CRA regulations.

See applicable state requirements.


See 12 C.F.R. 25.41,345.41, 563.41.
3

See 12 C.F.R. 25.21(b), 345.21(b), 563e.21(b).


The Bank has and will continue to, review publicly available demographic
data pertaining to its market area. In addition, the Bank will seek information
from community groups, trade associations and relevant governmental
entities. The Bank expects to use this information to develop
products and services to serve its entire market, including low and
moderate -income areas. Also See Exhibit 5, the Bank's proposed CRA
Plan, for a summary of the performance context for the Bank based on
the factors discussed in the CRA regulations.

3) Summarize the credit needs of the institution's proposed


assessment area(s).

Hampden County, MA comprises approximately 471,000 residents,


per Data USA, of which 17% live below the poverty line. There are
approximately 219,000 jobs in the County, which translates to a 46%
labor participation rate (without accounting for individuals living and
working in different counties). The unbanked and underbanked
population of the county is estimated to be in excess of 25% per the
2015 FDIC study, and these pockets of unbanked/underbanked
correlate closely with pockets of poverty and with the educational
achievement gap found in the low and moderate income census
tracts. There are 45 low and moderate income census tracts out of a
total of 103 tracts in the county.

Approximately 39% of the county's 178,000 occupied housing units


are renters. Using an estimate of 10% housing turnover per year
there are roughly 18,000 housing transactions annually, with roughly
5,000 being purchase transactions and 13,000 being renters. There
are ample opportunities to provide credit to this market, in particular
first time homebuyers, upwardly mobile buyers, and seniors in search
of affordable and transparent housing finance options.

In addition to providing credit to the AA, which is how CRA is


determined under the small bank test, the Bank intends to serve the
needs of the community by offering innovative deposit products and
by participating in community development service opportunities,
which will be tested once the Bank reaches the Intermediate Small
Bank test criteria and eventually the Large Bank test criteria.

See Section VI -D (Page 102) of the Business Plan, filed herewith as


Confidential Exhibit 1 and the Bank's proposed CRA Plan, filed
herewith as Exhibit 5 for a discussion of the credit needs of the Bank's
assessment areas.
4) Identify the CRA evaluation test' under which the institution proposes to
be assessed.

The Bank proposes to be assessed under the Small Bank Performance


Standards Test. See the Bank's proposed CRA Plan filed herewith as
Exhibit_ 5.

5) Discuss the institution's programs, products, and activities that will help
meet the existing or anticipated needs of its community(ies) under the
applicable criteria of the CRA regulation, including the needs of low- and
moderate -income geographies and individuals.

See the Bank's proposed CRA Plan, filed herewith as Exhibit 5.

4
See 12 C.F.R. 25.21(a); 345.21(a); 563e.21(a).

13
5. Premises and Fixed Assets
(a) Provide a physical description for permanent premises and discuss whether they
will be publicly and handicapped accessible. Indicate the level and type of property
insurance to be carried.

The Bank expects to lease premises at One Monarch Place, Springfield, MA for its main
office. The leased office space is located in a class A office building with full time
building security, multiple data providers, convenient access to major access roads, and
covered parking. The building is located at the heart of the Central Business District in
the city. The leased space comprises approximately 4,200 square feet of space including
workstations for up to 21 employees plus four conference rooms and a break room. The
Bank intends to apply for a limited service branch license for the site in order to service
the needs of tenants in the 26 story tower as well as business and consumer clients living
and working within walking distance of the location. There are in excess of 10,000
employees and 10,000 residents living within a three mile radius of the proposed main
office.

The Bank also intends to apply for a full service branch license at 908 Allen St.,
Springfield, MA. The seven proximate zip codes (01028, 01036, 01108, 01118, 01119,
01128, 01129) house 26 bank branches and just over $1.7 billion in deposits, an average
of $66 million per branch. Within two miles of the proposed branch are six branches
housing just under $500 million in aggregate deposits as of June 30, 2017. This full
service branch comprises over 3,300 square feet of useable area on approximately 3/4 of
an acre of land. The site, once renovated, will contain parking for in excess of 15 cars
and will have a double lane drive up facility with one lane for teller transactions and one
lane for a drive -up ATM. It is expected that the branch location will house tellers, a
Customer Service Representative, a Branch Manager, and a Cash Management Officer.
The site has capacity to handle additional business lines in the future, such as a
Mortgage Originator and a licensed financial planning specialist. This location, as well
as the main office location, will be ADA compliant and accessible for people with
physical disabilities. The lease at the branch location will be conditioned upon the bank
receiving appropriate zone change and special permits for the drive up banking facility.

(b) If the permanent premises are to be purchased, provide name of seller, purchase
price, cost and description of necessary repairs and alterations, and annual
depreciation. If the premises are to be constructed, provide the name of the seller,
the cost of the land, and the construction costs. Indicate the percentage of the building
that will be occupied by the bank. Provide a copy of the appraisal.

The Bank does not initially plan to purchase its premises.

(c) If the permanent premises are to be leased, provide name of owner, terms of the
lease, and cost and description of leasehold improvements. Provide a copy of the
proposed lease when available.

The applicant has negotiated lease terms with Picknelly Family Partnership for the main
office at One Monarch Place. Please see Confidential Exhibit 7 for a copy of the
proposed lease; the lease term is for five years.

14
The Bank is also proposing to enter into a lease with Ms. Judith Calabrese for a full
service branch location at 908 Allen St., Springfield, MA. The lease will be for an initial
term of three years with a series of extensions, and a right of first refusal to purchase the
property at a value to be established. The applicant intends to invest approximately
$300,000 to renovate the building and the parking area and to construct a drive -up
banking facility. A copy of the proposed lease is enclosed herewith under Confidential
Exhibit 7.

The applicant has obtained a third party opinion as to the appropriateness of the lease
terms from Commercial Appraisal Services, Inc. of East Longmeadow, MA, which is
also enclosed along with the leases under Confidential Exhibit 7.

(d) If temporary quarters are planned, provide a description of interim facility,


length of use, lease terms, and other associated commitments and costs.

No temporary quarters are planned.

(e) State whether proposed premises and fixed asset expenditures


conform to applicable statutory limitations.

As noted, the Bank is not purchasing at this time. All proposed fixed asset
expenditures will conform to applicable statutory limits.

(1) Outline the security program that will be developed and implemented,
including the security devices.'

The Bank will operate in full compliance with FDIC rules and regulations as set
forth in Section 326, which will include the designation of a Security Officer and
a written security program. The security program will:

1. Establish procedures for opening and closing for business and for the
safekeeping of all currency, negotiable securities, and similar valuables at all
times;

2. Establish procedures that will assist in identifying persons committing


crimes against the bank and that will preserve evidence that may aid in their
identification and prosecution; such procedures may include, but are not limited
to:
a. Retaining a record of any robbery, burglary, or larceny committed against
the bank;
b. Maintain a camera that records activity in the bank office; and
c. Use identification methods, such as prerecorded serial numbered bills.

See 12 C.F.R. 21, 326, 568.

15
(g) Discuss any significant effect the proposal will have on the quality of the human
environment. Include in the discussion changes in air and/or water quality, noise levels,
energy consumption, congestion of population, solid waste disposal, or environmental
integrity of private land within the meaning of the National Environmental Policy Act, 42
U.S.C. 4321, et seq.

The Bank's proposed location is in an existing building in an area this is a center of commercial activity
with nearby retail, service and business facilities. The Bank's use of the property is entirely consistent
with its prior use and the uses of surrounding properties. As such, the operation of the Bank at such
location will have no negative affect upon the quality of the human environment.

(h) Describe any plan to establish branches or relocate the main office within the first three years.
Any acquisition or operating expenses should be reflected in the financial projections.

The Bank has no current plans to relocate its main office during the first three (3) years of operation,
although circumstances could change this scenario. Should the Bank's plans change in this regard,
appropriate applications would be filed with the MBBI and the FDIC. As discussed in the Business Plan,
the Bank does plan on opening a third branch facility in the first three (3) years of operation. See Section
IIIG and Section X of the Business Plan, filed herewith as Confidential Exhibit 1.

(j) Indicate if the establishment of the proposed main office and/or any branch site may affect
any district, site, building, structure, or object listed in, or eligible for listing in, the National
Register of Historic Places pursuant to the National Historic Preservation Act, 16 U.S.C. 470f.
(See the Advisory Council on Historic Preservation at www.achp.gov for the Act and
implementing regulations.) Specify how such determination was made:
1) Consultation with the State Historic Preservation Officer (SHPO) and/or
Tribal Historic Preservation Officer (THPO) (when tribal lands or
historic properties of significance to a tribe are involved).
2) Reviewed National Register of Historic Places (see
www.cr.nps.gov/nr).
3) Applied National Register criteria to unlisted properties:
4) Reviewed historical records.
5) Contact with preservation organizations.
6) Other (describe).

As appropriate, provide a copy of any documentation of consultation with the SHPO and/or
THPO. You are reminded that if a historic property may be affected, no site preparation,
demolition, alterations, construction or renovation may occur without the appropriate regulatory
agency's authorization.

The proposed Bank site is in an existing building with no effects on any district, site, building,
structure or object listed in or eligible for listing in the National Register of Historic Places. The
proposed location of the Bank's offices is not Listed in the National Register of Historic Places and
the landlord has represented the location has not been designated as such. A letter will be sent to the
State of Historical Preservation Officer for confirmation. A copy of such letter will be filed
supplementally with the MBBI and the FDIC.

16
6
See 36 C.F.R. 60.4.

17
(6) Information Systems
1) State whether the institution plans to market its products and services (the
ability to do transactions or account maintenance) via electronic means. If yes,
specifically state the products and services that will be offered via electronic
banking or the Internet.

The Bank intends to offer retail and business electronic banking through its core
provider (Nymbus or COCC). The Bank will provide the opportunity to open
checking, savings, and loan accounts through an online account opening
application via mobile devices or computer. For personal checking the Bank will
offer traditional no and low fee accounts bundled with online balance transfer, bill
pay, person to person transfer, remote check deposit, online customer care,
overdraft protection, and compatibility with personal finance software such as
Quicken and other budgeting software. The Bank will also offer a "safe" checking
account with companion savings for individuals who wish to have protections
against overdraft fees. This account will contain most of the features of traditional
checking (online balance and transfer, online customer care, access to personal
financial management and personal finance software, bill pay, person to person
transfer) but will not come with checks or the ability to overdraw the account at a
merchant point of sale or at an ATM. This account will be charged a monthly fee
in exchange for the protection from overdraft charges. The Bank will offer a
savings account which can be linked to any of the consumer checking account
products. For consumer loans the bank intends to offer consumer credit cards (in
partnership with a third party initially) both unsecured and secured. The secured
card is intended to be included in the suite of products delivered with the safe
account product. The Bank also intends to offer direct auto and direct consumer
loans (secured and unsecured) via the electronic banking channel, as well as direct
residential mortgage loans (possibly through a pass -over to the Ellie Mae
Encompass loan origination website or to a conespondent bank website) and home
equity loans.

The Bank is pursuing opportunities to market the safe account through community
development partners, such as local United Way organizations and credit repair
organizations as a tool to facilitate re-entry of these consumers into the mainstream
banking system. The Bank organizers have researched the unbanked and
underbanked populations nationally, regionally, and locally since 2011, and have
concluded that a competitively structured safe account will assist in the re-entry of
many consumers and households into the mainstream system, saving these
households substantial fees in the process. Convenient online account opening is
critical to the success of this community development initiative.

For business banking products delivered through the online channel, the Bank
intends to offer a small business checking product offering up to 500 transactions
per month for no fee. The Bank will also offer a corporate checking account which
will include options for remote check deposit via scanner, online and mobile
balance inquiry, account transfer, bill pay, and customer care. The Bank will offer
IOLTA accounts, not for profit and sole proprietor NOW accounts, business
savings and business money market accounts. Business loans available through the
online channel will include secured and unsecured term notes and secured and
18
unsecured lines of credit up to a limited dollar amount (expected to be $100,000 for
unsecured credit and $500,000 for secured loans). Underwriting criteria for online
loan applications will be stringent, as this channel is intended to provide
convenience to highly qualified applicants. For applications that do not meet these
stringent parameters, the Bank will underwrite manually; the Bank will also
undertake a "second look" program offline for applicants denied through the online
channel.

2) Outline the proposed or existing information systems architecture and any


proposed changes or upgrades. The information should describe how: (1) the
information system will work within existing technology; (2) the information
system is suitable to the type of business in which the institution will engage; (3)
the security hardware, software, and procedures will be sufficient to protect the
institution from unauthorized tampering or access; and (4) the organizers and
directors will allocate sufficient resources to the entire technology plan.

The Bank will be outsourcing its core data processing and is researching core
processing technology from two CT based companies, COCC and Nymbus. The
Bank intends to seize the opportunity to acquire modern processing technology as a
new entity and is seeking progressive yet safe and compliant technology. Bank
personnel have extensive experience using COCC, including lengthy relationships
with many members of the senior management team. The Bank's President
represented a former employer in its relationship with COCC at a time when that
bank was the second largest shareholder of COCC stock. Nymbus represents a new
platform with many state of the art technologies and workflows. It also offers an
opportunity to significantly differentiate the Bank's platform in the marketplace.
The Bank understands the burden of comprehensive due diligence that lies before it
to ensure functionality, safety, and compliance with internal operating control
standards and cyber security at the perimeter and in each of the partner companies
integrating on the Nymbus platform. The Bank's CIO, COO, and President will be
conducting thorough due diligence prior to making any final recommendations on
core processor.

3) Provide lists or descriptions of the primary systems and flowcharts of the


general processes related to the products and services. The level of detail
in these system descriptions should be sufficient to enable verification of
the cost projections in the pro formas.

