July 29, 2016 Analyst Training in the Banking Sector

Current Trends in Bank Valuation and M&A• The State of the M&A Environment• Applied Mergers & Acquisitions• Valuation Implications

2

Table of Contents

I. The Bank M&A Environment: The Current State of Play and Key Deal Drivers 3

II. Applied Bank Mergers & Acquisitions: Overview and Key Considerations 14

III. Appendix: Olsen Palmer LLC Overview and M&A Advisory Credentials 21

3

I. The Bank M&A Environment:The Current State of Play and Key Deal Drivers

4

Transaction Volume

Transaction Pricing

Transaction Timeline

• Valuation multiples have risen at a deliberate, measured pace• Improvements in credit quality and a pickup in acquirer demand are likely driving better pricing

→ Pricing remains the strongest in large, high-growth, metropolitan markets

• Deal activity has recovered to pre-recession levels→ 2015 was a record year for bank consolidation

• Deals are generally taking much longer from initial discussions through to closing• Unlike in years past, many transactions are facilitated on a “one-off”/negotiated basis

→ Whether a seller or buyer, banks are well-served to identify and potentially initiate friendly relationships (e.g., participations) well-before any potential transaction

Key TrendsOverview of the current M&A landscape

• Acquisition demand remains stable, though the overall pool of potential buyers continues to shrink• The supply of sellers is increasing notably, driven in part by regulatory burden and lack of scale

→ Increasing supply of sellers and decreasing number of buyers may affect pricing going forward

Supply and Demand

The Value of Scale• Banks face 3 key challenges: 1) aggressive competition, 2) flat margins, and 3) rising regulatory costs• The primary – if not only – solution for growing earnings is realizing greater operating scale

→ Achieving larger asset base, whether organically or via M&A, is key to creating shareholder value

5

M&A Transaction VolumeCommunity bank M&A activity has picked up sharply in recent years

Source: SNL Financial.

Community Bank M&A VolumeNo. of Announced Transactions by Year Since 1990

169

274

357

451

524

435

442 450 47

5

334

254

250

211

260 27

0

271 29

6

288

142

118

173

148

230

226

285

284

128

0

100

200

300

400

500

600

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

1H

2015 vs. 2009:+ 141%

6

Sources: FDIC, SNL Financial.

Consolidation Trends Over TimeThe share of banks being acquired is on the upswing

3.3%

3.6%

4.3%

3.5%

3.8%4.0%

4.4%

3.3%

2.5%2.6%

2.3%

2.8%3.0% 3.0%

3.4%3.3%

2.0%

2.7%

4.1%

3.1%

3.6%3.5%

4.4%4.5%

4.2%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

E

Completed Bank & Thrift Acquisitions% of Total U.S. Institutions

Median:3.3%

7

M&A Activity by StateM&A activity by state is binary: those states with high-growth or notably slow-growth are the most active

Source: SNL Financial.

Most Active StatesWhole-bank Transactions Announced in 2016-1H

Key: No. of Deals (# of States)

2 - 3 (12)4 - 5 (10)> 5 (6) 0 Deals (17)1 Deal (5)

Heat Map: 2016 Transactions by Location of SellerWhole-bank Transactions Announced in 2016-1H

Location of Buyer Relative to SellerWhole-bank Transactions Announced in 2016-1H

455555

677

810

13

0 3 6 9 12 15

IATNNEVAMIIN

MOTXCA

MNWI

IL

In-State73.4%

Out-of-State26.6%

8

M&A Transaction Volume by Seller SizeThe majority of sellers are below $250mm; the ratio of seller size to buyer size has been steadily increasing

Source: SNL Financial.

24

21

42

17

1213

3

0

15

30

45

< $50mm $50mm-$100mm

$100mm-$250mm

$250mm-$500mm

$500mm-$1Bn

$1Bn-$5Bn

> $5Bn

Seller Asset Size

Number of Transactions by Seller Asset Size Whole-bank Transactions Announced in 2016-1H

Median Seller Size:$139 million

Typical Target Size: Seller Assets as a Percent of Buyer Assets Over Various Recent Time Periods

9.7%

13.8%

19.0%

0%

10%

20%

1990-'99 2000-'07 2008-'16 1H

Median Since 1990 (7,741 deals):12.66%

9

The Importance of ScaleThere is an observable correlation between size and profitability, efficiency

Note: ROAA is adjusted to account for Subchapter-S elections.Source: SNL Financial.

