(1) Audited financial statements which include a comparative balance sheet of the company as of the last day of the calendar year and of the preceding year, and comparative statements of income; stockholder's equity and changes in financial position for each such calendar y ear. These financial statements shall be prepared on an accrual basis accompanied by an accountant's report, including an opinion meeting the standards of the California Board of Accountancy (Rule 58.1 of the Board of Accountancy).

(2) An analysis of the allowance for loan losses, showing the balance at the beginning of the year, additions to the allowance less accounts charged to the allowance, and the balance at the end of the year.

(3) The accountant shall submit under separate cover, along with the audit report, a copy of the letter to management describing internal control and making recommendations for improving operating procedures. The company shall submit a copy of its letter, if any, in response to the management letter of the accountant. The accountant shall examine documentation on loans and include in the management letter appropriate comments on the condition of the loan files examined if any weaknesses exist (e.g., application, notes, security interest, insurance, appraisals).