RLR Management Consulting, Inc. (RLR) has offered financial institutions

solutions to their banking challenges since 1988. Founded by Ruth L.

Razook, RLR is a nationwide consulting firm focused on providing high quality

consulting assistance to financial institutions in the areas of corporate strategy,

organizational analysis, operations, project management, information

technology and payments.

RLR has served hundreds of clients nationwide, from De Novo Banks to

multi-billion dollar Financial Services companies. We serve local Community

Banks to mid-sized Regional Banks and Credit Unions. In addition, we

provide consulting services to Vendors, and to Third Party Service Providers.

RLR delivers solutions through hands-on, personalized service. We offer our

clients support and solutions to complex business problems. We believe in

partnering with our clients every step of the way to provide them with the

evaluation, planning, design, and implementation of high quality,

cost-effective solutions.

RLR consultants possess strong capabilities

and broad experience assisting clients in

assessing their current environment,

formulating new and creative tactical and

strategic alternatives, and implementing

positive change. Our staff is comprised of

seasoned professionals with extensive

banking and technology management

experience.

About RLR Management Consulting

www.rlrmgmt.com1-888-757-7330

RLR Management Consulting, Inc. provides periodic reviews of your Correspondent BankingRelationship as well as the fees associated with the services provided. If you haven’t looked at yourpricing or services in the past 18 months, you may be spending too much for current services and notusing services that could help increase your deposits and retain your current customers. The purposeof the review is to allow you to maintain existing clients, grow your deposits, stay competitive andreduce your expenses by offering best in breed services through your correspondent banking relationshipat the lowest price possible.

Relationship Review

RLR will work with you to determine the optimum correspondent banking services needed to achieveyour strategic goals by providing the following:

• Review the current services offered through your correspondent bank(s)• Insure that the services offered are in line with your strategy• Compare the services offered with best practices in the industry and your marketplace• Compare the services provided to what your peers are offering to insure that you remain

competitive• Compare the service quality of your current correspondent bank to the other providers in

your market place• Consolidate correspondent relationships if you are receiving services from multiple financial

institutions or vendors to take advantage of economies of scale or bundled pricing

Fee Review

RLR will determine what services are no longer needed, what fees you are paying that can be re-negotiated,and report savings to be realized through recommended changes. RLR will provide the following:

• Review your current account analysis statements or invoices against what we have seen inyour marketplace

• Recommend service changes to eliminate unnecessary fees• Negotiate with your current provider for better pricing based on our knowledge of the

providers and their market pricing• Review the pricing after 6 months to insure that the savings predicted are realized

Correspondent Changes

If you choose to change your correspondent banking relationship, RLR can assist you in the selectionprocess as follows:

• Submit an RFI or RFP to change your current correspondent banking services provider todetermine the optimum solution for your bank strategy

• Evaluate the RFP responses and assist you in choosing the correct correspondent bank• Assist you in the conversion to another correspondent bank relationship if necessary

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Correspondent Banking Relationship and Fee Review

CORRESPONDENT BANKING RELATIONSHIP AND FEE REVIEW

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Cash Management is defined as the tools and processes used to optimize the collection and distribution of cash as it pertains to the treasury functions of an individual or business. For purposesof our client base, this will include the following services that you offer your business clients:

• Internet Banking (information reporting, internal transfers, stop payments, document images, statements)

• Wire Transfers• Electronic Payments (ACH, Tax payments, bill pay, EDI, etc.)• Positive Pay• Remote Deposit Capture• Sweep or ZBA services• Online investment services• Online credit services (loan advances and payments)• Mobile Banking• Lockbox services• Account Reconcilement services

By offering these Cash Management Services to your clients, you will accomplish the followinggoals:

• Maintain competitive advantage or equality with your peer institutions• Provide services that successfully compete with larger institutions in your marketplace• Client retention by offering more services and remaining competitive• New client growth and market expansion

This practice is designed to offer Community Banks expertise in managing your Cash ManagementServices – from creating a Cash Management department up to and including implementation orconversion to a new cash management service offering. RLR offers a menu driven approach so youcan choose only what you need to fill in the gaps you may have in your organization.