The Bank will soon finalize the selection of its vendor and will then begin the
process of developing its primary systems and the processes relating to its
proposed products and services. The level of detail will allow verification of the
budget which will be proposed for these systems. Since the anticipated
products and services are quite traditional and are routinely integrated within
available systems and technology, the process is not expected to be lengthy or
difficult. Much or all of what the Bank requires is readily available.

The entire systems configurations in sufficient detail will be provided


supplementally as soon as it is available.

(a) Estimate the start-up budget for the information systems related to the
products and services and the expected annual operating and
19
maintenance costs (including telecommunications, hardware, software,
and personnel).

See Section X -C(2) (Page 152) "Detail of Operating Costs" of the


Business Plan, filed herewith as Confidential Exhibit 1 for an estimated
start-up budget for the information systems of the Bank.

(b) Describe the physical and logical components of security. Describe the
security system and discuss the technologies used and key elements for the
security controls, internal controls, and audit procedures. Discuss the types
of independent testing' the institution will conduct to ensure the integrity of
the system and its controls.

The Bank's fully comprehensive security programs, both physical and logical, will be
developed in conjunction with outsource vendors and will be provided when completed.
Physical security will be maintained through the use of alarm monitoring and video
surveillance. Logical security will be built into the network structure and into the core
processing systems and will utilize at a minimum user ID numbers and passwords.

Security controls, internal controls, audit procedures and disaster recovery procedures
and planning will be tested and examined annually by an external audit. The results of
that audit will be reported to management, directors and any appropriate regulatory
agencies.

4) Describe the information security program that will be in place to comply with the
"Interagency Guidelines Establishing Standards for Safeguarding Customer
Information."s

It is expected that the information security program will be developed in conjunction


with the Bank's systems providers with the assistance of third party data security
consultants. It will be tailored to the needs of the Bank and will be structured with
available contemporary technology. Periodic audits will be conducted to maintain
compliance with all applicable Interagency Guidelines.

7
Independent tests should cover general and environmental controls as well as audit, monitoring, and balancing controls.
Independent testing will provide an objective opinion on the adequacy of these controls.

20
7. Other Information
(a) List activities and functions, including data processing, that will be
outsourced to third parties, identifying the parties and noting any
affiliations. Describe all terms and conditions of the vendor management
activities and provide a copy of the proposed agreement when available.
Describe the due diligence conducted and the planned oversight and
management program of the vendors' or service providers' relationships
(for general vendor management guidance, see the Appendix of the FFIEC's
guidance, Risk Management of Outsourced Technology Services).

The Bank intends to use third party vendors for other aspects of its business
operations, such as Loan Origination Software (likely Encompass for residential
mortgage, Loan Writer for consumer and Loanvantage for small business), Anti
Money Laundering software (likely Verafin), perimeter security monitoring (likely
Sage Data Security), teller capture hardware (likely Burrows), deposit forms (likely
Wolters Kluwer), cash recyclers (likely New England Money), mobile capture (likely
Warsaw), bill payment (likely Checkfree), Person to Person transfers (likely Zelle),
general ledger software (Oracle financials), and card printing (likely Shoreline). An
IT strategic plan will be written and approved by the Board and submitted to
regulators upon completion of vendor due diligence on each of the proposed
technology vendors. The Bank will complete this IT strategic plan prior to opening.

See 15 U.S.C. 6801, 6805(b); 12 C.F.R. 30; 308 and 364; 568 and 570.

21
(b) List all planned expenses related to the organization of the institution and
include the name of recipient, type of professional service or goods, and
amount. Describe how organization expenses will be paid.

See Confidential Exhibit 8 for a breakdown of organizational expenses. For


information regarding planned start-up expenses, see Section X -C(2) (Page 152) of
the Business Plan, filed herewith as Confidential Exhibit 1.

(c) Provide evidence that the institution will obtain sufficient fidelity coverage on its
officers and employees to conform with generally accepted banking practices.

The Bank intends to employ an industry expert to assist in the selection of carriers and
the structuring of appropriate coverage. At a minimum, fidelity coverage will conform
to generally accepted bank practices. Discussions with carriers have demonstrated that
coverage will be available at the appropriate time.

(d) If applicable, list names and addresses of all correspondent depository


institutions that have been established or are planned.

The Bank expects to have one or more correspondent banking relationships. The likely
primary correspondent bank will be Eastern Bank.

(e) Provide a copy of management's policies for loans, investments, liquidity, funds
management, interest rate risk, and other relevant policies. Provide a copy of
the Bank Secrecy Act program. Contact the appropriate regulatory agencies to
discuss the specific timing for submission.

Copies of the proposed policies of the Bank are filed herewith as Confidential
Exhibit 9.

(0 For Federal Savings Banks or Associations, include information addressing the


proposed institution's compliance with qualified thrift lender requirements.

Not applicable - The Bank will not be a Federal Savings Bank or Association.

(g) If the institution is, or will be, affiliated with a company engaged in insurance
activities that are subject to supervision by a state insurance regulator, provide:

1) The name of insurance company.


2) A description of the insurance activity that the company is engaged in
and has plans to conduct.
3) A list of each state and the lines of business in that state in which the
company holds, or will hold, an insurance license. Indicate the state where
the company holds a resident license or charter, as applicable.

Not applicable - The Bank will not be affiliated with a company engaged in insurance.

22
FDIC CERTIFICATION
We, the organizers, certify that the information contained in this application has been
examined carefully and is true, correct, and complete, and is current as of the date of this
submission. We also certify that any misrepresentations or omissions of material facts with
respect to this application, any attachments to it, and any other documents or information
provided in connection with the application for the organization of the proposed financial
institution and federal deposit insurance may be grounds for denial or revocation of the
charter and/or insurance, or grounds for an objection to the undersigned as proposed
director(s) or officer(s) of the proposed financial institution, and may subject the undersigned
to other legal sanctions, including the criminal sanctions provided for in 18 U.S.C. 1001,
1007, and 1014. We request that examiners be assigned to make any investigations
necessary.

We acknowledge that approval of this application is in the discretion of the appropriate


federal banking agency or agencies. Actions or communications, whether oral, written, or
electronic, by an agency or its employees in connection with this filing, including approval of
the application if granted, do not constitute a contract, either express or implied, or any other
obligation binding upon the agency, other federal banking agencies, the United States, any
other agency or entity of the United States, or any officer or employee of the United States.
Such actions or communications will not affect the ability of any federal banking agency to
exercise its supervisory, regulatory, or examination powers under applicable law and
regulations. We further acknowledge that the foregoing may not be waived or modified by
any employee or agent of a federal banking agency or of the United States.

It is understood that the Board of Directors of the Federal Deposit Insurance Corporation
(Corporation), in applying the factors set out in federal statutes, will consider the application
only with respect to the general character or type of business stated and that the depository
institution will not engage in any other business without the prior written consent of the
Corporation.

It is further understood that federal deposit insurance will not become effective (a) until the
proposed depository institution has been incorporated and authorized to engage in the
business of receiving deposits, (b) until the board of directors of the depository institution
has adopted a resolution ratifying and confirming the action of the incorporators in making
this application with supporting information, (c) until the depository institution has fulfilled
such requirements, if any, as the Corporation may impose as a condition of its approval of

23
this application, and (d) until the depository institution has been notified that its membership
in the Corporation has been approved.

Si nature Date Typed Name

Frank P. Fitzgerald

J. Jeffrey Sullivan

James Garvey

Frank M. Antonacci

Lamont Clemons

Rocco J. Falcone II

Aaron Goodman

Peter Martins

Sarah Maggi Morin


EXHIBITS (check all that apply)

Business Plan
n
I I

Financial Projections

CRA Plan
n Articles of Association, Articles of Incorporation, or Charter

O By -Laws

n Oaths of Directors

n Interagency Biographical and Financial Reports

n Fingerprint cards (appropriate regulatory agency)

n Publication Certification/Affidavit/Notice of Publication

Copies of contracts/agreements
n Employment/compensation
Service providers
Other

Stock Benefit Plans

Economic survey or market feasibility study Market Area


0 Map
Waiver request, specify:

Offering Materials

Proposed stock certificate

Corporate or holding company audited statements or financial reports

OCC/OTS/state filing fee

Copy of policies, specify:


1. Asset and Liability Interest Rate Risk Management Policy
2. Audit Policy
3. BSA AML OFAC Policy
4. Business Continuity Policy
5. Capital Policy
6. Compliance Management Policy
25
7. CRA Program
8. Fixed Assets and Capital Expenditure Policy
9. Information Technology Policy
10. Interbank Liability Policy
11. Investment Policy
12. Liquidity and Contingent Funding Policy
13. Loan Policy
14. Physical Bank Security Policy
15. Vendor Management Policy

26
D
the Commonlinaltii of Iftlasoachuottto
Examiner William Francis Galvin
Secretary of the Commonwealth
One Ashburton Place, Boston, Massachusetts 02108-1512

ARTICLES OF ORGANIZATION
(General Laws, Chapter 172 )
Name
Approved
ARTICLE I
The exact name of the corporation is:
NEW VALLEY BANK & TRUST

ARTICLE H
The purpose of the corporation is to engage in the following business activities:

Transacting the business of a trust company under the Massachusetts General Laws and
to have and exercise all the powers, privileges and authority, express or implied, which may be
had and exercised by a trust company under the Massachusetts General Laws or other applicable
laws, and by all acts amendatory thereof and supplemental thereto.

El
P El

R.A. El

Note: If the space provided under any article or item on this form is insufficient, additions shall be set forth on one side
only of separate 8 1/2 x 11 sheets of paper with a left margin of at least 1 inch. Additions to more than one article may be
P.C. made on a single sheet so long as each article requiring each addition is clearly indicated.
156ban 8/8/02
ARTICLE UT
State the total number of shares and par value, if any, of each class of stock which the corporation is authorized to issue.

WITHOUT PAR VALUE WITH PAR VALUE

TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE

Common: Common: 50,000 $100.00

Class A :
Class A : 1,500 $.025

ARTICLE IV
If more than one class of stock is authorized, state a distinguishing designation for each class. Prior to the issuance of any
shares of a class, if shares of another class are outstanding, the corporation must provide a description of the preferences,
voting powers, qualifications, and special or relative rights or privileges of that class and of each other class of which shares
are outstanding and of each series then established within any class.

See Attached Continuation Sheets

ARTICLE V
The restrictions, if any, imposed by the Articles of Organization upon the transfer of shares of stock of any class are:
Transfer of shares of capital stock of the Bank shall be made only on its stock transfer books. Authority for such transfer shall be given only
by the holder of record thereof or by the holder's legal representative, who shall furnish proper evidence of such authority, or by the
holder's attorney thereunto authorized by power of attorney duly executed and filed with the Bank. Such transfer shall be made only on
surrender for cancellation of the certificate for such shares. The person in whose name shares of capital stock stand on the books of the
Bank shall be deemed by the Bank to be the owner thereof for all purposes.

ARTICLE VI
**Other lawful provisions, if any, for the condUct and regulation of the business and affairs of the corporation, for its voluntary
dissolution, or for limiting, defining, or regulating the powers of the corporation, or of its directors or stockholders, or of any
class of stockholders:

See Attached Continuation Sheets

**If Were are 170 provisions state "None".


Note: The preceding six (6) articles are considered to be permanent and may ONLY be changed by filing appropriate Articles of Amendment.
ARTICLE VII
The effective date of organization of the corporation shall be the date approved and filed by the Secretary of the Commonwealth.
If a later effective date is desired, specify such date which shall not be more than thirty days after the date of filing.

ARTICLE VIII
The information contained in Article VIII is not a permanent part of the Articles of Organization.
a. The street address (post office boxes are not acceptable) of the principal office of the corporation in Massachusetts is:
One Monarch Place, Springfield, Massachusetts 01144
b. The name, residential address and post office address of each director and officer of the corporation is as follows:

NAME RESIDENTIAL ADDRESS POST OFFICE ADDRESS


President:

Treasurer:

Clerk:

Directors:

c. The fiscal year (i.e., tax year) of the corporation shall end on the last day of the month of: December

d. The name and business address of the resident agent, if any, of the corporation is:
Fitzgerald Attorneys at Law, P.C., 46 Center Square, East Longmeadow, MA 01028
ARTICLE IX
By-laws of the corporation have been duly adopted and the president, treasurer, clerk and directors whose names are set forth
above, have been duly elected.

IN WITNESS WHEREOF AND UNDER THE PAINS AND PENALTIES OF PERJURY, I/we, whose signature(s) appear below as
incorporator(s) and whose name(s) and business or residential address(es) are clearly typed or printed beneath each signature
do hereby associate with the intention of forming this corporation under the provisions of General Laws, Chapter 156B and
do hereby sign these Articles of Organization as incorporator(s) this day of , 20

Note: If an existing corporation is acting as incorporator, type in the exact name of the corporation, the state or other jurisdiction where
it was incorporated the name of the person signing on behalf of said corporation and the title he/she holds or other authority by which
such action is taken.
THE COMMONWEALTH OF MASSACHUSETTS

ARTICLES OF ORGANIZATION
(General Laws, Chapter 156B)

I hereby certify that, upon examination of these Articles of Organiza-


tion, duly submitted to me, it appears that the provisions of the General
Laws relative to the organization of corporations have been complied
with, and I hereby approve said articles; and the filing fee in the amount
of $ having been paid, said articles are deemed to have been
filed with me this day of 20

Effective date:

WILLIAM FRANCIS GALVIN


Secretary of the Commonwealth

FILING FEE: One tenth of one percent of the total authorized capital
stock, but not less than $275.00. For the purpose of filing, shares of
stock with a par value less than $1.00, or no par stock, shall be deemed
to have a par value of $1.00 per share.

