<SEC-DOCUMENT>0001144204-13-031465.txt : 20130524
<SEC-HEADER>0001144204-13-031465.hdr.sgml : 20130524
<ACCEPTANCE-DATETIME>20130524090040
ACCESSION NUMBER:		0001144204-13-031465
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		6
CONFORMED PERIOD OF REPORT:	20130524
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20130524
DATE AS OF CHANGE:		20130524

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SHORE BANCSHARES INC
		CENTRAL INDEX KEY:			0001035092
		STANDARD INDUSTRIAL CLASSIFICATION:	NATIONAL COMMERCIAL BANKS [6021]
		IRS NUMBER:				521974638
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-22345
		FILM NUMBER:		13870267

	BUSINESS ADDRESS:	
		STREET 1:		18 EAST DOVER STREET
		CITY:			EASTON
		STATE:			MD
		ZIP:			21601-3013
		BUSINESS PHONE:		4108221400

	MAIL ADDRESS:	
		STREET 1:		18 EAST DOVER STREET
		CITY:			EASTON
		STATE:			MD
		ZIP:			21601-3013
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>v346087_8k.htm
<DESCRIPTION>8-K
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>UNITED STATES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Washington, D.C. 20549</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>FORM 8-K</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>CURRENT REPORT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>PURSUANT TO SECTION 13 OR 15(d) OF THE
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>SECURITIES EXCHANGE ACT OF 1934</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Date of Report (Date of earliest event reported):
May 24, 2013</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><U>SHORE BANCSHARES, INC.</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(Exact name of registrant as specified in
its charter)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 32%; border-bottom: windowtext 1pt solid; text-align: center">Maryland</TD>
    <TD STYLE="width: 2%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 32%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">0-22345</TD>
    <TD STYLE="width: 2%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 32%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">52-1974638</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">(State&nbsp;or&nbsp;other&nbsp;jurisdiction&nbsp;of</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">(Commission&nbsp;file&nbsp;number)</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">(IRS&nbsp;Employer</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">incorporation&nbsp;or&nbsp;organization)</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Identification&nbsp;No.)</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><U>18 East Dover Street, Easton, Maryland
21601</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Address of principal executive offices)
(Zip Code)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Registrant&rsquo;s telephone number, including
area code: <U>(410) 763-7800</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><U>N/A</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Former Name or Former Address, if Changed
Since Last Report)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Wingdings">&uml;</FONT></TD><TD>Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Wingdings">&uml;</FONT></TD><TD>Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Wingdings">&uml;</FONT></TD><TD>Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Wingdings">&uml;</FONT></TD><TD>Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


<!-- Field: Page; Sequence: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Item&nbsp;1.01 Entry into a Material Definitive Agreement.
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">The Talbot Bank of Easton, Maryland (the
&ldquo;Bank&rdquo;), the wholly owned subsidiary of Shore Bancshares, Inc. (the &ldquo;Company&rdquo;), has entered into a Stipulation
and Consent to the Issuance of a Consent Order (the &ldquo;Consent Agreement&rdquo;) with the Federal Deposit Insurance Corporation
(the &ldquo;FDIC&rdquo;), a Stipulation and Consent to the Issuance of a Consent Order (the &ldquo;Maryland Consent Agreement&rdquo;
and together with the Consent Agreement, the &ldquo;Consent Agreements&rdquo;) with the Maryland Commissioner of Financial Regulation
(the &ldquo;Commissioner&rdquo;) and an Acknowledgement of Adoption of the Order by the Commissioner (the &ldquo;Acknowledgement&rdquo;).
The FDIC and the Commissioner issued the related Consent Order (the &ldquo;Order&rdquo;), effective May 24, 2013. The description
of the Consent Agreements, the Order and the Acknowledgement set forth below is qualified in its entirety by reference to the Consent
Agreements, the Order and the Acknowledgement, copies of which are filed herewith as exhibits 10.1, 10.2, 10.3 and 10.4 respectively,
and incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt"><B><I>Management. </I></B>The Bank is required
to have and retain experienced, qualified management, and to assess management&rsquo;s ability to (1)&nbsp;comply with the requirements
of the Order; (2)&nbsp;operate the Bank in a safe and sound manner; (3)&nbsp;comply with all applicable laws, rules and regulations;
and (4)&nbsp;restore all aspects of the Bank to a safe and sound condition, including capital adequacy, asset quality, and management
effectiveness. The Bank has already implemented certain changes to comply with the Order.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt"><B><I>Board Participation</I>.</B> The
Bank&rsquo;s board of directors is required to increase its participation in the affairs of the Bank, assuming full responsibility
for the approval of sound policies and objectives and for the supervision of all the Bank activities. This participation shall
include comprehensive, documented meetings to be held no less frequently than monthly. The board of directors must also develop
a program to monitor the Bank&rsquo;s compliance with the Order.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt"><B><I>Loss Charge-Offs. </I></B>The Order
requires that the Bank eliminate from its books, by charge-off or collection, all assets or portions of assets classified &ldquo;Loss&rdquo;
by the FDIC or the Commissioner. The Bank has already eliminated from its books all such classified assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt"><B><I>Classified Assets Reduction</I>.
</B>Within 60 days of the effective date of the Order, the Bank will submit a Classified Asset Plan to the FDIC and Commissioner
to reduce the risk position in each asset in excess of $750,000 which is classified &ldquo;Substandard&rdquo; and &ldquo;Doubtful&rdquo;
by the FDIC or Commissioner. The Bank will revise its existing Classified Asset Plan to address the terms of the Order and will
submit the updated plan to the FDIC and Commissioner in accordance with the Order.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt"><B><I>Allowance for Loan and Lease Losses.
</I></B>Within 60 days of the effective date of the Order, the board of directors must review the adequacy of the allowance for
loan and lease losses (the &ldquo;ALLL&rdquo;), establish a policy for determining the adequacy of the ALLL and submit such ALLL
policy to the FDIC and Commissioner. The Bank is in the process of amending its ALLL policy to comply with the terms of the Order
and will submit the updated policy to the FDIC and Commissioner in accordance with the Order.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">&nbsp;</P>


