-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, E2cQmWx4EaG9kA/HUub1XWG9/Ot0XdBBEqRoe/DEhzr3WFAFIh6jWsEMagLVD0h1 jifSvnSZ6qVkunoxcrC/FQ== 0000950133-97-000808.txt : 19970317 0000950133-97-000808.hdr.sgml : 19970317 ACCESSION NUMBER: 0000950133-97-000808 CONFORMED SUBMISSION TYPE: SB-2/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19970314 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HCB BANCSHARES INC CENTRAL INDEX KEY: 0001029740 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTION, FEDERALLY CHARTERED [6035] STATE OF INCORPORATION: OK FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SB-2/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-19093 FILM NUMBER: 97556765 BUSINESS ADDRESS: STREET 1: HEARTLAND COMMUNITY BANK STREET 2: 237 JACKSON STREET CITY: CAMDEN STATE: AK ZIP: 71701 BUSINESS PHONE: 5018366841 MAIL ADDRESS: STREET 1: HEARTLAND COMMUNITY BANK STREET 2: 237 JACKSON STREET CITY: CAMDEN STATE: AK ZIP: 71701 SB-2/A 1 AMENDMENT #2 TO FORM SB-2 1 As filed with the Securities and Exchange Commission on March 14, 1997 Registration No. 333-19093 - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------------------- PRE-EFFECTIVE AMENDMENT NO. 2 TO FORM SB-2 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------------ HCB BANCSHARES, INC. (Name of small business issuer in its charter) OKLAHOMA 6035 62-1670792 ------------------ --------------- ----------- (State or other jurisdiction of (Primary standard industrial (I.R.S. employer incorporation or organization) classification code number) identification number)
237 JACKSON STREET, CAMDEN, ARKANSAS 71701-0878 (501) 836 6841 ------------------------------------------------------------------------------ (Address and telephone number of principal executive offices and principal place of business) MRS. VIDA H. LAMPKIN PRESIDENT AND CHIEF EXECUTIVE OFFICER HCB BANCSHARES, INC. 237 JACKSON STREET CAMDEN, ARKANSAS 71701-0878 (501) 836-6841 - ------------------------------------------------------------------------------- (Name, address, and telephone number of agent for service) PLEASE SEND COPIES OF ALL COMMUNICATIONS TO: Gary R. Bronstein, Esquire K. Scott Fife, Esquire Housley Kantarian & Bronstein, P.C. 1220 19th Street, N.W., Suite 700 Washington, D.C. 20036 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this registration statement becomes effective. If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. 2 ITEM 27. EXHIBITS: (a) The exhibits schedules filed as a part of this registration statement are as follows: * 1.1 Engagement Letter with Trident Securities, Inc. * 1.2 Form of Agency Agreement with Trident Securities, Inc. * 2 Plan of Conversion (Exhibit A to Proxy Statement filed as Exhibit 99.2) * 3.1 Articles of Incorporation of HCB Bancshares, Inc. * 3.2 Bylaws of HCB Bancshares, Inc. * 4 Form of Stock Certificate of HCB Bancshares, Inc. * 5 Opinion of Housley Kantarian & Bronstein, P.C. regarding legality of securities being registered * 8.1 Federal Tax Opinion of Housley Kantarian & Bronstein, P.C. * 8.2 State Tax Opinion of Gaunt & Co. * 8.3 Opinion of Ferguson & Co., LLP as to the value of subscription rights for tax purposes * 10.1 Form of HCB Bancshares, Inc. 1997 Stock Option and Incentive Plan * 10.2 Form of HCB Bancshares, Inc. Management Recognition Plan and Trust Agreement * 10.3(a) Employment Agreements by and between Heartland Community Bank and Vida H. Lampkin and Cameron D. McKeel * 10.3(b) Employment Agreements by and between HCB Bancshares, Inc. and Vida H. Lampkin and Cameron D. McKeel * 10.4(a) Change-in-Control Protective Agreement between Heartland Community Bank and William C. Lyon * 10.4(b) Change-in-Control Protective Agreement between HCB Bancshares, Inc. and William C. Lyon * 10.5 Heartland Community Bank Directors' Retirement Plan and the First Amendment Thereto * 23.1 Consents of Housley Kantarian & Bronstein, P.C. (in opinions filed as Exhibits 5 and 8.1) * 23.2 Consent of Gaunt & Co. 23.3 Consent of Ferguson & Co., LLP * 24 Power of Attorney (reference is made to the signature page) * 27 Financial Data Schedule * 99.1 Form of Stock Order Form * 99.2 Form of Proxy Statement for Special Meeting of Members of Heartland Community Bank; Form of Proxy * 99.3 Form of Miscellaneous Solicitation and Marketing Materials 99.4 Appraisal Report
- ----------- * Previously filed. (b) FINANCIAL STATEMENT SCHEDULES. No financial statement schedules are filed because the required information is not applicable or is included in the consolidated financial statements or related notes. 3 SIGNATURES In accordance with the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form SB-2 and authorized this amended registration statement to be signed on its behalf by the undersigned, in the City of Camden, State of Arkansas, as of the date set forth below. HCB BANCSHARES, INC. Date: March 13, 1997 By:/s/ Vida H. Lampkin -------------------------------- Vida H. Lampkin Chairman of the Board, President and Chief Executive Officer (Duly Authorized Representative) In accordance with the requirements of the Securities Act of 1933, this amended registration statement has been signed by the following persons in the capacities stated as of the date set forth above. /s/ Vida H. Lampkin /s/ Cameron D. McKeel - -------------------------------------------------- -------------------------------------------------------- Vida H. Lampkin Cameron D. McKeel Chairman of the Board, President Director and Vice President and Chief Executive Officer (Principal Executive, Financial and Accounting Officer) /s/ Roy Wayne Moseley* /s/ Bruce D. Murry* - -------------------------------------------------- ----------------------------------------------------------- Roy Wayne Moseley Bruce D. Murry Director Director /s/ Carl E. Parker, Jr.* /s/ Lula Sue Silliman* - -------------------------------------------------- ----------------------------------------------------------- Carl E. Parker, Jr. Lula Sue Silliman Director Director /s/ Clifford Steelman* - --------------------------------------------------- Clifford Steelman Director * /s/ Vida H. Lampkin --------------------------------------------- Vida H. Lampkin Attorney-in-Fact
EX-23.3 2 CONSENT OF FERGUSON & CO., LLP 1 EXHIBIT 23.3 [FERGUSON & CO., LLP LETTERHEAD] March 13, 1997 Board of Directors Heartland Community Bank 237 Jackson Street Southwest Camden, Arkansas 71701 Dear Directors: We hereby consent to the use of our firm's name in the Form AC Application for Conversion of Heartland Community Bank, Camden, Arkansas and any amendments thereto, and in the Form SB-2 Registration Statement of HCB Bancshares, Inc., and any amendments thereto. We also hereby consent to the inclusion of, summary of, and references to our Appraisal Report and our opinion concerning subscription rights in such filings including the Prospectus of HCB Bancshares, Inc. Sincerely, /s/ Charles M. Hebert -------------------------------------------- Charles M. Hebert Principal EX-99.4 3 APPRAISAL REPORT 1 EXHIBIT 99.4 CONVERSION VALUATION REPORT ---=====================--- Valued as of December 20, 1996 HEARTLAND COMMUNITY BANK CAMDEN, ARKANSAS Prepared by: Ferguson & Co., LLP Suite 550 122 West John Carpenter Freeway Irving, TX 75039 972-869-1177 2 [FERGUSON & CO., LLP LETTERHEAD] STATEMENT OF APPRAISER'S INDEPENDENCE HEARTLAND COMMUNITY BANK CAMDEN, ARKANSAS We are the appraiser for Heartland Community Bank in connection with its mutual to stock conversion. We are submitting our independent estimate of the pro forma market value of the Bank's stock to be issued in the conversion. In connection with our appraisal of the Bank's to-be-issued stock, we have received a fee which was not related to the estimated final value. The estimated pro forma market value is solely the opinion of our company and it was not unduly influenced by the Bank, its conversion counsel, its selling agent, or any other party connected with the conversion. We also received a fixed fee for assisting the Bank in connection with the preparation of its business plan to be submitted with the conversion application. Heartland Community Bank has agreed to indemnify Ferguson & Co., LLP under certain circumstances against liabilities arising out of our services. Specifically, we are indemnified against liabilities arising from our appraisal except to the extent such liabilities are determined to have arisen because of our negligence or willful conduct. Ferguson & Co., LLP /s/ CHARLES M. HEBERT --------------------------- Charles M. Hebert Principal January 13, 1997 3 [FERGUSON & CO., LLP LETTERHEAD] January 13, 1997 Board of Directors Heartland Community Bank 237 Jackson Street, SW Camden, Arkansas Dear Directors: We have completed and hereby provide, as of December 20, 1996, an independent appraisal of the estimated pro forma market value of Heartland Community Bank ("Heartland Bank" or the "Bank"), Camden, Arkansas, in connection with the conversion of Heartland Bank from the mutual form to the stock form of organization ("Conversion"). This appraisal report is furnished pursuant to the regulatory filing of the Bank's Application for Conversion ("Form AC") with the Office of Thrift Supervision ("OTS"). Ferguson & Co., LLP ("F&C") is a consulting firm that specializes in providing financial, economic, and regulatory services to financial institutions. The background and experience of F&C is presented in Exhibit I. We believe that, except for the fees we will receive for preparing the appraisal and assisting with Heartland Bank's business plan, we are independent. F&C personnel are prohibited from owning stock in conversion clients for a period of at least one year after conversion. In preparing our appraisal, we have reviewed Heartland Bank's Application for Approval of Conversion, including the Proxy Statement as filed with the OTS. We conducted an analysis of Heartland Bank that included discussions with Gaunt & Co., Ltd., the Bank's independent auditors, and with Housley Kantarian & Bronstein, P.C., the Bank's conversion counsel. In addition, where appropriate, we considered information based on other available published sources that we believe is reliable; however, we cannot guarantee the accuracy or completeness of such information. We also reviewed the economy in Heartland Bank's primary market area and compared the Bank's financial condition and operating results with that of selected publicly traded thrift institutions. We reviewed conditions in the securities markets in general and in the market for thrifts stocks in particular. Our appraisal is based on Heartland Bank's representation that the information contained in the Form AC and additional evidence furnished to us by the Bank and its independent auditors are truthful, accurate, and complete. We did not independently verify the financial statements and other information provided by Heartland Bank and its auditors, nor did we independently value the Bank's assets or liabilities. The valuation considers Heartland Bank only as a going concern and should not be considered an indication of its liquidation value. 