In an effort to provide a more formal and realistic training environment for all lenders and to provide a more structured process for evaluating credits, Houston Community Bank is implementing a new loan approval process and a new Officers Loan Committee. The information and training garnered from this new Committee will also serve as a tool to strength our credit skills and provide more uniform credit analysis. The following policy and procedure will become effective on October 20, 2003. Membership in the Officers Loan Committee consists of every loan officer and credit analyst (s). Each loan officer may approve an extension of credit or the renewal of existing loans to borrowers whose aggregate indebtedness does not exceed the loan officers' current lending authority. Please refer to the attached lending authority.

Any loan request up to $300, 000 which in the aggregate exceeds a loan officers lending authority may obtain credit approval by submitting the required documentation to the Chairman of the Board & C. E. O. In the Chairman's absence, the loan officer may obtain credit approval by the combined joint consent of both the Vice Chairman and the President. Any loan requests whereby either the direct loan amount or any related debt results in an amount in excess of $300, 000 will be presented to the newly created Officers Loan Committee. This Committee will meet weekly, as needed, at a time and location to be determined by the Chairman.

Each loan officer will notify the Chairman of pending loans in process and an estimated time line for presenting the loan or loans to the Officers Loan Committee. The presenting officer will be responsible for preparing a package for each committee member. Please be mindful of the required advance notice and the scheduling required for each committee member. Each loan officer with designated lending authority will be entitled to vote on the proposed loan which will be presented to the committee by the loan officer making the recommendation.

If the loan request is approved by the Officers Loan Committee, it will then be presented to the Director's Senior Loan Committee for final approval. As in the Director's Senior Loan Committee, the Chairman, the Vice Chairman or the President will have the authority to decline a loan proposal. Please remember that no loan or extension of Credit may be committed to or funded without the proper level of approval. All loans should conform to our loan policies and procedures, if it does not, an explanation in the loan package is appropriate. Please review your current loan policy manual and make sure it is up to date. If you have any questions regarding this new committee or a current loan policy or procedure, please contact the President, the Vice Chairman or the Chairman of the Board..