BASSWOOD CAPITAL MANAGEMENT, L.L.C.

Structure; History and Ownership Basswood Capital Management, L.L.C., referred to in this brochure as “Basswood,” “we,” “us” or the “firm,” is an investment advisory firm with its principal place of business in New York, New York. The firm is organized as a Delaware limited liability company. The firm commenced business in 1998. The principal owners of the firm are Bennett Lindenbaum and Matthew Lindenbaum. Basswood Partners, L.L.C. is an affiliate of Basswood Capital Management, L.L.C., and serves as the general partner of certain of the private investment funds for which Basswood serves as investment adviser. Basswood Partners, L.L.C. is not required to be separately registered with the SEC. References herein to “Basswood”, “we”, “us” or the “firm,” describe Basswood Partners, L.L.C. in addition to Basswood Capital Management, L.L.C. Basswood UK Limited is a subsidiary and 100% owned by Basswood. It was established in 2018 and maintains an office in London, United Kingdom. The firm has been registered with the SEC since June of 2011. Previously, the firm was registered with the SEC from January 2006 until January 2008. Types of Advisory Services We serve as investment adviser to a number of private investment funds (referred to in this brochure as the “funds”) and separately managed accounts (referred to in this brochure as the “separate accounts”), to which we provide discretionary investment advisory services. We currently do not manage non-discretionary accounts but may advise such accounts from time to time. The funds and the separate accounts to which we provide investment advisory services are sometimes referred to together in this brochure as the “accounts.” We manage the accounts by using “primary strategies”, with the investment objective of generating longterm capital appreciation by investing primarily on a long basis and short basis in a select number of investments that we identify as likely to experience significant price appreciation or depreciation. Our primary strategies mainly invest in equity securities and include a strategy focused on the U.S. financial services sector (“U.S. Financials Strategy”), a strategy focused on the financial services sector in Europe and other developed markets outside of the U.S. (“European Financials Strategy”). Within the U.S. Financials Strategy and European Financials Strategy (together, the “Financials Equity Strategies”), we manage long/short and long only accounts, which generally restrict short selling. The accounts managed under the Financials Equity Strategies can differ in their geographic focus: certain accounts are focused on U.S. investments, while other accounts are focused on non-U.S. investments or a combination between U.S. and non-U.S. We also manage a strategy that invests in Additional Tier 1 subordinated bonds of European and UK banks and preferred stock of U.S. Banks (“Liquid Credit Strategy”). The strategy is managed to seek high yields and price appreciation. From time to time, we may also advise accounts that are established to hold securities of a single or a limited number of issuers (the “Co-Investment Strategy”). Each such position will ordinarily be a position that is also held by some or all of the accounts using the primary strategies. The funds we advise do not offer their interests to the public. Fund interests are offered only in private placements to qualified investors. Details concerning the terms applicable to investors in the funds are

contained in the funds’ “offering documents”. Our investment advisory services to institutional investors on a separately managed account basis may be provided by way of private investment funds formed by us and open exclusively to the separate account investors; or special purpose entities formed by the separate account investors, which may also be considered to be private investment funds, each of which are referred to in this brochure as separate accounts. Our separate account arrangements are governed by the investment management agreement between us and each separate account investor. The investment strategies we employ on behalf of the funds and the separate accounts are described in greater detail below in Item 8 and in the offering documents of the funds and the investment management agreements for the separate accounts. In general, we do not tailor our strategies to the needs of individual fund investors or separate account clients. However, in certain limited circumstances, we may agree to particular investment guidelines or investment restrictions with particular fund investors or separate account clients. We may offer other products, accounts and/or investment strategies that differ from the strategies described in this section. We do not participate in any wrap fee programs. Assets Under Management As of December 31, 2025, we managed approximately $903,240,028 of client assets, all on a discretionary basis. This amount reflects the net asset value of the accounts as of such date. This Brochure does not constitute an offer to sell or solicitation of an offer to buy any securities. The securities of the funds are offered and sold on a private placement basis under exemptions promulgated under the Securities Act of 1933 and other applicable state, federal or non-U.S. laws. Significant suitability requirements apply to prospective investors in the Funds, including requirements that they be "accredited investors" as defined in Regulation D, "qualified purchasers" as defined in the Investment Company Act, or non- "U.S. Persons" as defined in Regulation S. Persons reviewing this Brochure should not construe this as an offer to sell or a solicitation of an offer to buy the securities of any of the funds described herein. Any such offer or solicitation will be made only by means of a confidential private placement memorandum.

Fees We are generally entitled to two types of fees from each of the funds and separate accounts: (i) an assetbased “management fee;” and (ii) an incentive allocation or fee, or a carried interest, based upon the performance of the fund or separate account (“incentive compensation” and together with management fee, the “fees”). Asset-Based Fee The management fee rate charged by the funds for our primary strategies is typically 1.5% per year of the fund’s net assets and is typically determined and payable quarterly in advance. A prorated management fee is paid with respect to any investments made during a quarter, and the unearned portion of the management fee is reimbursed in respect of any withdrawals made other than at the end of a calendar quarter.

