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Nominating Committee Charter

Audit Committee Charter

Compensation Committee Charter

NOMINATING COMMITTEE CHARTER

Purpose  

The Nominating Committee (the “Committee”) is appointed by the Board of Directors (the “Board”) of First Trust Bank (the “Bank”): (i) to assist the Board, on an annual basis, by identifying individuals qualified to become Board members, and to recommend to the Board the director nominees for the next meeting of shareholders at which directors are to be elected; (ii) to assist the Board in the event of any vacancy on the Board by identifying individuals qualified to become Board members, and to recommend to the Board qualified individuals to fill any such vacancy; and (iii) to recommend to the Board, on an annual basis, director nominees for each Board committee.  

Committee Membership  

The Committee shall consist of no fewer than three members, each of whom shall be a director of the Bank and each member shall be, (i) “independent” as defined by applicable NASDAQ listing standards; and (ii) shall meet all other applicable legal requirements. Members shall be appointed and removed by the Board. A majority of the members of the Committee shall constitute a quorum.

Operations

The Committee shall meet at least once a year. Additional meetings may occur as the Committee deems advisable. The Committee will cause to be kept adequate minutes of all its proceedings, and will report its actions to the next meeting of the Board. Committee members will be furnished with copies of the minutes of each meeting and any action taken by unanimous consent. The Committee is governed by the same rules regarding meetings (including meetings by conference telephone or similar communications equipment), action without meetings, notice, waiver of notice, and quorum and voting requirements as are applicable to the Board.  

Authority

The Committee will have the resources and authority necessary to discharge its duties and responsibilities, including the authority to retain outside counsel or other experts or consultants, as it deems appropriate. Any communications between the Committee and legal counsel in the course of obtaining legal advice will be considered privileged communications of the Bank and the Committee will take all necessary steps to preserve the privileged nature of those communications.  

The Committee shall have the authority to retain and terminate any search firm to be used to identify director candidates and shall have sole authority to approve the search firm’s fees and other retention terms, at the Bank’s expense.

The Committee, and each member of the Committee in his or her capacity as such, shall be entitled to rely, in good faith, on information, opinions, reports or statements, or other information prepared or presented to them by (i) officers and other employees of the Bank, whom such member believes to be reliable and competent in the matters presented, (ii) counsel, public accountants or other persons as to matters which the member believes to be within the professional competence of such person.  

Committee Responsibilities

The Committee shall have the responsibility to develop and recommend criteria for the selection of new directors to the Board, which criteria shall include, but not be limited to, the criteria set forth in Article III, Section 3 of the Bank’s bylaws.  The Committee shall have the power to apply such criteria in connection with the identification of individuals to be Board members, as well as to apply the standards imposed by all applicable federal laws and the underlying purpose and intent thereof in connection with such identification process. 

When vacancies occur on the Board or otherwise at the direction of the Board, the Committee shall actively seek individuals whom the Committee determines meet such criteria and standards for recommendation to the Board as nominee(s). 

The Committee shall recommend to the Board, on an annual basis, nominees for election as directors for the next annual meeting of shareholders.

AUDIT COMMITTEE CHARTER

Organization

There shall be a committee of the Board of Directors to be known as the Audit Committee. The Audit Committee shall be composed of directors who are independent of the management of the Company and are free of any relationship that, in the opinion of the Board of Directors, would interfere with their exercise of independent judgment as a committee member.  Members of the Audit Committee shall be financially literate or become financially literate within a reasonable period of time after appointment to the Audit Committee and at least one member shall have accounting, related financial management expertise, or other comparable experience or background that results in the individual's financial sophistication.

Statement of Policy

The Audit Committee shall provide assistance to the corporate directors in fulfilling their responsibility to the shareholders, potential shareholders, and investment community relating to corporate accounting, reporting practices of the Company, and the quality and integrity of the financial reports and other operating controls of the Company. In so doing, it is the responsibility of the Audit Committee to maintain free and open means of communication between the directors, the independent auditors, the internal auditors, the financial management and other employees of the Company.

Responsibilities

In carrying out its responsibilities, the Audit Committee believes its policies and procedures should remain flexible, in order to best react to changing conditions and to assure the directors and shareholders that the corporate accounting and reporting practices and other operating controls of the Company are of high quality and are in accordance with all requirements.  

In carrying out these responsibilities, the Audit Committee will:

• Select, evaluate, and where appropriate, replace the independent auditors who audit the financial statements of the Company and its subsidiaries.  In doing so, the Committee shall obtain disclosures regarding the auditors’ independence required by Independence Standards Board Standard No. 1, as may be modified or supplemented, and discuss with the auditors the auditors’ independence.  The independent auditors are to be accountable to the Board of Directors and the Audit Committee, as representatives of the shareholders.

• Review the scope of the audit and the audit procedures utilized.

• Review with the independent auditors, the internal auditor and the Company's financial and accounting personnel the adequacy and effectiveness of the accounting and financial controls of the Company.  Emphasis should be given to the adequacy of such internal controls to expose any payments, transactions, or procedures that might be deemed illegal or otherwise improper.

• Provide sufficient opportunity for the independent auditors to meet with the members of the Audit Committee without members of management present. Among the items to be discussed in these meetings are the independent auditors' evaluation of the Company's financial, accounting, and auditing personnel, and the cooperation that the independent auditors received during the course of the audit.

• Be available to the independent auditors during the year for consultation purposes.

• Discuss with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61, as may be modified or supplemented.