TO BE FILLED IN BY CORPORATION
Contact information:

Telephone:

Email:

A copy this filing will be available on-line at www.state.ma.us/sec/cor


once the document is filed.
RECEIVED
MAY 1 7 2018
Continuation Sheet IV FDIC
BOSTON AREA OFFICE
Article IV -A
Capital Stock

The Bank's capital stock shall consist of a maximum of Fifty Thousand (50,000) shares of
Common Stock having a par value of One Hundred Dollars and Zero Cents ($100.00) per share and
an original selling price of One Thousand Dollars and Zero Cents ($1,000.00) per share and One
Thousand Five Hundred (1,500) shares of Class A Common Stock having a par value of Zero
Dollars and Twenty Five Cents ($0.25) per share and an original selling price of $0.25 per share.
The minimum amount of the Bank's initial issued capital stock shall be $2,500,375 consisting of
25,000 shares of said Common Stock and 1500 shares of said Class A Common Stock. The Bank's
initial capitalization shall also include a Capital Surplus Account of $11,250,000 and an Undivided
Profits Account of $11,250,000. In the event capital is acquired in excess of the minimum set forth
herein the number of shares issued and the amounts allocated to the Capital Surplus and Undivided
Profits Account shall be adjusted accordingly.

Article IV -B
Dividends

The Board of Directors of the Bank may from time to time, out of funds legally available
therefor, declares a cash dividend payable on the ten outstanding shares of Common Stock. No
dividend shall be declared and paid on the Class A Common Stock.

Article IV -C
Liquidation, Dissolution or Winding Up.

A. Treatment at Liquidation, Dissolution or Winding Up. In the event of any


liquidation, dissolution or winding up of the Bank, whether voluntary or involuntary, the holders of
Common Stock shall be entitled to be paid first before any sums shall be paid or assets distributed
among the holders of Class A Common Stock, out of the assets of the Bank available for
distribution to holders of the Bank's stock of all classes, an amount equal to $1,000 per share of
Common Stock (which amount shall be subject to equitable adjustment whenever there shall occur
a stock split, combination, reclassification or other similar event involving the Common Stock). If
the assets of the Bank shall be insufficient to permit the payment in full to the holders of the
Common Stock the amount thus distributable, then the entire assets of the Bank available for such
distribution shall be distributed ratably amount the holders of the Common Stock. After the
payment or distribution to the holders of the Common Stock of the full preferential amount
aforesaid, the holders of the Common Stock and the Class A Common Stock shall be entitled to
receive ratably all the remaining assets of the Bank, with distributions to the holders of the
Common Stock and the Class A Common Stock to be based on the number of shares of Common
Stock into which such shares of the Class A Commons Stock are then convertible (assuming for this
purpose that the conditions to conversion set forth in Article IV -E have been met).

B. Distributions other than Cash. Whenever the distribution provided for in this

661857.1
Section shall be payable in property other than cash, the value of such distribution shall be the fair
market value of such property as determined in good faith by the Board of Directors of the Bank.

Article IV -D
Voting Power

Except as otherwise expressly provided herein or as required by law, the holders of shares of
Class A Common Stock shall have no voting rights whatsoever, all such rights being reserved to the
holders of shares of Common Stock.

Article IV -E
Conversion Rights

A. The shares of Class A Common Stock shall be converted into shares of Common
Stock. Each share of Class A Common Stock shall be convertible into one (1) fully paid and non -
assessable share of Common Stock (subject to equitable adjustment for any stock split,
combination, reclassification or other similar event involving the Common Stock). Such shares of
Class A Common Stock shall be converted upon the occurrence of the following events: 20 percent
of the shares of Class A Common Stock in the hands of each holder shall be eligible for conversion
into shares of Common Stock during each of the first five (5) complete fiscal years of the Bank if, as
a result of the conversion of such shares of Class A Common Stock, the book value of the shares of
the Common Stock of the Bank purchased pursuant to its initial private offering would not be
reduced following the conversion of the Class A Common Stock eligible for conversion to
common Stock below an amount equal to the original purchase price for the Common Stock plus 4
percent annual return thereon, compounded annually. All holders of Class A Common Stock
eligible for conversion into shares of Common Stock shall participate in any such conversion on a
pro rata basis in the event the Class A Common Stock eligible for conversion cannot be converted
into Common Stock because of the restriction against any decrease in the book value of the
Common Stock sold by the Bank pursuant to its initial private offering. All such Class A Common
Stock shall retain its eligibility for conversion until ninety (90) days after the end of the 10th
completed fiscal year of the Bank, subject to the continuing restriction against reduction in the book
value of the Bank's Common Stock as a result of the conversion of Class A Common Stock. In the
event of any proposed public offering of the Common Stock of the Bank, or sale of the Bank, all of
the issued and outstanding Class A Common Stock shall become eligible for conversion to
Common Stock immediately prior to any such public offering or sale.

B. Upon the conversion of Class A Common Stock, the holders thereof shall surrender
the certificate representing such shares at the office of the Bank or of any transfer agent for the
Common Stock. Thereupon, there shall be issued and delivered to such holder, promptly at such
office and in his name as shown on such surrendered certificate or certificates, a certificate or
certificates for the number of shares of Common Stock into which the shares of Class A Common
Stock surrendered were convertible on the date on which such conversion occurred.

C. The Bank shall not be obligated to issue certificates evidencing such shares of

661857.1
Common Stock upon conversion unless the certificates representing the shares of Class A Common
Stock being converted are either delivered to the Bank or any transfer agent, as hereinafter provided,
or the holder notifies the Bank or any transfer agent, as hereinafter provided, that such certificates
have been lost, stolen or destroyed and executes an agreement satisfactory to the Bank to indemnify
the Bank from any loss incurred by in in connection therewith.

D. Payment or adjustment shall be made upon conversion on account of any dividends


declared but not yet paid on the Common Stock issued upon such conversion.

E. Conversion of eligible shares may be deferred by the holder thereof until ninety (90)
days after the completion of the first 10 fiscal years of the Bank.

F. Notwithstanding the foregoing, no shares of Common Stock shall be issued upon


conversion of shares of Class A Common Stock, exception in compliance with all applicable
provides of M.G.L. c. 172, as amended.

661857.1
Continuation Sheet 'VI

Article VI -A
Preemptive Rights

Holders of the capital stock of the Bank shall not be entitled to preemptive rights with
respect to any shares of the capital stock of the Bank which may be issued.

Article VI -B
Advance Notice and New Business

Advance notice of stockholder nominations for the election of Directors and of business
to be brought by stockholders before any meeting of the stockholders of the Bank shall be given
in the manner provided in the Bylaws of the Bank.

Article VI -C
Directors

A. Classes of Directors. The Directors shall be divided into three classes, as nearly
equal in number as reasonably possible. The term of office of the first class shall expire at the
first annual meeting of stockholders, the term of office of the second class shall expire at the
annual meeting of stockholders one year thereafter and the term of office of the third class shall
expire at the annual meeting of stockholders two years thereafter, with each Director to hold
office until his or her successor shall have been duly elected and qualified. At each annual
meeting of stockholders following such initial classification and election, Directors elected to
succeed those Directors whose terms expire shall be elected for a term of office to expire at the
third succeeding annual meeting of stockholders after their election with each Director to hold
office until his or her successor shall have been duly elected and qualified.

B. Vacancies. The newly created directorships resulting from any increase in the
authorized number of Directors or any vacancies in the Board of Directors resulting from death,
resignation, retirement, disqualification, removal from office or other cause may be filled only by
a majority vote of the Directors then in office, though less than a quorum, and Directors so
chosen shall hold office for a term expiring at the annual meeting of stockholders at which the
term of office of the class to which they have been chosen expires. No decrease in the number of
Directors constituting the Board of Directors shall shorten the term of any incumbent Director.

C. Removal of Directors. Any Director, or the entire Board of Directors, may be


removed from office at any time, but only for cause and only by the affirmative vote of the
holders of at least two-thirds of the voting power of all of the then -outstanding shares of capital
stock of the Bank entitled to vote generally in the election of Directors. A Director may be
removed for cause by the Directors by a vote of two-thirds of the Directors then in office.

661857.1
D. Increase of Authorized Shares. A majority of the entire Board of Directors then in
office, without action by the stockholders, may amend the Articles of Organization to increase or
decrease the aggregate number of shares of stock or the number of shares of stock of any class
that the Bank has authority to issue.

Article VI -D
Amendment of Bylaws

The Board of Directors is expressly empowered to adopt, amend or repeal Bylaws of the
Bank. Any adoption, amendment or repeal of the Bylaws of the Bank by the Board of Directors
shall require the approval of a majority of the Directors then in office. The stockholders shall
also have power to adopt, amend or repeal the Bylaws of the Bank; provided, however, that, in
addition to any vote of the holders of any class or series of stock of this Bank required by law or
by these Articles of Organization, the affirmative vote of the holders of at least two-thirds of the
voting power of all of the then -outstanding shares of the capital stock of the Bank entitled to vote
thereon, voting together as a single class, shall be required to adopt, amend or repeal any
provisions of the Bylaws of the Bank.

Article VI -E
Evaluation of Certain Business Combinations

The Board of Directors of the Bank, when evaluating any offer to: (A) make a tender or
exchange offer for any equity security of the Bank; (B) merge or consolidate the Bank with
another corporation or entity; or (C) purchase or otherwise acquire all or substantially all of the
properties and assets of the Bank, may, in connection with the exercise of its judgment in
determining what is in the best interest of the Bank and its stockholders, give due consideration
to all relevant factors, including, without limitation, those factors that Directors of any subsidiary
of the Bank may consider in evaluating any action that may result in a change or potential
change in the control of the subsidiary, and the social and economic effect of acceptance of such
offer: on the Bank's present and future customers and employees and those of its subsidiaries; on
the communities in which the Bank and its subsidiaries operate or are located; and on the ability
of the Bank to fulfill its corporate objective as a commercial bank under applicable laws and
regulations.

Article VI -F
Indemnification

A. The Bank shall indemnify its Directors, officers and employees, whether serving
the Bank or at its request any other entity, to the full extent required or permitted by the
Massachusetts General Laws now or hereafter in force, including the advance of expenses under
the procedures and to the full extent permitted by law. Without limiting the generality of the
foregoing, the Bank shall indemnify its directors, officers and employees to the full extent
permitted by Mass. General Law Chapter 156D, Section 8.51 and Mass. General Law Chapter
156D, Section 8.56, all in accordance with the applicable provisions of Mass. General Law
Chapter 156D or any successor business corporation act in effect in the Commonwealth of

661857.1
Massachusetts. The foregoing rights of indemnification shall not be exclusive of any other rights
to which those seeking indemnification may be entitled. The Board of Directors shall take such
action as is necessary to carry out these indemnification provisions and is expressly empowered
to adopt, approve, and amend from time to time such bylaws, resolutions, or contracts
implementing such provisions or such further indemnification arrangements as may be permitted
by law. No amendment of the Articles of Organization of the Bank or repeal of any of its
provisions shall limit or eliminate the right to indemnification provided hereunder with respect to
acts or omissions occurring prior to such amendment or repeal.

B. The rights to indemnification and to the advancement of expenses conferred in


this Article VI -E shall not be exclusive of any other right which any person may have or
hereafter acquire under any statute, the Bank's Articles of Organization, bylaws, agreement, vote
of stockholders or disinterested Directors or otherwise.

C. The Bank may maintain insurance, at its expense, to protect itself and any
Director, officer, employee or agent of the Bank or another corporation, partnership, joint
venture, trust or other enterprise against any expense, liability or loss, whether or not the Bank
would have the power to indemnify such person against such expense, liability or loss under the
Massachusetts General Laws.

D. The Bank may, to the extent authorized from time to time by the Board of
Directors, grant rights to indemnification and to the advancement of expenses to any employee
or agent of the Bank to the fullest extent of the provisions of this Article VI -E with respect to the
indemnification and advancement of expenses of directors and officers of the Bank.

Article VI -G
Limitation on Officers' and Directors' Liability

To the full extent permitted by law, no Director or officer shall have personal liability to
the Bank for monetary damages for breach of his or her fiduciary duty as a Director or officer
notwithstanding any provision of law imposing such liability, provided that this provision shall
not eliminate or limit the liability of a Director or officer (a) for any breach of the Director's or
officer's duty of loyalty to the Bank or its stockholders, (b) for acts or omissions not in good
faith or which involved intentional misconduct or a knowing violation of law, (c) for improper
distributions under Mass. General Law Chapter 156D, Section 6.40 or (d) for any transaction
from which the Director or officer derived an improper personal benefit. No amendment of the
Articles of Organization of the Bank or repeal of any of its provisions shall limit or eliminate the
limitation on liability provided to Directors and officers hereunder with respect to any act or
omission occurring prior to such amendment or repeal.

Article VI -H
First Meeting of Incorporators

The First Meeting of Incorporators was held at (a/p.m.) on


, 20 .

661857.1
Article VI -I
Agreement of Association

A true copy of the Agreement of Association is attached to these Articles of


Organization.

Article VI -J
Amendment of Articles of Organization

Subject to Section D of Article V1 -C of these Articles of Organization, no amendment,


additional, repeal, alteration, change or repeal of the Articles of Organization shall be made,
unless the same is first approved by the Board of Directors by the affirmative vote of a majority
of the Directors then in office, and thereafter approved by the stockholders by the affirmative
vote of at least two-thirds of the total votes eligible to be cast in the election of Directors.
However, no amendment, addition, or change to, or alteration or repeal of Article IV, Articles
V1 -A through VI -G, or this Article VI -.1 shall be made unless such action is approved by the
affirmative vote of the holders of record of at least eighty percent (80%) of each class of capital
stock of the Bank entitled to vote thereon.