<!-- Field: Page; Sequence: 2; Options: NewSection; Value: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->2<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt"><B><I>Loan Policy. </I></B>Within 60 days
from the effective date of the Order, the Bank must (i) review its loan policies and procedures (&ldquo;Loan Policy&rdquo;) for
adequacy, (ii) make all appropriate revisions to the Loan Policy to address the lending deficiencies identified by the FDIC, and
(iii) submit the Loan Policy to the FDIC and Commissioner. The Bank has completed its review of the Loan Policy and is in the process
of making the required revisions. The updated Loan Policy will be submitted to the FDIC and Commissioner in accordance with the
terms of the Order.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt"><B><I>Loan Review Program</I>. </B> Within
30 days from the effective date of the Order, the Board must establish a program of independent loan review that will provide for
a periodic review of the Bank&rsquo;s loan portfolio and the identification and categorization of problem credits (the &ldquo;Loan
Review Program&rdquo;) and submit the Loan Review Program to the FDIC and Commissioner. The Bank is in the process of enhancing
its existing Loan Review Program and will submit it to the FDIC and Commissioner in accordance with the terms of the Order.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt"><B><I>Capital Requirements. </I></B>Within
90 days from the effective date of the Order, the Bank must meet and maintain the following minimum capital levels, after establishing
an appropriate ALLL, (i) a leverage ratio (the ratio of Tier 1 capital to total assets) of at least 8%, and (ii) a total risk-based
capital ratio (the ratio of qualifying total capital to risk-weighted assets) of at least 12%. As of March 31, 2013, the Bank exceeded
the Order&rsquo;s minimum capital requirements with a Tier 1 leverage ratio of 8.24% and total risk based capital ratio of 12.38%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt"><B><I>Profit and Budget Plan. </I></B>Within
60 days from the effective date of the Order and within 30 days of each calendar year thereafter, the Bank must submit a profit
and budget plan to the FDIC and Commissioner consisting of goals and strategies, consistent with sound banking practices, and taking
into account the Bank&rsquo;s other plans, policies or other actions required by the Order. In accordance with the Order, the Bank
intends to develop the profit and budget plan, which will be submitted to the FDIC and Commissioner within the required timeframe.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt"><B><I>Dividend Restriction. </I></B>While
the Order is in effect, the Bank cannot declare or pay dividends or fees to the Company without the prior written consent of the
FDIC and Commissioner.<B><I> </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt"><B><I>Brokered Deposits. </I></B>The Order
provides that the Bank may not accept, renew, or rollover any brokered deposits unless it is in compliance with the requirements
of the FDIC regulations governing brokered deposits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt"><B><I>Oversight Committee. </I></B>Within
30 days from the effective date of the Order, the Bank must establish a board committee to monitor and coordinate compliance with
the Order.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt"><B><I>Progress Reports. </I></B>Within
45 days from the end of each calendar quarter following the effective date of the Order, the Bank must furnish the FDIC and Commissioner
with progress reports detailing the form, manner and results of any actions taken to secure compliance with the Order.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">The Order will remain in effect until modified
or terminated by the FDIC and the Commissioner.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">On May 24, 2013, the Company issued a press
release announcing the Bank&rsquo;s entry into the Order with the FDIC and the Commissioner.&nbsp;&nbsp;A copy of the press release
is attached to this Current Report on Form 8-K as Exhibit 99.1.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.75in"><B>&nbsp;</B></P>


<!-- Field: Page; Sequence: 3; Value: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->3<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.75in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.75in"><B>Item</B> <B>9.01&#9;Financial
Statements and Exhibits.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">(d) Exhibits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The exhibits that are filed or furnished
with this report are listed in the Exhibit Index that immediately follows the signatures hereto, which list is incorporated herein
by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


<!-- Field: Page; Sequence: 4; Value: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->4<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SIGNATURES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">SHORE BANCSHARES, INC.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">Dated: May 24, 2013</TD>
    <TD STYLE="width: 5%">By:&nbsp;</TD>
    <TD STYLE="width: 45%; border-bottom: windowtext 1pt solid">/s/ W. Moorhead Vermilye</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>W. Moorhead Vermilye<BR>
Chief Executive Officer</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>


<!-- Field: Page; Sequence: 5; Value: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->5<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EXHIBIT INDEX</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%">Exhibit</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 90%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid">Number</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">Description</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>10.1</TD>
    <TD>&nbsp;</TD>
    <TD>Stipulation and Consent to the Issuance of a Consent Order with the FDIC</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>10.2</TD>
    <TD>&nbsp;</TD>
    <TD>Stipulation and Consent to the Issuance of a Consent Order with the Maryland Commissioner of Financial Regulation</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>10.3</TD>
    <TD>&nbsp;</TD>
    <TD>Consent Order issued by the Federal Deposit Insurance Corporation</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>10.4</TD>
    <TD>&nbsp;</TD>
    <TD>Acknowledgement of Adoption of the Order by the Maryland Commissioner of Financial Regulation</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>99.1</TD>
    <TD>&nbsp;</TD>
    <TD>Press release dated May 24, 2013 (furnished herewith)</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


<!-- Field: Page; Sequence: 6; Options: Last -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->6<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>v346087_ex10-1.htm
<DESCRIPTION>EX-10.1
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin-top: 0; margin-bottom: 0; margin-left: 0.5in; text-indent: 0in; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in; background-color: transparent">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in; background-color: transparent">FEDERAL
DEPOSIT INSURANCE CORPORATION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in; background-color: transparent">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in; background-color: transparent">WASHINGTON,
D.C.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in; background-color: transparent">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="width: 46%; border-top: windowtext 1pt solid; text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="width: 3%; text-align: left; text-indent: 0in">&nbsp;&nbsp;<FONT STYLE="color: black">)</FONT></TD>
    <TD STYLE="width: 51%; text-align: left; text-indent: 0in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="color: black">In the Matter of </FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;&nbsp;<FONT STYLE="color: black">)</FONT></TD>
    <TD STYLE="text-align: center; text-indent: 0in"><FONT STYLE="color: black">STIPULATION AND CONSENT</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;&nbsp;<FONT STYLE="color: black">)</FONT></TD>
    <TD STYLE="text-align: center; text-indent: 0in"><FONT STYLE="color: black">TO THE ISSUANCE OF</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="color: black">THE TALBOT BANK OF EASTON</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;&nbsp;<FONT STYLE="color: black">)</FONT></TD>
    <TD STYLE="text-align: center; text-indent: 0in"><FONT STYLE="color: black">A CONSENT ORDER</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in; background-color: white"><FONT STYLE="color: black">EASTON, MARYLAND</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;&nbsp;<FONT STYLE="color: black">)</FONT></TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;&nbsp;<FONT STYLE="color: black">)</FONT></TD>
    <TD STYLE="text-align: center; text-indent: 0in"><FONT STYLE="color: black">FDIC-13-018b</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in; background-color: white"><FONT STYLE="color: black">(INSURED STATE NONMEMBER BANK)</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;&nbsp;<FONT STYLE="color: black">)</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: left; text-indent: 0in; background-color: white">&nbsp;</TD>
    <TD STYLE="width: 3%; text-align: left; text-indent: 0in">&nbsp;&nbsp;<FONT STYLE="color: black">)</FONT></TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in; background-color: transparent">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in; background-color: transparent">Subject
to the acceptance of this STIPULATION AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER (&ldquo;CONSENT AGREEMENT&rdquo;) by the Federal
Deposit Insurance Corporation (&ldquo;FDIC&rdquo;), it is hereby stipulated and agreed by and between a representative of the Legal
Division of the FDIC and The Talbot Bank of Easton, Easton, Maryland (&ldquo;Bank&rdquo;), as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in; background-color: transparent">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in; background-color: transparent">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Bank has been advised of its right to receive a NOTICE OF CHARGES AND OF HEARING (&ldquo;NOTICE&rdquo;) detailing the unsafe or
unsound banking practices alleged to have been committed by the Bank, and of its right to a hearing on the alleged charges under
section 8(b)(1) of the Federal Deposit Insurance Act (&ldquo;Act&rdquo;), 12 U.S.C. &sect; 1818 (b)(1), and has waived those rights.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in; background-color: transparent">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in; background-color: transparent"><FONT STYLE="font-size: 10pt">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Bank, solely for the purpose of this proceeding and without admitting or denying any of the alleged charges of unsafe or unsound
banking practices, hereby consents and agrees to the issuance of a CONSENT ORDER (&ldquo;ORDER&rdquo;) by the FDIC. The Bank further
stipulates and agrees that such ORDER shall be deemed to be a final ORDER and that such ORDER shall become effective upon the
issuance by the FDIC and fully enforceable by the FDIC pursuant to the provisions of section 8(i)(l) of the Act, 12 U.S.C. &sect;
1818(i)(l), subject only to the conditions set forth in paragraph 3 of this CONSENT AGREEMENT.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in; background-color: transparent">&nbsp;</P>


