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Examining Committee Report (Form 7) (Microsoft Word 2003 - North

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Examining Committee Report (Form 7) (Microsoft Word 2003 - North

    NC Commissioner of Banks

    Location: 316 W. Edenton Street, Raleigh, NC 27603

    Mail Address: 4309 Mail Service Center, Raleigh, NC 27699-4309

    Telephone: 919/733-3016 Fax: 919/733-6918 Internet: www.nccob.org

    EXAMINING COMMITTEE REPORT

    ( To be completed only if the examination was performed by a CPA firm. )

    To the Board of Directors of

     , N.C.

    We, the Examining Committee appointed by you to examine the assets and liabilities of the

    above named Bank and in compliance with Section 53-83 of the North Carolina General Statutes,

    do hereby certify that the examination was made at the close of business .

Management of the bank is responsible for the accuracy of the financial statements included with

    this report, which are prepared in accordance with generally accepted accounting principles.

    Additionally, management is responsible for establishing and maintaining an adequate internal

    control structure to safeguard the bank’s assets from material loss or misuse.

With the approval of the Board of Directors, the examination was performed by the following

    independent certified public accounting firm:

Name of Accounting Firm:

The following should be attached to this report:

    ? The independent accounting firm’s management letter

    ? The bank’s response to the management letter

    ? A copy of the bank’s annual report

(If the external audit was performed at the holding company level, remit the holding

    company's annual report, management letter, and the holding company's response.)

The Examining Committee of the bank acknowledges the review of the examination findings and

    recommendations made by the certified public accountants. The attached questionnaire has been

    completed.

Form 7 (Revised 07/08) 1 Forms\Banks\Form7.doc

    EXAMINING COMMITTEE REPORT

    (To be completed only if the examination was conducted by the Examining Committee.)

To the Board of Directors of ,

     , N.C.

    We, the Examining Committee appointed by you to examine the assets and liabilities of the

    above named Bank and in compliance with Section 53-83 of the North Carolina General Statutes,

    do hereby certify that the examination was made at the close of business .

Management of the bank is responsible for the accuracy of the financial statements included with

    this report, which are prepared in accordance with generally accepted accounting principles.

    Additionally, management is responsible for establishing and maintaining an adequate internal

    control structure to safeguard the bank’s assets from material loss or misuse.

The Examining Committee of the bank has elected to examine the assets and liabilities of the

    Bank with the assistance of the holding company’s Audit Department, the bank’s Audit

    Department, or the audit personnel of an affiliated financial institution.

The attached Statement of Condition on Schedule A and the questionnaire have been completed.

Form 7 (Revised 07/08) 2 Forms\Banks\Form7.doc

    EXAMINING COMMITTEE REPORT

    Schedule A

     (To be completed only if the examination was conducted by the Examining Committee.)

     Amount

     ( 000 )

    ASSETS

    Total loans and leases .......................................................................................... Less: Reserve for loan and lease losses................................................................

     Net loans and leases .................................................................................... Interest-bearing balances ...................................................................................... Federal funds sold and securities purchased under agreements to resell ............. Securities .............................................................................................................. Cash and noninterest-bearing balances ................................................................ Bank premises and fixed assets, including capitalized leases .............................. Other real estate owned ........................................................................................ Intangible assets ................................................................................................... Investments in unconsolidated subsidiaries and associated companies ............... Other assets .......................................................................................................... TOTAL ASSETS................................................................................................

LIABILITIES

    Demand deposits .................................................................................................. Time and savings deposits ................................................................................... Federal funds purchased and securities sold under agreements to repurchase .... Other borrowed money ........................................................................................ Subordinated notes and debentures ...................................................................... Other liabilities..................................................................................................... TOTAL LIABILITIES ......................................................................................

EQUITY CAPITAL

    Perpetual preferred stock (No. shares outstanding - ) ............................... Common stock (No. shares authorized - )

     (No. shares outstanding - ) ................................................................ Surplus ................................................................................................................. Undivided profits ................................................................................................. Unrealized gains/losses on available-for-sale securities ...................................... Reserve for contingencies and other capital reserves .......................................... TOTAL EQUITY CAPITAL ............................................................................

    TOTAL LIABILITIES AND EQUITY CAPITAL ........................................

Form 7 (Revised 07/08) 3 Forms\Banks\Form7.doc

    EXAMINING COMMITTEE REPORT

    Questionnaire

     (To be completed by all banks.)

INTERNAL CONTROL QUESTIONS

     1. Are bank policies reviewed and approved by the Board of Directors annually and updated

    as needed? Yes , No

     2. Are audit procedures in effect to ensure compliance with Board approved policies and

    procedures for all banking locations and departments? Yes , No

     3. Does the Executive Committee or the Board of Directors approve the following:

     New Loans Yes , No

     Investments purchased Yes , No

     All Charge-Offs Yes , No

     Detailed Income/Expense Reports Yes , No

     4. Are duties adequately segregated in the loan functions and in the bookkeeping functions?

     Yes , No

     5. Does the bank perform continual loan documentation reviews to ensure all necessary loan

    documents are on file and current, including the following:

     Collateral Appraisals Yes , No

     Title Certificates Yes , No

     Financial Statements Yes , No

     Corporate Resolutions Yes , No

     Partnership Declarations Yes , No

     Insurance Policies Yes , No

     6. Is a loan grading system and Watch List maintained? Yes , No

     7. Is the Allowance for Loan and Lease Losses reviewed at least quarterly? Yes , No

     8. Is a Liability Ledger properly maintained? Yes , No

     9. Are general ledger accounts, including income and expense accounts, reviewed and

    approved for activity, proper posting, and reasonableness? Yes , No

     10. Are reconcilements of accounts properly reviewed and approved? Yes , No

     11. Is a daily record of cash items maintained? Yes , No

Form 7 (Revised 07/08) 4 Forms\Banks\Form7.doc

    EXAMINING COMMITTEE REPORT

    Questionnaire (continued)

    Complete the following information on the Bank’s Financial Institution Bond. Name and Address of Company:

    Financial Institution Bond: Amount , Deductible Excess Employee Dishonesty: Amount , Deductible Expiration Date:

Complete the following information on the Bank's Independent Accounting Firm.

    Name of Accounting Firm:

    Address:

    Phone Number: Contact:

    Change in Accounting Firm from prior year? Yes No .

    Signed and certified: _______________________________________________________

    _______________________________________________________

    _______________________________________________________

    Examining Committee (minimum 3 signatures required)

Sworn and subscribed before me, this the ______day of _____________________, 20______.

____________________________

     Notary Public

    ____________________________ (SEAL)

     My Commission expires

Form 7 (Revised 07/08) 5 Forms\Banks\Form7.doc

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