661857.1
AGREEMENT OF ASSOCIATION

NEW VALLEY BANK & TRUST

WE, whose names are hereto subscribed, do, by this Agreement associate ourselves with the
intention of forming a corporation according to the provisions of M.G.L. c. 172, as amended.

THE CORPORATION shall be known as NEW VALLEY BANK & TRUST. Its principal
office shall be located in the City of Springfield, Massachusetts.

THE CORPORATION is formed for the purpose of conducting and carrying on the business of a
trust company in the Commonwealth of Massachusetts and transacting any and all business
which such trust companies are authorized and empowered to transact under any and all of the
General Laws of the Commonwealth of Massachusetts, with all of the powers and privileges and
subject to all of the duties, restrictions and liabilities set forth in said Laws.

THE CORPORATION'S authorized capital stock shall consist of a maximum of Fifty Thousand
(50,000) shares of Common Stock having a par value of One Hundred Dollars and Zero Cents
($100.00) per share and an original selling price of One Thousand Dollars and Zero Cents
($1,000.00) per share and One Thousand Five Hundred (1,500) shares of Class A Common
Stock having a par value of Zero Dollars and Twenty Five Cents ($0.25) per share and an
original selling price of Zero Dollars and Twenty Five Cents ($0.25) per share. The minimum
amount of the Corporation's initial issued capital stock shall be $2,500,375 consisting of Twenty
Five Thousand (25,000) shares of Common Stock and One Thousand Five Hundred (1,500)
shares of Class A Common Stock. The Corporation's initial capitalization shall also include a
Capital Surplus Account of $11,250,000 and an Undivided Profits Account of $11,250,000. In
the event capital is acquired in excess of the minimum set forth herein the number of shares
issued and the amounts allocated to the Capital Surplus Account and Undivided Profits Account
shall be adjusted accordingly. The respective rights, preferences and privileges of the Common
Stock and the Class A Common Stock are as follows:

1. DIVIDENDS

The Board of Directors of the Corporation may from time to time, out of funds legally
available therefor, declare a cash dividend payable on the then outstanding shares of
Common Stock. No dividend shall be declared and paid on the Class A Common Stock.

2. LIQUIDATION, DISSOLUTION OR WINDING UP

(a) Treatment at Liquidation. Dissolution or Winding Up. In the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary, the
holders of Common Stock shall be entitled to be paid first before any sums shall be
paid or assets distributed among the holders of Class A Common Stock, out of the
assets of the Corporation available for distribution to holders of the Corporation's
stock of all classes, an amount equal to $1,000 per share of Common Stock (which
amount shall be subject to equitable adjustment whenever there shall occur a stock

661862.2
split, combination, reclassification or other similar event involving the Common
Stock. If the assets of the Corporation shall be insufficient to permit the payment in
full to the holders of the Common Stock of the amount thus distributable, then the
entire assets of the Corporation available for such distribution shall be distributed
ratably amount the holders of the Common Stock. After the payment or distribution
to the holders of the Common Stock of the full preferential amount aforesaid, the
holders of the Common Stock and the Class A Common Stock shall be entitled to
receive ratably all the remaining assets of the Corporation, with distributions to the
holders of the Common Stock and the Class A Common Stock to be based on the
number of shares of Common Stock into which such shares of the Class A Commons
Stock are then convertible (assuming for this purpose that the conditions of Section 4
below have been met).

(b) Distributions other than Cash. Whenever the distribution provided for in this Section
2 shall be payable in property other than cash, the value of such distribution shall be
the fair market value of such property as determined in good faith by the Board of
Directors of the Corporation.

3. VOTING POWER.

Except as otherwise expressly provided herein or as required by law, the holders of


shares of Class A Common Stock shall have no voting rights whatsoever, all such rights
being reserved to the holders of shares of Common Stock.

4. CLASS A COMMON STOCK CONVERSION RIGHTS.

(a) Conditions to Conversion. The shares of Class A Common Stock shall be converted
into shares of Common Stock. Each share of Class A Common Stock shall be
convertible into one (1) fully paid and non -assessable share of Common Stock
(subject to equitable adjustment for any stock split, combination, reclassification or
other similar event involving the Common Stock). Such shares of Class A Common
Stock shall be converted upon the occurrence of the following events: 20 percent of
the shares of Class A Common Stock in the hands of each holder shall be eligible for
conversion into shares of Common Stock during each of the first five (5) complete
fiscal years of the Corporation if, as a result of the conversion of such shares of Class
A Common Stock, the book value of the shares of the Common Stock of the
Corporation purchased pursuant to its initial private offering would not be reduced
following the conversion of the Class A Common Stock eligible for conversion to
Common Stock below an amount equal to the original purchase price for the
Common Stock plus 4 percent annual return thereon, compounded annually. All
holders of Class A Common Stock eligible for conversion into shares of Common
Stock shall participate in any such conversion on a pro rata basis and in the event the
Class A Common Stock eligible for conversion cannot be converted into Common
Stock because of the restriction against any decrease in the book value of the
Common Stock sold by the Corporation pursuant to its initial private offering, all
such Class A Common Stock shall retain its eligibility for conversion until ninety

661862.2
(90) days after the end of the 10th completed fiscal year of the Corporation, subject to
the continuing restriction against reduction in the book value of the Corporation's
Common Stock as a result of the conversion of Class A Common Stock. In the event
of any proposed public offering of the Common Stock of the Corporation, or sale of
the Corporation, all of the issued and outstanding Class A Common Stock shall
become eligible for conversion to Common Stock immediately prior to any such
public offering or sale.

Upon the conversion of Class A Common Stock, the holders thereof shall surrender
the certificate representing such shares at the office of the Corporation or of any
transfer agent for the Common Stock. Thereupon, there shall be issued and delivered
to such holder, promptly at such office and in his name as shown on such surrendered
certificate or certificates, a certificate or certificates for the number of shares of
Common Stock into which the shares of Class A Common Stock surrendered were
convertible on the date on which such conversion occurred. The Corporation shall
not be obligated to issue certificates evidencing such shares of Common Stock upon
conversion unless the certificate representing the share of Class A Common Stock
being converted are either delivered to the Corporation or any transfer agent, as
hereinafter provided, or the holder notified the Corporation or any transfer agent, as
hereinafter provided, that such certificates have been lost, stolen or destroyed and
executes an agreement satisfactory to the Corporation to indemnify the Corporation
from any loss incurred by it in connection therewith.

(b) Payment or adjustment shall be made upon conversion on account of any dividends
declared but not yet paid on the Common Stock issued upon such conversion.

(c) Conversion of eligible shares may be deferred by the holder thereof until ninety (90)
days after the completion of the 10th completed fiscal year of the Corporation.

(d) Notwithstanding the foregoing, no shares of Common Stock shall be issued upon
conversion of shares of Class A Common Stock, exception in compliance with all
applicable provides of M.G.L. c. 172, as amended.

(e) JEFFREY SULLIVAN shall receive 400 shares of Class A Common Stock.

(f) JAMES GARVEY shall receive 400 shares of Class A Common Stock.

(g) FRANK P. FITZGERALD shall receive 700 shares of Class A Common Stock.

5. RESTRICTIONS AND LIMITATIONS ON CLASS A COMMON STOCK

No share or shares of Class A Common Stock acquired by the Corporation by reason of


redemption, purchase, conversion or otherwise shall be reissued and all shares shall be
cancelled, retired and eliminated from the shares which the Corporation shall be
authorized to issue.

661862.2
6. EQUITY INCENTIVE PLAN

The Corporation shall reserve that number of shares of Common Stock equal to ten
(10%) percent of the total number of shares of Common Stock purchased pursuant to its
initial private offering for issuance as part of an equity incentive plan to be established by
the Board of Directors of the Corporation (the "Equity Incentive Plan"). The Equity
Incentive Plan shall provide senior management of the Corporation with the opportunity
to acquire equity in the Corporation consisting of shares of Common Stock upon the
terms and conditions set forth in the Equity Incentive Plan, which shall be structured in a
manner that provides a meaningful incentive for senior management of the Corporation to
carry out successfully the business of the Corporation and generate net earnings for the
benefit of the stockholders of the Corporation. The Equity Incentive Plan may include
the grant of options to purchase the Common Stock of the Corporation, vesting
provisions with respect to benefits provided to senior management of the Corporation
pursuant to the Equity Incentive Plan and such other provisions as may be necessary or
appropriate, all as determined by the Board of Directors of the Corporation.

7. FOUNDER INVESTOR WARRANTS

The Corporation is obligated to issue at the same time that the initial private offering of
the Common Stock of the Corporation closes and subscriptions are accepted by the
Corporation, warrants to certain founder investors of the Corporation pursuant to a
Founder Investor Warrant Agreement by New Valley Founders, LLC, which has been
formed by the Incorporator to organize the Corporation, in favor of founder investors (the
"Founder Warrant Agreement"). The Founder Warrant Agreement shall be assigned to
the Corporation and the Corporation shall assume all obligations pursuant to the Founder
Warrant Agreement. Holders of warrants that are the subject of the Founder Warrant
Agreement are entitled to exercise warrants to purchase shares of Common Stock of the
Corporation during the twenty (20) year period beginning upon the closing with respect
to the initial private offering of shares of the Common Stock of the Corporation at an
exercise price of One Thousand ($1,000.00) Dollars per share, subject to certain
provisions of the Founder Warrant Agreement that may shorten the period of time that
the warrants remain outstanding.

Each of the subscribers hereto shall be an Incorporator of the Corporation, pursuant to


M.G.L. c. 172, as amended. Each of the subscribers hereto agrees to take the number of
shares of the Corporation's Capital Stock set forth opposite his signature below.

FRANK P. FITZGERALD is hereby designated as the Incorporator who shall have the
responsibility for calling the first meeting of the Incorporators and serving each
Incorporator with timely notice of said meeting purchase to M.G.L. c. 172, as amended.

6618622
IN WITNESS WHEREOF, we have hereunto subscriber our names, residences, post
office addresses and the number of shares of stock agreed to be taken by each subscriber
hero this day of , 2018.

REMAINDER OF PAGE LEFT BLANK INTENTIONALLY

661862.2
Name and Signature City or Town of Post Office Number of
Residence Address Shares of Stock
Agreed to be
Taken

Wilbraham 50
Frank P. Fitzgerald

Springfield 50
J. Jeffrey Sullivan

East 50
James Garvey Longmeadow

Springfield 50
Lamont Clemons

Longmeadow 50
Rocco J. Falcone ll

50
Frank M. Antonacci, Jr.

Longmeadow 50
Aaron Goodman

Longmeadow 50
Sarah Maggi-Moran

Wilbraham 50
Peter Martins

50

Westfield

661862.2
Jeffrey A. Amanti

50
Guy Antonacci

Longmeadow 50
Andrea Cataldo

50
Frank Colaccino

Ellington, CT 50
Mathieu D'Amour

50
Timothy M. Lamotte

Wilbraham 50
Derek Salema

West Springfield 50
James E. Balise

50
Jerome Gagliarducci, Jr.

East 50
Dennis M. Murphy Longmeadow

East 50
James M. Quinn Longmeadow

50

Wilbraham
Michael Quinn

661862.2
BYLAWS OF
NEW VALLEY BANK & TRUST

ARTICLE I

Organization

Section 1.1. Name. The name of the Bank shall be New Valley Bank & Trust (the
'Bank"). The main office of the Bank shall be at , Springfield,
Massachusetts, or such other location as the Board of Directors may designate, subject to
change as authorized by law. The Bank shall conduct the business of a trust company
and shall have and may exercise all the powers, privileges and authority, express, implied
and incidental, now or hereafter conferred by applicable law.

ARTICLE II

Stockholders

Section 2.1. Annual Meeting. An annual meeting of the stockholders, for the election of
Directors and for the transaction of such other business as may properly come before the
meeting, shall be held at such place, on such date, and at such time as the Board of Directors
shall each year fix, which date shall be within months subsequent to the later
of the date of incorporation or the last annual meeting of stockholders.

Section 2.2. Special Meetings. Special meetings of the stockholders for any purpose or
purposes may be called at any time only by the Chairman of the Board, Vice Chairman,
the President or by a majority of the Directors then in office and shall be called by the
Chairman of the Board, Vice Chairman, the President or the Secretary if the holders of at
least 25% of all votes entitled to be cast on any issue to be Considered at the special
meeting sign, date and deliver to the Bank's Secretary one or more written demands for the
meeting describing the purpose for which it is to be held. Only those matters set forth in
the call of the special meeting may be considered or acted upon at such special meeting,
unless otherwise provided by law.

Section 2.3. Stockholder Lists. At least ten (10) days before each meeting of stockholders, a
complete list of the stockholders entitled to vote at such meeting, arranged in alphabetical order,
with the address of each and number of voting shares held by each, shall be prepared by the
officer or agent having charge of the stock transfer books. For a period of ten (10) days prior to
the meeting, the list shall be kept on file at the principal banking office of the Bank and shall be
subject to inspection by any stockholder at any time during usual business hours. The list shall
also be produced and kept open at the time and place of the meeting and shall be subject to the

1
inspection by any stockholder during the whole time of the meeting. The original stock transfer
books shall be prima facie evidence as to who are the stockholders entitled to examine such list
or transfer book or to vote at any such meeting of stockholders.

Section 2.4. Conduct ofMeetings. Annual and special meetings shall be conducted by the
Chairman of the annual or special meeting in accordance with the written procedures agreed
to by the Board of Directors. The Board of Di rectors shall designate, when present, either the
Chairman of the Board, the Vice Chairman or other designee to preside at such meetings.

