How can we help your bank?

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<ul><li> 1. How can we help your bank?Grant Thornton LLP servicesto the industry</li></ul><p> 2. Contents 2 Regulatory compliance programs 4 Regulatory reform 6 Loan portfolio reviews and stress testing 7 Foreclosure reviews 8 Internal audit services10 Corporate governance and internal control12 Enterprise risk management13 Mergers and acquisitions16 Corporate advisory &amp; restructuring services17 Performance improvement18 Problem bank services19 Mortgage banking and securitization services20 Valuation services21 SSAE 16/SAS 70 reviews22 Forensic accounting and fraud investigations23 Tax26 Audit28 Accounting30 Grant Thornton resources31 Contact us32 About Grant Thornton 3. In an era of increased public scrutiny and complex financialBecause of this experience with financial institutions andreform and regulatory demands, banks, thrifts, credit unions industry organizations, we can help you assess issues that areand other financial institutions need straightforward business important to your bank. Moreover, we can provide you withguidance delivered ethically and professionally. practical insights to help you improve your overall strategy.At Grant Thornton LLP, our Audit, Tax and AdvisoryWe offer a full range of banking industry services, providingServices professionals are among the most experienced in personalized attention and the highest-quality service to publicthe industry; we have been serving bankers for more than 80and private banks around the world.years. Our dedicated Banking professionals bring unparalleledindustry knowledge and insight, while our accessibilityand responsiveness mean that relevant business guidance isprovided in a timely manner and that issues are addressedappropriately.We are also strategically committed to the industry. Ourprofessionals are involved in a variety of industry organizations,including ABA, ICBA, NACHA, RMA, MBA, Bank TaxInstitute, the AICPA and its Depository Institutions ExpertPanel, among others.We are strategically committed to the bankingindustry worldwide. Our professionals excel andtake pride in helping financial institutions with theircritical business needs.Jack KatzNational Managing Partner, Financial Services 4. Regulatory compliance programsWe can assist in the development of a complete compliance Fair lending complianceprogram, as well as keep you informed of emerging regulatoryWe can help your bank comply with fair lending regulations,developments and share best practices for establishing relatedincluding the Fair Housing Act and Equal Creditpolicies and procedures.Opportunity Act.Bank Secrecy Act/Anti-money laundering services Red Flags Rule complianceWe offer leading Bank Secrecy Act/Anti-Money Laundering Businesses are required to comply with the Red Flags Rule(BSA/AML) advisory services. Our Certified Anti-Money regulation (FTC 16 CFR 681) of the Fair and Accurate CreditLaundering Specialists (CAMS) provide assistance to regional, Transactions Act of 2003 (FACT Act), which aims to preventnational and international financial institutions, whether public identity theft. The Federal Trade Commission (FTC) nowor private. requires compliance from all businesses that meet its definitionOur BSA/AML practice also works with businesses and of a creditor. Any entity including a bank that allows agovernment institutions as they navigate the current regulatory customer to defer payment for goods or services is a creditorenvironment and develop comprehensive and effective BSA/under the rule.AML programs, including implementing Office of ForeignOur Red Flags compliance services are designed to gatherAsset Control (OFAC) sanctions programs. Our BSA/AMLthe information banks need to know in order to maintainservices include: compliance. Using a combination of automated surveys, BSA/AML compliance program developmentstructured interviews, and reviews of available documentation, Program assessment and review for recommended we can deliver the necessary information you need to evaluateenhancementsyour Red Flags compliance program. Independent program testing Look-back investigations as part of regulator-mandatedactions or internal requirements AML software readiness assessments Recommended reading Beginning Dec. 31, 2010, all companies that send invoices will need to have a red flags compliance strategy in place to help combat identity theft. The Red Flags Rule, a component of the Fair and Accurate Credit Transactions (FACT) Act signed into law in December 2003, requires that financial institutions and creditors implement a plan to identify, detect and respond to attempts to use stolen identity information. Read The Red Flags Rule: What you need to know to find out more about the rule and what to consider when forming a compliance strategy. Visit www.GrantThornton.com/redflags for more.2 How can we help your bank? 5. Regulation ABRegulation AB addresses three significant areas: Disclosures required to be made