Board Justification

Base salary is established for each executive to reflect the potential contribution of the executive to the achievement of the Company’s and the Bank’s business objectives and to be competitive with base salaries paid by other institutions. The Company utilizes the Industry specific salary surveys as a source to evaluate competitiveness of base salaries. The level of each executive officer’s base salary is designed to reward performance for carrying out the required day-to-day activities and responsibilities of each officer’s position. We increase base salaries based upon competitive market needs, our past and expected financial performance and the individual executive’s performance. Base salary is a large element of the compensation program because it fairly compensates individuals for fulfilling their daily responsibilities and obligations.

Board Justification

Discretionary cash bonus paid in current year based on Company performance in prior year.

Board Justification

Includes $12,000 for car allowance, $372 for Company-paid life insurance premiums, $2,037 for interest paid on deferred Bonus, $4,500 for social club dues, $18,000 for director fees, $386 for dividends on restricted stock, $3,801 for Company-paid disability insurance and $14,127 for 401(k) match.

Board Justification

N/A