Section 2.5. Notice of Meetings. Written notice by the Bank's Secretary stating the date,
time and place, and purpose or purposes of such meeting shall be delivered no fewer than
seven (7) nor more than sixty (60) days before the meeting to each stockholder entitled to
vote at such meeting, by mailing, postage prepaid, to such stockholder at the stockholder's
address as it appears on the stock transfer books of the Ban k. When any stockholders'
meeting, either annual or special, is adjourned for thirty (30) days or more, notice of the
adjourned meeting shall be given as in the case of an original meeting. It shall not be necessary
to give any notice of the time and place of any meeting adjourned for less than thirty (30)daysor of
the business to be transacted thereat, otherthan an announcement at the meeting at which such
adjournment is taken.

Section 2.6. Waiver of Notice. Any stockholder may waive notice of any .meeting beforeorafter
the meeting. The waivermust be in writing, signed by thestockholder, and delivered to the Bank
for inclusion in the minutes or filing with the corporate records. A stockholder's attendance, in
person or by proxy, at a meeting (a) waives objection to lack of notice or defective notice of the
meeting, unless the stockholder or to the stockholder's proxy at the beginning of the meeting
objects to holding the meeting or transacting business thereat, and (b) waives objection to
consideration of a particular matter at the meeting that is not within the purpose or purposes
described in the meeting notice, unless the stockholder or the stockholder's proxy objects to
considering the matter before it is voted upon.

Section 2.7. Adjournments. Any meeting of stockholders may adjourn from time to time to
reconvene at the same or some other place, and notice need not be given of any such
adjournment meeting if the time, date and place thereof are announced at the meeting at which
the adjournment is taken. At the adjourned meeting, any business may be transacted which
might have been transacted at the original meeting. If the adjournment is for more than thirty
(30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at
the meeting.

Section 2.8. Quorum. A majority of the outstanding shares of capital stock of the Bank entitled
to vote, represented in person or by proxy, shall constitute a quorum at a meeting of stockholders. If
less than a quorum is present at a meeting, a majority of shares so represented may adjourn the
meeting from time to time and the meeting may be held as adjourned without further notice, except
as provided in Section 2.4. At such adjourned meeting at which a quorum shall bepresent or
represented, any business may be transacted which might have been .transacted at the meeting _as
originally noticed. The stockholders present at a duly constituted meeting may continue to transact
business until adjournment notwithstanding the withdrawal ofenough stockholders to leave less
than aquorum.

Section 2.9. Voling and Proxies. Each stockholder shall be entitled to cast one vote for each share
of stock held as of the record date, unless otherwise provided by law or by the Articles of
Organization. A majority of the shares voted at a meeting of stockholders shall be sufficient to
take or authorize action upon any matter which may properly come before the meeting, unless
otherwise provided by applicable law or regulation, the Bank's Articles of Organization or these
Bylaws, except that directors shall be elected by a plurality of the votes cast by the shares entitled to
vote in the election at a meeting at which a quorum is present. Stockholders of record may vote
either in person or by written proxy dated not more than six (6) months before the meeting named
therein. Proxies shall be filed with the Secretary at the meeting, orany adjournment thereof, before
being voted. Proxies solicited on behalf of the management shall be voted as directed by the
stockholder or, in the absence of such direction, as determined by a majority of the Board of
Directors. Except as otherwise limited therein, proxies shall entitle the persons authorized thereby
to vote at any adjournment of such meeting, but they shall not be valid after final adjournment of
such meeting.

Section 2.10. Votingof Shares in the Name of Two or More Persons. When ownership stands in the
name of two or more persons, in the absence of written directions to the Bank to the contrary, at
any meeting of the stockholders of the Bank, any one or more of such stockholders may cast, in
person or by proxy, all votes to which such ownership is entitled: In the event an attempt is made to
cast conflicting votes, in person or by proxy, bythe several persons in whose names shares of stock
stand, the vote or votes to which those persons are entitled shall be cast as directed by a majority of those
holding such stock and.present in person orbyproxy at such meeting, and then each person in whose
names shares o f stock stand shall be entitled to vote the shares in question proportionally.

Section 2.11. Voting ofShares by Certain Holders. Shares standing in the name of another
corporation may be voted by any officer, agent or proxy as the bylaws of such corporation may
prescribe, or, in the absence of such provision, as the board ofdirectors ofsuch corporation may
determine. Shares held by an administrator, executor, guardian orconservator may be voted by him or
her, either in person orbyproxy, without a transferofsuch shares into his orher name. Shares standing
in the name ofa trustee may be voted by him or her, either in person orbyproxy, but no trustee shall be
entitled to vote shares held by him orherwithout a transfer ofsuch shares into his orhername. Shares
held in trust in an IRA orKeogh Account, however, may be voted by the Bank if no other instructions
are received. Shares standing in the name ofa receiver may be voted by such receiver, and shares held
by orunder the control ofa receiver may be voted by such receiver without the transfer thereof into his
or her name if authority to do so is contained in an appropriate order of the court or other public authority
by which such receiver was appointed. A shareholder whose shares are pledged shall be entitled to vote
such s hares until the shares have been transferred into the name of the pledgee, and thereafter the
pledgee shall be entitled to vote the shares so transferred.

Section 2.12. Action without Meeting. Any action to be taken at any annual or special meeting of
stockholders may be taken without a meeting ifall stockholders entitled to vote on the matter consent to
the action in writing and the written consents are filed with the records of the meeting of stockholders.
Such consents shall be treated for all purposes as a vote at a meeting.

3
Section 2.13. Record Date. For the purpose of determining stockholders entitled to notice of or to vote
at any meeting of stockholders or any adjournment, or stockholders entitled to receive payment of any
dividend, or in order to make a determination of stockholders for any other purpose, the Board of
Directors shall fix in advance a date as the record date forany such determination of stockholders.
Suchdate in any case shall Benot more than seventy (70) days prior to thedate on which the particular
action requiring such determination ofstockholders, is to be taken. When a determination of
stockholders entitled to vote at any meeting of stockholders has been made as provided in this Section
2.11, such determination shall apply to any adjournment thereof, unless the meeting is adjourned to a
date more than 120days after the date fixed for the original meeting.

Section 2.14. New Business. Any new business to be taken up at the annual meeting shall be stated in
writing and filed with the Secretary at least 40days before the date ofthe annual meeting;provided,
however, that in the event that less than 50 days' notice or prior public disclosure of the date of the
meeting is given or made to stockholders, notice by the stockholder must be received not later than the
close of business on the 10th day following the day on which notice of the date of the annual
meeting was mailed or such public disclosure was made, and all business so stated, proposed and
filed shall be considered at the annual meeting so long as such business relates to a proper subject
matter for stockholder action. Any stockholder may make any otherproposal at the annual
meeting and the same may be discussed and considered, but unless stated in writing and filed with
the Secretary at least 40 days before the meeting, such proposal shall be laid over for action at an
adjourned, special or annual meeting of the stockholders taking place 30 days or more thereafter.
A stockholder's notice to the Secretary shall set forth as to each matter the stockholder proposes to
bring before the annual meeting (a) a brief description of the proposal desired to be brought before
the annual meeting and (b) the name and address of such stockholder and the class and number of
shares of the Bank which are owned of record or beneficially by such stockholder. This provision
shall not prevent the consideration and approval or disapproval at the annual meeting of reports of
officers, Directors and committees; but in connection with such reports, no new business shall be
acted upon at such annual meeting unless stated and filed asherein provided.

Section 2.15. Nominating Committee. The Board of Directors shall act as a nominating committee
for selecting the management nominees for election as Directors. Except in the case of a nominee
substituted as a result of the death or other incapacity of a management nominee the nominating
committee shall deliver written nominations to the Secretary at least 20 days prior to the date of
the annual meeting. No nominations for Directors except those made by the nominating
committee shall be voted upon at the annual meeting unless other nominations by stockholders are
made in writing and delivered to the Secretary of the Bank at least 40 days prior to the date of the
annual meeting;provided, however, that in the event that less than 50 days' notice orprior public
disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder
must be received not later than the close of business on the 10th day following the day on which
notice of the date of the annual meeting was mailed or such public disclosure was made.

Section 2.16. Order of Business. At each meeting of the stockholders and except as otherwise set
forth by resolution of the Board of Directors, one of the following officers of the Bank, in the order
in which they are listed (and in the absence of the first, the next, and so on), shall serve as chairman
of the meeting: the Chairman of the Board, the Vice -Chair of the Board, if there is one, the chief

4
executive officer, the president, a vice president(s) (in the order determined by the Board if more than
one) and the secretary. The order of business at each such meeting shall be as determined by the
chairman of the meeting, who shall have the right and authority to prescribe such rules, regulations
and procedures and to do all such acts and things as are necessary or desirable for the proper conduct
of the meeting, including, without limitation, the establishment of procedures for the maintenance of
order and safety, limitations on the time allotted to questions or comments on the affairs of the Bank,
restrictions on entry to such meeting after the time prescribed for the commencement thereof, and the
opening and closing of the voting polls. The secretary or an assistant secretary, or if such officers
shall not be present, the appointee of the chairman of the meeting, shall act as secretary of the
meeting.

2.17. Inspectors. The Board of Directors may, in advance of any stockholders' meeting, appoint one
or more inspectors to act at the meeting or any adjournment thereof. If inspectors are not appointed
by the Board or shall fail to qualify, the chairman of the meeting may, and at the request of any
stockholder entitled to voter thereat, shall, make such appointment. Each inspector, before
discharging any of the duties of inspector, shall take an oath faithfully to execute such duties at such
meeting with strict impartiality and according to the best of the inspector's ability. The inspector(s)
shall determine the validity and effect of proxies, receive votes or consents, count and tabulate votes
or consents, determine the result, and do such other acts as are proper to conduct the election or vote.
If there are three or more inspectors, the act of a majority shall govern.

ARTICLE III

Directors

Section 3.L Powers. The business and affairs of the Bank shall be managed by a Board of Directors
which may exercise all the powers of the Bank and do all lawful acts and things that are not by
statute, the Articles of Organization or these Bylaws, directed or required to be exercised or
done by the stockholders. In the event of a vacancy in the Board of Directors, the remaining
Directors, except as otherwise provided by law, may exercise the powers of the full Board.

Section 32. Composition and Term. The Board of Directors shall consist of not less than seven
(7)and no more than fifteen (15) members, as fixed by the Board of Directors of the Bank by
resolution, and shall be divided into three classes as nearly equal in number as possible. The term
of office of the first class shall expire at the first annual meeting of stockholders, the term of
office of the second class shall expire at the annual meeting of the stockholders one ((1) year
thereafter and the term of office of the third class shall expire at the annual meeting of
stockholders two (2) years thereafter, with each director to hold office until his or her successors
shall have been duly elected and qualified. At each annual meeting of stockholders following
such initial classification, and except as otherwise provided in these Bylaws, the members of the
Board of Directors shall be elected by the stockholders at each annual meeting fora term of three
(3) years and until their successors are elected and qualified.

Section 33. Qualification. A majority of the directors shall be citizens of the Commonwealth
of Massachusetts and residents therein . Each Director shall own, in the Director's own fight and
free of any lien or encumbrance, co on stock, either of the Bank or of a company owning seventy -

5
five per cent of the stock of the Bank, having a par value, or a fairmarketvalue on the date the person
became a Director, of not less than ten thousand dollars and zero cents ($10,000.00). Any
Director who ceases to be the owner of the required number of shares of stock, or who becomes in
any other manner disqualified, shall vacate office forthwith. Each Director, when appointed or
elected, shall take an oath that he or she will faithfully perform the duties of the office and that he
or she is the owner, in his or her own right and free of any lien or encumbrance, of the amount of
stock required by this Section 3.3. The oath shall be taken before a notary public or justice of the
peace, who isnot an officer of the Bank, and a record of the oath shall be made a part of the
records of the Bank. No person 75 years or older shall be eligible for election, reelection,
appointment or reappointment to the Board of Directors. The term of office of a Director of the
Bank shall expire upon the date of the annual meeting of stockholders immediately following
the date on which the Director becomes age 75. Notwithstanding the foregoing, however, an
individual who is 70 years of age or older but has not yet achieved the age of 75 as of the date
upon which the Bank opens for business to the public shall be permitted to continue to serve as a
Director after such individual achieves the age of 75, subject to the term limit hereafter set forth.
Specifically, notwithstanding the qualifications described above, no Director shall be eligible for
election, reelection, appointment or reappointment to the Board of Directors following such
Director's twelfth cumulative year of service on the Board of Directors.

Section3.4. Resignation. Any Director may resign at any time by delivering his or her written
resignation to the Board of Directors or the Chairman of the Board. Such resignation shall be
effective upon receipt thereof by the Board of Directors or the Chairman of the Board, unless it is
specified to be effective at a later time.

Section 3.5. Vacancies. Any vacancy occurring on the Board of Directors may be filled in
accordance with the Articles of Organization.

Section 3.6. Compensation. The members of the Board of Directors and the members of either
standing or special committees may be allowed such compensation for attendance at meetings as
the Board of Di rectors may determine.

Section 3.7. Regular Meetings. Unless otherwise provided by the Board of Directors, a regular
meeting of the Board of Directors shall be held without other notice than this Bylaw on the same date
and at the same place as the ann ual meeting of stockholders, or the special meeting held in lieu
thereof, following such meeting of stockholders. The Board of Directors may provide by
resolution, the time, date and place for the holding of regular meetings without other notice than
such resolution. There shall be regular meetings of the Board of Di rectors at a place or
places fixed from time to time by the Board of Directors. The Board of Directors shall
meet at intervals of not more than one (1) month.

Section 3.8. Special Meetings. Special meetings of the Board of Directors may be called
by or at the request of the Chairman of the Board, the Vice Chairman, the President, or a
majority of the Directors. The persons authorized to call special meetings of the Board of
Di rectors may fix the time, date and place for holding any special meeting of the Board of
Di rectors called by such persons.