<!-- Field: Page; Sequence: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in; background-color: transparent">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in; background-color: transparent">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event the FDIC accepts this CONSENT AGREEMENT and issues the ORDER, it is agreed that no action to enforce the ORDER in the
United States District Court will be taken by the FDIC unless the Bank or any of its directors, officers, employees, agents, successor
or assigns, or other institution-affiliated parties (as that term is defined in section 3(u) of the Act, 12 U.S.C. &sect; 1813(u)),
has violated or is about to violate any provision of the ORDER.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in; background-color: transparent">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in; background-color: transparent">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Bank hereby waives:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in; background-color: transparent">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: 0.25in; background-color: transparent">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
receipt of a NOTICE;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.25in; background-color: transparent">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: 0.25in; background-color: transparent">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;all
defenses to the allegations to be set forth in the NOTICE;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.25in; background-color: transparent">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: 0.25in; background-color: transparent">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a
hearing for the purpose of taking evidence on such alleged charges;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.25in; background-color: transparent">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: 0.25in; background-color: transparent"><FONT STYLE="color: black">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
</FONT>filing<FONT STYLE="color: black"> of PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF </FONT>LAW<FONT STYLE="color: black">;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.25in; background-color: transparent">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: 0.25in; background-color: transparent"><FONT STYLE="color: black">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
</FONT>issuance<FONT STYLE="color: black"> of a RECOMMENDED DECISION by an Administrative Law Judge;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.25in; background-color: transparent">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: 0.25in; background-color: transparent"><FONT STYLE="color: black">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Exceptions<FONT STYLE="color: black">
and briefs with respect to such RECOMMENDED DECISION; and</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: 0.25in; background-color: transparent">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: left; text-indent: -0.5in; background-color: transparent"><FONT STYLE="color: black">(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;judicial
review of the ORDER as provided by section 8(h) of the Act, 12 U.S.C. &sect; 1818(h), or any other </FONT>challenge<FONT STYLE="color: black">
to the validity of the ORDER.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in; background-color: transparent">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="width: 49%; text-align: left; text-indent: 0in"><FONT STYLE="color: black">Dated:&nbsp;&nbsp;&nbsp;May&nbsp;23,&nbsp;2013</FONT></TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 46%; text-align: left; text-indent: 0in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="color: black">Federal Deposit Insurance Corporation</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="color: black">The Talbot Bank of Easton</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="color: black">Legal Division</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="color: black">Easton, Maryland</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="color: black">By:</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="color: black">By:</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: 0in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in">/s/ Patty S. Ko</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: 0in">/s/ <FONT STYLE="color: black"> Herbert L. Andrew, III</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="border-top: windowtext 1pt solid; text-align: left; text-indent: 0in"><FONT STYLE="color: black">Patty S. Ko</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-top: windowtext 1pt solid; text-align: left; text-indent: 0in"><FONT STYLE="color: black">Andrew, Herbert L., III</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="color: black">Senior Attorney</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="color: black">Director</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left; text-indent: 0in; background-color: white"><FONT STYLE="font-size: 10pt; color: black">New York Regional Office</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


<!-- Field: Page; Sequence: 2; Options: NewSection; Value: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->2<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="width: 60%; text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 40%; border-bottom: windowtext 1pt solid; text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">/s/
    <FONT STYLE="color: black"> Brenda W.</FONT></FONT> Armistead</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Armistead,
    Brenda W.</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Director</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">/s/
    Lloyd L.
    Beatty, Jr.</FONT> </TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Beatty,
    Lloyd L., Jr.</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Director</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">/s/
    <FONT STYLE="color: black"> Carole Ann </FONT> Clem</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Clem,
    Carole Ann </FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Director</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">/s/
    Michael</FONT> R. Clemmer, Jr.</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Clemmer,
    Jr., R. Michael </FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Director</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">/s/
    <FONT STYLE="color: black"> John W.</FONT></FONT> Dillon</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Dillon,
    John W.</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Director</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">/s/
    <FONT STYLE="color: black"> William W.</FONT></FONT> Duncan</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Duncan,
    William W. </FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Director</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">/s/
    <FONT STYLE="color: black"> David A.</FONT></FONT> Fike</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Fike,
    David A.</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Director</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">/s/
    <FONT STYLE="color: black"> Duane F. </FONT></FONT>Marshall</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Marshall,
    Duane F. </FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Director</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">/s/ Stephen M. </FONT>
    Shearer</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Shearer,
    Stephen M. </FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Director</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">/s/ Christopher F.</FONT>
    Spurry</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Spurry,
    Christopher F.</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Director</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


<!-- Field: Page; Sequence: 3; Value: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->3<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="width: 60%; text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 40%; border-bottom: windowtext 1pt solid; text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">/s/ David P.</FONT>
    Valliant</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Valliant,
    David P</FONT>.</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Director</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">/s/
    <FONT STYLE="color: black"> W. Moorhead </FONT></FONT>Vermilye</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Vermilye,
    W. Moorhead </FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Director</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">Comprising
    the Board of Directors of <BR>
The Talbot Bank of Eason <BR>
Easton, Maryland</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


<!-- Field: Page; Sequence: 4; Options: Last -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->4<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>v346087_ex10-2.htm
<DESCRIPTION>EX-10.2
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 36%; font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">IN THE MATTER OF:</FONT></TD>
    <TD STYLE="width: 23%; font-family: Courier New, Courier, Monospace; layout-grid-mode: line; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">*</FONT></TD>
    <TD STYLE="width: 41%; font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">BEFORE</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line; text-align: center">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; text-transform: uppercase">THE talbot BANK</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">*</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">THE COMMISSIONER OF</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line; text-align: center">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; text-transform: uppercase">of easton, MARYLAND</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; text-transform: uppercase">*</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">FINANCIAL REGULATION</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line; text-align: center">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; text-transform: uppercase">EASTON, Maryland</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; text-transform: uppercase">*</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">FOR THE</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line; text-align: center">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">*</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">STATE OF MARYLAND</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">* &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;* &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*  &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><U>STIPULATION AND CONSENT TO </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><U>THE ISSUANCE OF A CONSENT ORDER </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Subject to the acceptance of this STIPULATION
AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER (&ldquo;CONSENT AGREEMENT&rdquo;) by the Commissioner of Financial Regulation for
the State of Maryland (&ldquo;Commissioner&rdquo;), it is hereby stipulated and agreed by and between the Commissioner and The
Talbot Bank of Easton, Maryland, Easton, Maryland (&ldquo;Bank&rdquo;), as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Bank, solely for the purpose of this proceeding and without admitting or denying any of the alleged charges of unsafe or unsound
banking practices, hereby consents and agrees to the issuance of a CONSENT ORDER (&ldquo;ORDER&rdquo;) by the Commissioner. The
Bank further stipulates and agrees that the ORDER shall be deemed to be a final ORDER and that the ORDER shall become effective
immediately upon its issuance by the Commissioner and fully enforceable by the Commissioner pursuant to the provisions of the Annotated
Code of Maryland, Financial Institutions Article (&ldquo;FI&rdquo;) &sect;&sect; 5-808 and 5-809, subject only to the conditions
set forth in paragraph 3 of this CONSENT AGREEMENT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Bank has been advised of its right to notice and a hearing on the alleged charges relating to the ORDER under FI &sect; 5-808(d)(2)
and Annotated Code of Maryland, State Government Article &sect;&sect; 10-207 and 10-208, and has waived those rights.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>


