Bank Directors Seminar, Coeur d'Alene, ID, September 15-17, 2019

Total Risk-Based Capital

Tier 1 Risk-Based Tier 1 Leverage Capital Capital

Regulatory Minimums - Well Capitalized

10.00%

6.00%

5.00%

Policy Guidelines

MINIMUMS FOR BANK

10.50%

9.00%

7.00%

CRE Concentration Additions (I)

Equal or less than peers (2)

0.00%

0.00%

0.00%

> peers and <= 125% of peers

025%

0.25%

0.25%

> 125% and <= 150% of peers

0.50%

0.50%

0.50%

> 150% and <= 175% of peers

0.75%

0.75%

0.75%

> 175% and <=200% of peers

1.00%

1.00%

1.00%

Classified Asset Additions (3)

<10%

0.00%

0.00%

0.00%

0.25%

0.25%

> 10% and <=20%

0.25%

>20% and <=30%

0.50%

0.50%

0.50%

> 30% and <=40%

0.75%

0.75%

0.75%

1.00%

>40% and <=50%

1.00%

1.00%

>50% and <=60%

1.25%

1.25%

1.25%

>60%

1.50%

1.50%

1.50%

(1) Total Risk-Based Capital divided into CRE, the result then divided into Peer CRE Ratio. CRE concentrations are all real estate secured loans less 1st TD-1-4 family residential and pre-sold -1st TD-1-4 family residential construction loans. (2) Peers are 2004 DeNovo Banks (3) Classified assets are Substandard, Doubtful, Loss and OREO as a percent of Total Risk-Based Capital

Minimum Risk-Based Capital CRE Concentration to Total Risk-Based Capital > peers and <= > 125% and <= > 150% and <= 125% of peers 150% of peers 175% of peers

Classified Asset to Total Risk- Based Cap

Equal or less than peers (2)

> 175% and <= 200% of peers

<10%

10.50%

11.00%

11.25%

11.50%

10.75%

> 10% and <=20%

10.75%

11.00%

11.25%

11.50%

11.75%

> 20% and <=30%

11.00%

11.25%

11.50%

11.75%

12.00%

12.00%

12.25%

>30% and <=40%

11.25%

11.50%

11.75%

>40% and <=50%

12.00%

12.25%

12.50%

11.50%

11.75%

12.25%

12.50%

12.75%

>50% and <=60%

11.75%

12.00%

>60%

12.00%

12.25%

12.50%

12.75%

13.00%

Capital Policy

-22-