• Review with management and the independent accountants the Company's financial disclosure documents, including all annual and quarterly financial statements and reports filed with the Federal Deposit Insurance Company or sent to stockholders.  Following the satisfactory completion of each year-end review, recommend to the Board the inclusion of the audited financial statements in the Company's filing on Form 10-KSB. The year-end review shall include any significant problems and material disputes between management and the independent accountants and a discussion with the independent accountants out of management's presence of the quality of the Company's accounting principles as applied in its financial reporting, the clarity of the Company's financial disclosures and degree of aggressiveness or conservatism of the Company's accounting principles and underlying estimates, and a frank and open discussion of other significant decisions made by management in, preparing the financial disclosure.  With respect to the independent accountants’ reviews of quarterly reports on Form 10-QSB, communication from the independent accountants may be received on behalf of the Audit Committee by the Committee Chair, who will report thereon to the full Audit Committee at its next meeting.

• Review the internal audit function of the Company including the independence and authority of its reporting obligations, the proposed audit plans for the coming year, and the coordination of such plans with the independent auditors.

• Receive reports or summaries of findings from completed internal audits, together with management responses, and monitor progress of the proposed internal audit plan, with explanations for any deviations from the original plan.

• Prepare the reports required by the rules of the applicable regulatory authorities to be included in the Company's annual proxy statement.

• Submit the minutes of all meetings of the Audit Committee to, or discuss the matters discussed at each committee meeting with, the Board of Directors.

• Investigate any matter brought to its attention within the scope of its duties, with the power to retain outside counsel for this purpose if, in its judgment, that is appropriate.  

While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company's financial statements are complete and accurate and are in accordance with generally accepted accounting principles. This is the responsibility of management and the independent auditor. Nor is it the duty of the Audit Committee to conduct investigations, to resolve disagreements, if any, between management and the independent auditor or to assure compliance with laws and regulations.

COMPENSATION COMMITTEE CHARTER  

Purpose  

The Compensation Committee (the “Committee”) is appointed by the Board of Directors (the “Board”) of First Trust Bank (the “Bank”) to discharge the Board’s responsibilities relating to compensation of the Bank’s directors and executive officers.  The Committee has overall responsibility for establishing corporate goals and objectives relevant to determining director and executive officer compensation and for evaluating and approving or recommending for approval to the Board the director and officer compensation plans, policies and programs of the Bank.  In discharging its responsibility, the Committee shall, on an annual basis: (i) review and report on the performance of the President and Chief Executive Officer (the “CEO”); (ii) review and recommend all elements and amounts of CEO compensation; (iii) review and recommend Board and committee compensation; (iv) approve compensation of other executive officers; and (v) review and recommend any management incentive compensation plans.  

Committee Membership  

The Committee shall consist of no fewer than three members, each of whom shall be a director of the Bank.  Each member of the Committee shall: (i) be “independent” as defined by Nasdaq listing standards and applicable regulations promulgated under the Securities Exchange Act of 1934; and (ii) shall meet all other applicable legal requirements.  The Committee will also consider the absence or presence of material relationships with the Bank which might impact independence.  Members shall be appointed and removed by the Board. A majority of the members of the Committee shall constitute a quorum.  

Operations  

The Committee shall meet at least once a year. Additional meetings may occur as the Committee deems advisable. The Committee will cause to be kept adequate minutes of all its proceedings, and will report its actions to the next meeting of the Board. Board members will be furnished with copies of the minutes of each meeting and any action taken by unanimous consent. The Committee is governed by the same rules regarding meetings (including meetings by conference telephone or similar communications equipment), action without meetings, notice, waiver of notice, and quorum and voting requirements as are applicable to the Board.  

Authority  

The Committee shall have the resources and authority necessary to discharge its duties and responsibilities, including the authority to retain outside counsel or other experts or consultants, as it deems appropriate and reasonably necessary. Any communications between the Committee and legal counsel in the course of obtaining legal advice will be considered privileged communications of the Bank and the Committee will take all necessary steps to preserve the privileged nature of those communications.  

The Committee, and each member of the Committee in his or her capacity as such, shall be entitled to rely, in good faith, on information, opinions, reports or statements, or other information prepared or presented to them by (i) officers and other employees of the Bank or its subsidiaries, whom such member believes to be reliable and competent in the matters presented, and (ii) counsel, public accountants or other persons as to matters which the member believes to be within the professional competence of such person.

Committee Responsibilities  

The Committee shall set corporate goals and objectives relevant to director and executive officer compensation.  In setting these goals and objectives, the Committee should consider, at a minimum, the Bank’s performance and relative stockholder return.  The Committee shall annually review and evaluate the corporate goals and objectives and amend such goals in its discretion.  

The Committee shall have the responsibility to review the performance of the CEO on an annual basis in light of the corporate goals and objectives.  The Committee shall report its findings concerning the performance of the CEO to the Board, and shall make recommendations to the Board based on its findings.  

The Committee shall have the responsibility to review all forms of compensation received by the CEO and the amounts thereof.  The Committee shall also have the responsibility of recommending to the Board for approval any changes in form or amount of compensation received by the CEO.  

The Committee shall have the responsibility of reviewing and recommending for approval changes, if any, of, the compensation paid to Board members for their service on the Board and any committees thereof.  

The Committee shall have the responsibility of approving the form and amount of compensation received by executive officers other than the CEO.  The Committee may solicit and accept, reject or modify the recommendation of the CEO with respect to the compensation of other executive officers.  

The Committee shall have the responsibility of reviewing any management incentive compensation plan, in effect or contemplated.  The Committee shall also have the responsibility of recommending for approval the adoption of or any changes to any management incentive compensation plan.  The Committee shall also be responsible for administering any incentive stock option plan adopted by the Bank and approved by its shareholders.  

The Committee shall make other reports to the Board when the Committee deems it appropriate or upon request of the Board.