4 Board of Directors January 13, 1997 Page 2 It is our opinion that, as of December 20, 1996, the estimated pro forma market value of Heartland Bank was $20,000,000, or 2,000,000 shares at $10.00 per share. The resultant valuation range was $17,000,000 at the minimum (1,700,000 shares at $10.00 per share) to $23,000,000 at the maximum (2,300,000 shares at $10.00 per share), based on a range of 15 percent below and above the midpoint valuation. The supermaximum was $26,450,000 (2,645,000 shares at $10.00 per share). Our valuation is not intended, and must not be construed, as a recommendation of any kind as to the advisability of purchasing shares of common stock in the conversion. Moreover, because such valuation is necessarily based upon estimates and projections of a number of matters, all of which are subject to change from time to time, no assurance can be given that persons who purchase shares of common stock in the conversion will thereafter be able to sell such shares at prices related to the foregoing estimate of the Bank's pro forma market value. F&C is not a seller of securities within the meaning of any federal or state securities laws and any report prepared by F&C shall not be used as an offer or solicitation with respect to the purchase or sale of any securities. Our opinion is based on circumstances as of the date hereof, including current conditions in the United States securities markets. Events occurring after the date hereof, including, but not limited to, changes affecting the United States securities markets and subsequent results of operations of Heartland Bank, could materially affect the assumptions used in preparing this appraisal. The valuation reported herein will be updated as provided in the OTS conversion regulations and guidelines. All updates will consider, among other things, any developments or changes in Heartland Bank's financial performance and condition, management policies, and current conditions in the equity markets for thrift shares. Should any such new developments or changes be material, in our opinion, to the valuation of the shares, appropriate adjustments will be made to the estimated pro forma market value. The reasons for any such adjustments will be explained in detail at the time. Respectfully, FERGUSON & CO., LLP /s/ CHARLES M. HEBERT ------------------------------- Charles M. Hebert Principal 5 FERGUSON & CO., LLP TABLE OF CONTENTS HEARTLAND COMMUNITY BANK CAMDEN, ARKANSAS
PAGE ---- INTRODUCTION 1 SECTION I. - FINANCIAL CHARACTERISTICS 3 PAST & PROJECTED ECONOMIC CONDITIONS 3 FINANCIAL CONDITION OF INSTITUTION 3 BALANCE SHEET TRENDS 3 ASSET/LIABILITY MANAGEMENT 4 INCOME AND EXPENSE TRENDS 11 REGULATORY CAPITAL REQUIREMENTS 11 LENDING 12 NONPERFORMING ASSETS 18 LOAN LOSS ALLOWANCE 19 MORTGAGE BACKED SECURITIES AND INVESTMENTS 20 SAVINGS DEPOSITS 22 BORROWINGS 25 SUBSIDIARIES 25 LEGAL PROCEEDINGS 25 EARNINGS CAPACITY OF THE INSTITUTION 25 ASSET-SIZE-EFFICIENCY OF ASSET UTILIZATION 25 INTANGIBLE VALUES 26 EFFECT OF GOVERNMENT REGULATIONS 26 OFFICE FACILITIES 26
i 6 FERGUSON & CO., LLP TABLE OF CONTENTS - CONTINUED HEARTLAND COMMUNITY BANK CAMDEN, ARKANSAS
PAGE ---- SECTION II - MARKET AREA 1 DEMOGRAPHICS 1 SECTION III - COMPARISON WITH PUBLICLY TRADED THRIFTS 1 COMPARATIVE DISCUSSION 1 SELECTION CRITERIA 1 PROFITABILITY 2 BALANCE SHEET CHARACTERISTICS 2 RISK FACTORS 2 SUMMARY OF FINANCIAL COMPARISON 3 FUTURE PLANS 3 SECTION IV - CORRELATION OF MARKET VALUE 1 MARKETABILITY & LIQUIDITY OF STOCK TO BE ISSUED 1 FINANCIAL ASPECTS 1 MARKET AREA 2 MANAGEMENT 3 DIVIDENDS 3 LIQUIDITY 3 THRIFT EQUITY MARKET CONDITIONS 4 ARKANSAS ACQUISITIONS 4
ii 7 FERGUSON & CO., LLP TABLE OF CONTENTS - CONTINUED HEARTLAND COMMUNITY BANK CAMDEN, ARKANSAS
PAGE ---- SECTION IV - CORRELATION OF MARKET VALUE - CONTINUED EFFECT OF INTEREST RATES ON THRIFT STOCK 5 ADJUSTMENTS CONCLUSION 6 VALUATION APPROACH 6 VALUATION CONCLUSION 7
iii 8 FERGUSON & CO., LLP LIST OF TABLES HEARTLAND COMMUNITY BANK CAMDEN, ARKANSAS
TABLE NUMBER TABLE TITLE PAGE ------ ----------- ---- SECTION I - FINANCIAL CHARACTERISTICS 1 Selected Financial Data 5 2 Selected Operating Data 6 3 Selected Operating Ratios 7 4 Loan Maturity Schedule 8 5 GAP Analysis 9 6 Net Portfolio Value 10 7 Regulatory Capital Compliance 11 8 Analysis of Loan Portfolio 13 9 Loan Activity 14 10 Average Balances, Yields, Costs 15 10a Interest Balances, Yields, Costs 16 11 Rate/Volume Analysis 17 12 Non-Performing Assets 18 13 Analysis of Allowance for Loan Losses 19 14 Allocation of Allowance for Loan Losses 20 15 Investment Securities 20 16 Investment Carrying Values 21 17 Deposit Portfolio 22 18 Deposits, Averages and Rates 23 19 Jumbo Certificates of Deposit 24 20 Savings Deposit Activity 24 21 Office Facilities 27 SECTION II - MARKET AREA 1 Key Economic Indicators 4 1a Key Economic Indicators - Counties 5 2 Earnings by Industry 6 3 Competitive Deposits 7
iv 9 FERGUSON & CO., LLP LIST OF TABLES - CONTINUED HEARTLAND COMMUNITY BANK CAMDEN, ARKANSAS
TABLE NUMBER TABLE TITLE PAGE ------ ----------- ---- SECTION III - COMPARISON WITH PUBLICLY TRADED THRIFTS 1 Comparatives General 4 2 Key Financial Indicators 5 3 Pro Forma Comparisons 6 4 Comparative Selection 8 SECTION IV - CORRELATION OF MARKET VALUE 1 Appraisal Adjustments to Earnings 2 2 Arkansas Acquisitions Since January 1, 1995 8 3 Recent Conversions 11 4 Comparison of Pricing Ratios 14
LIST OF FIGURES FIGURE NUMBER FIGURE TITLE PAGE ------ ------------ ---- SECTION IV - CORRELATION OF MARKET VALUE 1 SNL Index Since 1994 15 2 Interest Rates Last Six Months 16
v 10 FERGUSON & CO., LLP EXHIBITS HEARTLAND COMMUNITY BANK CAMDEN, ARKANSAS EXHIBIT TITLE Exhibit I - Ferguson & Co., LLP. Qualifications Exhibit II - Selected Region, State, and Comparatives Information Exhibit III - Heartland Community Bank TAFS Report Exhibit IV - Comparative Group TAFS and BankSource Reports Exhibit V - Pro Forma Calculations Pro Forma Assumptions Pro Forma Effect of Conversion Proceeds at the Minimum of the Range Pro Forma Effect of Conversion Proceeds at the Midpoint of the Range Pro Forma Effect of Conversion Proceeds at the Maximum of the Range Pro Forma Effect of Conversion Proceeds at the SuperMax of the Range Pro Forma Analysis Sheet vi 11 SECTION I FINANCIAL CHARACTERISTICS 12 FERGUSON & CO., LLP SECTION I. INTRODUCTION Heartland Community Bank, ("Heartland Bank" or "Bank") is a federally chartered, federally insured mutual savings and loan bank located in Camden (Ouachita County), Arkansas. It was chartered in 1934 as First Federal Savings and Loan Association of Camden, Camden, Arkansas. Its name was changed to Heartland Community Bank Savings and Loan Association in 1996. It obtained federal insurance of accounts in 1934 and joined the Federal Home Loan Bank system the same year. On November 21, 1996, it adopted a plan to convert to a stock savings and loan association, via a standard mutual to stock conversion. At September 30, 1996, Heartland Community Bank had total assets of $172.9 million, net loans of $89.3 million, mortgage-backed securities of $54.8 million, investment securities of $16.7 million, deposits of $147.2 million, borrowings of $10 million and net worth of $13.5 million, or 7.79% of assets. The Bank has seven offices located in five counties, Ouachita, Dallas, Grant, Pulaski, and Drew. In addition, the Bank also has market penetration in three additional counties, Cleveland, Saline and Calhoun. The eight counties are contiguous and are located in the south central portion of Arkansas. Arkansas is one of the West South Central states of the United States. It is bounded on the north and northeast by Missouri, on the east by Tennessee and Mississippi, on the south by Louisiana, on the southwest by Texas, and on the west by Oklahoma. The Mississippi River forms virtually the entire eastern boundary. Little Rock is the capital and the state's largest city. Arkansas is rich in mineral resources, chiefly petroleum, natural gas, and bauxite. By most standards, Arkansas is one of the poorest states in the United States. Although the trend in personal income is up, the real personal income of the state was 22% below that of the United States in 1995.