HANDOUT 2

Audit Committee Chapter

1. INTRODUCTION AND PURPOSE

The primary function of the Audit Committee is to assist the Board of Directors in
fulfilling its fiduciary responsibilities by overseeing the Company's financial reporting
and public disclosure activities. The Audit Committee's primary duties and
responsibilities are to:

A. Assist Board oversight of (1) the integrity of the Company's financial

statements, (2) the Company's compliance with legal and regulatory
requirements, (3) the independent auditor's qualifications and independence,
and (4) the performance of the Company's internal audit function and
independent auditors.
B. Prepare the report that Securities and Exchange Commission (SEC) rules
require to be included in the Company's annual proxy statement.

II. COMPOSITION

The members of the Audit Committee shall be elected by the Board. Unless a Chair is
elected by the full Board, the members of the Audit Committee may designate a Chair
by majority vote of the full Audit Committee membership.

A. Independence

The Audit Committee shall be comprised of three or more Directors each of

whom shall have been affirmatively determined by the Board to be
independent Directors as defined by the SEC, the New York Stock Exchange
(NYSE) and by the Federal Deposit Insurance Corporation (FDIC).

B. Financial Literacy and Expertise

Each member of the Audit Committee shall be financially literate, as such

qualification is interpreted by the Company's Board of Directors in its business
judgment. At least one member of the Audit Committee shall be an "Audit
Committee Financial Expert" as defined by the SEC. (If the Company does not
have an "Audit Committee Financial Expert" on the Audit Committee it shall
disclose that fact and the reasons therefore). At least one member of the Audit
Committee shall have accounting or related financial management expertise as
defined by the NYSE. At least two members of the Audit Committee shall
have banking or related financial management expertise as defined by the
FDIC. These determinations shall be made by the Board of Directors.

C. Other

Audit Committee members shall not simultaneously serve on the Audit Committees
of more than two other public companies.

III. MEETINGS

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The Audit Committee shall meet at least four times annually, or more frequently as
circumstances dictate. To the extent practicable, each of the Audit Committee
members shall attend each of the regularly scheduled meetings in person.

A majority of the Audit Committee members currently holding office constitutes a

quorum for the transaction of business. The Audit Committee shall take action by the
affirmative vote of a majority of the Audit Committee members present at a duly held
meeting.

The Audit Committee shall meet periodically in separate executive sessions with
management (including the chief financial officer and chief accounting officer), the
internal auditors and the independent auditor, and have such other direct and
independent interaction with such persons from time to time as the members of the
Audit Committee deem appropriate.

The Audit Committee may request any officer or employee of the Company or the
Company's outside counsel or independent auditor to attend a meeting of the
Committee or to meet with any members of, or consultants to, the Committee.

IV. COMMITTEE AUTHORITY AND RESPONSIBILITIES

The Audit Committee shall have the sole authority to appoint or replace the
independent auditor (subject, if applicable, to shareholder ratification). The Audit
Committee shall be directly responsible for the appointment, compensation, and
oversight of the work of any independent auditor employed by the Company
(including resolution of disagreements between management and the auditor
regarding financial reporting) for the purpose of preparing or issuing an audit report
or related work, and each such independent auditor shall report directly to the Audit
Committee.

The Audit Committee shall pre-approve all audit and permitted non-audit services.
The Audit Committee may form and delegate authority to subcommittees consisting
of one or more members when appropriate, including the authority to grant pre-
approvals of audit and permitted non-audit services, provided that decisions of such
subcommittee to grant pre-approvals shall be presented to the full Audit Committee at
its next scheduled meeting.

The Audit Committee shall have the authority to retain, to the extent it deems
necessary or appropriate, without prior permission from the Board or management,
special legal, accounting or other consultants to advise the Committee. The Company
shall provide for appropriate funding, as determined by the Audit Committee, in its
capacity as a committee of the Board of Directors, for payment of compensation to
any advisors employed by the Committee and for the ordinary administrative
expenses of the Committee that are necessary or appropriate in carrying out its duties.

The Audit Committee shall make regular reports to the Board. The Audit Committee
shall annually review the Audit Committee's own performance. The Audit Committee
shall review and reassess the adequacy of this Charter annually and recommend any
proposed changes to the Board for approval.

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The Audit Committee shall:

Financial Statement and Disclosure Matters

1. Review and discuss with management and the independent auditor the annual
audited financial statements, including the Company's specific disclosures
made in management's discussion and analysis, and recommend to the Board
whether the audited financial statements should be included in the Company's
Form 10-K.
2. Review and discuss with management and the independent auditor the
company's quarterly financial statements prior to the filing of its Form 10-Q,
including the results of the independent auditor's review of the quarterly
financial statements.

3. Review with management and the independent auditor: (1) major issues
regarding accounting principles and financial statement presentation, including
any significant changes in the Company's selection or application of
accounting principles; and (2) major issues as to the adequacy of the
Company's internal controls and any special audit steps adopted in light of
material control deficiencies and the adequacy of disclosures about changes in
internal control over financial reporting; and (3) the effect of regulatory and
accounting initiatives, as well as off-balance sheet structures, on the financial
statements of the Company.