0.76%

0.85% 0.86% 0.88%0.94%

1.05%

0.00%

0.25%

0.50%

0.75%

1.00%

1.25%

$50M-$200M

$200M-$500M

$500M-$1B $1B-$3B $3B-$5B $5B-$10B

Return on Average AssetsAll U.S. Institutions – Median 2015

70.8%

67.9% 67.4%

65.2%

63.0%

60.5%

50%

55%

60%

65%

70%

75%

$50M-$200M

$200M-$500M

$500M-$1B $1B-$3B $3B-$5B $5B-$10B

Efficiency Ratio All U.S. Institutions – Median 2015

10

The Value of ScaleA clear correlation exists between scale and valuation, both as a going concern and in M&A

Source: SNL Financial.

119.0%

141.0%

158.0%

179.0%

100%

125%

150%

175%

200%

$0 - 250mm $250 - 500mm $500mm - 1Bn $1 - 5Bn

Pric

e /

Tang

ible

Boo

k Va

lue

Seller Asset Size

Valuation by Size – M&A SellerWhole-bank Transactions Announced in 2015 – 1H 2016

Median Price/Tangible Book Value:1.36x

Valuation by Size – Publicly-Traded BanksAll publicly-traded U.S. banks

93.9%

138.5%

50%

75%

100%

125%

150%

< $1Bn > $1Bn

Pric

e /

Tang

ible

Boo

k Va

lue

Bank Asset Size

Median Price/LTM Earnings:13.3x 14.7x

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M&A Valuation Multiples Over TimePrice-to-earnings multiples are back to pre-crisis peak levels, well-above the long-term median

Note: Data as of June 30, 2016. Source: SNL Financial.

1.37

x

1.32

x

1.41

x 1.67

x

1.66

x

1.69

x

1.78

x 2.09

x

2.56

x

2.12

x

1.83

x

1.74

x

1.68

x 2.04

x

2.14

x

2.18

x

2.25

x

2.10

x

1.60

x

1.17

x

1.20

x

1.10

x

1.15

x

1.22

x

1.35

x

1.41

x

1.34

x

13.9

x

12.5

x

12.2

x 13.7

x

13.7

x 15.7

x

16.5

x

19.2

x

22.6

x

21.2

x

18.3

x

18.8

x

19.2

x 21.3

x 22.5

x

22.6

x

22.6

x

22.6

x

22.7

x

18.3

x22

.2x

25.3

x

18.6

x

18.9

x

21.4

x 22.8

x

22.6

x

0.0x

5.0x

10.0x

15.0x

20.0x

25.0x

30.0x

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016YTD

Tran

sact

ion

Pric

e /

Earn

ings

(x)

Tran

sact

ion

Pric

e /

Tang

ible

Boo

k Va

lue

(x)

Median Deal Value/ Tangible Book Value (%) - left axis Median Price/Earnings (x) - right axis

Community Bank M&A Valuation MultiplesMedian M&A transaction valuation multiples by year since 1990

2015 vs. 2011:+ 28%

27-Year Median:19.3x

12

Seller profitability influenced pricing more than the other

factors examined

17.1%

14.8%

13.3%

11.6%

6.3%

1.2% 1.1% 0.7% 0.4% 0.1%0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Seller ROAE(%)

Seller ROAA(%)

Seller NPAs/Assets (%)

SellerNonint.

Income/ AvgAssets (%)

Seller AssetChange (%)*

SellerAssets/

Buyer Assets

SellerEfficiency

Ratio

Seller CoreDeposits/

TotalDeposits

SellerNumber ofBranches

Seller TotalAssets

Value Deconstructed: What Factors Drive Value?Regression analysis suggests that a seller’s return on equity is the primary driver of value

Percentage of Deal Value / Tangible Book Value Explained by Select Factors (R Square) Deals announced since January 1990

*Change in assets measured over a two-year time period.Source: SNL Financial and Olsen Palmer analysis.