(1) Heartland Community Bank is a traditional thrift with a slight orientation toward loans. It invests primarily in: (1) 1-4 family loans and, to a lesser extent, in multifamily, commercial real estate, construction loans, commercial non-real estate loans, and consumer loans; (2) mortgage backed securities; (3) United States government and agency securities; and (4) temporary cash investments. It is funded principally by savings deposits, borrowings, and existing net worth. It has utilized borrowings as an alternate funding source. The Bank offers a variety of loan products to accommodate its customer base, and single family loans dominate the Bank's loan portfolio. In recent years, Heartland Community Bank has concentrated its lending on one year ARM's and 15 year fixed rate single family loans. At September 30, 1996, gross loans on 1-4 family dwellings made up 34.84% of total assets and 67.51% of the loan portfolio. Mortgage backed securities made up 31.71% of total assets. Investment securities made up 9.65% of Heartland Community Bank's assets at September 30, 1996. Heartland Community Bank had $990.3 thousand in non-performing assets at September 30, 1996 (1.09% of total assets), as compared to $1.02 million at June 30, 1996 (1.20% of total assets). In real dollars, non-performing assets are up from the $672.6 thousand at June 30, 1995, and the $464.9 thousand at June 30, 1994. However, expressed as a percentage of assets there is improvement. Non-performing assets were 1.23% of total assets at June 30, 1995, and .87% of total assets at June 30, 1994. - --------------------------- (1) "Arkansas" Encarta Encyclopedia, Funk & Wagnalls Corporation. 1 13 FERGUSON & CO., LLP SECTION I. Savings deposits increased during the four year and three month period from June 30, 1992, to September 30, 1996, by $42.87 million. The majority of this increase can be attributed to the purchase of another financial institution in 1996. Between June 30, 1992 and June 30, 1995 the deposits grew from $104.3 million to $112 million. This growth trend is the result of deliberate actions on the part of Management. In 1996, Management began to seek alternative funding sources in order to improve spreads and reduce interest rate risk Heartland Community Bank has relied extensively on borrowings during recent years. At September 30, 1996, advances from FHLB were $10 million and have been at that level since. The Bank's capital to assets ratio has shown steady growth. Equity capital, as a percentage of assets, has increased from 8.78% at June 30, 1992, to 11.24% at June 30, 1995. After acquiring another financial institution in 1996, the capital ratio dropped to 8.31% (above the "well capitalized" level) in June of 1996. By September 30, 1996, the capital ratio was down to 7.79%. The decrease was due mainly to asset growth and recognition of need for additional provisions for loan losses in the newly acquired subsidiary. Nevertheless, capital levels remain ample. This capital position was a result of consistent earnings combined with steady growth. Capital in dollars has increased from $10.138 million to $13.478 million, which is a 32.95% increase. Heartland Community Bank's profitability, as measured by return on average assets ("ROAA"), was above its peer group average of thrifts filing TFR's with the OTS, consisting of OTS supervised thrifts with assets from $100 million to $500 million, with the exception of the first two quarters of 1996. For the years ending December 31, 1993, 1994, and 1995, and the quarter ended June 30, 1996, Heartland Community Bank ranked in the 63rd, 79th, 57th, and 3rd percentile, respectively, in ROAA. In return on equity for the same periods, Heartland Community Bank ranked in the 49th, 79th, 57th, and 4th percentile, respectively.(2) The two quarters of 1996 reflect a "cleaning up" of the operation, in preparation for conversion (see Exhibit III). - ---------------------------------- (2) "TAFS" by Sheshunoff Information Services, Inc., as of June 30, 1996. 2 14 FERGUSON & CO., LLP SECTION I. I. FINANCIAL CHARACTERISTICS PAST & PROJECTED ECONOMIC CONDITIONS Fluctuations in thrift earnings in recent years have occurred within the time frames as a result of changing temporary trends in interest rates and other economic factors. However, the year-to-year results have been upward while the general trends in the thrift industry have been improving as interest rates declined. Interest rates began a general upward movement during late 1993, followed by a decline in interest margins and profitability. Rates began a general decline in mid 1995. Since early 1996, rates have moved in a narrow band. From mid-March until early June there was a slight upward trend, with the spread between the short end and the long end increasing. Early July saw the jobless rate dip, and responding to inflation fears, the rates rose slightly. In late July Greenspan's comments sparked a rise in the Dow-Jones, but rates remained steady. Mid-August's report on the rising CPI caused a slight increase in rates, but they remained within the narrow band. The recent pass by the Federal Reserve to raise rates should provide stability in rates and the equities market. The S&P 500 Index increased more than 14% in the first 10 months of 1996. Toward the end of the year there were some periods of adjustment, but equities and the S&P have rebounded nicely. This increase was on top of a sizable gain in 1995.(3) The general rise in the equity market has translated into overall gains in the thrift equity market. These factors, coupled with the circumstances of having fewer conversions in 1996, have had some dramatic results in the thrift equities market. There is little evidence that market conditions will change in the near future. The number of "conversion stock speculators" has grown as thrift and bank acquisitions have continued. The hope of a quick profit has many speculative dollars chasing fewer good conversion opportunities. The thrift industry generally is better equipped to cope with changing interest rates than it was in the past, and investors have recognized the demonstrated ability of the thrift industry to maintain interest margins in spite of rising interest rates. However, the industry is still a long lender and for the most part a short borrower. Periods of gradually rising interest rates can be readily managed, but periods of rapidly rising rates and interest rate spikes can negate, to a certain degree, the positive impact of adjustable rate loans and investments. FINANCIAL CONDITION OF INSTITUTION BALANCE SHEET TRENDS As Table I.1 shows, Heartland Community Bank demonstrated a modest increase in assets during the three year period between June 30, 1992, and June 30, 1995. Assets increased $11.5 million, or 9.97% during that period. The acquisition of a subsidiary in 1996 caused a significant increase in asset size, from $127.0 million at June 30, 1995, to $171.2 million at June 30, 1996, and finally increasing to $172.9 million at September 30, 1996. Loans increased $4.4 million, or 8.7% between June 30, 1992, and June 30, 1995. After the acquisition, loans were $84.6 million and $89.3 million at June 30, 1996, and September 30, 1996, respectively. Cash and cash equivalents have remained relatively constant, fluctuating between $3 million and $3.7 million between June 30, 1992, and September 30, 1996, with one notable exception. That exception was at June 30, 1996, - ---------------------------------- (3) National Economic Trends, published by the Research Division of the Federal Reserve Bank of St. Louis, Missouri. 3 15 FERGUSON & CO., LLP SECTION I. the cash and cash equivalents increased to $17.3 million. However, by September 30, 1996, they went back down to $3.7 million. The majority of the cash and cash equivalents held at June 30, 1996, were used to purchase investment securities, which were $5.3 million at June 30, 1996, and $16.7 million at September 30, 1996. Mortgage backed securities have always been a major portion of earning assets of the Bank. MBS's were $58.5 million at June 30, 1992, $66.8 million for 1993, $64.1 million in 1994, $63.4 million in 1995, $57.4 million in 1996, and $54.8 million at September 30, 1996. The most notable difference in the portfolio is that $12.2 million of the MBS's are available for sale at September 30, 1996. Prior to that, $6.1 million were held for sale at June 30, 1995, and $12.2 million were in the same category at June 30, 1996. Equity accounts increased steadily from $10.1 million at June 30, 1992, to $14.2 million at June 30, 1996. However in the quarter ending September 30, 1996, equity declined to $13.5 million. The decline was mainly due to additional provisions to the reserve for loan and lease losses. Internal comparisons of equity using the percentage of asset calculation are not comparable due to the acquisition. ASSET/LIABILITY MANAGEMENT Managing interest rate risk is a major and necessary component of the strategy used in operating a thrift. Most of a thrift's interest earning assets are long term, while most of the interest bearing liabilities have short to intermediate terms to contractual maturity. To compensate, asset/liability management techniques include: (1) making long term loans with interest rates that adjust to market periodically, (2) investing in assets with shorter terms to maturity, (3) lengthening the terms to maturities of savings deposits, and (4) seeking to employ any combination of the aforementioned techniques artificially through the use of synthetic hedge instruments. Table I.4 contains information on contractual loan maturities at June 30, 1996. However, this table must be read in conjunction with Table I.5. Table I.5 shows the gap analysis of Heartland Community Bank's interest earning assets and interest bearing liabilities at June 30, 1996. It shows that, within one year of June 30, 1996, Heartland