<!-- Field: Page; Sequence: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event the Commissioner accepts the CONSENT AGREEMENT and issues the ORDER, it is agreed that no action to enforce the ORDER
in a court of competent jurisdiction will be taken by the Commissioner unless the Bank or any director, officer, employee, agent,
successor or assignee, or other affiliate of the Bank has violated or is about to violate any provision of the ORDER.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">The Bank hereby waives:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(a)</TD><TD>its right to notice and a hearing conducted for the purpose of taking evidence on the allegations to be set forth in the ORDER;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(b)</TD><TD>all defenses to the allegations to be set forth in the ORDER;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(c)</TD><TD>its right to appeal the ORDER by filing exceptions; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(d)</TD><TD>its right to appeal the ORDER to a court of competent jurisdiction.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD>
    <TD STYLE="width: 4%; font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Dated:</FONT></TD>
    <TD STYLE="width: 46%; border-bottom: windowtext 1pt solid; font-family: Courier New, Courier, Monospace; layout-grid-mode: line; padding-left: 0.125in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">May 23, 2013</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Courier; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD>
    <TD STYLE="width: 50%; border-bottom: windowtext 1pt solid; padding-left: 9pt; font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">/s/ Mark A. Kaufman</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Mark A. Kaufman,</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Commissioner of Financial Regulation</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 62%; font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif; text-transform: uppercase">THE talbot BANK of easton, MARYLAND</FONT></TD>
    <TD STYLE="width: 38%; font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">EASTON, MARYLAND:</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">BY:</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 40%; border-bottom: windowtext 1pt solid; padding-left: 9pt; font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">/s/ Herbert L. Andrew, III </FONT></TD>
    <TD STYLE="width: 60%; font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Herbert L. Andrew, III</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Director</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-left: 9pt; font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">/s/ Brenda W. Armistead </FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Brenda W. Armistead</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Director</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-left: 9pt; font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">/s/ Lloyd L. Beatty, Jr.</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Lloyd L. Beatty, Jr.</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Director</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Courier; margin: 0pt 0">&nbsp;</P>


<!-- Field: Page; Sequence: 2; Options: NewSection; Value: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">- <!-- Field: Sequence; Type: Arabic; Name: PageNo -->2<!-- Field: /Sequence --> -</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Courier; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 40%; border-bottom: windowtext 1pt solid; padding-left: 9pt; font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">/s/ Carole Ann Clem </FONT></TD>
    <TD STYLE="width: 60%; font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Carole Ann Clem</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Director</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-left: 9pt; font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">/s/ R. Michael Clemmer, Jr.</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">R. Michael Clemmer, Jr.</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Director</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-left: 9pt; font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">/s/ John W. Dillon </FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">John W. Dillon</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Director</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-left: 9pt; font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">/s/ David A. Fike </FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">David A. Fike</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Director</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-left: 9pt; font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">/s/ Duane F. Marshall </FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Duane F. Marshall</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Director</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-left: 9pt; font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">/s/ Steve M. Shearer </FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Steve M. Shearer</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Director</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-left: 9pt; font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">/s/ Christopher F. Spurry </FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Christopher F. Spurry</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Director</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-left: 9pt; font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">/s/ David P. Valliant </FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">David P. Valliant</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Director</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid; padding-left: 9pt; font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">/s/ W. Moorhead Vermilye </FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">W. Moorhead Vermilye</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Director</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Comprising the Board of</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Directors of</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">The Talbot Bank of Easton, Maryland</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Easton, Maryland</FONT></TD>
    <TD STYLE="font-family: Courier New, Courier, Monospace; layout-grid-mode: line">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Courier; margin: 0pt 0">&nbsp;</P>


<!-- Field: Page; Sequence: 3; Options: Last -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">- <!-- Field: Sequence; Type: Arabic; Name: PageNo -->3<!-- Field: /Sequence --> -</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Courier; margin: 0pt 0">&nbsp;</P>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.3
<SEQUENCE>4
<FILENAME>v346087_ex10-3.htm
<DESCRIPTION>EX-10.3
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">FEDERAL DEPOSIT
INSURANCE CORPORATION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">WASHINGTON,
D.C.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 35%; border-top: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: left; background-color: white; width: 15%">&nbsp;&nbsp;<FONT STYLE="font-size: 10pt; color: black">)</FONT></TD>
    <TD STYLE="width: 50%; text-align: left; background-color: white">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-size: 10pt">In the Matter of</FONT></TD>
    <TD STYLE="text-align: left; background-color: white">&nbsp;&nbsp;<FONT STYLE="font-size: 10pt; color: black">)</FONT></TD>
    <TD STYLE="text-align: center; background-color: white"><FONT STYLE="font-size: 10pt; color: black">CONSENT ORDER</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left; background-color: white">&nbsp;</TD>
    <TD STYLE="text-align: left; background-color: white">&nbsp;&nbsp;<FONT STYLE="font-size: 10pt; color: black">)</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left; background-color: white"><FONT STYLE="font-size: 10pt; color: black">THE TALBOT BANK OF EASTON</FONT></TD>
    <TD STYLE="text-align: left; background-color: white">&nbsp;&nbsp;<FONT STYLE="font-size: 10pt; color: black">)</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 10pt; color: black">EASTON, MARYLAND</FONT></TD>
    <TD STYLE="text-align: left; background-color: white">&nbsp;&nbsp;<FONT STYLE="font-size: 10pt; color: black">)</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 10pt; color: black">FDIC-13-018b</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left; background-color: white">&nbsp;</TD>
    <TD STYLE="text-align: left; background-color: white">&nbsp;&nbsp;<FONT STYLE="font-size: 10pt; color: black">)</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="text-align: left; background-color: white">(<FONT STYLE="font-size: 10pt; color: black">INSURED STATE NONMEMBER BANK)</FONT>&nbsp;&nbsp;&nbsp;</TD>
    <TD STYLE="text-align: left; background-color: white">&nbsp;&nbsp;<FONT STYLE="font-size: 10pt; color: black">)</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left; background-color: white; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: left; background-color: white">&nbsp;&nbsp;<FONT STYLE="font-size: 10pt; color: black">)</FONT></TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">The
Federal Deposit Insurance Corporation (&ldquo;FDIC&rdquo;) is the appropriate Federal banking agency for The Talbot Bank of Easton,
Easton, Maryland (&ldquo;Bank&rdquo;), under section 3(q) of the Federal Deposit Insurance Act (&ldquo;Act&rdquo;), 12 U.S.C. &sect;
1813(q).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">The
Bank, by and through its duly elected and acting Board of Directors (&ldquo;Board&rdquo;), has executed a STIPULATION AND CONSENT
TO THE ISSUANCE OF A CONSENT ORDER (&ldquo;CONSENT AGREEMENT&rdquo;), dated May 23, 2013, that is accepted by the FDIC. With the
CONSENT AGREEMENT, the Bank has consented, without admitting or denying any charges of unsafe or unsound banking practices relating
to weaknesses in, among others, asset quality and capital to the issuance of this Consent Order (&ldquo;ORDER&rdquo;) by the FDIC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Having
determined that the requirements for issuance of an order under section 8(b) of the Act, 12 U.S.C. &sect; 1818(b), have been satisfied,
the FDIC hereby orders that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>