Incentive Compensation The incentive compensation charged by the funds for the primary strategies is calculated as a percentage of the net profits of the fund for the relevant period (attributable to each investor’s limited partnership interest or shares in the fund). The incentive compensation is typically determined and allocated/paid on an annual basis but will be determined and allocated/paid for shorter periods under certain circumstances (such as with respect to amounts withdrawn/redeemed from the fund). The incentive compensation is subject to a loss carry forward or high-water mark provision that requires that any losses suffered by a fund (adjusted to reflect withdrawals/redemptions) be offset by subsequent net profits before we are entitled to subsequent incentive compensation from the fund. The incentive compensation rate for Class A investments and Class D investments is 15% for the primary strategy funds. These investments may be withdrawn at the end of any calendar quarter on 30 calendar days’ prior written notice. Certain funds for the primary strategies currently offer classes of interests or offered classes of interests, which are subject to different incentive compensation rates and different liquidity terms. General The management fee and incentive compensation rates charged by the funds and the details of how the fees are calculated for the funds are described in further detail in the applicable offering documents of the funds, which are provided to potential investors. The fees paid by separate account investors are negotiated individually and such fee rates agreed to and the details of how the fees are calculated for the separate accounts are included in the investment management agreement for each separate account. The fees described above are our typical fee rates. However, each fund has the right to establish additional share classes or enter into agreements with one or more of its investors providing for the waiver or modification of certain fund terms, or certain rights and obligations of fund investors, including, but not limited to, fees, reporting and/or liquidity terms, otherwise applicable to such interest(s), in each case without notice to the other fund investors. Under certain circumstances we may agree to different management fee, incentive compensation, reporting obligations and/or liquidity terms from those described above for particular separate account clients. Therefore, the management fee, incentive compensation and/or the liquidity terms for a separate account client may be more favorable than those applicable to the funds or other separate account clients. The fees payable by the funds are deducted from the assets of the funds and paid to us or, in the case of incentive allocations, are reallocated from the capital accounts of fund investors and into our capital account. Our fees for the separate accounts are typically billed to the client and paid from the assets of the account. Additionally, Basswood and persons affiliated with Basswood that have investments in the funds are not charged management fees and incentive compensation with respect to their investments. Expenses Each fund pays, or reimburses us or the fund’s administrator, for all operating expenses and other costs of the fund as described in each fund’s offering documents, which may include, but are not limited to:

third party accounting, fund administration, valuation, bookkeeping and auditing fees and expenses;

third party legal fees and expenses, including, but not limited to, fees and expenses incurred in connection with a fund’s offering documents and the offering of the funds’ interests, fund contracts and investments;

fees and disbursements of a fund’s and Basswood’s attorneys, consultants and other third parties performing work benefiting the fund (including, without limitation, the legal and other fees, costs and expenses of a fund in any proxy contest or other shareholder initiative or proceeding, and any threatened or actual litigation or governmental investigation or proceeding, and the amount of any judgments or settlements paid in connection with such litigation or fines or penalties levied as a result of any such proceeding or investigation);

insurance and bonding costs, including, but not limited to, insurance premiums for errors and omissions insurance and directors and officers insurance;

trading expenses and transaction costs, including, but not limited to, brokerage commissions, exchange fees, expenses relating to short sales, clearing and settlement charges, interest on loans and debit balances, margin interest and broker service fees;

fees and costs related to any U.S. and non-U.S. regulatory reporting and filings related to the operations of a fund, including the costs of preparing such regulatory reporting and filings (e.g., Form 13F, Schedule 13D and Schedule 13G);

such research and portfolio management expenses as we deem appropriate, which may include, but are not limited to, o

expenses incurred in connection with due diligence investigations or research as to investments or potential investments (including public and private companies and potential investments that the fund ultimately does not make), including travel, lodging and other expenses incurred in connection with visits to companies, meetings, research symposiums and communications with company management, security holders, analysts and other third parties,

o

costs of research reports, data feeds and databases, news wires and quotation/pricing services, periodical subscription fees and costs of software (including risk control) that we utilize in connection with managing a fund’s portfolio;

fees of a fund’s registered agent;

the cost of preparation and distribution of reports and statements to investors;

the costs and fees attributable to any third-party proxy voting service or consultant;

custodial fees, bank service fees, and fees or expenses associated with insuring a fund’s assets;

management fees;

incentive fees or allocations;

all applicable federal, state, local and non-U.S. taxes payable by a fund; and

any extraordinary expenses, such as indemnification and litigation expenses.

In addition, a fund will pay its organizational expenses (such as legal, accounting, and Blue Sky fees). Separate account clients will be responsible for all trading expenses and transaction costs (including, but not limited to, brokerage commissions and expenses relating to short sales, clearing and settlement charges, interest on loans and debit balances, margin interest, broker service fees and custodial expenses), withholding or transfer taxes incurred in connection with trading for the separate account, as well as our fees applicable to the account (as described above). Depending on the structure and strategy of the separate

account, the client may also be responsible for certain other expenses described above, such as, research and portfolio management expenses and, fees and disbursements of Basswood’s attorneys, consultants and other third parties performing work benefiting the account (including, without limitation, the legal and other fees, costs and expenses incurred in any proxy contest or other shareholder initiative or proceeding, and any threatened or actual litigation or governmental investigation or proceeding, and the amount of any judgments or settlements paid in connection with such litigation or fines or penalties levied as a result of any such proceeding or investigation). Permissible expenses that are incurred by the firm with respect to more than one account shall be allocated on a pro rata basis based upon the respective NAV of each applicable account or, in the case of expenses that relate to a specific investment held by more than one account, generally it will be allocated pro rata based upon the market value of such investment in each applicable account. Any expenses that are attributable to the firm (or related firm accounts) and one or more client accounts will be allocated in good faith in a manner that we believe to be fair and consistent with disclosures made to clients of all affected accounts. As we consider appropriate, we may invest a portion of an account’s assets in one or more money market funds, mutual funds or exchange-traded funds. When any such investments are made, the account will be paying, in addition to the compensation payable to us, the account’s proportionate share of any management fees charged by the manager of such money market fund, mutual fund or exchange-traded fund. A description of the brokerage and other transaction costs that will be borne by the funds and separate accounts are described in more detail in Item 12 (Brokerage Practices) in this brochure.