Community Bank has a negative gap to interest bearing liabilities of 55.0% and a negative gap to total assets of 31.96%. Heartland Community Bank has a positive cumulative gap at the end of five years of $7.1 million, which lowers the cumulative gap to total assets to a negative 27.84%. There is further improvement in the gap at the end of 10 years, but from a practical stand point, these improvements would not have significant positive impact on the current interest rate risk position. Table I.6 provides rate shock information at varying levels of interest rate change and confirms the conclusions derived from Table I.5 in regard to the interest rate sensitivity of Heartland Bank. The Bank has major interest rate risk and would suffer deterioration in profitability as well an erosion in the value of its portfolio equity. The preparation of the gap analysis (Table I.5) was approached in a normal manner. The following assumptions were used: 1) monthly amortizing fixed rate loans were assumed to repay at contractual amortization; 2) adjustable rate loans and investments were included in the time period in which they are scheduled to reprice; 3) checking accounts and statement savings were assumed to reprice in the earliest period available; and 4) certificates of deposit and borrowings were included in the period of contractual maturity. Heartland Community Bank's basic approach to interest rate risk management has been to emphasize adjustable mortgage loans and intermediate term mortgage-backed securities, shorten fixed rate mortgage terms (no fixed rate loans beyond 15 years maturity are retained in the portfolio), increase consumer and commercial non-real estate loans, and increase investments in short and intermediate term investment securities. In addition, Heartland Community Bank has 4 16 FERGUSON & CO., LLP SECTION I. used FHLB advances since 1995. These advances have served to lengthen the maturities of the liabilities. In addition, these advances are secured and not as likely to be called. As of September 30, 1996, Heartland Bank had $10.1 million in advances for the FHLB; on the other hand, it had only $11.2 million in jumbo certificates. The results of this funding strategy, combined with other actions, have been to produce an asset/liability position that is less sensitive to rate changes. However, the remaining risk is significant and the corrective measures are generally ones that require shortening the maturities of assets, along with the lowering of earnings. TABLE I.1 - SELECTED FINANCIAL DATA
At September At June 30, 30, -------------- ---------------------------------------------------------------------------- 1996 1996 1995 1994 1993 1992 ---- ---- ---- ---- ---- ---- (Unaudited) Total amount of total assets $ 172,971,862 $171,241,011 $126,987,168 $126,722,704 $123,748,431 $115,471,970 Loans receivable, net 89,334,387 84,564,365 55,112,980 53,247,142 50,000,592 50,700,927 Cash and cash equivalents 3,703,927 17,291,882 3,125,599 3,054,978 3,527,284 2,941,579 Investment securities: Available for sale 16,693,638 5,279,625 957,500 3,386,625 - - - - Held to maturity - - - - 2,000,000 - - 909,600 748,400 Mortgage -backed securities: Available for sale 12,195,438 12,155,199 6,088,450 - - - - - - Held to maturity 42,636,028 45,212,891 57,144,915 64,084,120 66,773,893 58,481,104 Deposits 147,172,744 145,919,251 112,005,588 113,350,670 111,771,582 104,301,919 FHLB advances 10,000,000 10,000,000 - - - - - - - - Notes payable 400,000 - - - - - - - - - - Equity - substantially restricted 13,478,001 14,234,125 14,270,972 12,860,593 11,472,231 10,137,861
Includes Heritage Bank, FSB Does not include Heritage Bank, FSB Source: Offering Circular 5 17 FERGUSON & CO., LLP SECTION I. TABLE I.2 - SELECTED OPERATING DATA
Three Months Ended September 30, Years ended June 30, ----------------------- ---------------------------------------------------------------- 1996 1995 1996 1995 1994 1993 1992 ---- ---- ---- ---- ---- ---- ---- Interest income $3,115,301 $2,419,447 $10,333,240 $8,844,782 $8,416,735 $8,492,889 $9,446,035 Interest expense 2,066,022 1,530,698 6,766,598 5,112,481 4,645,404 4,920,251 5,855,192 ---------- ---------- ----------- ---------- ---------- ---------- ---------- Net interest income 1,049,279 888,749 3,566,642 3,732,301 3,771,331 3,572,638 3,590,843 Provision for loan loss (560,738) 0 (42,483) 0 (7,500) (120,000) (120,000) ---------- ---------- ----------- ---------- ---------- ---------- ---------- Net interest income after provision for loan losses 488,541 888,749 3,524,159 3,732,301 3,763,831 3,452,638 3,470,843 Noninterest income 59,952 27,796 (773,651) 196,023 102,212 173,986 256,873 Noninterest expense 1,915,176 412,370 2,346,159 1,609,961 1,585,401 1,444,384 1,307,592 ---------- ---------- ----------- ---------- ---------- ---------- ---------- Income before income taxes and cumulative effect of change in accounting for income taxes and investment securities (1,366,683) 504,175 404,349 2,318,363 2,280,642 2,182,240 2,420,124 Provision for income taxes (523,265) 174,512 173,611 966,763 869,756 847,869 909,774 (benefits) ---------- ---------- ----------- ---------- ---------- ---------- ---------- Income (loss) before cumulative effect of change in accounting for income taxes and investment (843,418) 329,663 230,738 1,351,600 1,410,886 1,334,371 1,510,350 securities Cumulative effect of change in accounting for income 0 0 0 0 (22,523) 0 0 taxes. Cumulative effect of change in accounting for investment 0 0 0 77,567 0 0 0 securities ---------- ---------- ----------- ---------- ---------- ---------- ---------- Net income (loss) ($843,418) $329,663 $230,738 $1,429,167 $1,388,363 $1,334,371 $1,510,350 ========== ========== =========== ========== ========== ========== ==========
Source: Offering Circular 6 18 FERGUSON & CO., LLP SECTION I. TABLE I.3 - SELECTED OPERATING RATIOS
At Three Months Ended September 30, At or for the Year Ended June 30, ------------------ ------------------------------------------------- 1996 1995 1996 1995 1994 1993 1992 ---- ---- ---- ---- ---- ---- ---- PERFORMANCE RATIOS: Return on assets (net income (loss) divided by average total assets) (1.95%) 1.00% 1.12% 1.10% 1.10% 1.36% Return on average equity (net income(loss) divided by average equity) (23.80%) 9.10% 1.57% 10.38% 11.40% 12.24% 16.11% Interest rate spread (combined weighted average interest rate earned less combined average weighted interest rate cost) 2.28% 2.18% 2.05% 2.49% 2.66% 3.60% 3.34% Net interest margin (net interest income divided by average interest-earning assets) 2.54% 2.74% 2.54% 2.95% 3.03% 3.08% 3.36% Ratio of average interest-earning assets to average interest-bearing liabilities 105.26% 111.81% 110.04% 111.54% 110.06% 108.09% 107.84% Ratio of noninterest expense to 1.11% 0.31% 0.16% 1.26% 1.25% 1.19% 1.18% average assets ASSET QUALITY RATIOS: Nonperformng assets to total assets at end of period 0.17% 0.16% 0.14% 0.23% 0.37% 0.35% 0.26% Nonperforming loans to total loans at end of period 0.17% 0.21% 0.19% 0.29% 0.27% 0.62% 0.50% Allowance for loan losses to total loans at end of period 1.54% 1.46% 1.01% 1.29% 1.37% 1.45% 1.23% Allowance for loan losses to nonperforming loans at end of period 9.00 7.00 5.28 4.41 5.08 2.36 2.45 Provision for loan losses to total loans 0.00% 0.00% 0.05% 0.00% 0.00% 0.24% 0.23% Net charge-offs to average loans 0.00% 0.00% 0.02% 0.00% 0.04% 0.04% 0.08% outstanding CAPITAL RATIOS: Equity to total assets at end of period 7.79% 10.88% 8.48% 11.25% 10.15% 9.27% 8.78% Average equity to average assets 8.20% 10.96% 10.25% 10.76% 9.66% 9.02% 8.46%
Source: Offering Circular 7 19 FERGUSON & CO., LLP SECTION I. TABLE I.4 - LOAN MATURITY SCHEDULE
Due After Due After Due During the Year Ending 3 Through 5 Through June 30, 5 Years After 10 Years After ---------------------------------------- June 30, 1996 June 30, 1996 1997 1998 1999 ------------- -------------- ---- ---- ---- Real estate loans: 1-4 family residential. $ 3,542,577 $ 337,022 $ 3,508,333 $ 5,109,590 $ 11,069,553 Other mortgage 951,912 1,640,179 626,047 1,756,613 3,689,288 loans Consumer loans: Loans secured by 1,465,744 366,436 deposits Other consumer 989,522 533,915 199303 412,664 117,058 ----------- ----------- ----------- ----------- ------------ Total $ 6,949,755 $ 2,877,552 $ 4,333,683 $ 7,278,867 $ 14,875,899 =========== =========== =========== =========== ============
Due After 10 Through Due After 15 15 Years After Years After June 30, 1996 June 30, 1996 Total --------------- ------------- ----- Real estate loans: 1-4 family residential. $ 25,249,088 $ 12,865,297 $ 61,681,460 Other mortgage 3,537,649 9,121,766 21,323,454 loans Consumer loans: 0 Loans secured by 1,832,180 deposits Other consumer 37,308 2,289,770 ------------ ------------ ------------ Total $ 28,824,045 $ 21,987,063 $ 87,126,864 ============ ============ ============
The following table sets forth at June 30, 1996, the dollar amount of all loans due one year or more after June 30, 1996 which have predetermined interest rates and have floating or adjustable rates.
Fixed Adjustable Rate Rate ------------- ------------ Real estate loans: 1-4 family mortgage loans................... $ 38,020,263 $ 19,089,024 Other mortgage loans.................. 14,362,736 8,229,604 Consumer loans: Loans secured by deposits 605,457 Home improvement and other 146,240 ------------- ------------ Total $ 53,134,696 $ 27,318,628 ============= ============
Source: Offering Circular 8 20 FERGUSON & CO., LLP SECTION I. TABLE I.5 - GAP ANALYSIS The following table sets forth the amounts of interest-earning assets and interest-bearing liabilities outstanding at September 30, 1996, which are expected to mature or reprice in each of the time periods shown.