<!-- Field: Page; Sequence: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>MANAGEMENT</U></B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Bank shall have and retain qualified management. Each member of management shall possess qualifications and experience commensurate
with his or her duties and responsibilities at the Bank. At a minimum, such management shall include: a chief executive officer
with proven ability in managing a bank of comparable size and complexity and experience in upgrading a low quality loan portfolio;
a senior lending officer and a chief credit officer with an appropriate level of lending, collection, and loan supervision experience
for the type and quality of the Bank&rsquo;s loan portfolio. The Board shall provide the necessary written authority to management
to implement the provisions of this ORDER.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
qualifications of management shall be assessed on its ability to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;comply
with the requirements of this ORDER;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;operate
the Bank in a safe and sound manner;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;comply
with applicable laws, rules, and regulations; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;restore
all aspects of the Bank to a safe and sound condition, including capital adequacy, asset quality, and management effectiveness.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>BOARD PARTICIPATION</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board shall increase its participation in the affairs of the Bank, assuming full responsibility for the approval of sound policies
and objectives and for the supervision of all of the Bank&rsquo;s activities, consistent with the role and expertise commonly expected
for directors of banks of comparable size.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
participation shall include meetings to be held no less frequently than monthly at which, at a minimum, the following areas shall
be reviewed and approved: reports of income and expenses; new, overdue, renewal, insider, charged off, and recovered loans; Watch
List, loan exceptions, and concentrations; investment activity; liquidity levels and funds management; adoption or modification
of operating policies; individual committee reports; audit reports; internal control reviews including managements&rsquo; responses;
reconciliation of general ledger accounts; and compliance with this ORDER. Board minutes shall document these reviews and approvals,
including the names of any dissenting directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>


<!-- Field: Page; Sequence: 2; Options: NewSection; Value: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->2<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Bank shall notify the Regional Director of the FDIC&rsquo;s New York Regional Office (&ldquo;Regional Director&rdquo;) and the
Commissioner of Financial Regulation for the State of Maryland (&ldquo;Commissioner&rdquo;) in writing of any resignations or terminations
of any members of its Board or any of its &ldquo;senior executive officers&rdquo; (as that term is defined in section 303.101(b)
of the FDIC&rsquo;s Rules and Regulations, 12 C.F.R. &sect; 303.101(b)) within 10 days of the event. Any notification required
by this subparagraph shall include a description of the background(s) and experience of any proposed replacement personnel and
must be received by the Regional Director and the Commission for non-objection or comment at least 30 days prior to the individual(s)
assuming the new position(s). The Bank shall also establish procedures to ensure compliance with section 32 of the Act, 12 U.S.C.
&sect; 1831i, and Subpart F of Part 303 of the FDIC&rsquo;s Rules and Regulations, 12 C.F.R. Part 303.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>LOSS CHARGE-OFF</U></B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Bank shall eliminate from its books, by charge-off or collection, all assets or portions of assets classified &ldquo;Loss&rdquo;
by the FDIC or the Commissioner in the current Report of Examination, dated August 20, 2012, that have not been previously collected
or charged off. Elimination or reduction of such assets with the proceeds of other Bank extensions of credit shall not be considered
&ldquo;collection&rdquo; for purposes of this paragraph. Thereafter, within 30 days after the receipt of any Report of Examination
or Visitation Letter of the Bank from the FDIC or the Commissioner, the Bank shall eliminate from its books, by charge-off or collection,
all assets or portions of assets classified &ldquo;Loss&rdquo; in any Report of Examination or Visitation Letter that have not
been previously collected or charged off.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>


<!-- Field: Page; Sequence: 3; Value: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->3<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>CLASSIFIED ASSETS REDUCTION</U></B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Within
60 days from the effective date of this ORDER, the Bank shall formulate and submit for review as described in subparagraph (c),
a written plan (&ldquo;Classified Asset Plan&rdquo;) to reduce the Bank&rsquo;s risk position in each asset in excess of $750,000
which is classified &ldquo;Substandard&rdquo; or &ldquo;Doubtful&rdquo; in the current or future Report of Examination, or Visitation
Letter. For purposes of this provision, &ldquo;reduce&rdquo; means to collect, charge off, or improve the quality of an asset so
as to warrant its removal from adverse classification by the Regional Director and the Commissioner.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Classified Asset Plan shall include, at a minimum, the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;an
action plan to review, analyze and document the current financial condition of each classified borrower including source of primary
repayment, repayment ability, and alternative repayment sources, as well as the value and accessibility of any pledged or assigned
collateral, and any possible actions to improve the Bank&rsquo;s collateral position;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a
schedule showing, on a quarterly basis, the expected consolidated balance of all adversely classified assets, and the ratio of
the consolidated balance to the Bank&rsquo;s projected Tier 1 Capital plus the Allowance for Loan and Lease Losses (&ldquo;ALLL&rdquo;);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;specific
action plans intended to reduce the Bank&rsquo;s risk exposure in each classified asset;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>


<!-- Field: Page; Sequence: 4; Value: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->4<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;delineate
areas of responsibility for loan officers; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(v)&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;provide for the submission of monthly written progress reports to the Board for review and notation
in minutes of the Board meetings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Classified Asset Plan shall be submitted to the Regional Director and the Commissioner for non-objection or comment. Within 45
days from receipt of non-objection or any comments from the Regional Director and the Commissioner, and after incorporation and
adoption of all comments, the Board shall approve the Classified Asset Plan, which approval shall be recorded in the minutes of
the Board meeting. Thereafter, the Bank shall implement and fully comply with the Classified Asset Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Bank shall not extend, directly or indirectly, any additional credit to, or for the benefit of, any borrower who is already obligated
in any manner to the Bank on any extensions of credit (including any portion thereof) that has been charged off the books of the
Bank or classified &ldquo;Loss&rdquo; in the current or any future Report of Examination or Visitation Letter, so long as such
credit remains uncollected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Bank shall not extend, directly or indirectly, any additional credit to, or for the benefit of, any borrower whose loan or other
credit has been classified &ldquo;Substandard&rdquo; or &ldquo;Doubtful&rdquo; in the current or any future Report of Examination
or Visitation Letter, and is uncollected, unless a written, detailed explanation of why the extension is in the best interest of
the Bank, prior to extending additional credit pursuant to this paragraph, whether in the form of a renewal, extension, or further
advance of funds, is provided for approval by the Board who shall determine that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>


<!-- Field: Page; Sequence: 5; Value: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->5<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
failure of the Bank to extend such credit would be detrimental to the best interests of the Bank, with a written explanation of
why the failure to extend such credit would be detrimental;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
extension of such credit would improve the Bank&rsquo;s position, with a written explanatory statement of how and why the Bank&rsquo;s
position would improve; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;an
appropriate workout plan has been developed and will be implemented in conjunction with the additional credit to be extended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board&rsquo;s determinations and approval shall be recorded in the minutes of the Board meeting and copies shall be submitted to
the Regional Director and the Commissioner at such times as the Bank submits the progress reports required by this ORDER or sooner
upon the written request of the Regional Director or the Commissioner.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>ALLOWANCE FOR LOAN AND LEASE LOSSES</U></B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Within
60 days from the effective date of this ORDER, the Bank shall develop and submit for review as described in subparagraph (d), a
comprehensive policy and methodology for determining the ALLL (&ldquo;ALLL Policy&rdquo;). The ALLL Policy shall provide for a
review of the ALLL at least once each calendar quarter. Said review shall be completed no later than 15 days subsequent to the
end of each calendar quarter in order that the results of the review conducted by the Board may be properly reported in the quarterly
Consolidated Reports of Condition and Income (&ldquo;Call Report&rdquo;). Such reviews shall, at a minimum, be made in accordance
with:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>