Investment Strategies Primary Strategies With the exception of the long only funds and accounts, which generally restrict short selling, the investment objective of our primary strategies is to generate long-term capital appreciation by investing primarily on a long basis and short basis in a select number of investments that we identify as likely to experience significant price appreciation or depreciation. Our primary investment methodology is valueoriented and opportunistic, employing fundamental research and analysis to identify investments that we feel are undervalued (or, in the case of short positions, overvalued) by the marketplace, and to identify proper entry and exit points. We expect to cause the accounts for which we use the Financials Equity Strategies to invest in a variety of industries within the financial services sector including, without limitation, one or more of the following: banks, savings and loans, asset managers, brokerage, insurance, specialty finance, mortgage-related and real estate investment trusts. There are no limitations on the industries within the financial services sector in which we may cause the accounts to invest. The accounts may also invest in companies of other sectors and industries that we consider to be indirectly related to the financial services sector, such as real estate, construction, homebuilders and other housing-related companies. With respect to the primary strategies, there is also no limitation on the amount of the account’s assets that may be invested in any single industry, subsector, issuer or security. It is possible that an account will hold one or more relatively large positions. As a result, the account may be considered to be concentrated from time to time or at all times with respect to industry, subsector, issuer and/or securities. While our primary strategies involve investing primarily in common stocks, the accounts are authorized to invest in any other securities, instruments, derivatives and other investments we deem appropriate including, without limitation: preferred stock, options on stocks and indices, warrants, bonds, debentures, convertible securities and other debt obligations (including securities subject to SEC Rule 144A under the Securities Act and non-U.S. government securities), exchange traded funds, credit default swaps and other swaps, forwards, futures, indices, structured and other synthetic securities and related derivative instruments (including those relating to equity securities, equity indices, interest rate products, fixed-income products, currencies and indices), special purpose acquisition companies (generally referred to as SPACs) and securities of non-U.S. issuers. An account’s exposure to derivative instruments and their related risks may be significant. The accounts may also hold cash, U.S. Treasury and agency securities, commercial paper, bankers’ acceptances, certificates of deposit and short-term money-market obligations. Up to 5% of a fund’s assets (based on cost at the time such a security is purchased) may be invested in securities that are not publicly traded or are subject to restrictions on transfer (which restriction will not apply to “convertible preferred” securities

or restricted securities that are to be filed for registration with the SEC within a reasonable period after acquisition); provided, however, that certain funds may offer a separate share class that will not participate in (and will not receive gains or losses from, or be subject to limitations on liquidity as a result of) such investments by the fund. Our strategies utilize leverage on a selective basis, primarily for investment purposes. We expect to cause the accounts to buy securities on margin and arrange with banks, brokers and others to borrow money against a pledge of an account’s assets in order to employ leverage, when we deem such action appropriate. We may also cause the accounts to employ shorting, options, swap agreements and other derivatives for investment and/or hedging purposes if, when and as we deem appropriate. We are not required to employ any minimum level of portfolio hedging for the accounts. Subject to the accounts’ primary investment objective, we endeavor to manage the assets of our onshore funds employing our primary strategies, to the extent we deem appropriate, in a manner that will reduce and/or defer the taxable income for U.S. taxable investors arising in connection with their investments in the funds. Our determination as to whether or not, and to what extent, such funds should invest in a particular security or other investment will periodically take into account the expected income tax implications that such action will have for U.S. taxable investors. Further, the timing of specific purchase and disposition transactions may be determined in part based upon the expected income tax implications for U.S. taxable investors. As a result, the funds’ portfolio holdings and investment transactions may vary from what they would be if such tax considerations were not taken into account and, consequently, the funds’ performance may be impacted. There can be no assurance that this (or any) aspect of our investment strategy will be effective. Prospective investors should be aware that accounts employing our primary strategies and their investors will incur all of the risks inherent in discretionary investments involving the securities and instruments referenced above. The various investment techniques we employ on behalf of the accounts such as, without limitation, the use of derivatives, investments in restricted securities, the use of leverage, short selling, etc. may increase the accounts’ risk of loss. The accounts’ portfolios will not necessarily represent a broad diversification of investments among particular issuers, industries, industry sectors, or types of securities or investments. We utilize a variety of ongoing risk management policies and practices in the management of the accounts’ portfolios, including, but not necessarily limited to, monitoring and adjustment of portfolio exposure, the selective use of hedging instruments against certain market risks, and the use of real-time portfolio evaluation tools. Notwithstanding these risk management practices, our investment strategies inherently involve certain significant risks (certain of which are described below). Moreover, there can be no assurance that our risk management practices will necessarily be applied in all cases, or if applied, will successfully limit risk to acceptable levels. Liquid Credit Strategy The general investment objective of our Liquid Credit Strategy is to invest in Additional Tier 1 subordinated bonds of European and UK banks and preferred stock of U.S. Banks seeking high yields and price appreciation. Our fundamental investment approach allows us to seek to understand the structural nuisances, such as call date, frequency of call, reset spreads and the specific issuers historic track record of calls, and seek to identify and invest in issuers where risks are misunderstood and mispriced by the market. This strategy seeks to emphasize fundamentals and risk-adjusted returns, without being constrained by liquidity or ratings. Co-Investment Strategy