6
Section 3.9. Notice of Meetings. Regular meetings of the Board of Directors may be held
without notice. The person or persons calling a special meeting of the Board of Directors
shall, at least 48 hours before the meeting, give notice thereof by any usual means of
communication. Such notice need not specify the purpose for which the meeting is called.
Any Director may waive notice of any meeting by a writing executed by the Director either
before or after the meeting and filed with the records of the meeting. The attendance of a
Director at a meeting shall constitute a waiver of notice of such meeting, except where a
Di rector attends a meeting for the express purpose of objecting to the transaction of any
business because such meeting is not lawfully called or convened. Neither the business to
be transacted at, nor the purpose of, any meeting of the Board of Directors need be specified
in the notice or waiver of notice of such meeting.

Section 3.10. Quorum. A majority of the number of Directors fixed by resolution of the
Board of Directors in accordance with Section 3.2 of this Article III shall constitute a
quorum for the transaction of business at any meeting of the Board of Directors, but if less
than a quorum is present at a meeting, a majority of the directors present may adjourn the
meeting from time to time. Notice of any adjourned meeting shall be given in the same
manner as prescribed by Section 3.9.

Section 3.11. Manner of Acting. The act of the majority of the Di rectors present at a
meeting at which a quorum is present shall be the act of the Board of Di rectors, unless a
greater number is prescribed by applicable law, by the Articles of Organization or by these
Bylaws.

Section 3.12. Action by Consent. Any action required or permitted to be taken by the
Board of Directors at any meeting may be taken without a meeting if a consent in writing,
setting forth the action so taken, shall be signed by all of the Directors then in office. Such
written consents shall be filed with the records of the meetings of the Board of Directors
and shall be treated for all purposes as a vote at a meeting of the Board of Directors.

Section 3.13. Presumption of Assent. A Di rector of the Bank who is present at a meeting
of the Board of Directors at which action on any Bank matter is taken shall be presumed to
have assented to the action taken unless the Director' s dissent or abstention has been entered
in the minutes of the meeting or unless he has filed a written dissent to such action with the
person acting as the Secretary of the meeting before the adjournment thereof or has forwarded
such dissent by registered mail to the Secretary of the Bank within five (5) days after the date such
dissenting Director receives a copy of the minutes of the meeting. Such right to dissent shall not
apply to a Director who voted in favor of such action.

Section 3.14. Committees. The Board of Directors, by vote of a majority of all of the Directors
then in office, shall elect from its number an Executive Committee, and may elect such other
committees as it deems appropriate, and may delegate to such committees some or all of its
powers except those which by law, by the Articles of Organization or by these Bylaws may not be
delegated. Any committees shall consist of not less than three (3) members of the Board of
Directors. Except as the Board of Directors may otherwise determine, any committee may make
rules for the conduct of its business, but unless otherwise provided by the Board of Directors or in

7
such rules, its business shall be conducted so far as possible in the same manner as is provided by
these Bylaws for the Board of Directors. All members of committees shall hold such offices at the
pleasure of the Board of Directors. The Board of Directors may abolish any committee (other than
the Executive Committee) at any time, subject to applicable law. Any committee to which the
Board of Directors delegates any of its powers or duties shall keep records of its meetings and shall
report its action to the Board of Directors. The Board of Directors shall have power to rescind any
action of any committee, but no such rescission shall have retroactive effect.

Section 3.15. Manner of Participation. Members of the Board of Directors may participate in
meetings of the Board by means of conference telephone or similar communications equipment
by which all persons participating in the meeting can hear each other. Such participation shall
constitute presence in person.

Section 3.16. Integrity ofDirectors. A person is riot qualified to serve as a Director or nominate
anyone to serve as a Director if he or she: ( 1) is under indictment for, or has ever been convicted
of, a criminal offense involving dishonesty or breach of trust and the penalty for such offense
could be imprisonment for more than one year, or (2) is a person against who a banking agency has
issued a cease and desist order for conduct involving dishonesty or breach of trust and that order is
final and not subject to appeal, or (3) has been found either by a regulatory agency whose decision
is final and not subject to appeal or by a court to have (i) breached a fiduciary duty involving
personal profit or (ii) committed a willful violation of any law, rule or regulation governing
banking, securities, commodities or insurance, or any final cease and desist order issued by a
banking, securities, commodities or insurance regulatory agency.

Section 3.17. Compensation of Directors. The Board of Directors shall have authority to
determine, from time to time, the amount of compensation, if any, which shall be paid to its
members for their services as directors and as members of committees. The Board shall also
have power in its discretion to provide for and to pay to directors rendering services to the Bank
not ordinarily rendered by directors as such, special compensation appropriate to the value of
such services as determined by the Board from time to time. In addition, the directors may be
paid their expenses. Nothing herein contained shall be construed to preclude any director from
serving the Bank in any other capacity and receiving compensation therefor.

ARTICLE IV

Officers

Section 4.1. Positions. The officers of the Bank shall consist of a President, a
Treasurer, a Secretary, and such other officers, including without limitation a Chairman of the
Board, a Vice Chairman, a Secretary and one or more Vice President , as the Board ofDirectors may
determine. The officers of the Bank are not required to be stockholders of the Bank or residents
of the Commonwealth of Massachusetts.

Section 42. Election. The President, the Treasurer and all officers at the level of Vice President
and above shall be elected by the Board of Directors annually at their first meeting following
the annual meeting of stockholders. The Secretary shall be elected by the stockholders at their

8
annual meeting ofstockholders orat a special meeting ofthe stockholders. All otherofficers may be
elected by the Board ofDirectors or appointed by the President.

Section 4.3. Qualification. Any two or more offices may be held by any person. The Secretary
shall be a resident ofMassachusetts unless the Bank has a resident agent appointed for the purpose of
service of process. Any officer may be required by the Board of Directors to give bond for the
faithful performance of the officer's .duties in such amount and with such sureties as the Board of
Directors may determine.

Section 4.4. Tenure. Except as otherwise provided by law, by the Articles of Organization or
by these Bylaws, the President and Treasurer shall hold office until the first meeting of the Board of
Directors following the next annual meeting of stockholders and until their respective successors are
chosen and qualified. The Secretary shall hold office until the next annual meeting of stockholders
and until the Secretary's successor is chosen and qualified. All otherofficers shall hold office until
the first meeting of the Board of Directors following the next annual meeting of stockholders and
until theirsuccessors are chosen and qualified, or forsuch shorter terms the and of Directors
may fix at the time such officers are chosen.

Section 4.5. Resignation and Removal. Any officer may resign by delivering his or her
written resignation to the Bank at its main office addressed to the President or Secretary. Such
resignation shall be effective upon receipt thereofby the President or Secretary, unless it isspecified
to be effective at a later time. Any officer may be removed at any time with or without cause by the
Board of Directors.

Section 46. Chairman of the Board. The Board of Directors may annually elect a Chairman of
the Board. Unless the Board of Directors otherwise provides, in absence of the Chairman, the
Vice Chairman of the Bank or other designee shall preside, when present, at all meetings of
stockholders and -the Board ofDirectors.

Section 4.7. President and VicePresident. ThePresident and any Vice President shall have such
powers and shall perform such duties as the Board of Directors may from time to time designate.

Section 4.8. Treasurer. The Treasurer shall, subject to the direction of the Board of Directors,
have general charge of the financial affairs ofthe Bank and shall cause to be kept accurate books of
account. 'TheTreasurer shall have custody ofall funds, securities, and valuable documents of the
Bank, except as the Board of Directors may otherwise provide. The Treasurer shall also perform
such other duties as the Board of Directors may from time to time designate and be
responsible for the performance of all acts and duties required of the Bank under applicable law as
such provisions are applicable to the Treasurer or to the Bank. Any Vice Treasurer and any
Assistant Treasurer shall have such powers and perform such dutiesasthe Board ofDirectors may
from time to time designate.

Section 4.9. Secretary. The Secretary shall keep a record of the meetings of the Board of
Directors. In the absence of the Secretary, any Assistant Secretary, the Clerk and any Assistant
Clerk, a Temporary Secretary shall bedesignated by thepersonpresiding at such meeting toperform
the duties of the Secretary.

9
Section 4.10. Other Powers and Duties. Subject to these Bylaws, each officer of the Bank shall
have in addition to the duties and powers specifically set forth in these Bylaws, such duties and
powers as are customarily incident to his or her office, and such duties and powers as may be
designated from time to time by the Board of Directors.

ARTICLE V

Capital Stock

Section 5.1. Capital Stock. The Bank's capital stock shall consist of a maximum of Fifty
Thousand (50,000) shares of Common Stock having a par value of One Hundred Dollars and Zero
Cents ($100.00) per share and an original selling price of One Thousand Dollars and Zero Cents
($1,000.00) per share and One Thousand Five Hundred (1,500) shares of Class A Common Stock
having a par value of Zero Dollars and Twenty Five Cents ($0.25) per share and an original selling
price of $0.25 per share. The minimum amount of the Bank's initial issued capital stock shall be
$2,500,375 consisting of 25,000 shares of said Common Stock and 1500 shares of said Class A
Common Stock. The Bank's initial capitalization shall also include a Capital Surplus Account of
$11,250,000 and an Undivided Profits Account of $11,250,000. In the event capital is acquired in
excess of the minimum set forth herein the number of shares issued and the amounts allocated to
the Capital Surplus and Undivided Profits Account shall be adjusted accordingly.

Section 5.2. Dividends. The Board of Directors of the Bank may from time to time, out of funds
legally available therefor, declares a cash dividend payable on the then outstanding shares of
Common Stock. No dividend shall be declared and paid on the Class A Common Stock.

Section 5.3. Treatment at Liquidation, Dissolution or Winding Up. In the event of any liquidation,
dissolution or winding up of the Bank, whether voluntary or involuntary, the holders of Common
Stock shall be entitled to be paid first before any sums shall be paid or assets distributed among the
holders of Class A Common Stock, out of the assets of the Bank available for distribution to
holders of the Bank's' stock of all classes, an amount equal to $1,000 per share of Common Stock
(which amount shall be subject to equitable adjustment whenever there shall occur a stock split,
combination, reclassification or other similar event involving the Common Stock. If the assets of
the Bank shall be insufficient to permit the payment in full to the holders of the Common Stock of
the amount thus distributable, then the entire assets of the Bank available for such distribution shall
be distributed ratably amount the holders of the Common Stock. After the payment or distribution
to the holders of the Common Stock of the full preferential amount aforesaid, the holders of the
Common Stock and the Class A Common Stock shall be entitled to receive ratably all the
remaining assets of the Bank, with distributions to the holders of the Common Stock and the Class
A Common Stock to be based on the number of shares of Common Stock into which such shares of
the Class A Commons Stock are then convertible (assuming for this purpose that the conditions of
Section 4 have been met).

Section 5.4. Distributions other than Cash. Whenever the distribution provided for in this Section
5.3 above shall be payable in property other than cash, the value of such distribution shall be the
fair market value of such property as determined in good faith by the Board of Directors of the

10
Bank.

Section 5.5. Voting Power. Except as otherwise expressly provided herein or as required by law,
the holders of shares of Class A Common Stock shall have no voting rights whatsoever, all such
rights being reserved to the holders of shares of Common Stock.

Section 5.6. Conversion Rights. The shares of Class A Common Stock shall be converted into
shares of Common Stock. Each share of Class A Common Stock shall be convertible into one (1)
fully paid and non -assessable share of Common Stock (subject to equitable adjustment for any
stock split, combination, reclassification or other similar event involving the Common Stock).
Such shares of Class A Common Stock shall be converted upon the occurrence of the following
events: 20 percent of the shares of Class A Common Stock in the hands of each holder shall be
eligible for conversion into shares of Common Stock during each of the first five (5) complete
fiscal years of the Bank if, as a result of the conversion of such shares of Class A Common Stock,
the book value of the shares of the Common Stock of the Bank purchased pursuant to its initial
private offering would not be reduced following the conversion of the Class A Common Stock
eligible for conversion to Common Stock below an amount equal to the original purchase price for
the Common Stock plus 4 percent annual return thereon, compounded annually. All holders of
Class A Common Stock eligible for conversion into shares of Common Stock shall participate in
any such conversion on a pro rata basis, and in the event the Class A Common Stock eligible for
conversion cannot be converted into Common Stock because of the restriction against any decrease
in the book value of the Common Stock sold by the Bank pursuant to its initial private offering, all
such Class A Common Stock shall retain its eligibility for conversion until ninety (90) days after
the end of the 10th completed fiscal year of the Bank, subject to the continuing restriction against
reduction in the book value of the Bank's Common Stock as a result of the conversion of Class A
Common Stock. In the event of any proposed public offering of the Common Stock of the Bank,
or sale of the Bank, all of the issued and outstanding Class A Common Stock shall become eligible
for conversion to Common Stock immediately prior to any such public offering or sale.

Section 5.7. Consequence of Conversion. Upon the conversion of Class A Common Stock, the
holders thereof shall surrender the certificate representing such shares at the office of the Bank or of
any transfer agent for the Common Stock. Thereupon, there shall be issued and delivered to such
holder, promptly at such office and in his name as shown on such surrendered certificate or
certificates, a certificate or certificates for the number of shares of Common Stock into which the
shares of Class A Common Stock surrendered were convertible on the date on which such
conversion occurred. The Bank shall not be obligated to issue certificates evidence such shares of
Common Stock upon conversion unless the certificate representing the share of Class A Common
Stock being converted are either delivered to the Bank or any transfer agent, as hereinafter
provided, or the holder notified the Bank or any transfer agent, as hereinafter provided, that such
certificates have been lost, stolen or destroyed and executes an agreement satisfactory to the Bank
to indemnify the Bank from any loss incurred by in connection therewith. Payment or adjustment
shall be made upon conversion on account of any dividends declared but not yet paid on the
Common Stock issued upon such conversion. Conversion of eligible shares may be deferred by the
holder thereof until ninety (90) days after the completion of the 10th completed fiscal year of the
Bank. Notwithstanding the foregoing, no shares of Common Stock shall be issued upon

e 11
conversion of shares of Class A Common Stock, exception in compliance with all applicable
provides of M.G.L. c. 172, as amended.