Cash Management Organization

RLR will assist you in evaluating the organization for Cash Management and make recommendationson how to position you in the marketplace for expanding your Cash Management presence.We will analyze and provide the following:

• Sales models • Pipeline process• Organizational structure • Staff skill sets• Job descriptions • Technology tools• Revenue goals • Compensation models• Recommended structure • Recommended strategy• Three year plan

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Revenue Generation and Deposit Growth through Cash Management

REVENUE GENERATION AND DEPOSIT GROWTH THROUGH CASH MANAGEMENT

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Profitability Review

RLR will assist you in evaluating your current product offering (if applicable) to determine the gapsbetween what you have today and what your market needs. We will analyze the following:

• Marketplace • Competition• Features and Functions • Customer Base• Strategy • System configuration• Customer usage (statistics) • Fee collection analysis• Pricing and profitability

RLR will provide a complete recommendation and gap analysis for your customer base and marketplace.

System Review/Replacement

RLR will provide assistance to you for the review and replacement of your current product offering or for a new product offering using the RFI/RFP process. This will include:

• Requirements gathering• Vendor list• Creation, distribution and coordination of the RFI/RFP• Evaluation summary of the responses• Presentation scheduling, logistics, evaluation coordination of team members and

follow-up on outstanding items• Decision facilitation and recommendation documentation• Pricing and contract negotiation

Implementation and Execution

RLR will assist you in implementing Cash Management service(s) by providing the following:

• Project management • Product and industry expertise• Business Case and financials • Conversion data research• Test plans, scripts and coordination of results • Rollout plan and materials• Support throughout implementation and conversion• Internal documentation (policies, procedures, forms, training materials, etc.)• External documentation (agreements, forms, applications, manuals and quick reference

materials)

Periodic Reviews

RLR can provide reviews of the implemented system periodically to insure that you are taking fulladvantage of the new system. These might include:

• 6 month evaluation of customer acceptance• Annual review of product offerings and documentation• Contract review and/or pricing negotiation at contract renewal• Customer surveys• Review of internal processes ensuring procedures and policies are being followed• Review to ensure that your system is performing as efficiently as possible• Peer analysis of execution• Revenue and deposit fees

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RLR provides a complete set of consulting services associated with Check 21

and Remote Capture:

Check 21 Evaluations

• Assessment and analysis of the current Item Processing environment,

(processes, volumes, fees) and evaluation of Check 21 clearing options

available through the Financial Institution’s item processor

• Comprehensive evaluation of current Item Processing activities

• Recommendations for processing (current POD process, or remote/

branch capture or a combination thereof)

• Cost/Benefit Analysis of the current POD process with Check 21 clearing

and remote capture with Check 21 clearing

• Recommendations for phasing processing and products into the

current infrastructure

Branch Capture and Merchant Capture Evaluation and Implementation:

• Evaluation of Merchant Capture and

Branch Capture solutions available

through the Financial Institution’s

Data Processor, Item Processor

and Internet Banking providers

• Evaluation of features and functionality

based on business requirements and

marketplace analysis

• Detailed cost analysis of

Branch and Merchant Capture

Check 21 and Remote Capture

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• Merchant Capture Implementation Management including:

• Merchant Capture customer agreement development

• Merchant Capture processing agreement and service level

agreement review and negotiations

• Development of Branch and Merchant Capture Risk Assessments

• Development of Policies and Procedures

• Integration of Merchant Capture with the Financial Institution’s

Internet Banking site

• Internet Banking authentication integration

• Branch Capture Implementation:

• Development of Policies and Procedures

• Branch Capture processing agreement and service level agreement

review and negotiations

• Evaluate float table adjustment for Check 21 exchange

• Evaluate marketplace pricing for Merchant Capture

• Update disclosures for compliance on Merchant Capture

RLR Check 21 Toolkit

Our proprietary Check 21 toolkit delivers the ready-to-use solution needed for

a successful Check 21 implementation. The toolkit includes:

• Planning and Rollout for your Bank

• Managing Your Vendor(s)

• Reg CC Changes

• Training and FAQ’s

• Copy and Paste Forms and Templates, Notifications and Disclosures

• Claims tracking Software with Automated Forms Printing and Audit

Reporting

IT Audits

RLR has completed over 100 IT audits for our clients. Our Certified Information

Systems Auditor (CISA) takes a positive approach with our clients through

reviews of existing Information Technology (IT) operations, policies, procedures

and controls. IT Audits are conducted in strict accordance with the Federal

Financial Institutions Examination Council (FFIEC) Information Systems

Examination Handbook and other applicable financial institution requirements

and guidelines. The scope of the audit includes reviews of the following areas:

• Status of Findings from Previous Examinations

• IT Organization Structure and Board/Management Oversight

• Network and End-User Computing

• IT Risk Management

• Information Security Program (includes GLBA 501b related requirements)

• Electronic Banking and Website

• Disaster Recovery and Business Continuity Planning

Information Technology Policies & Procedures

RLR has worked with numerous clients

assisting them with the development of

their policies and procedures for all areas of

Information Technology, including the

Information Security Risk Assessment and

Information Security Program. IT policies

and procedures are customized specifically

for each client’s unique environment and

comply with all FFIEC regulatory require-

ments, covering all required topics.

Information Technology & Compliance

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Information Security Programs

RLR has developed numerous Information Security Programs for our clients. Inaccordance with FFIEC and GLBA requirements, the Information SecurityProgram is a set of policies and procedures that describe the bank’s managementresponsibilities, security measures and controls. An Information Security RiskAssessment is first conducted to determine the security and control measuresneeded to adequately protect all bank and customer confidential information.

Information Security Risk Assessment

RLR has worked with many clients to assist with the development of theirInformation Security Risk Assessment to comply with FFIEC and GLBA requirements. The Information Security Risk Assessment is a documentedprocess to identify the client’s information and technology assets, threats tothose assets, vulnerabilities, existing security controls and processes, and thecurrent security standards and requirements. The Information Security RiskAssessment also analyzes the probability and impact associated with the knownthreats and vulnerabilities to the assets, and prioritizes the risks present due tothreats and vulnerabilities to determine the appropriate level of training, controls, and assurance necessary for effective mitigation.

Vendor Due Diligence Review

RLR has defined a framework to develop and document the vendor due diligence required for our client’s critical Technology Service Providers. Vendordue diligence includes a documented review of the following areas:

• Information Technology & Compliance• Financial Condition• Information Security (including Security Assessment Review and

Vendor Information Security Program)• Internal Controls (SAS 70 or similar Independent Auditor’s Report)• Business Continuity/Disaster Recovery Plan and Test Results• Contract Review• Client References• Insurance

• Loan Compliance Audit

• Loan Review Audit/ALLL Analysis

• Loan Servicing Audit

• Loan Workouts

• Credit Shocking/Stress Testing

• IRR Review (interest rate risk)

• Loan Pricing Models

• Liquidity Reviews

• Senior Management/Board Education

(asset/liability management concepts)

• Credit Administration Department Review

Lending and Loan Related Services

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LENDING AND LOAN RELATED SERVICES

Loan Compliance AuditRLR offers in-house compliance reviews and training programs. Our compliance reviews consist of examiningand reviewing notices/forms, checking financial calculations, reviewing or writing compliance policies andprocedures, training client personnel and if requested, assisting with resolution of regulatory enforcementactions.

Loan Review and Servicing AuditRLR loan reviews are conducted by experienced senior lenders who have regional and community bankingsenior/executive credit level experience. RLR’s loan review programs are customized to the client's needs.The reviews can be conducted at specified intervals or single engagements. Our samplings include all riskbased asset types including criticized and classified loans.