The general investment objective of our Co-investment Strategy is to hold securities of a single or a limited number of issuers. A security becomes a co-investment opportunity (i) only if the position is or is intended to be held in some or all of the primary strategy accounts; (ii) the position reaches its desired allocation (in the discretion of the portfolio managers) in the primary strategy accounts and there is still available capacity in the name to make additional investments on behalf of co-investment clients. The investment objective may vary for each co-investment account and each co-investment position. It is intended that the assets of each co-investment position will be held until we determine to exit the position (a “Liquidity Event”). Following a Liquidity Event, the applicable position will generally be sold and the net proceeds will be distributed to the relevant client or fund investors. While the Co-Investment Strategy involves investing primarily in common stocks of public companies, the accounts may be authorized to invest in common stocks of private companies and any other securities, instruments, derivatives we deem appropriate. The positions to be held will not be limited by industry or sector. There can be no assurance that any account or co-investment position will achieve its investment objective. We anticipate that each co-investment opportunity will have limited capacity, and such opportunity will not be offered during the time that such capacity is filled. Upon identifying a co-investment opportunity, we shall make the opportunity available to clients that have expressed an interest in this strategy and can meet the minimum requirements of a separate account. If capacity is still available in the opportunity, we shall establish a new class of shares and offer the opportunity to other qualified fund investors through our coinvestment fund. Any securities of a co-investment position shall be acquired, held and disposed of at the same time and on the same terms and conditions for all funds/accounts that holds such position except as may be necessary to (i) fund an account’s redemptions, withdrawals or terminations; (ii) deploy new capital received in any account; or (iii) maintain adherence to any guidelines or restrictions imposed on any account. General There can be no assurance that any account will achieve its investment objective. The foregoing description of our investment objectives and strategies represents our present intentions in view of current market conditions and other factors. We have the right under the relevant account documents to vary the foregoing investment objectives and strategies to the extent we determine that doing so will be in the best interests of an account. Risks Associated with Our Investment Strategies Our investment programs are speculative and entail substantial risks. There can be no assurance that the investment objective of an account will be achieved or that an account will not incur losses, and investment results may vary substantially over time. In fact, the investment techniques which we may employ for the accounts from time to time can, in certain circumstances, adversely impact the accounts’ investment performance. Accordingly, an account’s activities could result in substantial losses under certain circumstances. An investment in an account is suitable only for persons who are willing and able to assume the risk of losing their entire investment. Prospective investors in a fund or separate account for which we employ our strategies should carefully consider the risks involved in an investment in an account, including, but not limited to, those certain risks discussed below. Prospective investors should consult their own legal, tax and financial advisors as to all

of these risks and an investment in an account generally. Prospective investors in a fund should review the applicable offering documents which describe all identified risks concerning the funds and Basswood. Material risks involved in our strategies are described below. Risks of Investments in Securities Generally. All securities investments risk the loss of capital. No

Read the rest in the brochure

We generally provide investment advice to private investment funds and institutional separate accounts. The private investment funds are generally organized as either a U.S. limited partnership, under the laws of the state of Delaware (referred to in this brochure as the “onshore funds”) or an exempted company, under the laws of the Cayman Islands (referred to in this brochure as the “offshore funds”). The onshore funds and corresponding offshore funds are structured either as separate funds (managed pari-passu) or within a master-feeder structure. The types of investors in the funds we advise include pension and profit sharing plans, trusts, estates and charitable organizations, sovereign wealth funds, funds of funds (whether organized as partnerships, corporations or other entity types), high net worth individuals and family offices. Our separate account clients are typically funds of funds, family offices, pension and profit sharing plans, charitable organizations or other institutional investors. The minimum amount of assets for a separate account that we will advise is generally $50 million.

Minimum investment amounts for our primary strategy funds are $1 million. Additional investments to any of those funds must be in increments of $100,000. These minimums may be reduced or waived by us, or the general partner or boards of directors of the funds, subject to any applicable statutory minimums. Fund interests are generally offered only to a limited number of individual and institutional investors that qualify as: (i) “accredited investors”, as defined in SEC Regulation D promulgated under the U.S. Securities Act of 1933 (the “Securities Act”); and (ii) “qualified purchasers” or “knowledgeable employees”, as defined in the U.S. Investment Company Act of 1940 and the rules promulgated thereunder.

As described in Item 5 above, we receive part of our compensation from the funds and separate accounts in the form of performance-based allocations and fees. Some of the accounts we manage charge a lower performance-based allocation/fee or do not charge any such allocation/fee. These circumstances may create an incentive for us to favor some accounts over other accounts. Accordingly, we (i) strive to ensure that all clients are treated fairly and equitably; (ii) monitor the trading activity for the accounts on a daily basis; and (iii) maintain trade allocation and aggregation policies and procedures that are reasonably designed to address this potential conflict of interest.

Material Financial Industry Affiliations of the Firm Basswood Capital Management, L.L.C. is under common ownership with Basswood Partners, L.L.C. which serves as the general partner of certain of the private investment funds for which Basswood Capital Management, L.L.C. serves as investment adviser. We currently serve as investment adviser to the following private funds:

Basswood Opportunity Partners, L.P. Basswood Financial Fund, Ltd. Basswood Financial Fund, L.P. Basswood Financial Long Only Fund, L.P. Basswood Financial Long Only Fund, Ltd. Basswood International Fund, L.P.