Section 5.8. Restrictions and Limitations. No share or shares of Class A Common Stock acquired
by the Bank by reason of redemption, purchase, conversion or otherwise shall be reissued and all
shares shall be cancelled, retired and eliminated from the shares which the Bank shall be authorized
to issue.

Section 5.9. Transfers. Transfer of shares of capital stock of the Bank shall be made only on its
stock transfer books. Authority for such transfer shall be given only by the holder of record
thereof or by the holder's legal representative, who shall furnish proper evidence of such
authority, or by the holder's attorney thereunto authorized by power of attorney duly executed and
filed with the Bank. Such transfer shall be made only on surrender forcancellation of the certificate
for such shares. The person in whose name shares of capital stock stand on the books of the Bank
shall be deemed by the Bank to be the owner thereof for all purposes.

Section 5.10. Replacement ofCertificates. In case ofthe alleged Joss, destruction or mutilation of a
certificate of stock, a duplicate certificate may be issued in place thereof, upon such terms as the Board
of Directors may prescribe.

ARTICLE VI

Miscellaneous Provisions

Section 6.1. Fiscal Year. Except as otherwise determined by the Board of Directors, the fiscal
year of the Bank shall be the twelve months ending December 31st.

Section 6.2. Seal. The Board of Directors shall have the power to adopt and alter the seal of
the Bank.

Section 6.3. Execution ofInstruments. All deeds, leases, transfers, contracts, bonds, notes and
other instruments and obligations. to be entered into by the Bank in the ordinary course ofits business
without Board ofDi rectors action may be executed on behalfofthe Bank by the Chairman ofthe
Board, the President, any Vice President, Treasurer or, as the Board of Directors may authorize, any
other officer, employee or agent of the Bank.

Section 6.4. VotingofSecurities. Unless otherwise provided by the Board of Directors, the
Chairman ofthe Board, the President orany other officeror agent designated by the Board of
Directors may waive notice ofand act on behalfofthe Bank, orappo int another person orpersons to
act as proxy or attorney in fact for the Bank with or without discretionary power and/or power of
substitution, at any meeting of stockholders or shareholders of any other organization, any of whose
securities are held by the Bank.

Section 6.5. Insurance. To the extent consistent with applicable laws and regulations, the Bank may
purchase and maintain insurance or other arrangements on behalf of any person who is or was a

erI 12
director, officer, employee or agent of the Bank or who is or was serving at the request of the Bank as
a director, officer, partner, venture, proprietor, trustee, employee, agent or similar functionary of
another foreign or domestic trust company, partnership, joint venture, sole proprietorship, trust, other
enterprise, or employee benefit plan, against any liability asserted against him and incurred by him in
such a capacity or arising out of his status as such a person, whether or not the Bank would have the
power to indemnify him against that liability under the Articles of Organization or these Bylaws. If
the insurance or other arrangement is with a person or entity that is not regularly engaged in the
business of providing insurance coverage, the insurance or arrangement may provide for payment of
a liability with respect to which the Bank would not have the power to indemnify the person only if
including coverage for the additional liability has been approved by the stockholders of the Bank.
Without limiting the power of the Bank to procure or maintain any kind of insurance or other
arrangement, the Bank may, to the extent consistent with applicable laws and regulations, for the
benefit of persons indemnified by the Bank: (i) create a trust fund; (ii) establish any form of self-
insurance; or (iii) establish a letter of credit, guaranty, or surety arrangement.

The insurance or other arrangement may be procured, maintained, or established within the Bank or
with any other insurer or other person deemed appropriate by the Board of Directors regardless of
whether all or part of the stock or other securities of the insurer or other person are owned in whole or
in part by the Bank. In the absence of fraud, the judgment of the Board of Directors as to the terms
and conditions of the insurance or other arrangement and the identity of the insurer or other person
participating in an arrangement shall be conclusive and the insurance or arrangement shall not be
voidable and shall not subject the Directors approving the insurance or arrangement to liability, on
any ground, regardless of whether directors participating in the approval are beneficiaries of the
insurance or arrangement.

Section 6.6. Transactions Between the Bank and an Officer, Director or Shareholder. No contract or
other transaction between the Bank and any of its Directors, officers or any trust company or other
organization in which any of them are directly or indirectly interested, shall be void or voidable
solely by reason of the interest or relationship of such Director or officer if: (1) the material facts of
the relationship or interest of each such Director, officer or security holder are known or disclosed
(a) to the Board of Directors and it nevertheless authorizes or ratifies the contract or transaction by a
majority of the Directors present, each such interested Director to be counted in determining whether
a quorum is present but not in calculating the majority necessary to carry the vote; or (b) to the
stockholders and they nevertheless authorize or ratify the contract or transaction by a majority of the
shares present, each such interested person to be counted for quorum and voting purposes; or (ii) the
contract or transaction is fair to the Bank as of the time it is authorized or ratified by the Board of
Directors, or the stockholders.

Section 6.5. Resident Agent. The Board ofDirectors may appoint a resident agent upon .whom
legal process may be served in any action orproceeding against the Bank. Said resident agent shall be
either an individual who is a resident ofand has a business address in Massachusetts, a corporation
organized under the laws of the Commonwealth of Massachusetts, or acorporation organized under the
laws ofany other state of the United States, which has qualified to do business in, and has an office in
Massachusetts.

Section 6.6. Bank Records. The original, or attested copies, of the Articles of Organization,

,," 13
Bylaws and record of all meetings of the Directors or stockholders, and the stock and transfer records,
which shall contain the names of all stockholders and the record address and the amount ofstock held
by each, shal l be kept in Massachusetts at the main office ofthe Bank, °ratan office of its transfer
agent, Secretary orresident agent.

Section 6.7. Articles of Organization. All references in these Bylaws to the Articles of
Organization shall be deemed to refer to the Articles of Organization of the Bank, as amended and
in effect from time to time.

Section 6.8. Amendments. These Bylaws may be amended or repealed in the manner set forth in
the Articles of Organization.

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1. Overview

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Overview CRA Commitment . . .

The Bank's proposed management and board of directors are fully committed to servicing the community and
to becoming good corporate citizens.
This is evidenced by the community service background of both the proposed management and board of
directors.
As such they and the Bank are fully committed to the principles and objectives of the Community
Reinvestment Act.

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Bank classification and CRA Overview .. .

---.:11111111.11715111111MBENZBEMENI

Based on the financial projections for the Bank, it is anticipated that the Bank will be classified as a "Small
Bank" which means a small institution with assets of less than $313 million as of December 31 of both of the
prior two calendar years.
- This will be the focus of this CRA analysis for the De novo bank.
The Bank as a De novo with initially a single branch office and a limited service branch and projected
moderate growth for the first few years of operation, will be inherently limited in its ability to service a large
geographic area. While located in Springfield, MA, the Bank plans to fully serve its CRA assessment market
area.

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Small bank standards ...
Under the newly approved CRA regulations, an institution is considered a small bank if it meets the following
qualifications as of December 31 of either of the two previous years:
- Less than $313 million in total assets.
Under the CRA guidelines, small banks will be assessed under the following criteria:
1. The bank's loan -to -deposit ratio.
2. The percentage of loans and, as appropriate, other lending -related activities located in the bank's
assessment area.
3. The bank's record of lending to and, as appropriate, engaging in other lending -related activities for
borrowers of different income levels and businesses and farms of different sizes.
4. The geographic distribution of the bank's loans given its service area (examiners will perform the
geographic analysis and will consider all loans, not just those subject to HMDA).
5. The bank's record of taking action, if warranted, in response to written complaints about its CRA
performance.

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2. Assessment Area

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The assessment area .

Due to the size of the Bank, projected deposit gathering, projected loan production and the scope of its
activities, the Bank has delineated its Assessment Area to Hampden County, Massachusetts. The assessment
area was defined using numerous factors including the Bank's proposed lending area, natural geographic
boundaries and competitive situation.
- The Bank plans to track the assessment area through the de novo period and adjust as necessary.

The Bank's lending activities are expected to be concentrated primarily in the following CBSA/MD:

Counties Included

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The assessment area map by geographic income level (based on the 2015 census definitions) ...

Census Tract by Income Level

P N/A
Low
Moderate
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The assessment area has the following characteristics . . .

The Bank's assessment area is comprised of 103 census tracts. There are 21 low and 24 moderate income
census tracts within the assessment area, accounting for 43.69% of the total census tracts.

Tract Land
Income Level Count Area OA

N/A 0 0.00% 0.00 0.00%

Low 21. 20.39% 9.94 1.61%

Moderate 24 23.30% 26.04 4.22%


Middle 33 32.04% 309.31 50.17%
Upper 25 24.27% 271.21 43.99%
V
Total 103 100. 00% 616.50 100. 00%

Low & Moderate 45 43. 69% 35.98 5. 84%

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NOTE: This data is based off of the 2015 Census tract definitions.
Source: 2015 US Census
© 2017 - FinPro, Inc. 8
Assessment area characteristics cont'd

Although low and moderate income census tracts comprise 43.69% of the assessment area tracts, they
account for 40.04% of the population, 39.16% of the households, and 24.26% of the owner occupied housing
units.

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N/A 0 0.00 0 0 0 0.0% 0 0 0.0%


Low 21 9.94 68,614 26,291 55,109 80.3% 30,234 4,929 16.3%
Moderate 24 26.04 116,951 43,301 58,836 50.3% 47,750 22,250 46.6%
Middle 33 309.31 155,631 63,580 26,316 16.9% 67,219 45,820 68.2%
Upper 25 271.21 122,294 44,553 9,383 7.7% 46,460 39,046 84.0%
Total (median %) 103 616.50 463,490 177,725 149,644 32.3% 191,663 112,045 58.5%
Low& Moderate 45 35.98 185,565 69,592 113,945 61.4% 77,984 27,179 34.9%
as a % of:
N/A 0.00% 0.00% 0.00% 0.00% 0.00% F 0.00% 0.00% 0.00% 0.00%
Low 20.39% 1.61% 14.80% 14.79% 36.83% F 36.83% 15.77% 4.40% 4.40%
Moderate 23.30% 4.22% 25.23% 24.36% 39.32% 39.32% 24.91% 19.86% 19.86%
Middle 32.04% 50.17% 33.58% 35.77% 17.59% 17.59% 35.07% 40.89% 40.89%
Upper 24.27% 43.99% 26.39% 25.07% 6.27% F 6.27% 24.24% 34.85% 34.85%
Total 100.00% 100.00% 100.00% 100. 00% 100.00% r 100.00% 100.00% 100.00% 100.00%
Low& Moderate 43.69% 5.84% 40.04% 39.16% 76.14% 40.69% 24.26%

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Source: 2015 US Census 9
3. Performance Evaluation

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Performance evaluation - HMDA trends . . .

AIINSYNEM".,,;

The Home Mortgage Disclosure Act (HMDA) requires that banks report mortgage loan data annually. On
March 8, 1996 the FDIC released the joint examination procedures for monitoring compliance with the
revised CRA regulations. These guidelines call for the review of HMDA data as it applies to evaluating the
institution under the revised performance criteria. This section analyzes the peer HMDA data for 2016.
Peer lending levels establish a starting benchmark for evaluating future CRA performance of the Bank.

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HMDA activity within assessment area - peer comparison ...
Of all loans reported in the assessment area in 2016, 64.9% were originated, 19.7% were denied, and 15.4%
of applications were withdrawn.
The peer data includes all HMDA loans reported in the assessment area for 2016.

2016 HMDA Data - Disposition by Action


within the assessment area
HMDA Total
Count Balance
Originations 11,437 1,977,026
Denials 3,470 520,896
Not accpt/Withdrawn 2,720 463,845
Total 17,627 219611767
% of Total
Originations : ;, L, 0 .
66.8%
Denials 19.7% 17.6%
Withdrawls 15.4% 15.7%
Total 100.0% 100.0%

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Source: FFIEC HMDA Raw Data 12
HMDA activity by race - peer comparison ...
44.1?.;=2

The peer data includes all HMDA loans reported in the assessment area for 2016. As the following table
illustrates, 6.5% of loans originated or purchased were to minority borrowers, but the peer data was missing
race data for 22.7% of originations.
The benchmark for this ratio is determined by peer performance and the demographics of the assessment
area.

2016 HMDA Data - Originations by Race


within the assessment area
Minority HMDA Total
Pop Count Balance
White 313,846 8,090 1,343,720
Minority 149,644 747 118,709
No Data 0 2,600 514,597
Total 463,490 11,437 1,977,026
of Total
White 67.7% 70.7% 68.0%
ii
Minority .tom:. . `)/-'
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, < v' 6.5% . 6.0%
No Data 0.0% 22.7% 26.0%
Total 100.0% 100.0% 100.0%

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Source: FFIEC HMDA Raw Data 13
HMDA activity by borrower income - peer comparison . . .

The peer data includes all HMDA loans reported in the assessment area for 2016. As the
following table illustrates, 27.6% of all HMDA loans originated or purchased within the
assessment area were to low and moderate income borrowers.
The benchmark for this ratio is determined by peer performance and the demographics of the
assessment area.