Loan WorkoutsRLR’s experienced workout consultants can assist with complicated and time consuming criticized/classifiedand charged off loans. We can work directly with your borrower to determine the operational and collateraldeficiencies (FAS 114) and make recommendations for a turnaround. Our team is versed in all types of workoutcredit functions CRE, Construction, C&I, SBA, Bankruptcies, Foreclosures and more.

Credit Shocking/Stress TestingStress testing is a risk management concept that RLR can assist the Bank with. Stress testing examines theimpact of an event (or combination of events) on loan revenue streams and loan portfolio value. The stress testing process significantly increases awareness of loan risk and the need for risk management principles.Stress testing can be applied to all types of diversified loan portfolios. Banks can employ a form of stresstesting by subjecting risk based assets (and liabilities) to hypothetical “rate shock” scenarios to determinetheir exposure to changes in interest rates. Bankers are encouraged to talk with RLR professionals in designinga stress/shocking model to identify the potential future problems.

IRR Review (Interest Rate Risk)IRR is the exposure of a bank's current or future earnings and capital to interest rate changes. Interest ratefluctuations affect earnings by changing net interest income and other interest-sensitive income andexpense levels. Interest rate changes affect capital by altering a banks' economic value of equity (EVE). IRRhas many components, including re-pricing risk, basis risk, yield curve risk, option risk, and price risk. RLR focuseson identifying, reviewing and auditing these risks.

Loan Pricing ModelsRLR loan pricing model enables banks to improve risk-adjusted ROE. For community bankers Loan PricingModels offer a consistent methodology to calculate risk-adjusted ROE and provides sophisticated lendinganalytics currently utilized by the larger Banks. The benefit to a higher loan pricing level is simple; an increaseto net income, overall profitability and more informed decision making.

Liquidity ReviewsGiven the current economic environment, Banks should consider some type of stress testing and scenarioanalysis of their liquidity needs, develop contingency funding plans for dealing with possible liquidity crisesand document their liquidity risk-management policy. Stress tests should be varied and tailored to the institution and its current and anticipated circumstances. Significant stress events may include deteriorationof access to liability-based liquidity; a reduction in deposits (i.e., a “run” on the bank or loss of a large customer); negative press coverage; reduction of the bank’s CAMELS or investment rating; a severe declinein asset quality; or other events that may lead to an institution’s inability to meet its funding obligations. RLRprovides this service to identify risk and deficiencies with the Banks liquidity. The main benefit is reducingthe risk of a bank becoming unable to meet liabilities during periods of firm specific or market-wide liquiditystress and reducing the need for intervention by the regulatory authorities.

Credit Administration Department ReviewRLR provides reviews of the standards and practices followed in extending, servicing, and collecting loans.Credit administration can have a significant impact on the quality of the loan portfolio. Effective credit administration can mitigate certain credit risks, while deficient credit administration can increase credit riskand is often a forerunner of deterioration in the loan portfolio. As such, credit administration periodic reviewsshould ensure all loans are administered in a safe and sound manner and in compliance with Regulations.

Operations Analysis and Improvements

A focus on growth may prompt concern that workflows are not effectively supporting current operations and continued growth. RLR provides consulting services that will collect data throughinterviews, and observation, develop review documentation and perform a Workflow Analysis toaccomplish the following:

• Improve workflow efficiency by eliminating redundant and non-productive steps• Improve procedural controls over accuracy and completeness of transactions• Improve risk management practices with regards to potential loss exposure• Improve performance timeliness by task reassignment or by automation opportunities

Operational Policies and Procedures

RLR can assist with the development of “customized” standard Operational Policies and Procedures. Operational procedures can be customized to reflect simple “how to” documentation.

Reconcilement/On-Call Support

RLR staff is comprised of seasoned professionals with extensive Financial Services and technologymanagement experience. Our hands-on approach enables us to offer support for “daily tasks”required for temporary staffing needs or special reconcilement situations.