Basswood International Fund, Ltd. Basswood Strategic Financial Fund, LP Basswood International Long Only Fund, Ltd. Basswood Co-Investment Fund (SPC), Ltd. Basswood Co-Investment Fund, Ltd. Basswood Co-Investment Partners, Ltd.

We also serve as investment adviser to other private investment funds formed for the purpose of separately managed accounts for certain institutional investors. From time to time, the portfolio managers or senior investment professionals may be appointed, nominated and/or elected to serve on the board of directors of companies in which the funds and accounts and other persons affiliated with Basswood are investors. As of the date of this brochure, a Basswood portfolio manager serves on the board of Dime Community Bancshares, Inc. (DCOM) and a senior investment professional serves on the board of Regional Management Corp. (RM). Additionally, the principals of the firm are managing members and/or general partners to limited liability companies and limited partnerships that serve as vehicles for managing assets of the principals and their family members. Conflicts of Interest Basswood and its principals, officers and employees will devote as much of their time to the activities of each account as they deem necessary and appropriate in their discretion. The firm, its affiliates, and their respective principals, officers and employees, are not restricted from engaging in other business activities of any kind. Basswood and such other persons may provide investment management services to additional investment funds and client separate accounts, as well as proprietary accounts of the firm, its principals, their family members, and their respective affiliates. The existence of such accounts necessarily creates a number of potential conflicts of interest, and may involve substantial time and resources of the firm, its affiliates, and their respective principals, officers and employees. Certain of the accounts have investment objectives and policies that are similar or identical to those of other accounts. We expect there to be differences at times between and among the accounts with respect to investment objectives, investment strategies, investment parameters and restrictions, portfolio management personnel, tax considerations, liquidity considerations, legal and/or regulatory considerations, asset levels, timing and size of investor capital contributions and redemptions, cash flow considerations, market conditions, existing exposure to an investee company or security, and other criteria we deem relevant (the nature and extent of the differences may be expected to vary from one account to another). Notwithstanding these differences, there are circumstances where accounts participate in parallel investment transactions, on a pro rata basis, at the same time and on the same terms; this is the case most commonly with respect to

accounts that have similar investment objectives and investment strategies. However, this will not always be the case. There may be expected to be circumstances where:

only some of the accounts participate in parallel investment transactions;

the level of participation between and among the accounts in parallel investment transactions is not on a pro rata basis;

the terms of parallel investment transactions vary between and among the accounts;

accounts effectively engage in opposite transactions with respect to a particular investment (for instance, if an account acquires a long position in a security while one or more of the other accounts sell or short the security); and/or

investment transactions by the accounts vary in other respects.

Such non-parallel and/or non-pro rata investment transactions between and among the accounts will be made in our discretion: (i) when we deem appropriate given the differences between the accounts involved; (ii) to adjust the portfolio holdings of one or more accounts so as to rebalance the portfolio composition we determine suitable; and/or (iii) when we deem it otherwise to be in the best interests of the accounts involved. It is our general policy that no account may receive inappropriate preferential treatment or otherwise be treated unfairly, and we seek to uphold such policy when making decisions regarding investment allocations and transactions; however, it is possible that the activities of other accounts could, from time to time, have an adverse impact on the market value of the portfolio holdings of an account and, consequently, the account’s performance. Allocations among accounts of equity securities issued in initial public offerings (“new issues”) will be made only to “eligible accounts”, based on the principles described above for allocations generally. Eligible accounts are determined by us based on the amount of account assets and/or fund investors that are eligible to participate in the net profits or net losses of new issues. Investors in the funds that, under applicable rules, are “restricted persons” with respect to new issues will not be allocated any net profits or net losses with respect to any new issue investments made by the funds. We may provide personnel to sit on the board of directors or to serve in any other capacity with respect to a company or banking institution in which an account is invested or intends to invest. In return for such services, the company or banking institution may pay management fees or directors' fees directly to Basswood and/or the individual serving in such capacity. Such fees may take the form of cash, securities of the company or banking institution or the right to acquire securities in the company or banking institution on a basis more favorable than that available to the accounts. In these circumstances, we will either (i) allocate the fees pro rata across the applicable accounts; or (ii) offset the amount of the fees received against future management fees receivable from the applicable accounts by the same amount. We have an obligation to accurately value the securities held by the funds and separate accounts. This process is critical for determining the net asset value of the clients’ accounts which affects, among other things, the calculation of the fees paid to the firm and the calculation and reporting of the performance returns of the clients’ accounts. Securities that are listed on national securities exchanges and securities traded over the counter which are freely transferable will be valued at their last sales price on the date of determination or, if no sales occurred on the date of determination, such securities will be valued at the arithmetic mean of the bid and asked price on the date of determination. All other securities and investment instruments held by a client account will be valued in the manner determined by the firm or its designee (such as the fund administrator) to reflect their fair market value. The accounts may hold certain illiquid securities or investment instruments for which there is no readily available pricing. Such securities or investment instruments are valued either by an independent third-party or at the firm’s discretion - in which case the valuations are generally based upon an internal valuation analysis, which presents a potential

