CASH 2018 Special Proxy Statement

CRESTMARK BANCORP, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 4 – LOANS, LEASES AND RECEIVABLES (Continued) During the year-ending December 31, 2017, the terms of one commercial loan was modified as a troubled debt restructuring. The modification included a combination of a change in the payment terms and an extension of the maturity date. During the year-ending December 31, 2016, the terms of one commercial loan was modified as a troubled debt restructuring. The modification included a combination of a change in the payment terms and an extension of the maturity date. The loans considered outstanding troubled debt as of December 31, 2016 have been re-modified during 2017 under current market conditions and are now included in the current loan portfolio and are no longer classified as troubled debt restructurings as of December 31, 2017. During the year-ending December 31, 2015, the terms of one commercial loan was modified as a troubled debt restructuring. The modification included a combination of a change in the payment terms and an extension of the maturity date. The loans considered outstanding troubled debt as of December 31, 2015 have been re-modified during 2016 under current market conditions and are now included in the current loan portfolio and are no longer classified as troubled debt restructurings as of December 31, 2016. There were no troubled debt restructurings for which there was a payment default within twelve months following the modification during the years ended December 31, 2017, 2016 and 2015, respectively. Credit Quality Indicators: The Corporation categorizes loans, leases and receivables into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, and repayment probability based on the liquidation value of the collateral pledged, credit documentation, public information, and current economic trends, among other factors. The Corporation analyzes loans, leases and receivables individually by classifying the loans, leases and receivables based on credit risk. This analysis includes commercial loans, leases and factoring receivables. This analysis is performed continuously and formally reported on a monthly basis. The Corporation uses the following definitions for risk ratings: Special Mention. Loans, leases and receivables classified as special mention have certain characteristics that deserve management’s closer attention. This can include specific weaknesses identified in a specific account that may result in deterioration of the repayment prospects for the account. Special mention accounts also identify general characteristics that management wants to monitor in more detail, such as industry segment, geographic location or type of account. Substandard. Loans, leases and receivables classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans, leases and receivables so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Corporation will sustain some loss if the deficiencies are not corrected. Doubtful. Loans, leases and receivables classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Loans, leases and receivables not meeting the risk rating above that are analyzed as part of the above described process are considered to be pass-rated loans, leases and receivables. F-22