<!-- Field: Page; Sequence: 6; Value: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->6<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Financial
Accounting Standards Board (&ldquo;FASB&rdquo;) ASC 310-40 and FASB ASC 310-10-35-2 through 30;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
FFIEC&rsquo;s Instructions for the Call Report;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the
<I>Interagency Statement of Policy on the Allowance for Loan and Lease Losses</I> (FIL-105-206, issued December 13, 2006);</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;other
applicable regulatory guidance that addresses the appropriateness of the Bank&rsquo;s ALLL; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;any
analysis of the Bank&rsquo;s ALLL provided by the FDIC and the Commissioner.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(b)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Such reviews shall include, at a minimum:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;the Bank&rsquo;s loan loss experience;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;an
estimate of the potential loss exposure in the portfolio; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;trends
of delinquent and nonaccrual loans and prevailing and prospective economic conditions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
minutes of the Board meetings at which such reviews are undertaken shall include complete details of the reviews and the resulting
recommended adjustment in the ALLL. The Board shall document in the minutes the basis for any determination not to require provisions
for loan losses in accordance with subparagraphs (a) and (b).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>


<!-- Field: Page; Sequence: 7; Value: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->7<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
ALLL Policy shall be submitted to the Regional Director and the Commissioner for non-objection or comment. Within 30 days from
receipt of non-objection or any comments from the Regional Director and the Commissioner, and after incorporation and adoption
of all comments, the Board shall approve the ALLL Policy, which approval shall be recorded in the minutes of the Board meeting.
Thereafter, the Bank shall implement and fully comply with the ALLL Policy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
deficiency in the ALLL shall be remedied in the calendar quarter in which it is determined by a charge to current operating earnings
prior to any Tier 1 Capital determinations required by this ORDER and prior to the Bank&rsquo;s submission of its Call Report.
The Bank shall thereafter maintain an appropriate ALLL.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
analysis supporting the determination of the adequacy of the ALLL shall be submitted to the Regional Director and the Commissioner.
These submissions shall be made at such times as the Bank files the progress reports required by this ORDER or sooner upon the
written request of the Regional Director or the Commissioner. In the event that the Regional Director or the Commissioner determines
that the Bank&rsquo;s ALLL is inadequate, the Bank shall increase its ALLL and amend its Call Reports accordingly.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>LOAN POLICY</U></B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Within
60 days from the effective date of this ORDER, the Bank shall conduct a review of the Bank&rsquo;s loan policies and procedures
(&ldquo;Loan Policy&rdquo;) for adequacy and, based upon such review, shall make all appropriate revisions to the Loan Policy necessary
to address the lending deficiencies identified in the current Report of Examination. The revised Loan Policy shall be submitted
for review as described in subparagraph (c). The Board shall also establish review and monitoring procedures to ensure that all
lending personnel adhere to the Loan Policy, and that the Board receives timely and fully documented reports on loan activity,
including reports that identify deviations from the Loan Policy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>


<!-- Field: Page; Sequence: 8; Value: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->8<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Loan Policy shall, at minimum:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;require
that all extensions of credit originated or renewed by the Bank, including loans purchased from a third party (loan participations):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">a.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;have
a clearly defined and stated purpose;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">b.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;have
a predetermined and realistic repayment source and schedule, including secondary source of repayment;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">c.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;are
supported by complete loan documentation, including lien searches, perfected security interests, and collateral valuations; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1.5in">d.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;are
supported by current financial information, profit and loss statements or copies of tax returns, and cash flow projections, which
shall be maintained throughout the term of the loan; and are otherwise in conformance with the Loan Policy;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;incorporate
limitations on the amount that can be loaned in relation to established collateral values, require the source of collateral valuations
to be identified, require that collateral valuations be completed prior to the commitment to lend funds, and require that collateral
valuations be performed on a periodic basis over the term of the loan;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;require
that extensions of credit to any of the Bank&rsquo;s executive officers, trustees, or principal shareholders, or to any related
interest of such person, be reviewed for compliance with Regulation O of the Board of Governors of the Federal Reserve System,
12 C.F.R. Part 215, and section 337.3 of the FDIC&rsquo;s Rules and Regulations, 12 C.F.R. &sect; 337.3;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>


<!-- Field: Page; Sequence: 9; Value: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->9<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;require
accurate reporting of past due loans to the Board or the Bank&rsquo;s loan committee at least monthly;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;require
the individual reporting of loans granted as exceptions to the Loan Policy and aggregation of such loans in the portfolio;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;prohibit
the capitalization of interest or loan-related expenses unless the Board or the Bank&rsquo;s loan committee provides, in writing,
a detailed explanation of why such action is in the best interest of the Bank; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(vii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;establish
review and monitoring procedures for compliance with the FDIC&rsquo;s appraisal regulation, 12 C.F.R. Part 323, and the <I>Interagency
Appraisal and Evaluation Guidelines</I> (FIL-74-94, issued November 11, 1994).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Loan Policy shall be submitted to the Regional Director and the Commissioner for non-objection or comment. Within 30 days from
receipt of non-objection or comments from the Regional Director and the Commissioner, and after incorporation and adoption of all
comments, the Board shall approve the Loan Policy, which approval shall be recorded in the minutes of the Board meeting. Thereafter,
the Bank shall implement and fully comply with the Loan Policy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>LOAN REVIEW PROGRAM</U></B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Within
30 days from the effective date of this ORDER, the Board shall establish a program of independent loan review that will provide
for a periodic review of the Bank&rsquo;s loan portfolio and the identification and categorization of problem credits (&ldquo;Loan
Review Program&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
a minimum, the Loan Review Program shall provide for:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>


<!-- Field: Page; Sequence: 10; Value: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->10<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;prompt
identification of loans with credit weaknesses that warrant the special attention of management, including the name of the borrower,
amount of the loan, reason why the loan warrants special attention; and assessment of the degree of risk that the loan will not
be fully repaid according to its terms;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;prompt
identification of all outstanding balances and commitments attributable to each obligor identified under the requirements of subparagraph
(i), including outstanding balances and commitments attributable to related interests of such obligors, including the obligor of
record, relationship to the primary obligor identified under subparagraph (i), and an assessment of the risk exposure from the
aggregate relationship;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;identification
of trends affecting the quality of the loan portfolio and potential problem areas;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;assessment
of the overall quality of the loan portfolio;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;identification
of credit and collateral documentation exceptions;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;identification
and status of violations of laws, rules, or regulations with respect to the lending function;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(vii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;identification
of loans that are not in conformance with the Bank&rsquo;s Loan Policy;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(viii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;identification
of loans to directors, officers, principal shareholders, and their related interests; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(ix)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a
mechanism for reporting periodically, but in no event less than quarterly, the information developed in (i) through (viii) above
to the Board.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>


<!-- Field: Page; Sequence: 11; Value: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->11<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Loan Review Program shall be submitted to the Regional Director and the Commissioner for non-objection or comment. Within 30 days
from receipt of non-objection or any comments from the Regional Director and the Commissioner, and after incorporation and adoption
of all comments, the Board shall approve the Loan Review Program, which approval shall be recorded in the minutes of the Board
meeting. Thereafter, the Bank shall implement and fully comply with the Loan Review Program.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>CAPITAL</U></B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Within
90 days from the effective date of this ORDER, the Bank shall meet and maintain the following minimum capital levels (as defined
in Part 325 of the FDIC&rsquo;s Rules and Regulations, 12 C.F.R. Part 325), after establishing an appropriate ALLL:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tier
1 Capital at least equal to 8 percent of total assets;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
risk-based Capital at least equal to 12 percent of total risk-weighted assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of this ORDER, all terms relating to capital shall be calculated in accordance with Part 325 of the FDIC&rsquo;s Rules
and Regulations, 12 C.F.R. Part 325, and the Bank shall comply with the FDIC&rsquo;s <I>Statement of Policy on Risk-Based Capital</I>
found in Appendix A to Part 325 of the FDIC&rsquo;s Rules and Regulations, 12 C.F.R. Part 325, App. A.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event any capital ratio falls below the minimum required by this ORDER, the Bank shall immediately notify the Regional Director
and the Commissioner; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;within
30 days shall increase capital in an amount sufficient to comply with this ORDER; or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>