conflict of interest. Accordingly, we (i) strive to reasonably determine that such securities and investment instruments reflect their fair market value; (ii) work with the fund’s administrator and independent auditors to verify the reasonableness of the valuations; and (iii) maintain valuation policies and procedures that are reasonably designed to assist in mitigating this potential conflict of interest. Basswood and persons affiliated with Basswood have investments in the funds and/or may elect to make subsequent investments in the funds or in other accounts managed by the firm. We generally waive the management fee and incentive fee/allocation for such investors. Other present and future activities of Basswood and its affiliates may give rise to additional conflicts of interest. While none of Basswood, or its directors, officers, employees or affiliates is obligated to resolve any conflicts in favor of any account, we will endeavor to ensure that any conflict of interest is resolved fairly. Trade Error Policy We have adopted a policy for the purpose of addressing trade errors that may arise, from time to time, with respect to the securities transactions of clients. An example of a trade error is the sale of a security when it should have been purchased. Pursuant to the policy, we will seek to identify and correct any trade errors in an expeditious manner without disadvantaging any client in any way. Any losses as a result of trade errors caused by us will be reversed, with Basswood being responsible to make the affected client accounts whole. Gains caused by trade errors will be credited to the affected account and may not be used to offset losses from other or additional trade errors. We will not use “soft dollars” or “client commissions,” either directly or indirectly, to correct trade errors. We will document each trade error with appropriate supervisory approval and maintain a trade error file. The determination of whether or not a trade, or series of trades, has been made in error shall be in our sole discretion.

Personal Trading Code of Ethics We have established and maintain a Code of Ethics intended to satisfy our obligations in connection with Rule 204A-1 under the Investment Advisers Act of 1940, as amended (“Advisers Act”). All Basswood employees, principals and any other affiliated persons, as determined by the firm’s Chief Compliance Officer (together, “supervised persons”), are required to comply with and acknowledge receipt of the Code of Ethics. The purpose of our Code of Ethics is to identify the ethical and legal framework in which we and our supervised persons are required to operate and to highlight some of the guiding principles and mechanisms for upholding our standard of business conduct. Our Code of Ethics is designed to ensure that all supervised persons are aware of and adhere to our policies and procedures. Our Code of Ethics covers conflicts of interest; personal trading; certain reporting requirements including violations of the Code of Ethics; and review and enforcement. A complete copy of our Code of Ethics will be provided to clients and prospective clients upon request. Interested Transactions We may, from time to time, recommend a security in which the firm or one of our related persons, directly or indirectly, has an interest. For instance, it may be expected that separate account assets will be invested in securities of issuers in which one or more other separate accounts or funds hold positions. In addition, fund assets may be invested in securities of issuers in which one or more other funds or separate accounts

hold positions. Given the likely frequency of such occurrence, clients will not be provided with notification of such occurrences. This may represent a conflict of interest for us. All personal securities transactions by the firm’s supervised persons, in which they have or will have, as a result of the transaction, a direct or indirect beneficial interest, are subject to pre-approval by our Chief Compliance Officer before the supervised person may proceed with the transaction, except for transactions in certain categories of securities such as money market funds and U.S. government securities. Securities maintained or acquired by a supervised person are subject to specific holding periods and supervised persons are generally prohibited from trading any security issued by a company that is held in a client portfolio or that is otherwise deemed to be restricted by the firm. We may permit a supervised person to invest in securities or related securities that a client account is also investing in, but subject to the requirement that such a transaction will not disadvantage any client account. In addition, all supervised persons are required to submit to the firm a list of all personal security holdings and other investments in which they have a direct or indirect beneficial interest, upon hire and annually; and arrange to have copies of trade confirmations and account statements of each personal investment account sent directly to us. The firm’s Chief Compliance Officer reviews all information regarding a supervised person’s personal trading activity. Our pre-approval procedure and the submission of supervised persons’ personal trading information assist us towards our goal of ensuring that no personal trading of any supervised person will disadvantage any client account. We may determine that it is in a client’s best interest to execute a transaction between the client account and Basswood’s own account or an affiliate account (“principal transaction”). In accordance with Section 206(3) of the Advisers Act, if we determine to execute a principal transaction, then we will provide applicable written disclosures to the client before the completion of such transaction, and obtain the client’s consent. In regard to the onshore funds, we appointed Ogier Global (Cayman) Limited (“Ogier”) as an objective and disinterested third party that can approve, or disapprove, each transaction that may be deemed a principal transaction. Principal transactions involving the offshore funds are to be reviewed and approved by the fund’s independent board members. As such, we will provide Ogier or the fund’s independent board members, as applicable, with the appropriate disclosures regarding these transactions and request their consent. Consistent with our fiduciary duty, we may execute principal transactions only if such transactions are in the best interests of the clients and are executed consistent with our duty to obtain best execution. In addition, we will not receive any remuneration for principal transactions and the funds will not be subject to any commission costs.

Selection of Brokers Basswood has full investment discretion with respect to the initiation of all portfolio securities transactions for the accounts as well as full authority to select broker-dealers to execute such transactions. We have selected prime brokers for the funds. The prime brokers have certain administrative responsibilities, including the issuance of account statements and information with respect to securities transactions affected through other broker-dealers. The prime brokers are allocated a portion of the funds’ securities transactions, subject to principles of best execution. The funds are not committed to continue their prime brokerage relationship with particular broker-dealers for any minimum period, and we may, in our sole discretion, select other or additional brokers to act as prime broker(s) of the funds at any time.

In addition to the prime brokers, we place transactions with other broker-dealers, which include the following:

Execution brokers – brokers that provide execution only services;

Full service brokers - brokers that provide both research and execution services; and

CSA brokers – brokers subject to a commission sharing arrangement (“CSA”) whereby the brokerdealer effecting the transaction generally retains a portion of the commission for the execution and allocates the balance to a third-party research firm or other vendor that has provided us research products or services eligible under Section 28(e) (as defined below).

