1. Alec Lajoie (Peoples United Bank) & Clint Bagdon

2.  Covenants had recently been enhanced to create a history area for each detail record  New spread templates for NFP, AUTO & CRE required that each covenant be tied to an Industry  New grid technology now allowed the user to:  Select columns  Reorder those columns  Print ad hoc reports 2

3.  Previously this was inconsistent from bank to bank and made coding reports virtually impossible  Bank A would use: ‘Ongoing, Open or Closed’  Bank B would use: ‘In Compliance / Out of Compliance’  Bank C would use: ‘Pending / Past Due / Waived’  Standardization of Detail Status  Detail status is ONLY set as either Open / Closed  Measurement statuses are still bank defined  Created a new In Compliance Flag  Created a new Past Due Flag  Admin Consideration: CovenantStatus Picklist has now been replaced with the CovenantMeasurementStatus Picklist 3

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5.  In Compliance is now displayed when 1 of 2 things occur for a measurement:  User manually sets it (Non Financial)  LV evaluates a manually entered and automatic values (Financial)  The system will look to automatically populate a one time measurement once the statement date is reached  If spreads are updated after this occurs, the value can be updated and the compliance flag updated accordingly utilizing the ‘Refresh’ button 5

6. 6 1.Once a calculation is set, a refresh button will be activated 2.Once clicked, it will update the value + update the compliance flag 3.User will need to update the measurement date (if necessary)

7.  Past due flag will only be set when:  Past due date has been reached  No measurement date has been set  This flag will be shown in ANY measurements for this covenant are passed due  Old measurements that will not contain a value need to either be removed or waived with a measurement date  Admin Consideration: This functionality can be turned off by utilizing the covenant measurement status third code = ‘NOCHANGE’ logic 7

8. 8 Current LogicLast Year Detail status (Open / Closed)Detail Status (bank defined) Measurement status default available No status was defaulted when creating a new measurement In compliance flag set either automatically by LV or manually N/A Past due flag calculated with the ability to be turned off N/A Query ability for ALL aboveQuery ability for detail status only Column selection ability for ALL above Column selection ability for detail status only

9.  New measurement rows can be created by the system  Utilizes a recurring flag that can be defaulted at the covenant type level and managed further for each covenant record  The system requires that the next measurement be both created and it’s statement date be in the future  It will create the new record utilizing the frequency 9

10. 10  Create at Measurement with a statement date in the future and no meas. date  On 1/1/2016 a new measurement row will be created

11.  The system will search for a spread whose period date matches the statement date.  The value is selected from multiple like spreads using the following hierarchy 1. Audited 2. Qualified 3. Unqualified 4. Reviewed 5. Tax Return 6. Compiled 7. Draft 8. Prepared 9. Co. Prepared 10. Interim 11. Internal 11 The following Statement types will be ignored: Budgeted Need Other Projected

12.  Added ‘Monitored by’ field to the detail portion of the page. This field will draw selections from the banks team table  Admin Consideration: New teams can be created to create custom groupings  Changing a covenant name in admin will now update the name globally across all existing covenants of this type. Previously, this would only update the ones newly created  Added the ability for each covenant record to be tied to one or multiple entities.  This can be multiple parties, accounts or collaterals, but NOT a combination of the three logics. 12

13. 13 1.Click required for link 2.Select the entities 3.Click Ok 4. Once selected, you can hover over the entity are and see all the linkages

14. A Perspective from People’s United Bank Alec Lajoie

15. Financial Covenants Non-Financial Covenants Prerequisite Required Docs Recurring Required Docs Debt Service30 Day Annual Pay down Flood Determination Business Financial Statements Minimum Liquidity Dividend Restriction Letter of IntentAccounts Receivable Aging Minimum Loan to Value Escrow Reserve Account Joint Credit Acknowledgement Personal Financial Statement 15

16.  Formula/Advance Rate Covenants  Primarily used by Commercial & Industrial Group  Examples  Borrowing Base Formulas  CapEx Advance Formulas 16

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18.  Any covenant that is required by the bank that is NOT a non-financial covenant, a document, or formula  Most commonly tracked quarterly or annually  Examples:  Minimum Debt Service Coverage  Minimum Loan to Value  Minimum Liquidity  Maximum Debt to Net Worth 18

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20.  Non-Financial Covenant  Any covenant that is required by the bank that is NOT financial covenant, a document, or formula  Examples:  Dividend Restriction  Annual 30 Day Principal Pay down for Line of Credit  Deposit Relationship for Life of Loan 20

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22.  Required Document  Any document that is required by the bank during the life of the loan  Examples  Annual FYE Business Financials  Annual Personal Financial Statement  Multiple Property Schedule  Monthly Borrowing Base 22

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24.  Used on items that are pending, and may affect credit approval  Appraisals  Environmental Reports  Debt Service Coverage  Additional Requirements 24

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27.  Covenants and Exceptions Sub-Report  Subject-To Items  Formulas/Advance Rates  Document Reporting  Financial Covenants  Non-Financial Covenants/Escrow/Reserve Types 27

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