<!-- Field: Page; Sequence: 12; Value: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->12<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;within
30 days shall develop a written plan (&ldquo;Capital Plan&rdquo;) describing the primary means and timing by which the Bank shall
increase its capital ratios up to or in excess of the minimum requirements set forth in this ORDER, as well as a contingency plan
(&ldquo;Contingency Plan&rdquo;) for the sale, merger, or liquidation of the Bank in the event the primary sources of capital are
not available within 30 days. The Capital Plan and Contingency Plan shall be submitted for review as described below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
a minimum, the Capital Plan shall include:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;specific
plans to achieve the capital levels required under this ORDER;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;specific
plans for the maintenance of adequate capital that may in no event be less than the requirements of the provisions of this ORDER;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;projections
for asset growth and capital requirements, and such projections shall be based upon a detailed analysis of the Bank&rsquo;s current
and projected assets, liabilities, earnings, fixed assets, and off-balance sheet activities, each of which shall be consistent
with the Bank&rsquo;s strategic business plan;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;projections
for the amount and timing of the capital necessary to meet the Bank&rsquo;s current and future needs;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;the primary source(s) from which the Bank will strengthen its capital to meet the Bank&rsquo;s needs;
and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;contingency
plans that identify alternative sources of capital should the primary source(s) under (v) above not be available.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>


<!-- Field: Page; Sequence: 13; Value: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->13<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Capital Plan and the Contingency Plan shall be submitted to the Regional Director and the Commissioner for non-objection or comment.
Within 30 days from receipt of non-objection or any comments from the Regional Director and the Commissioner, and after incorporation
and adoption of all comments, the Board shall approve the Capital Plan and the Contingency Plan, which approval shall be recorded
in the minutes of the Board meeting. Thereafter, the Bank shall implement and fully comply with the Capital Plan and the Contingency
Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board shall review the Bank&rsquo;s adherence to the Capital Plan, at minimum, on a monthly basis. Copies of the reviews and updates
shall be submitted to the Regional Director and the Commissioner as part of the progress reports required by this ORDER.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B><U>PROFIT AND
BUDGET PLAN</U></B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Within
60 days from the effective date of this ORDER, and within the first 30 days of each calendar year thereafter, the Bank shall formulate
and submit for review as described in subparagraph (c), a written profit and budget plan (&ldquo;Profit Plan&rdquo;) consisting
of goals and strategies, consistent with sound banking practices, and taking into account the Bank&rsquo;s other written plans,
policies, or other actions as required by this ORDER.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Profit Plan shall include, at a minimum:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a
description of the operating assumptions that form the basis for, and adequately support, material projected revenue and expense
components;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;specific
goals to maintain appropriate provisions to the ALLL;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>


<!-- Field: Page; Sequence: 14; Value: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->14<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;realistic
and comprehensive budgets for all categories of income and expense;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a
budget review process to monitor the revenue and expenses of the Bank whereby actual performance is compared against budgetary
projections not less than quarterly; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;recording
the results of the budget review and any actions taken by the Bank as a result of the budget review in the Board minutes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Profit Plan shall be submitted to the Regional Director and the Commissioner for non-objection or comment. Within 30 days from
receipt of non-objection or any comments from the Regional Director and the Commissioner, and after incorporation and adoption
of all comments, the Board shall approve the Profit Plan, which approval shall be recorded in the minutes of the Board meeting.
Thereafter, the Bank shall implement and fully comply with the Profit Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Within
30 days following the end of each calendar quarter following completion of the Profit Plan required by this paragraph, the Board
shall evaluate the Bank&rsquo;s actual performance in relation to the Profit Plan, record the results of the evaluation, and note
any actions taken by the Bank in the minutes of the Board meeting at which such evaluation is undertaken.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>DIVIDEND RESTRICTION</U></B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Bank shall not declare or pay any dividend or fees to its holding company without the prior written consent of the Regional Director
and the Commissioner.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>


<!-- Field: Page; Sequence: 15; Value: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->15<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>BROKERED DEPOSITS</U></B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Bank shall not accept, renew, or rollover any brokered deposit, as defined by section 337.6(a)(2) of the FDIC&rsquo;s Rules and
Regulations, 12 C.F.R. &sect; 337.6(a)(2), unless it is in compliance with the requirements of 12 C.F.R. &sect; 337.6(b), governing
solicitation and acceptance of brokered deposits by insured depository institutions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Bank shall comply with the restrictions on the effective yields on deposits described in section 337.6 of the FDIC&rsquo;s Rules
and Regulations, 12 C.F.R. &sect; 337.6.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>OVERSIGHT COMMITTEE</U></B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Within
30 days from the effective date of this ORDER, the Board shall establish an oversight committee (&ldquo;Oversight Committee&rdquo;),
a majority of which members who are not now, and have never been, involved in the daily operations of the Bank, with the responsibility
of ensuring compliance with the provisions of this ORDER.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Oversight Committee shall monitor compliance with this ORDER and submit a written report monthly to the entire Board, and a copy
of the report and any discussion related to the report or this ORDER shall be part of the minutes of the Board meeting. Copies
of the monthly report shall be submitted to the Regional Director and the Commissioner as part of the progress reports required
by this ORDER. Nothing contained herein shall diminish the responsibility of the entire Board to ensure compliance with the provisions
of this ORDER.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>PROGRESS REPORTS</U></B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Within
45 days from the end of each calendar quarter following the effective date of this ORDER, the Bank shall furnish to the Regional
Director and the Commissioner written progress reports detailing the form, manner, and results of any actions taken to secure compliance
with this ORDER. All progress reports and other written responses to this ORDER shall be reviewed and approved by the Board and
made a part of the Board minutes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>


<!-- Field: Page; Sequence: 16; Value: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->16<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>SHAREHOLDER DISCLOSURE</U></B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Within
30 days from the effective date of this ORDER, the Bank shall send a copy of this ORDER, or otherwise furnish a description of
this ORDER, to its parent holding company. The description shall fully describe the ORDER in all material respects.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">The
provisions of this ORDER shall not bar, estop, or otherwise prevent the FDIC or any other federal or state agency or department
from taking any other action against the Bank or any of the Bank&rsquo;s current or former institution-affiliated parties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">This
ORDER shall be effective on the date of issuance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">The
provisions of this ORDER shall be binding upon the Bank, its institution-affiliated parties, and any successors and assigns thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">//</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">//</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">//</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">//</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">//</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">//</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">//</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">//</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>


<!-- Field: Page; Sequence: 17; Value: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->17<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">The
provisions of this ORDER shall remain effective and enforceable except to the extent that and until such time as any provision
has been modified, terminated, suspended, or set aside by the FDIC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">Issued
Pursuant to Delegated Authority</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.25in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="width: 50%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 40%; text-align: left"><FONT STYLE="color: black">Dated: May 24, 2013</FONT></TD>
    <TD STYLE="width: 10%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="color: black">By:</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="color: black">/s/ John F. Vogel</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="color: black">John F. Vogel</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="color: black">Regional Director</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="color: black">Division of Risk Management Supervision</FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left"><FONT STYLE="color: black">Federal Deposit Insurance Corporation</FONT></TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>


