This excerpt taken from the FULT 8-K filed Jan 12, 2005.
Section 3.26 Loan Portfolio of Somerset Bank.
(a) Attached hereto as Schedule 3.26 is a list of (i) all outstanding commercial loans, commercial loan commitments and commercial letters of credit, of Somerset Bank
- 26 -
in excess of $1,500,000, (ii) all loans of Somerset Bank classified by Somerset Bank or any regulatory authority as Monitor, Substandard, Doubtful or Loss, (iii) all commercial and mortgage loans of Somerset Bank classified as non-accrual, and (iv) all commercial loans of Somerset Bank classified as in substance foreclosed.
(b) Somerset Bank has adequately reserved for or charged off loans in accordance with applicable regulatory requirements, United States generally accepted accounting principles and current written policies of Somerset Bank.
(c) Except as set forth on Schedule 3.26, Somerset Bank does not engage in so-called subprime Section 32 lending. For the purposes of this representation, subprime lending shall be deemed to refer to programs that target borrowers with weakened credit histories typically characterized by payment delinquencies, previous charge-offs, judgments or bankruptcies, or that target borrowers with questionable repayment capacity evidenced by low credit scores or high debt-burden ratios.
Section 3.27 Investment Portfolio. Attached hereto as Schedule 3.27 is a list of all securities held by Somerset and the Somerset Subsidiaries for investment, showing the holder, principal amount, book value and market value of each security as of a recent date, and of all short-term investments held by them as of September 30, 2004. These securities are free and clear of all liens, pledges and encumbrances, except as shown on Schedule 3.27. Except as set forth on Schedule 3.27, the investment portfolio of Somerset or the Somerset Subsidiaries does not include any financial derivatives.