At September 30, 1996 --------------------------------------------------------------------------------------------- Over One Over Five Over Ten One Year Through Through Through Over or Less Five Years Ten Years Twenty Years Twenty Years Total ------- ---------- --------- ------------ ------------ ----- Interest-earning assets 1-4 family mortgage loans $ 15,490,924 $ 8,060,201 $ 14,148,441 $ 21,519,738 $0 $ 59,219,304 Other mortgage loans 3,110,616 10,302,041 7,497,210 3,124,073 0 24,033,940 Consumer loans: 3,381,924 1,220,557 821,816 656,846 0 6,081,143 Investment securities. 948,728 15,744,910 0 0 0 16,693,638 Mortgaged -backed securities 40,536,998 1,518,917 6,121,933 451,505 6,202,113 54,831,466 FHLB Stock 1,203,000 0 0 0 0 1,203,000 Other interest bearing assets 2,900,234 0 0 0 0 2,900,234 ------------- ------------- ------------- ------------- ------------ ------------ Total $ 67,572,424 $ 36,846,626 $ 28,589,400 $ 25,752,162 $ 6,202,113 $164,962,725 ------------- ------------- ------------- ------------- ------------ ------------ Interest-bearing liabilities Deposits. $ 122,771,802 $ 24,400,942 $0 $0 $0 $147,172,744 FHLB Advances. 0 5,000,000 5,000,000 0 0 10,000,000 Notes payable. 80,000 320,000 0 0 0 400,000 ------------- ------------- ------------- ------------- ------------ ------------ Total $ 122,851,802 $ 29,720,942 $ 5,000,000 $0 $0 $157,572,744 ------------- ------------- ------------- ------------- ------------ ------------ Interest sensitivity gap $(55,279,378) $ 7,125,684 $ 23,589,400 $ 25,752,162 $ 6,202,113 $ 7,389,981 ============= ============= ============= ============= ============ ============ Cumulative interest sensitivity gap $(55,279,378) $(48,153,694) $(24,564,294) $ 1,187,868 $ 7,389,981 $ 7,389,981 ============= ============= ============= ============= ============ ============ Ratio of interest-earning assets to interest-bearing liabilities. 55.00% 123.98% 571.79% - - - - 104.69% ============= ============= ============= ============= ============ ============ Ratio of cumulative gap to total -31.96% -27.84% -14.20% 0.69% 4.27% 4.27% assets ============= ============= ============= ============= ============ ============
9 21 FERGUSON & CO., LLP SECTION I. TABLE I.6 - NET PORTFOLIO VALUE
September 30, 1996 Change in ------------------------------------------------------------------- Interest Rates Net Portfolio Value NPV as % of PV of Assets in Basis Points ------------------------------------------------------------------- (Rate Shock) Amount $000 Change % Change NPV Ratio Change - ----------------- ------------------------------------------------------------------- 400 5,064 -9,073 - 3.12% -501 bp 300 7.586 -6,552 % 4.59% -354 bp 200 9,941 -4,196 - 5.91% -222 bp 100 12,137 -2,000 -14% 7.09% -104 bp Static 14,137 - - 8.13% (100) 15,658 1,521 11% 8.88% +75 bp (200) 16,649 2,411 +17% 9.28% +115 bp (300) 17,346 3,209 +23% 9.62% +149 bp (400) 18,608 4,470 +32% 10.18% +205 bp
SOURCE: FEDERAL HOME LOAN BANK OF DALLAS, TEXAS 10 22 FERGUSON & CO., LLP SECTION I. INCOME AND EXPENSE TRENDS Heartland Community Bank was profitable for the four fiscal years ending June 30, 1996. However, the three months ending September 30, 1996, reflect a net operating loss of $843 thousand. Losses during that period were due primarily to increased provisions for loan losses. In other periods, the principal reason for income fluctuations can be traced directly to: (1) changes in non-interest income, and (2) reductions in net interest margins (see Table I.2). Although losses were incurred in the quarter ending September 30, 1996, and profitability was disappointing at year end June 30, 1996, the ability to generate core earnings is still intact. As mentioned earlier, net interest margins have suffered some erosion, but the basic earnings capacity of the Bank remains. However, the anticipated infusion of capital and the expected increase in earning assets should show positive results. Non-interest income levels have remained constant with the exception of 1996, when a significant loss on the sale of assets was recorded. Non-interest expense items have also been stable with the exception of 1996, when there was an increase of approximately 45%. However, analytically speaking, profitability is stable and sustainable, at some level. REGULATORY CAPITAL REQUIREMENTS As Table I.7 demonstrates, Heartland Community Bank meets all regulatory capital requirements and meets the regulatory definition of a "Well Capitalized" institution. Moreover, the additional capital raised in the stock conversion will add to the existing capital cushion. TABLE I.7 - REGULATORY CAPITAL COMPLIANCE
Amount ($000's) Percent GAAP Capital $13,478 7.79% Tangible Capital: Capital level 11,717 6.84% Requirement 2,568 1.50% ----- ----- Excess 9,149 5.34% Core Capital: Capital level 11,717 6.84% Requirement 5,136 3.00% ----- ----- Excess 6,581 3.84% Risk Based Capital: Capital level 12,482 20.40% Requirement 4,896 8.00% ----- ----- Excess 7,586 12.40%
Source: Heartland Community Bank TFR, Form SB-2, and F&C calculations. 11 23 FERGUSON & CO., LLP SECTION I. LENDING Table I.8 provides an analysis of the Bank's loan portfolio by type of loan and security. This analysis shows that, from June 30, 1992, through June 30, 1996, plus the quarter ending September 30, 1996, Heartland Community Bank's loan composition has been dominated by 1-4 family dwelling loans. However, there is a noticeable upward trend in the non-residential loans. This trend is consistent with recent changes in business strategies. Also corresponding to the changes in business strategy is the notable increase in the consumer portfolio Table I.9 provides information with respect to loan origination's and repayments. It indicates the year ended June 30, 1996, and the quarter ending September 30, 1996, will be considered good growth periods overall and in most individual categories. Closer analysis reveals the continued emphasis on one to four residential loans. "Other Mortgage Loans" and "Consumer Loans" both show significant growth. Table I.10 provides rates, yields, and average balances for the three months ended September 30, 1996, compared with the three months ending September 30, 1995. Net yield on average interest-earning assets increased from 7.45% in 1995 to 7.54% in 1996. Interest rates paid on average interest-bearing liabilities decreased from 5.27% in 1995 to 5.26% in 1996. The net yield on interest earning assets increased from 2.18% in 1995 to 2.28% in 1996. Heartland Community Bank's spread increased from 2.18% in 1995 to 2.28% in 1996. However, the ratio of average interest earning assets to average interest bearing liabilities decreased from 111.18% in 1995 to 105.26% in 1996. The deterioration of this ratio is reflected in overall profitability. 12 24 FERGUSON & CO., LLP SECTION I. TABLE I.8 - ANALYSIS OF LOAN PORTFOLIO
At June 30, At September 30, ---------------------------------------------------------------------- 1996 1996 1995 1994 ---- ---- ---- ---- Amount % Amount % Amount % Amount % ------ - ------ - ------ - ------ - Type of Loan - ------------ Real estate loans: 1-4 family residential .. $63,213,264 67.51% $ 61,681,460 70.79% $ 36,844,183 65.23% $ 36,860,523 67.83% 5 or more family 7,002,247 7 .48% 6,819,212 7.83% 4,928,219 8.72% 3,607,108 6.64% residential Non-residential 16,345,518 17.46% 13,746,549 15.78% 11,367,097 20.12% 10,366,724 19.08% Loans to facilitate sale of foreclosed real estate 689,956 0 .74% 720,749 0.83% 1,144,993 2.03% 1,339,086 2.46% Land and other mortgage 122,385 0 .13% 36,944 0.04% 53,044 0.09% 53,099 0.10% loans Consumer loans: Loans secured by deposits 1,608,626 1 .72% 1,832,180 2.10% 1,623,155 2.87% 1,586,932 2.92% Home improvement 216,676 0 .23% 204,776 0.24% 5,340 0.01% 9,007 0.02% Commercial 1,110,440 1 .19% 880,311 1.01% 132,877 0.24% 148,948 0.27% Auto 1,101,834 1 .18% 786,656 0.90% 42,070 0.07% 66,477 0.12% Other consumer 2,228,442 2 .38% 418,027 0.48% 344,452 0.61% 302,313 0.56% ------------ --------- ------------ -------- ------------ -------- ------------ -------- Total $93,639,388 100.00% $ 87,126,864 100.00% $ 56,485,430 100.00% $ 54,340,217 100.00% ------------ ========= ------------ ======== ------------ ======== ------------ ======== Less: Loan in process $ 2,674,892 $ 1,544,097 $ 529,862 $ 195,985 Deferred loan fees and 188,304 137,335 114,097 168,599 discounts Allowance for loan 1,441,805 881,067 728,491 728,491 losses ------------ ------------ ------------ ------------ Total $89,334,387 $ 84,564,365 $ 55,112,980 $ 53,247,142 ============ ============ ============ ============
Source: Offering circular 13 25 FERGUSON & CO., LLP SECTION I. TABLE I.9 - LOAN ACTIVITY Table I.9 clearly demonstrates that Heartland Community Bank is still primarily a residential lender. Although, the information also shows that consumer and business type loans are becoming more common and are a growing portion of the loan portfolio.