2016 HMDA Data - Originations by Borrower Inc Level


within the assessment area
Hhlds HMDA Total
Count Count Balance
N/A 0 1,945 415,264
Low 26,291 812 84,928
Moderate 43,301 2,349 314,767
Middle 63,580 2,649 416,440
Upper 44,553 3,682 745,627
Total 177,725 11,437 1,977,026
Low & Mod 69,592 3,161 399,695
% of Total
N/A 0.0% 17.0% 21.0%
Low 14.8% 7.1% 4.3%
Moderate 24.4% 20.5% 15.9%
Middle 35.8% 23.2% 21.1%
Upper 25.1% 32.2% 37.7%
Total 100.0% 100.0% 100.0%
Low & Mod "'" -' 2°/ -'.0/01 20.2%

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Source: FFIEC HMDA Raw Data 14
HMDA activity by geographic income - peer comparison .. .

The peer data includes all HMDA loans reported in the assessment area for 2016. As the
following table illustrates, 24.7% of all HMDA loans originated or purchased within the
assessment area are within low and moderate income geographies.
The benchmark for this ratio is determined by peer performance and the demographics of the
assessment area.

2016 HMDA Data - Originations by Tract Inc Level


within the assessment area
Owner Occ HMDA Total
Hous Units Count Balance
N/A 0 0 0
Low 4,929 508 89,803
Moderate 22,250 2,315 331,900
Middle 45,820 4,530 713,690
Upper 39,046 4,084 841,633
Total 112,045 11,437 1,977,026
Low & Mod 27,179 2,823 421,703
% of Total
N/A 0.0% 0.0% 0.0%
Low 4.4% 4.4% 4.5%
Moderate 19.9% 20.2% 16.8%
Middle 40.9% 39.6% 36.1%
Upper 34.8% 35.7% 42.6%
Total 100.0% 100.0% 100.0%
Low & Mod 77-77 Y47i9v - ' '24 7/021.3%

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Source: FFIEC HMDA Raw Data 15
Performance evaluation - Small,Business loan trends ...
All state member banks, state nonmember banks, national banks, and savings associations, except small
institutions, are subject to CRA data collection and reporting requirements (Small Business and Farm Loan
data). A small institution is a bank or thrift that, as of December 31 of either of the prior two calendar years,
had total assets of less than $313 million.
Although the Bank is not required to collect and report CRA data, the review of CRA data can be used to
evaluate the institution under the revised performance criteria. This section analyzes the peer Small Business
lending levels in the assessment area for 2015.
Peer lending levels establish a starting benchmark for evaluating CRA performance of the Bank.

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Performance evaluation - CRA Small Business Loan Data, peer distribution .. .

Total Small Business Originations - in Assessment Area


Small Business Loans Loans To:
To Business w/Gross Total Avg
Total Small
Amt >$100,000 Annual Revenue <41 Small Small
Busn
Amt <4100,000 <=$250,000 Amt >$250,000 million Busn Busn
Count Balance Count Balance CoUnt Balance Count Balance Count Balance Balance
Pr r r r
All Loans as a % of Total 91% 31% 4% 18% * 4% 51% 50% 33% 100% 100%

Loans by Geographic Income Level


N/A 0 0 0 0 0 0 0 0 0 0 0

Low 8,032 117,630 420 75,312 399 204,313 4,286 123,815 8,851 397,255 . 45
Moderate 2,318 31,244 140 25,386 92 42,852 1,206 40,802 2,550 99,482 39
Middle 4,266 66,520 214 38,462 232 122,806 2,302 67,636 4,712 227,788 48
Upper 3,828 54,064 114 19,606 132 72,340 2,228 56,616 4,074 146,010 36
Total 18,444 269,458 888 158,766 855 442,311 10,022 288,869 20,187 870,535 43
Low & Moderate 10,350 148,874 560 100,698 491 247,165 5,492 164,617 11,401 496;737 44
as a % of total originations
N/A 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Low 43.5% 43.7% 47.3% 47.4% 46.7% 46.2% 42.8% 42.9% 43.8% 45.6%
Moderate 12.6% 11.6% 15.8% 16.0% 10.8% 9.7% 12.0% 14.1% 12.6% 11.4%
Middle 23.1% 24.7% 24.1% 24.2% 27.1% 27.8% 23.0% 23.4% 23.3% 26.2%
Upper 20.8% 20.1% 12.8% 12.3% 15.4% 16.4% 22.2% 19.6% 20.2% 16.8%
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Low & Moderate 56.1% 55.2% 63.1% 63.4% 57.4% 55.9% 54.81)/0 57.0% 56.5% 57.1%

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Based on all small business loan originations reported within the assessment area in 2015 .

91% of all small business loan originations reported in the assessment area in 2015 were with a balance of
$100,000 or less.
50% of all small business loan originations reported in the assessment area in 2015 were to businesses with
gross annual revenues of $1,000,000 or less.
56.5% of all small business loan originations reported in the assessment area in 2015 were to businesses
located in low and moderate income geographies.

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CRA Activities . . .

In addition to providing loans to all economic segments of community in compliance with its CRA objectives,
the bank will utilize all available tools at its disposal to improve the community and contribute to the quality
of life in the community. These tools will include but are not limited to;
Qualified Investment -A lawful investment, deposit, membership share or grant that has as its primary
purpose community development.
Community development loans - originated or purchased by consortia in which the Bank will participate or by
third parties in which the Bank will invest. A loan that has as its primary purpose community development;
not been reported as a home mortgage, small business, small farm or consumer loan, unless it is a multifamily
dwelling loan; and benefits the bank's assessment area(s) or a broader statewide or regional area that
includes the bank's assessment area.

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CRA Activities continued .

WSW
Community Development - Encompasses affordable housing (including multifamily rental housing) for LMI
individuals; community services targeted to LMI individuals; activities that promote economic development
by financing businesses that meet the size eligibility standards of the Small Business Administration's
Development Company or Small Business Investment Company programs or have gross annual revenues of $1
million or less; or activities that revitalize or stabilize LMI geographies.
Community Development Service - Services that has as its primary purpose community development, is
related to the provision of financial services, has not been considered in the evaluation of the bank's retail
banking services, benefits the bank's assessment area(s) or a broader statewide or regional area that includes
the bank's assessment area and has not been claimed by other affiliated institutions.
Active involvement in philanthropic organizations- providing charitable services to the community.

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Appendix A - CRA Overview

This section provides and overview of a few of the key issues as they relate to CRA and the evaluation of the Bank's
performance.

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The following definitions have been established for measurement purposes ...
7±101151222Er-ew2

Assessment Area(s) - One or more of the geographic area(s) that is delineated by the bank and used by the
regulatory agency in evaluating the bank's record of helping to meet the credit needs of its community. It
must, in general, consist of one or more MSAs or one or more contiguous political subdivisions, such as
counties, cities or towns. It must include geographies in which the bank has its main office, branches and
deposit -taking ATMs, as well as the surrounding geographies in which the bank has originated or purchased a
substantial portion of its loans. A bank may adjust the boundaries of its assessment area(s) to include only the
portion of a political subdivision that it reasonably can be expected to serve. An assessment area must consist
only of whole geographies, may not reflect illegal discrimination, may not arbitrarily exclude LMI geographies
and may not extend substantially beyond a CMSA boundary or beyond a state boundary, unless the
assessment area is located in a multistate MSA.
Community Development - Encompasses affordable housing (including multifamily rental housing) for LMI
individuals; community services targeted to LMI individuals; activities that promote economic development
by financing businesses or farms that meet the size eligibility standards of the Small Business Administration's
Development Company or Small Business Investment Company programs or have gross annual revenues of $1
million or less; or activities that revitalize or stabilize LMI geographies.
Community Development Loan -A loan that has as its primary purpose community development; (except
for wholesale or limited purpose banks) has not been reported or collected by the bank or an affiliate for
consideration in the bank's assessment as a home mortgage, small business, small farm or consumer loan,
unless it is a multifamily dwelling loan; and benefits the bank's assessment area(s) or a broader statewide or
regional area that includes the bank's assessment area.

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Definitions (continued) . . .

Community Development Service -A service that has as its primary purpose community development, is
related to the provision of financial services, has not been considered in the evaluation of the bank's retail
banking services, benefits the bank's assessment area(s) or a broader statewide or regional area that includes
the bank's assessment area and has not been claimed by other affiliated institutions.
Geography -A census tract or a block numbering area delineated by the U.S. Bureau of the Census in the
most recent decennial census.
Income Level - Geography
- Low -Income - Median family income is less than 50 percent of the area median income
- Moderate -Income - Median family income at least 50 percent and less than 80 percent of the area
median income
- Middle -Income - Median family income is at least 80 percent and less than 120 percent of the area
median income
- Upper -Income - Median family income is 120 percent or more of the area median income
Income Level - Individual
- Low -Income - Less than 50 percent of the area median income
Moderate -Income - At least 50 percent and less than 80 percent of the area median income
- Middle -Income - At least 80 percent and less than 120 percent of the area median income
Upper -Income - At least 120 percent or more of area median income

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Definitions (continued) .

Performance Context -A bank's performance is judged in the context of information about the bank and its
assessment area(s), including
demographic data on median income levels, distribution of household income, nature of housing stock,
housing costs and other relevant data
lending, investment and service opportunities
- the bank's product offerings and business strategy, capacity and constraints, past performance and the
performance of similarly situated lenders
the bank's public file and any written comments about the bank's CRA performance
any other relevant information
Qualified Investment -A lawful investment, deposit, membership share or grant that has as its primary
purpose community development.
Limited Purpose Bank -A bank that offers only a narrow product line, such as credit card or motor vehicle
loans, to a regional or broader market and has received designation as a limited purpose bank from its
supervisory agency.
Wholesale Bank -A bank that is not in the business of extending home mortgage, small business, farm or
consumer loans to retail customers and has received designation as a wholesale bank from its supervisory
agency.

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And each institution must maintain a file, updated annually on April 1, which is readily available for
public inspection and includes ...

Quarterly loan -to -deposit ratios (small institutions)


Any written comments received from the public concerning its efforts to meet the credit needs of the
community, and the bank's responses to any comments received
A copy of the public sections of the bank's most recent CRA performance evaluation
A list of bank branches, respective street addresses and census tracts
A list of branches opened or closed during the current and previous two calendar years
A list of services generally offered at the branches
A map of the assessment area(s) showing the boundaries of the area and the census tracts within the area
Any other information the bank feels would be beneficial to the public in understanding how it meets the
credit needs of its assessment area(s)
If a HMDA bank, two years of HMDA data

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The Small bank standards ...
An institution is considered a small bank if it meets the following qualifications as of December 31 of either of
the two previous years:
- Less than $313 million in total assets.
Under the CRA guidelines, small banks will be assessed under the following criteria:
1. The bank's loan -to -deposit ratio.
2. The percentage of loans and, as appropriate, other lending -related activities located in the bank's
assessment area.
3. The bank's record of lending to and, as appropriate, engaging in other lending -related activities for
borrowers of different income levels and businesses and farms of different sizes.
4. The geographic distribution of the bank's loans given its service area (examiners will perform the
geographic analysis and will consider all loans, not just those subject to HMDA).
5. The bank's record, of taking action, if warranted, in response to written complaints about its CRA
performance.

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Small Bank - rating guidelines . . .

F. 9m.f.KSI

45,,,,
.. °'°,4 1
- , Satisfactory ,,. NeedOci,:Impir,9;i,4_,, - - ----4J Suliptantial :
4 '- ' \,-41,1' ' ' ' '''',- - ., ,,,', , ,,- ,,,.. , , ; . , :, f, , '4,i,- '. ''' :-.' ''' ' ''': `'; ''* ' ' '' °- t .., ' Noncomriliarice,
-..
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if.-,,... ..,:,,,,, . ,..1.,,,,,,,,, ,. - .% itt; it?.4, ': . '-, 0 - ,,, . ° .i. ;, .-1_,.:,:-.:c1-,;s ,12 ...q.,....,..-. .,,,- ':Wc.i.A.-
'' ,.,. ,;.,\,,- '. Nei 4. et:40.' :'..' J

Loan -to -Deposit Ratio MORE THAN REASONABLE given REASONABLE LESS THAN UNREASONABLE
the bank's size, financial condition REASONABLE
and assessment area(s) credit
needs.

Assessment Area(s) A SUBSTANTIAL MAJORITY of MAJORITY MAJORITY SUBSTANTIAL


Concentration loans and other lending related MAJORITY
activities are IN the assessment IN OUTSIDE OUTSIDE
area(s).

Borrower's Profile EXCELLENT penetration among REASONABLE POOR VERY POOR


individuals of different income levels
and business of different sizes.
Geographic Distribution of The geographic distribution of loans REASONABLE POOR VERY POOR
Loans reflects EXCELLENT penetration .
throughout assessment area(s).
Response to Substantiated EXCELLENT record of serving credit APPROPRIATE INADEQUATE UNRESPONSIVE
Complaints needs of low-income individuals and
areas and very small businesses.
Investments The investment record ENHANCES N/A N/A N/A
credit availability in assessment
area(s). ' .

Services Record of providing branches and/or N/A N/A N/A


other services ENHANCES credit
availability in assessment area(s).

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On July 19, 2005, The federal banking agencies approved final Community Reinvestment Act (CRA)
rules ...
..MENIEESECM911

The final rules:


Raise the small bank asset size.threshold to assets of less than $1 billion without regard to holding
company affiliation
Exempt banks with assets between $250 million and $1 billion, referred to as "intermediate small
banks," from the data reporting obligations the current CRA regulations imposed on banks with assets
larger than $250 million.
Subject intermediate small banks to a two-part test (retail lending and community development)
instead of the current three-part test (lending, investment, and service). For intermediate small banks,
a satisfactory community development rating, as well as a satisfactory retail lending rating, would be
necessary for an overall rating of "Satisfactory".
Revise the definition of "community development" for all banks of any size to make it more responsive
to the community development needs of rural areas.
The rules, which are being issued jointly by the Board of Governors of the Federal Reserve System, the
Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, took effect
on September 1, 2005.

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