Seller size alone had relatively small influence on price / tangible book value

Key Takeaway:• 17.1% of the transaction valuation (as % of the seller’s tangible book

value) was explained by the seller’s Return on Average Equity (ROAE)• More broadly, a seller’s ability to generate a high return on equity

appears to play the strongest role in driving transaction valuations

13

$50.0

$75.0

$50.0

$0

$10

$20

$30

$40

$50

$60

$70

$80

1% ROAA / No Growth 0.75% ROAA / 5% Annual Growth 0.5% ROAA / 5% Annual Growth

Profitability vs. GrowthPresent Value of Future Cash Flows ($ millions)

Value Deconstructed: Growth vs. EarningsBoth profitability and growth factor heavily into valuation

Assumptions: Scenario 1: Stable w/ 1.0% ROAA

Scenario 2: Growth w/ 0.75% ROAA

Scenario 3: Growth w/ 0.50% ROAA

Assets $500 million $500 million $500 million

ROAA 1.00% 0.75% 0.50%

Perpetuity Growth 0.0% 5.0% 5.0%

Equally Valuable as Scenario 1

Note: Analysis assumes a discount rate of 10.0%.

Key Takeaway:• The Bank in Scenario 2 is the most valuable• Achieving a healthy combination of growth

and profitability is the critical path toward maximizing value

50% More Valuable Than Scenario 1

14

II. Applied Bank Mergers & Acquisitions:Overview and Key Considerations

15

Operating Scale

Diversification

Enhanced Fee Income

Cultural Compatibility

Market Share

Maintain Brand / Identity

Minimize Ownership Dilution

Human Capital

Enhance Overall Franchise Value

Deposit Funding and/or Loan Growth

Strategic ConsiderationsStrategic Rationale for an Acquisition

Criteria:Earnings per Share (“EPS”)

Accretion

Internal Rateof Return

(“IRR”)

Tangible Book Value Dilution

Earnback(in Years)

Regulatory Capital

(Leverage Ratio)Description:

Customary > 0 - 5% 10 - 15% 3-5 years > 9 - 10%

Exceptional > 5 - 10% > 15 - 20% < 3 years > 10%

Sub-Optimal < 0% < 10% > 6 years < 9%

Financial ConsiderationsFinancial Rationale for an Acquisition

Acquisition RationaleAny acquisition should satisfy previously-established financial and strategic criteria

16

2014 2015 2016 2017 2018

Transaction ValueTotal ($000) $140,000

ConsiderationConsideration - Cash ($000) $56,000Consideration - Stock ($000) $84,000Consideration - Cash Used to Purchase Target's Options ($000) $0

Buyer Institution Share Count Impact:Buyer Institution Shares Issued to Target Institution 3,360,000Target Institution Ownership % of Pro Forma Company 11.8%

Transaction MultiplesPrice / Target Institution Book Value 123.7%Price / Target Institution Net Income 17.9x

Accretion / (Dilution) ofEarnings per Fully Diluted Share (Excl. Trans. Charges) 0.2% 5.1% 5.1% 8.2% 8.1%

Accretion / (Dilution) ofTangible Book Value per Share -2.1% -1.5% -1.0% -0.4% 0.2%

Pro Forma Capital RatiosTier 1 Leverage Ratio 9.6%Tier 1 Risk Based Capital Ratio 12.6%Total Risk Based Capital Ratio 13.6%

Shareholder ReturnInternal Rate of Return 13.9%

Sample Transaction ModelingTransaction Summary

Target’s pro forma ownership = 12%

Market expectation is immediate EPS accretion

Market expectation is tangible book value per share accretion by or before year 5-6

Minimum acceptable IRR is typically > 10-12%

17

Key Deal IssuesOn any given deal, certain critical issues will require appropriate attention

Equity• Delineation between total equity vs. common equity vs. tangible common equity• Appropriate treatment of any preferred or hybrid equity:

• Trust Preferred Securities (i.e., TruPS)• TARP• Small Business Lending Fund (i.e., SBLF)

• Accounting equity at closing, as adjusted for requisite fair value adjustments (see next item)

Fair Value Accounting• Appropriate identification, treatment, and structuring of relevant items affected by FASB 141r (fair value

accounting in merger transactions):• Loan portfolio: credit and interest rate mark -to-market• Real estate: Fair value estimates• Securities Portfolio (inclusive of AOCI): Fair value estimates• Deposits: Interest rate mark-to-market• Other borrowings: Interest rate mark-to-market

• Impact of transaction terms and structure on goodwill, intangibles, and pro forma equity

Social Issues and Governance

• Accurately estimating amount and timing of cost savings opportunities• Remaining duration and ‘convenience fee’ (i.e., termination) of any data processing agreement

Human Capital• Contractual payments or obligations triggered upon a change-of-control• Requisite employment agreements and non-compete terms to be executed upon closing• Any retention pools to incentive key employees to remain with company post-deal• Treatment of any severed employees

Form of Consideration• Implications of cash vs. stock• Implications of using privately-held, non-traded currency as consideration• Valuation of stock consideration• Target’s consideration preferences based on tax implications, liquidity, dividends, upside potential, etc.

Price• Target’s price expectations / requirements• Comparison to pro forma value as would-be shareholder of acquirer

Cost Savings

• Integration approach, treatment of target’s name and brand, role of target’s management in combined firm• Number of board seats, if any, offered to target

18

Implied Equity Value Reference Range

$21.9

$19.8

$21.2

$18.5

$23.0

$25.9

$23.3

$24.2

$22.0

$25.8

$15

$17

$19

$21

$23

$25

$27

Public - U.S. Comps Public - State Comps Transactions - U.S. Transactions - State DCF

Impl

ied

Equi

ty V

alue

($ m

illio

ns)

Implied Value:

$20MM to $25MM

Target Valuation MethodologyA number of valuation methodologies are utilized to arrive at a valuation range

1 2 3

Discounted Cash Flow (DCF)M&A Transaction ComparablesPublic Trading Comparables

Multiples are applied to the target company’s operating data that are derived from similar (comparable) companies / M&A transactions.

A company’s future free cash flows are projected and then converted to

a present value

19

Options for Exploring a SaleThere are generally 3 options for conducting a sale, each with implications on confidentiality and valuation

1. Unilateral Discussions 2. Discreet Marketing Process 3. Broad Auction

Description Discreet negotiations w / only one party Simultaneous discussions w/ several parties Formal auction among multiple parties

No. of Parties Involved 1 2 - 10 > 10

Benefits• Maximizes discretion• Greater diligence on prospective acquirer• Enhanced relationship with acquirer may

correlate to higher value

• Avoids “all eggs in one basket” approach of unilateral discussions

• Allows for leveraging multiple parties against each other

• Utilizes proprietary market intelligence to exclude irrelevant parties

• Typically maximizes value• Maximizes negotiating leverage• Minimizes the duration to closing

Limitations • Value may be lower than broad auction• Longer duration to closing

• Less discreet than unilateral discussions• Value may be lower than broad auction

• Least discreet options• Arms-length process may dissuade

certain buyers

Summary: DiscretionValue MaximizationSpeed to Closing

Low

High

Low

High

Low

High

20

Hypothetical Term SheetThis blueprint sketches out the key terms typically negotiated in a combination

Transaction Structure • Acquirer Bancorp (“AB”) acquires Target Bank (“TB”)

Purchase Price • $[#.##] per TB share• Total value of $[# million]

Form of Consideration • 50% stock / 50% cash• Election – TB shareholders can elect to receive all cash, all stock, or

50% stock and 50% cash subject proration so that overall consideration paid is 50% stock / 50% cash

• Structured as a tax-free reorganization for IRS purposes

Exchange Ratio • Each TB share will be converted into the sum of:o [0.0000x] AB shares, pluso $[#].00 in cash