Operational Practices Audits

RLR provides a complete approach to reviewing a Financial Institution’s operating structure and reporting functions. Within this framework we determine what methods are in place and whatmethods are required to monitor operational activities, identify and report potential weaknesses,and resolve efficiences. We focus on the following:

• Legal Processes• ATM/EFT & ACH Controls• Bank Controls• Cash Controls• Certifications• Operating Losses• Collateral & Safekeeping• Documentary Collections• Installment Collections• Consigned Items• Wire Transfers

Operations and Regulatory Compliance

• Deposit Accounts• Merchant Bankcard Operations• New Accounts• Certificates of Deposit• Attorney Client Trust Funds• Tax ID Numbers and Backup Withholding• Customer Service• Branch Security• Signing Authority• General Management• Dormant Accounts, Escheat, Unclaimed Property

www.rlrmgmt.com1-888-757-7330

Compliance Reviews

RLR provides our Financial Services clients with technical and operational expertise to determineadherence with regulatory guidelines. RLR performs a detailed review of Financial Institutions compliance structure and functions, reviews compliance materials, performs a review of the processfor disseminating compliance information, and looks at the methods for validating complianceefforts. Our review includes, but is not limited to, the following:

• Regulation D• Regulation E• Regulation CC – Funds Availability• Regulation DD – Truth in Savings

Disaster Recovery/Business Continuity Planning

RLR delivers Disaster Recovery/Business Continuity Plans. Our plans are tailored for each financialservices company we are engaged with, and addresses all functional areas, ensuring compliancewith all applicable regulatory requirements.

The Disaster Recovery/Business Continuity Plan specifically covers the following topics:• Risk Assessment and Business Impact Analysis• Evaluate Critical Needs• Establish Recovery Priorities• Determine and Document Strategies and Procedures to Recover: facilities, hardware,

software, communications, data files, customer services, critical systems, and other processing operations

• Determine types of Teams and Team Responsibilities for Crisis ManagementInformation Systems, Core Business and Reconstruction

• Designation of Key Responsibilities• Define Responsibilities for: Staff Members, Key Personnel, Department Leaders,

Coordinators, Chairpersons• Identify Backup Locations• Identify Available Workspace at other Locations• Emergency Notification Procedures• Determine and Document Individual Plans for the Crisis Management Team, the IS Team,

Core Business Team and Reconstruction Team• Network Backup Plan• Voice Communications Backup Plan

New and Revised Regulation Toolkits

RLR’s proprietary toolkits deliver a turnkey, ready-to-use solution that Financial Institutions need for successful implementation of new or revised government regulations. The most recent Toolkitshave been created for Check 21, for BSA changes for Money Service Business customers, and forMerchant Capture.

Our Toolkits are designed to guide you from start to finish:• Planning and Rollout at Your Financial Institution• Managing Your Vendor• Updating Regulatory Information• Training and Customer FAQs• Forms, Notifications, Disclosures

Simplified programs can be downloaded and installed from our website.

• Bank Secrecy Act• U.S. Patriot Act• OFAC• Consumer Privacy

Strategic Planning

RLR provides expertise in assisting our clients with assessing the changing

world of payments and providing consulting services in understanding,

evaluating and implementing new and emerging products and services in the

Financial Services Market.

We offer business and technology consulting services that address the following

payments technologies and trends:

• Image Exchange

• Off-Line Debit

• On-Line Debit

• Consumer Credit

• Commercial Credit

• Stored Value

• ACH

• Positive Pay

• EPBB

• Mobile/Wireless

Payments & Emerging Markets

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Payments Strategy & Operations

• Product Planning and Execution

• Competitive Assessments

• Processing Analysis

• Operations Assessments

• Revenue and Expense Modeling

• Issuer and Acquirer Payment Value Chain Assessments

• Card Processing Assessments

Payments Technology Solutions

• Technology and Security Assessments

• Third Party Processor Reviews

• Vendor Assessments

Emerging Market Solutions

• Market Trend Analysis

• New Entrant Product and Technology Assessments

• Emerging Regulatory Guidance

• Payment Instrument Value Analysis