The Adviser considers a number of factors in selecting a broker-dealer to execute transactions (or series of transactions) and determining the reasonableness of the broker-dealer’s compensation. Such factors may include, among other considerations, net price, reputation, financial strength and stability, efficiency of execution and error resolution. In selecting a broker-dealer to execute transactions (or series of transactions) and determining the reasonableness of the broker-dealer’s compensation, the Adviser need not solicit competitive bids and does not have an obligation to seek the lowest available commission cost. Due to the average trading volumes, factors such as speed of execution and discreteness are important factors in determining best execution. It is not the Adviser's practice to negotiate “execution only” commission rates, thus the Adviser’s clients may be deemed to be paying for research, brokerage or other services provided by a broker-dealer which are included in the commission rate. We may place transactions with a prime broker or other broker-dealer that (i) provides us with the opportunity to participate in capital introduction events sponsored by the broker-dealer; (ii) provides us with other consulting services; or (iii) refers investors to the funds or other products we advise, if otherwise consistent with seeking best execution; provided, that we are not selecting the broker-dealer in recognition of the opportunity to participate in such capital introduction events, consulting services utilized or the referral of investors. We will be subject to a conflict of interest in determining whether to select such brokers-dealers to execute transactions on behalf of the accounts, because we will have an incentive to select or recommend a broker-dealer based on our interests, rather than on our clients’ interest in receiving most favorable execution. We will manage any such conflict of interest appropriately and will not allocate business or effect transactions on behalf of the accounts with a broker-dealer in recognition of such incentives if such allocations or transactions would not be in the best interest of the accounts. Soft Dollars In allocating brokerage to the prime brokers or such other broker-dealers, the commissions the accounts will pay to such broker-dealers will not necessarily represent the lowest commission rates available, but will reflect our evaluation of the research and other brokerage-related services supplied by such brokerdealers and which benefit the accounts, either alone or together with the other accounts. Therefore, we may pay a commission to a broker-dealer, in recognition of the value of the brokerage and other products and services provided by the broker-dealer, which is greater than the commission another broker-dealer might have charged for effecting the same transaction. In doing so, we are receiving a benefit because the firm does not have to produce or pay for the research, products or services and accordingly, we may have an incentive to select a broker-dealer based on our interest in receiving the research or other products or services, rather than on our clients’ interest in receiving most favorable execution. In each case, we will make a good faith determination that the amount of commission costs on account of such research or other services is reasonable relative to the value of services so provided. Section 28(e) of the Securities Exchange Act of 1934 provides a “safe harbor” to investment managers who use commission dollars of their advisory accounts (so-called “soft-dollars”) to obtain investment research,

brokerage and other services that provide lawful and appropriate assistance to the investment managers in performing investment decision-making responsibilities, provided that the amount of any increased commission costs on account of such research or other services is reasonable relative to the value of the services so provided. Any such arrangement we enter into will be confined to the products or services that qualify as “research and brokerage services” within the meaning of Section 28(e) and that meet the other requirements of that Section. The research we receive under such an arrangement is both proprietary (prepared by the relevant broker/dealer) and may be created or developed by third parties. The research obtained through an account’s brokerage allocations, whether or not directly useful to it, may be useful to us in connection with services we render to other accounts. Similarly, research we obtain for commissions paid to brokers in the course of managing other accounts, may be useful to an account. Since any particular research we obtain may be useful to any or all accounts, in considering the reasonableness of brokerage commissions paid by the accounts we will not attempt to allocate the relative costs or benefits of research as between the accounts, except in limited circumstances where we believe it to be appropriate to do so. The products and services for which we use soft dollars include: research reports or other information about particular securities, companies and industries; market and economic surveys and analyses; discussions with research analysts; recommendations as to specific securities and companies; attendance at certain seminars and conferences; meetings with corporate executives; financial publications; portfolio evaluation services; trading software; and data services and feeds. All of the services paid for with soft dollars were services the costs of which would have been paid for or reimbursed by the accounts if not paid for with soft dollars. In general, any and all brokerage allocations will be subject to principles of best execution and the other allocation policies described above, as well as any restrictions imposed by applicable law. Aggregation of Orders When we deem the purchase or sale of securities to be in the best interest of more than one account, we may aggregate the securities to be purchased or sold by all such accounts in order to obtain more favorable execution and/or lower brokerage expenses. Each account that participates in the order shall do so at the average price and shall share in commissions or other transaction costs on a pro rata basis. In such events, allocation of the securities purchased or sold, as well as commissions and other expenses incurred in the transaction, will be made among the participating accounts by applying such considerations as we deem equitable, including:

relative account size of such entities and clients,

amount of available capital,

size of existing positions in the same or similar securities,

impact of leverage,

investment objective and

strategy considerations, including, without limitation, ○

concentration parameters,

○

tax considerations and

○

other factors.

As a result of such considerations, allocations among the accounts will not necessarily be pro rata. No account will be entitled to investment priority over another account and an account may not necessarily participate in every investment opportunity. Although we seek to allocate investment activities in a fair and equitable manner, situations may occur where an account could be disadvantaged because of the investment activities we conduct for other accounts.

Basswood does not receive any economic benefit from a non-client for providing investment advice or other advisory services to a client. Basswood does not currently have any arrangements in place to compensate anyone for client referrals.