<!-- Field: Page; Sequence: 18; Options: Last -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->18<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>5
<FILENAME>v346087_ex10-4.htm
<DESCRIPTION>EX-10.4
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ACKNOWLEDGEMENT OF ADOPTION OF FDIC CONSENT
ORDER </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>BY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>THE COMMISSIONER OF FINANCIAL REGULATION
AND </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>THE TALBOT BANK OF EASTON, MARYLAND</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Commissioner of Financial Regulation
for the State of Maryland (the &ldquo;Commissioner&rdquo;), having duly approved the foregoing Consent Order (&ldquo;ORDER&rdquo;),
and The Talbot Bank of Easton, Maryland, Easton, Maryland (&ldquo;Bank&rdquo;) agree that, upon the issuance of the ORDER by the
Federal Deposit Insurance Corporation, the ORDER shall be binding between the Bank and the Commissioner with the same legal effect
and to the same degree that the ORDER would be binding on the Bank if the Commissioner had issued a separate order pursuant to
Md. Code Ann., Fin. Inst. &sect; 5-808 that included and incorporated all of the provisions of the ORDER.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Commissioner and Bank further agree
that the provisions of the ORDER shall remain effective and enforceable by the Commissioner against the Bank except to the extent
that, and until such time as, any provisions of the ORDER shall be modified, terminated, suspended, or set aside by the Commissioner.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; border-bottom: Black 1pt solid">/s/ Teresa M. Louro</TD>
    <TD STYLE="width: 5%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 45%; text-align: center; border-bottom: Black 1pt solid">May 23, 2013</TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD>Teresa M. Louro,</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Date</TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD>Assistant Commissioner for Bank Supervision</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    </TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Agreed and Acknowledged:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>The Talbot Bank of Easton, Easton, Maryland: </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">BY:</TD>
    <TD STYLE="width: 50%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid">/s/ Herbert L. Andrew, III</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Herbert L. Andrew, III</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Director</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


<!-- Field: Page; Sequence: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; border-bottom: windowtext 1pt solid">/s/ Brenda W. Armistead</TD>
    <TD STYLE="width: 50%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Brenda W. Armistead</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Director</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid">/s/ Lloyd L. Beatty, Jr.</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Lloyd L. Beatty, Jr.</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Director</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid">/s/ Carole Ann Clem</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Carole Ann Clem</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Director</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid">/s/ Michael Clemmer, Jr.</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Michael Clemmer, Jr.</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Director</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid">/s/ John W. Dillon</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>John W. Dillon</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Director</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid">/s/ David A. Fike</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>David A. Fike</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Director</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid">/s/ Duane F. Marshall</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Duane F. Marshall</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Director</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid">/s/ Steve M. Shearer</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Steve M. Shearer</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Director</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid">/s/ Christopher F. Spurry</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Christopher F. Spurry</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Director</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid">/s/ David P. Valliant</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>David P. Valliant</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Director</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


<!-- Field: Page; Sequence: 2; Options: NewSection; Value: 2 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->2<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; border-bottom: windowtext 1pt solid">/s/ W. Moorhead Vermilye</TD>
    <TD STYLE="width: 50%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>W. Moorhead Vermilye</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Director</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Comprising the Board of</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Directors of</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>The Talbot Bank of Easton, Maryland</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Easton, Maryland</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


<!-- Field: Page; Sequence: 3; Options: Last -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->3<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>6
<FILENAME>v346087_ex99-1.htm
<DESCRIPTION>EX-99.1
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Shore Bancshares, Inc</B>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">28969 Information Lane, Easton, Maryland
21601</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><U>Talbot Bank Enters into Consent Order
with Regulators</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Easton,
MD, May 24, 2013 - Shore Bancshares, Inc.</FONT> <FONT STYLE="font-family: Times New Roman, Times, Serif">(NASDAQ: SHBI) announced
today that its wholly owned subsidiary, The Talbot Bank of Easton, Maryland (the &ldquo;Bank&rdquo;), entered into a Consent Order
with the Federal Deposit Insurance Corporation (&ldquo;FDIC&rdquo;) and the Commissioner of Financial Regulation of Maryland (&ldquo;Commissioner&rdquo;)
with certain requirements, including improving credit quality and reviewing and revising certain of the Bank&rsquo;s policies and
procedures.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Patrick M. Bilbrough, Chief Executive Officer of the Bank, commented:
&ldquo;Everyone is familiar with the fact that the local and national economies have experienced a very difficult time. No bank
has been immune from the challenges created by the economic downturn. The Bank, like most businesses, is facing challenges. As
we deal with those challenges, we are working closely with the FDIC and the Commissioner to make sure that we handle these challenges
in the correct way and in a timely manner.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Importantly, despite the economic problems encountered over
the last several years, the Bank had a Tier 1 leverage ratio of 8.24% and a total risk based capital ratio of 12.38% at the end
of the first quarter of 2013 which exceeds the regulatory requirement of the Consent Order as well as internal levels set by the
Bank. Additionally, the Company reported Net Income for the first quarter of 2013 reflecting an improvement in credit quality.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Bank has been aggressively improving its credit quality
and has already accomplished many of the requirements of the Consent Order. The Bank&rsquo;s management team is confident that
the administrative aspects of this Consent Order can be effectively addressed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Mr. Bilbrough further noted: &ldquo;While these types of agreements
have become somewhat commonplace in the banking industry over the last three years, every member of our Board and management team
is focused and committed to working with our regulators to continue to resolve the issues facing the Bank and meeting all the terms
and conditions of the Consent Order. At the same time, we are committed to continuing to provide to our customers the superior
care and service levels to which they are accustomed.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Mr. Bilbrough concluded: &ldquo;We look forward to overcoming
our current challenges and emerging an even stronger bank.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>


<!-- Field: Page; Sequence: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">The Bank is a member of the Shore
Bancshares family of companies, the largest independent financial services company that offers banking, insurance and wealth
management services to families and businesses on the Delmarva Peninsula. As a financial holding company with $1.1 billion in
assets, the Shore Bancshares family of companies also includes CNB, Wye Financial &amp; Trust, Avon-Dixon Agency, LLC,
Elliott Wilson Insurance, LLC and Jack Martin &amp; Associates, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">With 7 locations in Talbot and Dorchester
counties, we serve the local needs of our customers and our community through personalized banking services and products, convenient
operations and secure and reliable banking solutions. Our employees offer a personalized &ldquo;hometown&rdquo; approach to make
your banking experience positive. <I>We invest in what is important to you.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Forward-Looking Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This press release contains forward-looking statements as defined
by the Private Securities Litigation Reform Act of 1995. Forward-looking statements do not represent historical facts, but statements
about management&rsquo;s beliefs, plans and objectives. These statements are evidenced by terms such as &ldquo;anticipate,&rdquo;
&ldquo;estimate,&rdquo; &ldquo;should,&rdquo; &ldquo;expect,&rdquo; &ldquo;believe,&rdquo; &ldquo;intend,&rdquo; and similar expressions.
Although these statements reflect management&rsquo;s good faith beliefs and projections, they are not guarantees of future performance
and they may not prove true. These projections involve risk and uncertainties that could cause actual results to differ materially
from those addressed in the forward-looking statements. For a discussion of these risks and uncertainties, see the section of the
periodic reports filed by Shore Bancshares, Inc. with the Securities and Exchange Commission entitled &ldquo;Risk Factors&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>For further information contact: W. Moorhead Vermilye, Chief
Executive Officer, 410-763-7800</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


<!-- Field: Page; Sequence: 2; Options: Last -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