Three Months Ended At September 30, Year Ended June 30, ------------------------------------ ---------------------------------------------------- 1996 1995 1996 1995 1994 ---- ---- ---- ---- ---- Loans originated: Real estate loans 1-4 family residential $ 5,422,578 $ 2,119,960 $ 6,766,000 $ 2,645,000 $ 5,003,000 Other mortgage loans 2,686,600 1,480,500 3,928,000 3,756,000 4,249,000 Consumer loans: 2,616,746 17,500 1,867,292 1,296,000 1,364,000 -------------- -------------- -------------- -------------- -------------- $ 10,725,924 $ 3,617,960 $ 12,561,292 $ 7,697,000 $ 10,616,000 ============== ============== ============== ============== ============== Loans purchased Real estate loans: 1-4 family residential $ 1,004,776 $ 2,064,999 $ 4,555,000 $ 2,628,000 $ 3,018,000 ============== ============== ============== ============== ============== Loans sold: $ 287,681 $ - $ 244,230 $ - $ - ============== ============== ============== ============== ==============
Source: Offering circular 14 26 FERGUSON & CO., LLP TABLE I.10 - AVERAGE BALANCES, YIELDS, COSTS
At September 30, Three Months Ended September 30, ----------------------- -------------------------------------------------------------------------- 1996 1996 1995 ----------------------- ------------------------------------ ----------------------------------- Average Average Yield/ Average Yield/ Average Yield/ Balance Cost Balance Interest Cost Balance Interest Cost ------- ---- ------- -------- ---- ------ -------- ---- Interest-earning assets Loans receivable, net (1) $ 89,334,387 8.28% $ 87,733,005 $ 1,861,425 8.49% $ 58,711,829 $1,184,115 8.07% Investment securities 16,693,638 6.54% 9,896,933 1,057,293 6.30% 21,051,438 1,174,225 6.78% Mortgage -backed securities 54,831,466 6.78% 57,189,477 48,205,110 Other interest earning assets 4,103,234 7.25% 10,484,365 196,583 7.50% 1,866,768 61,107 13.09% ------------ ------------ -------------------- ------------ ------------------- Total interest-earning assets 164,962,725 165,303,780 3,115,301 7.54% 129,835,145 2,419,447 7.45% -------------------- ------------------- Non-interest earning assets 7,804,435 7,956,161 2,456,081 ------------ ------------ ------------ Total assets $172,767,160 $173,259,941 $132,291,226 ============ ============ ============ Interest-bearing liabilities Deposits. 147,172,744 4.67% 147,048,510 1,908,114 5.19% 112,784,361 1,489,337 5.28% FHLB Advances 10,000,000 6.21% 10,000,000 155,935 6.24% 3,333,333 41,361 4.96% Notes payable 400,000 7.50% 133,333 1,973 5.92% - - - - - - ------------ ------------ -------------------- ------------ -------------------- 157,572,744 157,181,843 2,066,022 5.26% 116,117,694 1,530,698 5.27% -------------------- -------------------- Non-interest-bearing liabilities 1,929,867 1,493,913 5,597,665 ------------ ------------ ------------ Total liabilities 159,502,611 158,542,423 121,715,359 Equity 13,825,287 14,317,518 14,513,764 ------------ ------------ ------------ Total liabilities and equity $173,327,898 $172,859,941 $136,229,123 ============ ============ ============ Net interest income $ 1,049,279 $ 888,749 =========== ========= Interest rate spread 2.28% 2.18% ======= ====== Net yield on interest-earning assets 2.54% 2.74% ======= ====== Ratio of average interest-earning assets to average interest-bearing liabilities 105.26% 111.81% ======= =======
The average yield is calculated by combining earnings on investment securities and mortgage-backed securities in one Category for presentation in this schedule. Source: Offering Circular 15 27 FERGUSON & CO., LLP SECTION I. TABLE I.10A
Year Ended June 30, - ---------------------------------------------------------------------------------------------------------------------------------- 1996 1995 ---- ---- Average Average Average Yield/ Average Yield/ Balance Interest Cost Balance Interest Cost ------- -------- ---- ------- -------- ---- Interest-earning assets Loans receivable, net (1) $ 65,360,871 $ 5,352,338 8.19% $ 55,879,000 $4,526,621 8.10% Investment securities 12,080,632 4,467,685 6.74% 20,787,786 4,130,123 6.10% Mortgage -backed securities 54,172,586 46,882,637 Other interest earning assets 6,719,134 513,217 7.64% 2,420,316 188,038 7.77% ------------- ----------------------- ------------ --------------------- Total interest-earning assets 138,333,223 $ 10,333,240 7.47% 125,969,739 8,844,782 7.02% ----------------------- -------------------- Non-interest-bearing liabilities 5,115,105 1,905,468 ------------- ------------ Total assets 143,448,328 $127,875,207 ============= ============ Interest-bearing liabilities Deposits 120,029,295 $ 6,314,641 5.26% $111,006,767 $4,979,125 4.49% FHB Advances 7,500,000 451,957 6.03% 2,250,000 133,356 5.93% ------------- ----------------------- ------------ --------------------- Total interest-bearing liabilities 127,529,295 $ 6,766,598 5.31% $113,256,767 $5,112,481 4.51% ----------------------- ----------------------- Non-interest-bearing liabilities 1,215,854 854,350 ------------- ------------ Total liabilities 128,745,149 114,111,117 Retained earnings 14,703,179 13,764,090 ------------- ------------ Total liabilities and retained earnings 143,448,328 $127,875,207 ============= ============ Net interest income $ 3,566,642 $3,732,301 ============ ========== Interest rate spread 2.16% 2.51% ======= ======= Net yield on interest-earning assets 2.58% 2.96% ======= ======= Ratio of average interest-earning assets to average interest-bearing liabilities 108.47% 111.22% ======= =======
Year Ended June 30, - ------------------------------------------------------------------------------------------------------- 1994 ---- Average Average Yield/ Balance Interest Cost ------- -------- ---- Interest-earning assets Loans receivable, net (1) $ 52,619,736 $ 4,386,848 8.34% Investment securities 1,405,162 3,841,621 5.70% Mortgage -backed securities 66,018,315 Other interest earning assets 4,510,356 188,266 4.17% ------------- ----------------------------- Total interest-earning assets 124,553,569 8,416,735 6.76% ----------------------------- Non-interest-bearing liabilities 2,229,777 ------------- Total assets $ 126,783,346 ============= Interest-bearing liabilities Deposits $ 113,171,498 $ 4,645,404 4.10% FHB Advances 0 0 0.00% ------------- ----------------------------- Total interest-bearing liabilities 113,171,498 $ 4,645,404 4.10% ----------------------------- Non-interest-bearing liabilities 1,364,426 ------------- Total liabilities 114,535,924 Retained earnings 12,247,422 ------------- Total liabilities and retained earnings $ 126,783,346 ============= Net interest income $ 3,771,331 =========== Interest rate spread 2.66% ======== Net yield on interest-earning assets 3.03% ======== Ratio of average interest-earning assets to average interest-bearing liabilities 110.06% ========
The average yield is calculated by combining earnings on investment securities and mortgage-backed securities in one category for presentation in this schedule. 16 28 FERGUSON & CO., LLP Table I.11 provides a rate volume analysis, measuring differences in interest earning assets and interest bearing liabilities, and the interest rates thereon comparing the years ended June 30, 1995 and 1996, and also comparing the year ending June 30, 1994 with June 30, 1995. The table shows that of the $261 thousand increase in income between 1994 and 1995, $167.3 thousand can be attributed to volume and $93.6 thousand can be attributed to rate. The reversal of the former is shown in the 1995 - 1996 comparison, where income decreased $165.7 thousand. This was a net result in a $681.8 thousand increase in income due to volume, and a $847.5 thousand decrease due to rates. Rate volume calculations are never used as a predictor of interest rate risk, but the rate sensitivity of an institution can be seen in the comparisons as the increasing rates in the deposit portfolio overwhelmed the volume increases and rate changes in the loan portfolio. TABLE I.11 - RATE/VOLUME ANALYSIS
Year Ended June 30, ------------------------------------ ---------------------------------------- 1996 vs. 1995 ------------------------------------ ---------------------------------------- Increase (Decrease) Volume Rate Total Volume Rate Total ------ ---- ----- ------ ---- ----- Interest Income Loans receivable $ 585,190 $ 92,120 $ 677,310 $ 766,893 $ 58,824 $ 825,717 Investment securities and Mortgage-backed securities combined (62,005) (54,927) (116,932) 319,673 17,889 337,562 Other interest-earning 135,476 135,476 325,120 325,120 assets --------- -------- --------- ----------- --------- ----------- Total interest-earning assets $ 658,661 $ 37,193 $ 695,854 $ 1,411,686 $ 76,713 $ 1,488,399 --------- -------- --------- ----------- --------- ----------- Interest-bearing liabilities Deposits 422,704 (3,927) 418,777 411,290 924,226 1,335,516 FHLB Advances 114,574 114,574 318,601 318,601 Note payable 1,973 1,973 --------- -------- --------- ----------- --------- ----------- Total interest-bearing 539,251 (3,927) 535,324 729,891 924,226 1,654,117 liabilities --------- -------- --------- ----------- --------- ----------- Change in net interest income 119,410 41,120 160,530 681,795 (847,513) (165,718) ========= ======== ========= =========== ========= ===========
Year Ended June 30, ------------------------------------------------ 1995 vs. 1994 ------------------------------------------------ Increase (Decrease) Volume Rate Total ------ ---- ----- Interest Income Loans receivable $ 273,882 $ (134,109) $ 139,773 Investment securities and Mortgage-backed securities combined 17,821 270,681 288,502 Other interest-earning (228) (228) assets --------- --------- --------- Total interest-earning assets $ 291,475 $ 136,572 $ 428,047 --------- --------- --------- Interest-bearing liabilities Deposits (9,205) 42,926 33,721 FHLB Advances 133,356 133,356 Note payable --------- --------- --------- Total interest-bearing 124,151 42,926 167,077 liabilities --------- --------- --------- Change in net interest income 167,324 93,646 260,970 ========= ========= =========
Source: Offering Circular 17 29 FERGUSON & CO., LLP SECTION I. NON-PERFORMING ASSETS As shown in Table I.12, Heartland Community Bank's total non-performing loans as of September 30, 1996, were $990.3 thousand and represented 1.09% of total loans. Most of the non-performing loans as of that date were secured. The level of non-performing assets is lower than the level of June 30, 1996, $1.02 million. Although the dollar amount is increasing, the non-performing assets have been $672.6 thousand at June 30, 1995 (1.23% of total loans) and $464.9 thousand at June 30, 1994 (0.87% of total loans. TABLE I.12 - NON-PERFORMING ASSETS