during the securities registration process Exchange Act reporting requirements for asset-backed securities Annual servicing assertion and accountants attestation report requirementsOur professionals have considerable experience advising entitieson the requirements of Regulation AB, as well as performing theservices required in order to issue an attestation report. How can we help your bank? 3 6. Regulatory reformThe Dodd-Frank Wall Street Reform and Consumer Protection Banks will receive updates on new developments from ourAct mandates sweeping changes across the banking industry. Financial Regulatory Reform Task Force and can also read aboutWe can help banks as they maintain compliance with heightenedthem on our online Financial Regulatory Reform Resourceregulatory requirements and related issues including:Center at www.GrantThornton.com/financialreform. Learn New disclosure and reporting requirementsmore about our numerous resources at the end of this document. Swaps trading regulations (especially for those designated as major swap participants) Spinning off of derivatives units onto broker-dealer affiliates (and related systems/procedures assessments) Regulatory examination readiness and remediation Volcker Rule (pertaining to proprietary trading and fund investments) Establishment of risk management committees Reporting responsibilities to the new Financial Stability Oversight Council for large banks Whistleblower rules New and enhanced compensation and governance oversight New or revised capital standards Recommended reading On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Act). The Act is significantly reshaping financial regulation in the United States. Our Financial Regulatory Reform Resource Center provides key information about the legislation, its effects and updates on new developments. Visit www.GrantThornton.com/financialreform.4 How can we help your bank? 7. Our team of dedicated professionals providea unique perspective on the issues financialinstitutions face in the current environment.We have the global resources to help meetyour needs on a broad range of industry-related matters, wherever you do business.Nichole JordanNational Banking and Securities Industry LeaderHow can we help your bank? 5 8. Loan portfolio reviews andstress testingRegulators now require many banks to stress test their loan Loan reviews are performed using our establishedportfolios using multiple economic scenarios. Our professionals methodology, which is consistent with current regulatorycan assist with modeling a variety of scenarios.objectives. We can tailor the scope of this review to fit your We can also help your bank conduct loan portfolio reviews, banks needs, or we can perform a full-scope assessment of yourperform remediation activities and train personnel. loan portfolio if necessary. Examples of loan reviews include thefollowing: Watch list review and assessment Review and assessment of insider loans and processes Sampling of loans by type and/or loan officer Review of the institutions top lending relationships Review of specific attributes of the loan portfolio, includingconcentrations6 How can we help your bank? 9. Foreclosure reviewsWe can assist banks by evaluating their foreclosure processesWe can assist with any remediation efforts, particularly forand controls and helping them address related accounting and public banks subject to SOX 404 and Federal Deposit Insurancetax planning issues. Our professionals can help banks applyCorporation Improvement Act (FDICIA) requirements, and wethe Federal Housing Finance Agency (FHFA)s foreclosurecan coordinate with other reviewers.process framework by conducting risk assessments to identify In addition, our foreclosure issues task force is monitoringdeficiencies in documentation. By choosing a third party tothis ever-changing situation and can keep our clients up to dateconduct a foreclosure review, banks can instill confidence and on emerging developments.thus minimize the possibility of conflicts with the FHFA orother regulators.Recommended readingMortgage foreclosures have been making headlines after regulators identified improper foreclosure proceedings for defaulted borrowers.Numerous investigations have been launched into whether homeowners have been subjected to improper foreclosures. Some bankshave temporarily halted their foreclosure proceedings in order to review their documentation and processes. This issue of Currency,Strengthening the foundation for foreclosures, explores current foreclosure issues, financial and regulatory issues, FHFA frameworkand next steps. Visit www.GrantThornton.com/financialservices to learn more.How can we help your bank? 7 10. Internal audit servicesOur internal audit services can help you backstop the internal Benefits of an internal audit include:controls that safeguard your banks valuable business assets and Increased efficiency, effectiveness and functionality of theprocesses, including data and IT systems. Our professionals can internal