[1]

Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses.

[2]

Fair value is generally determined through independent appraisals of the underlying property (in the case of OREO) or collateral (in the case of impaired loans).

[3]

The weighting of qualitative factors includes items such as economic conditions (positive weight) and estimated liquidation expenses. Regarding OREO, the weighting of qualitative factors is further adjusted by a factor based on historical experience of appraised value to realized sales value, which at December 31, 2016 is a "haircut" to the weighting of 13%.