At At June 30, September 30, ----------------------------------------- 1996 1996 1995 1994 ---- ---- ---- ---- Loans accounted for on a non-accrual basis: (1) Real estate: 1-4 family residential $160,234 $ 166,228 $ 165,009 $ 143,289 Other mortgage loans 0 0 0 0 Consumer loans: 0 0 0 0 -------- ---------- --------- --------- Total $160,234 $ 166,228 $ 165,009 $ 143,289 ======== ========== ========= ========= Accruing loans which are contractually past due 90 days or more: Real estate: 1-4 family residential $703,350 $ 725,487 $ 502,064 $ 314,939 Other mortgage loans 0 0 0 0 Consumer loans: 126,718 127,142 5,525 6,735 -------- ---------- --------- --------- Total $830,068 $ 852,629 $ 507,589 $ 321,674 ======== ========== ========= ========= Total non-performing loans $990,302 $1,018,857 $ 672,598 $ 464,963 ======== ========== ========= ========= Percentage of total loans 1.09% 1.20% 1.23% 0.87% ======== ========== ========= ========= Other nonperforming assets (2) 118,685 168,206 659,917 842,895 ======== ========== ========= ========= Loans modified in trouble debt 293,756 298,195 313,970 328,573 restructuring ======== ========== ========= =========
(1) Designated non-accrual loans; payments received applied first to contractual principal; interest income recognized when contractually current. (2) Other nonperforming assets includes foreclosed real estate. In 1995 and 1994, loans to facilitate the sale of foreclosed real estate with little or no consumer equity have been reclassified to foreclosed real estate. SOURCE: OFFERING CIRCULAR. 18 30 FERGUSON & CO., LLP SECTION I. TABLE I.13 - ANALYSIS OF ALLOWANCE FOR LOAN LOSSES The following table sets forth an analysis of the Bank's allowance for possible loan losses for the periods indicated:
Year Ended June 30 ------------------------- ---------------------------------------- 1996 1995 1996 1995 1994 ---- ---- ---- ---- ---- Balance at beginning of period $ 881,067 $ 728,491 $ 728,491 $ 728,491 $ 740,803 Loans charged-off: Real estate mortgage: Single-family residential 0 0 12,130 0 34,315 Other mortgage loans 0 0 0 0 0 Consumer 0 0 0 0 0 ---------- --------- --------- --------- --------- Total charge-offs $0 $0 $ 12,130 $0 $ 34,315 ---------- --------- --------- --------- --------- Recoveries: Real estate mortgage: Single-family residential $0 $0 $ 250 $0 $ 14,503 Other mortgage loans 0 0 0 0 0 Consumer 0 0 0 0 0 ---------- --------- --------- --------- --------- Total recoveries $0 $0 $ 250 $0 $ 14,503 ---------- --------- --------- --------- --------- Net loans charged-off $0 $0 $ 11,880 $0 $ 19,812 ---------- --------- --------- --------- --------- Acquisition of subsidiary $ 121,973 Provision for loan losses 560,738 0 42,483 0 7,500 Balance at end of period $1,441,805 $ 728,491 $ 881,067 $ 728,491 $ 728,491 ========== ========= ========= ========= =========
Source: Offering Circular LOAN LOSS ALLOWANCE Table I.13 provides an analysis of the allocation of Heartland Community Bank's loan loss allowance. Significant increases to the loan loss reserves were made at September 30, 1996. These increases in loan loss reserves were not dictated by historical or anticipated losses, but instead were adjustments made following an internal audit of the Bank's subsidiary. Table I.14 shows the allocation of the loan loss allowance among the various loan categories as of the quarter ending September 30, 1996, and years ending June 30, 1996, June 30, 1995, and June 30, 1994. 19 31 FERGUSON & CO., LLP SECTION I. TABLE I.14
At June 30, ----------------------------------------------------------------------------- At September 30, 1996 1996 1995 1994 ------------------------- ----------------------- ---------------------- ---------------------- Percent of Percent of Percent of Percent of Loans in Loans in Loans in Loans in Each Each Each Each Category to Category to Category to Category to Amount Total Loans Amount Total Loans Amount Total Loans Amount Total Loans ------ ----------- ------ ----------- ------ ----------- ------ ----------- Allocated to : Real estate loans $1,414,434 93.31% $878,432 95.27% $725,856 96.20% $725,856 96.11% Consumer loans: 27,371 6.69% 2,635 4.73% 2,635 3.80% 2,635 3.89% ---------- ------- -------- ------- -------- ------- -------- ------- Total $1,441,805 100.00% $881,067 100.00% $728,491 100.00% $728,491 100.00% ========== ======= ======== ======= ======== ======= ======== =======
Source: Offering Circular The preceding table allocates the allowance for loan losses by loan category at the dates indicated. The allocation of the allowance to each category is not necessarily indicative of future losses and does not restrict the use of the allowance to absorb losses in any other category. MORTGAGE-BACKED SECURITIES AND INVESTMENTS Table I.15 provides a breakdown of mortgage-backed securities, interest bearing deposits, and investment securities with maturity and yield information as of September 30, 1996. TABLE I.15 -SCHEDULED MATURITIES OF INVESTMENTS, AND INVESTMENT SECURITIES MATURITIES AND YIELDS
One Year One to Five Five to Ten More than Ten or Less Years Years Years ----------------- ------------------ ------------------ ------------------- Carrying Avg. Carrying Avg. Carrying Avg. Carrying Avg. Value Yield Value Yield Value Yield Value Yield ----- ----- ----- ----- ----- ----- ----- ----- Securities available-for-sale: U.S. government $1,146,091 3.96% $14,634,322 6.61% $ 232,092 6.73% $ 681,133 6.38% agencies Collateralized mortgage obligations 2,587,579 7.52% 6,049,216 6.58% Mortgage-backed securities 714,036 7.88% 998,562 7.45% 402,565 7.79% 1,443,480 6.47% ---------- ----------- ---------- ----------- $1,860,127 $15,632,884 $3,222,236 $ 8,173,829 ---------- ----------- ---------- ----------- Securities held-to-maturity U.S. government agencies Collateralized mortgage obligations Mortgage-backed securities 520,355 9.34% 3,131,789 8.39% 38,983,884 6.73% ----------- ---------- ----------- 0 520,355 3,131,789 38,983,884 ---------- ----------- ---------- ----------- $1,860,127 $16,153,239 $6,354,025 $47,157,713 ========== =========== ========== =========== Total Portfolio ------------------------- Carrying Market Value Value ----- ----- Securities available-for-sale: U.S. government agencies $16,693,638 $16,693,638 Collateralized mortgage obligations 8,636,795 8,636,795 Mortgage-backed securities 3,558,643 3,558,643 ----------- ----------- $28,889,076 $28,889,076 ----------- ----------- Securities held-to-maturity U.S. government agencies Collateralized mortgage obligations Mortgage-backed securities 42,636,028 43,210,151 ----------- ----------- 42,636,028 43,210,151 ----------- ----------- $71,525,104 $72,099,227 =========== ===========
SOURCE: OFFERING CIRCULAR 20 32 FERGUSON & CO., LLP SECTION I. TABLE I.16 -INVESTMENT CARRYING VALUES The following table sets forth the carrying value of the Bank's investment security portfolio at the dates indicated:
At September At June 30, 30, ----------- ------------------------------------------- 1996 1996 1995 1994 ---- ---- ---- ---- Securities available-for-sale: U.S. government agencies $16,693,638 $ 5,279,625 $ 957,500 $ 3,386,625 Collateralized mortgage 8,636,795 9,034,604 1,655,352 obligations Mortgage-backed securities 3,558,643 3,120,595 4,433,098 ----------- ------------ ----------- ----------- $28,889,076 $ 17,434,824 $ 7,045,950 $ 3,386,625 ----------- ------------ ----------- ----------- Securities held-to-maturity U.S. government agencies 2,000,000 $ 2,474,525 Collateralized mortgage obligations 24,968,493 28,057,031 Mortgage-backed securities 42,636,028 45,212,891 32,176,422 36,027,089 ----------- ------------ ----------- ----------- $42,636,028 $ 45,212,891 $59,144,915 $64,084,120 ----------- ------------ ----------- ----------- Total $71,525,104 $ 62,647,715 $66,190,865 $67,470,745 =========== ============ =========== ===========
Source: Offering circular MORTGAGE BACKED SECURITIES CONT'D Mortgage backed securities have been used by Management to supplement a limited demand for both "fixed rate" and "adjustable rate" loan products. Competitive factors within the primary trade area of the Bank have made expansion of the one to four residential portfolio difficult. Management has committed a significant portion of Bank's assets to MBS's. They have taken a conservative stance, and as of September 30, 1996, have classified $12.2 million of the MBS's as "Available for Sale," and $16.7 million of Investment Securities as "Available for Sale." The remaining portfolio, $42.6 million has been classified as "Held to Maturity." 21 33 FERGUSON & CO., LLP SECTION I. TABLE I.17 - DEPOSIT PORTFOLIO Deposits in the Bank at September 30, 1996, were represented by the various types of deposit programs described below.
Interest Minimum Minimum Percentage Rate Term Category Amount Balance of Total ---- ---- -------- ------ ------- Savings ------- % Demand Deposits: 2.75 None NOW Accounts $ 500 $ 5,959,839 4.05% * 4.21 None Money Market 2,500 17,691,103 12.02% ------------ ------- Total Demand Deposits $ 23,650,942 16.07% ------------ ------- 3.30 None Savings deposits - passbook 7,742,694 5.26% ------------ ------- Certificates of Deposit ----------------------- * 4.23 3 months or Fixed-term, fixed rate 1,000 5,739,396 3.90% less * 4.97 6 months Fixed-term, fixed rate 1,000 25,591,057 17.39% 7 months Fixed-term, fixed rate 9 months Fixed-term, fixed rate * 5.42 12 months Fixed-term, fixed rate 1,000 29,129,484 19.79% 14 months Fixed-term, fixed rate * 5.94 15-72 months Fixed-term, fixed rate 1,000 55,319,171 37.59% ------------ ------- Total certificates of deposit 115,779,108 78.67% ------------ ------- Total deposits $147,172,744 100.00% ============ ======= * Represents average weighted interest rate.
Source: Offering circular SAVINGS DEPOSITS At June 30, 1996, Heartland Community Bank's deposit portfolio was composed as follows: total transaction type accounts--$25.7 million or 16.07%; savings deposits and passbook account--$7.7 million, 5.26% and certificate accounts--$115.8 million or 78.67% (see Table I.17 above). Table I.18 displayed below shows the totals of time deposits and the maturities by year with rate ranges at the quarter ending September 30, 1996, and the years ending June 30, 1996, June 30, 1994, and June 30, 1994. The rate section of Table I.18 clearly shows the rising cost of funds for the institution. However, the changes between June 30, 1996, and September 30, 1996, reflects positive changes in the rate structure. However, the recent acquisition has undoubtedly had some impact on the deposit structure, but it is too early to tell. At September 30, 1996, $74.4 million or 64.24% of Heartland Community Bank's certificates matured within one year. This dependency on short term certificates has added to the interest rate risk of the institution. 22 34 FERGUSON & CO., LLP SECTION I. TABLE I.18 - TIME DEPOSIT RATES AND MATURITIES The following table sets forth the rates and maturities of time deposits at September 30, 1996.