audit functionwork with you to assess your corporate-level risk, identify the Reduced costs of hiring, training and retaining qualityareas of greatest risk, and develop appropriate workplans and personnelaudit programs that you can use to mitigate those risks. Compliance with applicable laws and regulations Assessment of the risks associated with SOX as it pertains toFollowing are examples of the internal audit services we offer: internal controls Full outsourcing of internal audits Improved risk management, controls and governance Co-sourcing with the existing internal audit function processes Internal audit transformation Implementation of internal controls that help banks achieve IT auditing their goals and minimize surprises along the way Process mapping and process reviews Enhanced communication with the audit committee Operational audits Quality assurance reviews Internal control documentation and testing Specialized audits Startup and development advice Internal audit training8 How can we help your bank? 11. Staff augmentation Information technology audit servicesFor complex projects, we offer staff augmentation so yourBanks today depend upon information systems for nearly allbank will not have to hire additional full-time employeesaspects of their financial and operational functions. Accordingly,for temporary needs and special projects. Having externalthe security of this information is very important to a banksprofessionals conducting your internal audit will also provide fiscal and organizational health, as well as to its shareholders,a new perspective in assessing your operations and bring regulators and compliance examiners.technical knowledge to efficiently reach your project goals. StaffWith the aid of our IT services, your bank can protect itsaugmentation will also allow you time to interview potential data and overall system architecture from internal and externalcandidates to find the right person or people for your team. threats, while improving its overall IT functionality. Our teamStaff augmentation is a cost-effective alternative toof dedicated professionals can help your bank take stock oftemporarily adding staff or adding the wrong staff. Ourits current information security environment and develop andprofessionals can complement your internal staff byimplement best practices and optimal techniques.providing open communication, schedule flexibility and freshWe can offer you a variety of services, including businessrecommendations and insights.continuity planning, testing, solution selection, cyber security (network security), IT security, IT strategy, IT assessment, IT due diligence, and SAS 70/SSAE 16 reporting assistance.How can we help your bank? 9 12. Corporate governance andinternal controlPublic banks must comply with the financial disclosure and With experienced professionals that specialize in monitoringinternal control requirements of the Sarbanes-Oxley Act of 2002risks and controls, Grant Thornton facilitates constructive(SOX) and related SEC rules. Private banks preparing for aninteraction among your audit committee, managementIPO or seeking to improve their internal controls would also team, existing external auditor and internal audit group. Ourbenefit from SOX compliance. knowledgeable and accredited professionals help banks reap aGrant Thornton can help banks address their compliance number of benefits:needs and assist audit committees and boards of directors Effective evaluation, documentation and sign-off procedureswith the establishment of appropriate corporate governance to support managements design and operation of the internalprocedures. Related services include the following:control system Internal control documentation and evaluation services A foundation from which to start looking at enterprise-wideDocumentation of the internal control environment, testing risks, based on recognized COSO standardsand evaluation of control effectiveness, assessment of risks, Improved oversight by the audit committee and board ofremediation of inefficiencies, and recommendations for directorsimprovement and continuous monitoring. Increased efficiency, effectiveness and overall functionality of Board of directors/audit committee services the internal audit functionEffectiveness assessments, director education, whistleblower An industry-recognized framework and risk-basedprograms, evaluation of codes of conduct, and compensation methodologiesstructure reviews.Recommended readingIn the midst of economic recovery, a major factor in determining future success may lie in one key consideration: risk. Enterprise riskmanagement (ERM) helps align risk with strategy, although its implementation can be a daunting task. Find out what bank executivespolled for the 17th Bank Executive Survey view as major risks and how ERM can help manage them in this issue of Currency.Visit www.GrantThornton.com/financialservices for more.10 How can we help your bank? 13. C...</p>

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