Pro Rata Ownership of Combined Company

• 90% AB / 10% TB

Management and Employees

• Role of TB management: [TBD]• Role of TB employees:

• Retention pool for key employees• Customary severance for any displaced employees

Governance • [#] of AB board seat(s) given to TB• Exact number of seats to-be-negotiated, typically based on TB’s pro

rata ownership percentage of combined company

Required Approvals • Standard regulatory and shareholder approvals

Expected Signing • Q4 2016

Expected Closing • Q1 / Q2 2017

Other Key Issues: • Consideration form:

o Cash vs. Stocko Tax implicationso Liquidity implications

• Fair value accounting adjustmentso Loanso OREOo Real Estateo Bond Portfolio

• Credit Issues / OREO• Minimum equity / Minimum net worth• Synergies• Human Capital matters

o Contractso Retention / Severanceo Non-Competeo Change-of-Control Payments

21

III. Appendix: Olsen Palmer LLC Firm Overview and Bank M&A Advisory Expertise

22

Expertise and CredentialsChristopher Olsen – Managing Partner, Olsen Palmer LLC

PROFESSIONALEXPERIENCE

• Mr. Olsen is the co-founder and managing partner of Olsen Palmer LLC where he advises Banks & Thrifts across the full spectrum of Mergers & Acquisitions• Before founding Olsen Palmer, Mr. Olsen served with Milestone Advisors (acquired by Houlihan Lokey) as well as with Hovde Financial, in both cases as a Managing

Director and head of Southeast U.S. Bank & Thrift M&A• Mr. Olsen has previously worked in the Financial Institutions Group of Morgan Stanley’s Investment Banking Division as well as for First Annapolis Consulting• Mr. Olsen began his career working for Norwest (now Wells Fargo) and then for a 3-branch community bank• Over his career, Mr. Olsen has advised on over 60 completed M&A transactions among financial services companies with deal values as large as $4 billion

PROFESSIONALRECOGNITION

• Christopher Olsen named to “Leading Investment Banker Rankings” – S&P Capital IQ (February 2016)• Olsen Palmer LLC named Top 10 M&A Advisor to Banks & Thrifts – SNL Financial (July 2015)

QUOTES ANDPUBLICATIONS

• “Bank M&A Deal Drivers”, Mergermarket, July 2016• “Community Banks Size Up Consolidation”, Baltimore Business Journal, April 24, 2015• “Bank M&A in 2014 the Strongest in Nearly a Decade, What's Ahead for 2015”, Nashville Business Journal, February 18, 2015• “Trend Lines: Renewed Hopes for M&A Activity”, SNL Financial, January 7, 2015• “Why Tennessee's banking M&A scene is among the country's most active”, Nashville Business Journal, June 25, 2014• “Olsen Palmer Ready to Explore Strategic Options for Banks”, SNL Financial, September 18, 2013• “The Pipeline: Will Banks Seek a Special Combination?”, SNL Financial, September 12, 2011• “M&A Pro to Focus on Southeast Banks”, SNL Financial, July 14, 2011• “Despite Losses, First Tennessee Marches Ahead”, Nashville Business Journal, July 13, 2008• “Ante raised for banks buying into Nashville”, Nashville Business Journal, February 25, 2007• “M&A: Bank buying buzz in Georgia’s Big Peach”, SNL Financial, August 28, 2006• “Banks See Nashville as Growth Machine”, The Tennessean, November 4, 2005• “Banks Paying High Dollar to be in Nashville Market”, The Tennessean, September 30, 2004