Basswood and the persons affiliated with Basswood have not been involved in any legal or disciplinary events that would be material to the evaluation or the integrity of our advisory business.

The portfolio managers review all securities transactions daily and all accounts are reviewed periodically. Reviews generally consist of a review and analysis of all positions, risk analysis, performance to date in light of each account’s investment objective and an evaluation of any appropriate changes to be implemented with respect to each portfolio. After the end of each fiscal year, each investor in a fund is provided with audited financial information with respect to the financial statements of such fund, as well as information regarding the status of the investor’s capital account and certain tax reporting information, where applicable. After the end of each month, each investor in a primary strategy fund is provided with unaudited information for such period with respect to the performance of such fund and the investor’s capital account balance. Separate account clients will generally be provided with account statements by the account’s prime broker or custodian on at least a monthly or quarterly basis, at the client’s discretion. Notwithstanding the foregoing, separate account clients may be provided with additional or more frequent reports subject to negotiation between Basswood, the separate account client and the prime broker or custodian. All fund and account information provided to our clients and fund investors, as described above, is in writing, and distributed either electronically or in hardcopy form.

We would be considered to have custody in the event Basswood directly or indirectly holds or has authority to take possession of client’s funds or securities. Accordingly, we maintain all client funds and securities with unaffiliated banks and/or broker-dealers that are considered qualified custodians. However, where we act in any capacity (such as general partner of a limited partnership) that gives us, or our supervised persons, legal ownership of, or access to, a client’s funds or securities, the firm is deemed to have custody. In such cases, the fund is subject to an annual audit and we distribute the audited financial statements to all investors in the fund. The audited financial statements are prepared by an independent auditing firm –licensed and examined by the Public Company Accounting Oversight Board (“PCAOB”) in accordance with generally accepted accounting principles—and distributed to all investors in the fund within 120 days of the end of the fund’s fiscal year. Basswood may also be considered to have custody if we inadvertently receive a client’s funds or securities. If we inadvertently receive client funds or securities, we will return the funds/securities promptly to the sender, but in any case, within three business days following receipt, and document the receipt and return of the funds/securities.

If we are deemed to have custody of the assets of a client account that is not a pooled investment vehicle, the client will be provided with an account statement by a third-party custodian no less than quarterly. These statements will be sent directly to the client by the account custodian. These statements list the account positions, activity in the account over the covered period, and other related information. Clients will also be sent confirmations following each brokerage account transaction unless receipt of confirmations has been waived by the client. We will generally not issue separate reports with respect to such clients. Clients should carefully review statements they receive from the account custodian. Such client account must undergo an annual surprise examination by an independent public accountant that verifies the client funds and securities over which the firm has custody.

Item 4 includes a description of the investment discretion that we exercise with respect to the funds and separate accounts. Fund investors generally do not have any ability to restrict the investment of the fund, although under limited circumstances we may agree with a particular investor that such investor will not participate in certain categories of investment made by the fund. Separate account investors have greater flexibility to impose restrictions on types of investments or investment strategies and under certain circumstances may be deemed to have shared discretion with us. We generally exercise investment discretion with respect to accounts pursuant to a power of attorney that is granted by each fund or separate account client as part of the investment management agreement relating to each such account.

We have authority to vote client securities for the funds and certain separate accounts. We have engaged a third-party proxy advisory and voting service provider (the “Proxy Adviser”) to assist us with the analysis, voting and record keeping of all proxies. The Proxy Adviser provides independent assessment and recommendations with regard to the proxy items for securities held by our clients. We have adopted a written policy regarding the voting of client proxies that is designed to ensure that we fulfill our fiduciary obligation to our clients. It is our policy to generally vote proxies in accordance with the proxy voting recommendations and guidelines issued by the Proxy Adviser (“Proxy Guidelines”). The Proxy Guidelines are designed to address a wide range of common business and social issues often contained in proxy statements. Although the firm may rely on the recommendations provided by the Proxy Adviser, we retain final authority to determine how each proxy is voted. Items not specifically addressed in the policy will be addressed on a case-by-case basis by Basswood’s Chief Compliance Officer and the principals, with guidance, as deemed necessary, from the Proxy Adviser. We may base our proxy voting decisions on established policies or recommendations on individual proxy proposals developed by the Proxy Adviser, or may vote a proxy contrary to such policies or recommendations, if we determine that such action is in the best interest of our clients. Furthermore, we reserve the right to abstain from voting, or to not vote, proxies in certain situations or for certain clients, if we determine that such action is in the best interests of the clients. We have included procedures in our proxy voting policy for dealing with known potential or actual conflict of interests. Each conflict of interest relating to a particular proxy proposal will be handled on a case-bycase basis, based on the particular facts and circumstances. If we are uncertain how to address a conflict relating to a particular proxy proposal, we will vote the proposal in accordance with the recommendation provided by the Proxy Adviser; or if no recommendation is provided by the Proxy Adviser, our Chief

Compliance Officer may determine for the client to be notified of such conflict and will cause the proxy to be voted in accordance with the client’s instructions, or if no instructions are received, abstain from voting. A client may obtain a copy of our proxy voting policy, as well as information regarding how we voted proxies for their account, by contacting our Chief Compliance Officer at (212) 521-9500.

We do not believe there to be any financial condition that is reasonably likely to impair our ability to meet contractual commitments in managing client accounts. We do not require or solicit prepayment of more than $1,200 in fees from the accounts, six months or more in advance, and therefore are not required to include a balance sheet for our most recent fiscal year.