March 25, 2004 **Conditional Approval #630**

**April 2004**

Mr. James S. Furash

President

Treasury Bank, National Association

1199 North Fairfax Street, Suite 500

Alexandria, Virginia 22314

Re: Increase in Capital via a Material Noncash Contribution to Surplus

OCC Control No.: 2004 NE 12 0068 Charter No.: 24141

Dear Mr. Furash:

The Comptroller of the Currency (OCC) has granted preliminary
conditional approval for Treasury Bank, National Association,
Alexandria, Virginia, to increase its capital surplus by up to \$250
million, as outlined in your letter of February 27, 2004. The capital
contribution will be provided by the bank's parent, Effinity Financial
Corporation, which will contribute home equity loans having a fair value
of up to \$250 million.

The preliminary conditional approval is subject to the following
conditions "imposed in writing by the agency in connection with the
granting of any application or other request" within the meaning of 12
U.S.C. § 1818 and, as such, are enforceable under 12 U.S.C. § 1818.

1)  No loan shall be to a borrower with a FICO score lower than 660.

2)  No loan contributed to the bank shall be delinquent.

3)  The bank should submit to the Supervisory Office, within 15 days of
    the date of this letter, the results of the aggregate portfolio
    valuation performed by an independent, qualified firm, which
    substantiates the fair market value of the portfolio to be
    contributed. The bank shall immediately correct any deficiency, to
    the Supervisory Office's satisfaction.

Mr. James S. Furash

President

Treasury Bank, National Association

Page two

4\) Immediately following the capital contribution, the bank will retain
a qualified

independent accounting firm to verify that the loans were transferred
using the value methodology represented in your application and, within
10 days of receipt of the report, submit the results to the Assistant
Deputy Comptroller of OCC's Maryland/DC Supervisory Office ("SO"). The
bank shall promptly correct, to the SO's satisfaction, any deficiencies
noted.

The following requirement must also be satisfied:

1)  Management should certify to this Office, with proper documentation,
    that the portfolio complies with the bank's underwriting standards
    and policies and that the characteristics of the portfolio are
    consistent with the representations made by the bank, including that
    each borrower's minimum FICO score shall be no lower than 660.

This conditional approval is granted based on a thorough review of all
information available, including the representations and commitments
made in the application and by the bank's representatives. Specifically,
we relied on certain representations made in the bank's application,
including management's commitments that: 1) all contributed loans will
have the same characteristics, or better, as those identified in the
filing, 2) all contributed loans with a loan to value ("LTV") exceeding
90% will have mortgage insurance, and, 3) all contributed loans will be
contributed at the lower of cost or market value and be subject to
independent verification.

Your February 27, 2004 letter contains a request with respect to the
existing loan pool. We understand that management requests OCC's
approval to substitute loans of at least the same type and the same
quality or better, as outlined in your correspondence, in order to
maintain a total loan pool of up to \$250 million, prior to the capital
contribution. We have no objection to management's plan, provided that
any loan substitutions also comply with all the above requirements.

Pursuant to 12 USC 57, receiving a material non-cash contribution to
capital surplus requires the approval by shareholders owning a majority
of the bank's capital stock. In addition, 12 USC 21a requires approval
by the shareholders to amend the bank's Articles of Association, if
appropriate.

Please notify the OCC after you have completed the change and complied
with legal requirements. Upon receipt of your notification, OCC will
authorize the increase in capital, provided you have satisfied all the
pre-contribution requirements and it is legal.

Mr. James S. Furash

President

Treasury Bank, National Association

Page three

This conditional approval and the activities and communications by OCC
employees in connection with the filing, do not constitute a contract,
express or implied, or any other obligation binding upon the OCC, the
U.S., any agency or entity of the U.S., or any officer or employee of
the U.S, and do not affect the ability of the OCC to exercise its
supervisory, regulatory and examination authorities

under applicable law and regulations. The foregoing may not be waived or
modified by any employee or agent of the OCC or the U.S.

The change in capital should be completed within one year of the date of
this letter. If you have any questions, please contact Kerry Rice,
Licensing Analyst at (212) 790-4055.

Sincerely,

/s/ Anthony P. DosSantos

Anthony P. Dossantos

Licensing Manager