SPEAKINGENGAGEMENTS

• Building an M&A Blueprint, Bank Director Magazine (2016)• Executive Management Conference, Mississippi and Tennessee Bankers’ Association (2016, 2013)• CEO Forum, Maryland, Virginia, and West Virginia Bankers’ Association (2016)• Maryland Banker’s Association, Annual Meeting, “The M&A Landscape: Valuation Trends, Deal Drivers, and Strategic Alternatives” (2016)• SNL Financial, “Advanced Topics in Bank Valuation” (2016, 2015, 2014, 2013, 2012, 2008)• Building a Successful M&A Strategy, Webinar, in conjunction with HORNE LLP (2015)• Tennessee Banker’s Association, Annual Meeting, “The State of the Bank M&A Landscape” (2015)• Waller Law’s Southeastern Banking Seminar, “Bank M&A, Deployment of Capital, and Regulatory Hurdles” (2014)• Society of CPAs, “Bankers Night – The Bank M&A Landscape: Trends, Themes, and Deal Drivers” (2012)• TBA Independent Banker’s Division, Annual Meeting, “The Community Banking Landscape” (2012, 2007)• Tennessee Banker’s Association, Annual Meeting, “Measuring, Maximizing, and Protecting the Value of Your Institution” (2006)

EDUCATION • MBA – Columbia University• BBA – George Washington University• Additional Professional Studies – Columbia University Law School; American Bankers Association

CERTIFICATIONS • Licensed with Financial Industry Regulatory Authority (FINRA) aso General Securities Principal (series 24)o Investment Banking Representative (series 79)o General Securities Representative (series 7)o Uniform Securities Agent (series 63)o Limited Representative – Private Securities Offering (series 82)

23

Olsen Palmer LLC: Specialized ExpertiseWe are exclusively focused on community bank M&A advisory

Olsen Palmer is a nationally-recognized independent investmentbanking firm that specializes inadvising community banks across thefull spectrum of Mergers &Acquisitions.

By design, we take a communitybanking approach: nimble, high-touch, and conflict-free

We advise community banks across the spectrum of M&A, including:• Whole-bank sales• Whole bank acquisitions • Mergers / Mergers-of-Equals• Branch sales and purchases• FDIC-assisted transactions• Fairness opinions• Valuations• Strategic planning

The principals of Olsen Palmer havebeen advising financial institutions forthree decades.

Our experience includes prominentboutique firms including HoulihanLokey, Milestone Advisors, and HovdeFinancial as well as national fullservice firms including MorganStanley and Bank of America.

We have advised financial institutionson transactions with values as smallas $4 million and as large as $4 billion.

Olsen Palmer has been ranked a“Top 10 M&A Advisor” andManaging Partner Christopher Olsenwas named a “Leading Dealmaker”based on the number of transactionsadvised, according to SNL Financialand S&P Capital IQ.

We have intentionally formed ourfirm to be a boutique in every sense.

We bring to every client engagementour extensive expertise andunmatched market intelligence whilemaintaining the flexibility to dedicateour full, senior-level attention to eachand every transaction.

By specializing on advising truecommunity banks, we provide adeeper-level of expertise and clientservice than many of our competitorswho focus on larger institutions.

By design, we solely provide advisoryservices and intentionally do not offersales and trading, equity research,institutions services, or secondarycapital markets.

Our model allows us to remain freefrom any real or potential conflictsthat inherently reside in the businessmodels of larger, diversified firms.

Our Firm Our Services Our Expertise Our Advantage

Independent,Client-Centric

Advice

LocalizedMarket

Intelligence

CommunityBank-Specific

Expertise• “Top 10 M&A Advisory Firm” – SNL Financial

• “Leading Bank M&A Advisor” – S&P Capital IQ

24*Includes transactions executed by Olsen Palmer professionals while at other firms.

Has been acquired by

March 6, 2015

Advised Seller

Has been acquired by

December 14, 2012

Advised Seller

Has acquired 4 branches from

November 9, 2012

Advised Acquirer

Has been acquired by

June 30, 2012

Advised Seller

Has been acquired by

November 30, 2007

Advised Seller

Has acquired 1 branch from

December 7, 2012

Advised Acquirer

Has been acquired by

August 1, 2006

Advised Seller

Has been acquired by

March 15, 2006

Advised Seller

Has acquired

December 13, 2006

Advised Acquirer

Has merged with

September 1, 2006

Advised Merger-of-Equals

September 11, 2015

Has been acquired by

Advised Seller

Has acquired

Advised Acquirer

April 30, 2015

Has Acquired

Advised Acquirer

August 31, 2015

Recent TransactionsOlsen Palmer is a leading advisor to banks across the M&A spectrum

Has been acquired by

December 31, 2004

Advised Seller

Premier Bank of Brentwood

Has been acquired by

July 1, 2007

Advised Seller

Has acquired

October 1, 2014

Advised Acquirer

Has Acquired

Advised Acquirer

September 25, 2015

F&M Bancorp, Inc.