4. Review and discuss with management and the independent auditor the
Company's internal controls report and the independent auditor's attestation of
the report prior to filing of the Company's Form 10-K.

5. Review and discuss quarterly reports from the independent auditor on:

a. All critical accounting policies and practices to be used;

b. All alternative treatments with Generally Accepted Accounting
Principles for policies and practices related to material items that have
been discussed with management, including ramifications of the use of
such alternative disclosures and treatments, and the treatment preferred
by the independent auditor.
c. Other material written communications between the independent
auditor and management, such as any management letter or schedule of
unadjusted differences.
6. Discuss earnings press releases, as well as financial information provided to
analysts and rating agencies. The discussion may be general in nature (i.e.,
discussion of the types of information to be disclosed and the type of
presentation to be made) and need not discuss in advance each earnings
release.

7. Discuss with management the Company's major risk exposures and the steps
management has taken to monitor and control such exposures including the
Company's risk assessment and risk management policies.

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 8. Discuss with the independent auditor the matters required to be discussed by
Statement on Auditing Standards No. 61 (as amended) relating to the conduct
of the audit, including any difficulties encountered in the course of the audit
work, any restrictions on the scope of activities or access to requested
information, and any significant disagreements with management.

9. Review disclosures made to the Audit Committee by the Company's CEO and
CFO during their certification process for the Form 10-K and Form 10-Q
about any significant deficiencies in the design or operations of internal
controls or material weaknesses therein and any fraud involving management
or other employees who have a significant role in the Company's internal
controls.

Oversight of the Company's Relationship with the Independent Auditor

10. Review and evaluate the lead partner of the independent auditor.
11. At least annually, obtain and review a report by the independent auditor
describing: the firm's internal quality-control procedures; any material issues
raised by the most recent internal quality-control review, or PCAOB
inspection, of the firm, or by any inquiry or investigation by governmental or
professional authorities, within the preceding five years, respecting one or
more independent audits carried out by the firm, and any steps taken to deal
with any such issues; and all relationships between the independent auditor
and the Company. Evaluate the qualifications, performance and independence
of the independent auditor, taking into account the opinions of management
and internal auditors. The Audit Committee shall present its conclusions with
respect to the independent auditor to the Board.

12. Ensure the regular rotation of the lead independent audit partner as required by
law.

13. Monitor compliance with Audit Committee approved policies regarding the
hiring of employees or former employees of the independent auditors.

14. Review with the independent auditor any audit problems or difficulties and
management's response. Discuss with the independent auditor material issues
on which the independent auditor was consulted by the Company's audit team.

Oversight of the Company's Internal Audit Function

15. Review and approve the appointment and replacement of the Chief Audit
Executive (CAE). The Audit Committee will have direct input into evaluations
of the CAE's performance as well as any decisions regarding CAE
compensation.
16. Review the significant recommendations made to management by the internal
auditing department and management's responses.

17. Discuss with the independent auditor and management the internal audit
department responsibilities, budget and staffing and any recommended
changes in the planned scope of the internal audit.

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Compliance Oversight Responsibilities

18. Obtain from the independent auditor assurance that Section 10A(b) of the
Exchange Act has not been implicated.
19. Review reports from management with respect to the Company's compliance
with applicable legal and regulatory requirements and the Company Code of
Ethics.

20. Obtain an annual report from the general counsel regarding the adequacy of
the Company's compliance program.

21. Review reports and disclosures of insider and affiliated party transactions.

22. Ensure appropriate procedures are established and maintained:

o to permit the Audit Committee to monitor the receipt, retention, and

treatment of complaints received by the Company regarding
accounting, internal accounting controls, or auditing matters; and

o to permit the confidential, anonymous submission by employees of the

Company of concerns regarding questionable accounting or auditing
matters to the Audit Committee.

23. Review the significant findings from supervisory examination reports of state
and federal agencies and the corrective action taken by management to such
reports.

24. Discuss with management and the independent auditor any correspondence
with regulators or governmental agencies and any published reports which
raise material issues regarding the Company's financial statements or
accounting policies.

25. Review with management and the independent auditor the basis for their
reports issued under 12 CFR section 363.2(b).

26. Discuss with the Company's General counsel legal matters that may have a
material impact on the financial statements or the Company's compliance
policies and internal controls.

Other Responsibilities

27. Review management's determination of the consolidated allowance for loan

and lease loss reserves.
28. Review the adequacy of the Company's insurance coverages.

29. Monitor the systems that management has established to implement the
Company's information security and business continuity programs.

V. Qualification. While the Audit Committee has the responsibilities and powers set
forth in this Charter, it is not the duty or responsibility of the Audit Committee to plan

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or conduct audits or to determine that the Company's financial statements and
disclosures are complete and accurate and are in accordance with generally accepted
accounting principles and applicable rules and regulations. These are the
responsibilities of Company management and the independent auditor. Nor is it the
duty or responsibility of the Audit Committee to conduct investigations or to assure
compliance with laws and regulations