Has been acquired by

Advised Seller

November 6, 2015

Advised Acquirer

May 13, 2016

Has acquired3 Branches from

Has acquired4 Branches from

Advised Acquirer

April 1, 2016

25

Advisory Services in DetailWe offer comprehensive community bank M&A advisory support

Acquisition Advisory

Sell-side Advisory

Valuations

Fairness Opinions

Board Planning and Education

• Whole-bank, branch, or FDIC acquisitions

• Comprehensive buy-side transaction advisory services:

• Planning: Pre-transaction strategic planning and analysis

• Preparation: Develop M&A blueprint and acquisition criteria

• Target Identification: Identify potential targets using key filters and proprietary market intelligence

• Valuation: Calculate valuation levels based on cash flow analysis, comparable transactions, and public-market characteristics

• Modeling: Detailed modeling of contemplated transaction(s), including impact on book value, EPS, earn-back, IRR and capital ratios

• Discussions: Initiate and facilitate discussions with potential target(s)

• Structure: Advise on the optimal transaction structure based on transaction-specific circumstances

• Negotiations: Lead the efforts to successfully negotiate key business terms

• Documentation: Facilitate the drafting of merger agreement and other applicable documents

• Announcement: Support the transaction-related notices and announcements

• Board Presentation: Present and discuss transaction rationale to board members

• Whole-bank sale or branch divestitures

• Comprehensive transaction advisory services:

• Planning: Pre-transaction strategic planning and analysis

• Preparation: Develop M&A sale process including blueprint and timeline

• Buyer Identification: Identify potential acquirers using key filters and proprietary market intelligence

• Valuation: Calculate valuation levels based on cash flow analysis, comparable transactions, and public-market characteristics

• Modeling: Detailed modeling of contemplated transaction(s), including impact on book value, EPS, earn-back, IRR and capital ratios

• Process: Determine optimal sell-side process (e.g., one-off discussions, full auction, limited auction, etc.)

• Discussions: Initiate and facilitate discussions with potential acquirers

• Structure: Advise on the optimal transaction structure based on transaction-specific circumstances

• Negotiations: Lead the efforts to successfully negotiate key business terms

• Documentation: Facilitate the drafting of merger agreement and other applicable documents

• Announcement: Support the transaction-related notices and announcements

• Board Presentation: Present and discuss transaction rationale to board members

• Presenting up-to-date outlook on M&A market characteristics

• Support drafting of Board-level M&A blueprint

• Transaction-related buy-side and sell-side Fairness Opinion letters and supporting presentations

• Stand-alone and transaction-related bank and branch valuations based on cash flow projections, comparable transactions, public-market characteristics , and capital adequacy

26

General Information and Limitations

This presentation, and any oral or video presentation that supplements it, have been developed by and are proprietary toOlsen Palmer LLC (“Olsen Palmer”) and were prepared exclusively for the benefit and internal use of the recipient. Neitherthis printed presentation, nor any oral or video presentation that supplements it, nor any of their contents, may be used,reproduced, disseminated, quoted or referred to for any other purpose without the prior written consent of Olsen Palmer.

The analyses contained herein rely upon information obtained from public sources, the accuracy of which has not beenindependently verified, and cannot be assured by, Olsen Palmer. Neither Olsen Palmer nor any other party makes anyrepresentation or warranty regarding the information contained herein and no party may rely on such information.

The information contained herein will not be updated or corrected based on any additional information. This informationshould not be construed as, and Olsen Palmer is not undertaking to provide any legal, regulatory, accounting, insurance,tax, investment or similar professional advice. This presentation is protected under applicable copyright laws and does notcarry any rights of publication or disclosure.

Christopher OlsenManaging Partner

O: 202.627.2043M 202.215.2568colsen@olsenpalmer.com

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