September 30, At June 30, ------------ ---------------------------------------- TIME DEPOSITS BY RATES 1996 1996 1995 1994 ----- ----- ----- ----- 2.00 - 3.99%................ 0 0 0 $37,361,228 4.00 - 5.99%................ 94,078,456 75,847,271 61,799,314 46,310,867 6.00 - 7.99%................ 21,700,652 39,883,699 26,056,756 2,310,111 8.00 - 9.99%................ 0 0 63,352 629,137 ------------ ------------ ----------- ----------- $115,779,108 $115,730,970 $87,919,422 $86,611,343 ============ ============ =========== ===========
TIME DEPOSIT MATURITY SCHEDULE The following table sets forth the amounts and maturities of time deposits at September 30, 1996
Amount Due Less Than After One Year 1 - 2 Years 2 - 3 Years 3 Years Total -------- ----------- ----------- ------- ----- 2.00 - 3.99%................ 0 0 0 0 0 4.00 - 5.99%................ 66,080,877 24,867,832 3,129,748 0 94,078,457 6.00 - 7.99%................ 8,300,718 9,578,673 3,821,260 0 21,700,651 8.00 - 9.99%................ 0 0 0 0 0 ------------ ----------- ----------- --------- ------------ $ 74,381,595 $34,446,505 $ 6,951,008 0 $115,779,108 ============ =========== =========== ========= ============
Source: Offering circular 23 35 FERGUSON & CO., LLP SECTION I. Heartland Community Bank is not dependent on jumbo certificates of deposit. At September 30, 1996, the Bank had $11.1 million in certificates that were issued for $100 thousand or more, or 7.59% of its total deposits (see Table I.19). TABLE I.19 - JUMBO CD'S AT SEPTEMBER 30, 1996 Time Deposits over $100,000 - Maturity Schedules
Certificates of Maturity Period Deposits - --------------- -------- Three months or less $ 2,797,577 Over three through six months 3,395,291 Over six through 12 months 3,125,766 Over 12 months 1,844,627 ----------- $11,163,261 ===========
Source: Offering circular Table I.20 presents information on deposit flows for the years ending June 30, 1995 and 1996. The most notable thing about the Bank's deposit flows is the lack of deposit growth when viewed in relation to asset growth. This dichotomy is the result of Management's decision to fund asset growth with advances from the FHLB rather than increase interest rates and interest expense. TABLE I.20 - SAVINGS DEPOSIT ACTIVITY
Three Months Ended At September 30, Year Ended June 30, ------------------------------ ----------------------------------------------- 1996 1995 1996 1995 1994 ---- ---- ---- ---- ---- Deposits......................... $ 43,800,573 $ 17,922,866 $ 93,534,688 $ 83,892,579 $ 72,013,266 Withdrawals...................... (44,455,194) (17,527,276) (91,037,454) (90,216,784) (75,079,582) Net increase (decrease) before interest credited............... (654,621) 395,590 2,497,234 (6,324,207) (3,066,316) Subsidiary acquisition 25,101,788 Interest credited................ 1,908,114 1,480,919 6,314,641 4,979,125 4,645,404 ------------- ------------- ------------- ------------- ------------- Net increase (decrease) in savings deposits............... $ 1,253,493 $ 1,876,509 $ 33,913,663 $ (1,345,082) $ 1,579,088 ============= ============= ============= ============= =============
Source: Offering circular 24 36 FERGUSON & CO., LLP SECTION I. BORROWINGS At September 30, 1996, Heartland Community Bank had FHLB advances of $10.0 million. One half, or $5.0 million, were due in less than five years, and the remaining $5.0 million were due in less than 10 years. At September 30, 1996, the former bore interest at the rate of 6.21% and the latter at 6.24%. The current position in advances is the result of Management's decision to fund asset growth with advances rather than increase overall deposit interest expense. SUBSIDIARIES Heartland Community Bank has one subsidiary savings bank which has been consolidated with the financial information reported herein. The subsidiary savings bank was purchased in May 1996 for approximately $3.5 million and resulted in goodwill of approximately $1.26 million, which is to be amortized over 10 years. In addition, the Bank has one subsidiary service corporation which was formed to acquire real properties that could be used for future expansion. At September 30, 1996, the Bank's investment in the service corporation was $357 thousand. LEGAL PROCEEDINGS From time to time, Heartland Community Bank becomes involved in legal proceedings principally related to the enforcement of its security interest in real estate loans. In the opinion of Management of the Bank, no legal proceedings are in process or pending that would have a material effect on Heartland Community Bank's financial position, results of operations, or liquidity. EARNINGS CAPACITY OF THE INSTITUTION As in any interest sensitive industry, the future earnings capacity of Heartland Community Bank will be affected by the interest rate environment. Historically, the thrift industry has performed at less profitable levels in periods of rising interest rates. This performance is due principally to the general composition of the assets and the limited repricing opportunities afforded even the adjustable rate loans. The converse earnings situation (falling rates) does not afford the same degree of profitability potential for thrifts due to the tendency of borrowers to refinance both high rate loans, fixed rate loans, and adjustable loans as rates decline. Heartland Community Bank is no exception to the aforementioned paradox. With its current asset and liability structure, however, the effect of rising interest rates will have negative impact on earnings due to the current amount of interest rate risk. However, recent management strategies and changes in asset composition, if completed, will mitigate a portion of the negative effects of rising rates. The addition of capital through the conversion will allow Heartland Community Bank to grow. As growth is attained, the leverage of that new capital should, from a ratio of expenses to total assets standpoint, reduce the operating expense ratio. However, growth and additional leverage will likely be moderate and well controlled to maintain the current acceptable risk levels inherent in the Bank's asset base. ASSET-SIZE-EFFICIENCY OF ASSET UTILIZATION At its current size and in its current asset configuration, Heartland Community Bank is an efficient operation. With total assets of approximately $173 million, Heartland Community 25 37 FERGUSON & CO., LLP SECTION I. Bank has 62 full time equivalent employees. However, if current strategies are employed, the asset and liability composition of the institution will change and become more volume oriented. With the onset of additional volumes and with the expansion of the branch network creating logistic problems, it is logical to conclude that the current low employee to asset ratio will increase. INTANGIBLE VALUES Heartland Community Bank's greatest intangible value (other than the goodwill discussed earlier) lies in its loyal deposit base. Heartland Community Bank has a 63 year history of sound operations, controlled growth, and generally consistent earnings. The Bank currently has 2.37% of the deposit market in its area, and it has the ability to increase market share (see Table II.3 in Section II). Heartland Community Bank has no significant intangible values that could be attributed to unrecognized asset gains on investments and real estate. EFFECT OF GOVERNMENT REGULATIONS Although still considered a traditional thrift, Heartland Community Bank has emphasized more passive investments (MBS's) during the recent years. With its current efforts to increase loans as a percentage of deposits, the Bank's loan mix is expected to continue to change. Government regulations will have the greatest impact in the area of cost of compliance and reporting. The conversion will create an additional layer of regulations and reporting and thereby increase the cost to the Bank. Moreover, no future plans currently exist to make additional acquisitions, purchase additional branches, or complicate operations with matters that would add to reporting and regulatory compliance. However, economic situations change, and if an appropriate opportunity arises, it will be considered and a proper request will be made of the regulators, if necessary. OFFICE FACILITIES Heartland Community Bank's main office is an adequately maintained facility. Table I.22 provides information on all of Heartland Community Bank's offices. The Bank's facilities are currently adequate for the convenience and needs of the Bank's customer base. 26 38 FERGUSON & CO., LLP SECTION I. TABLE I.21 - OFFICE FACILITIES AND LOCATIONS
Year Owned/ Book Value at Approximate Deposits at Opened Leased September 30, 1996 Square Footage September 30, 1996 ------ ------ ------------------ -------------- ------------------ Main Office: 1933 Owned $ 717,123 12,000 $98,579,799 Camden, Arkansas Branch Offices: Cardinal Branch 1981 Owned 137,717 1,200 0 Camden, Arkansas Fordyce Branch 1969 Owned 621,306 2,500 21,348,791 Fordyce, Arkansas Sheridan Branch 1996 Leased 233,437 900 1,706,613 Sheridan, Arkansas Subsidiary: Heartland Community Bank, 1993 Owned 624,745 1,800 14,103,570 FSB Little Rock Arkansas Subsidiary Branches: Monticello, Arkansas 1993 Leased 175,644 2,200 11,433,971 Bryant, Arkansas 1996 Leased 0 1,000 0 $2,509,972 ==========
SOURCE: HEARTLAND COMMUNITY BANK SAVINGS AND LOAN BANK 27 39 SECTION II MARKET AREA 40 FERGUSON & CO., LLP SECTION II. II. MARKET AREA DEMOGRAPHICS Heartland Bank operates from its main office located at 237 Jackson Street, Southwest, Camden, Arkansas. The Bank has three branch offices. One is in Camden, one in Fordyce and one in Sheridan, Arkansas. Heartland Bank's subsidiary, Heritage FSB, operates from an office in Little Rock and has a branch in Monticello, Arkansas. In addition to the branches, the subsidiary has a loan production office located in Bryant, Arkansas. Heartland Bank has determined that its principal trade area is Pulaski County, Ouachita County, Dallas County, Grant County, and Drew County. These are the counties in which the Bank has branches. In addition to these, the Bank also has economic influence in Saline County, Cleveland County, and Calhoun County. In combination, these eight counties comprise the principal assessment area for the institution. Undoubtedly, some market penetration has been made in counties contiguous to the delineated counties, creating a sizable trade area. Tables II.1 and II.1a presents historical and projected trends for the United States, Arkansas, and all of the counties heretofore mentioned. The information provided addresses population, income, employment, and housing trends. As indicated in Tables II.1 and II.1a, the counties have experienced varying growth rates, in terms of population. Some are well above that of the United States and the State of Arkansas, (which is slightly below that of the United States), and some are well below. Five of the eight counties had population increases between 1990 and 1996. They are: Pulaski (0.61%), Grant (9.06%), Drew (4.04%), Saline (18.17), and Cleveland (4.94%). All of the counties showing population increases from 1990 to 1996 are estimating growth between 1996 and 2001. The estimated population growth rates are 0.51% for Pulaski, 6.66% for Grant, 3.10% for Drew, 12.30% for Saline, and 3.75% for Cleveland. In general, these counties compare well to the 6.67% and 6.94% growth rates for the United States and Arkansas, respectively. They also compare favorably in terms of anticipated growth when compared to the 5.09% anticipated in the United States and the 5.48% anticipated in the State of Arkansas. The counties in the assessment area that have experienced declines in population between 1990 and 1996 are Ouachita (7.76%), Dallas (1.38%), and Calhoun (0.12%). Going forward to the year 2001, these counties are also estimating continued declines. They are: Ouachita 2.80%, Dallas 1.09%, and Calhoun 0.10%. When viewed in aggregate, the population trends of the assessment area are good. The past gains and the anticipated gains in population will handily offset the areas of decline. Arkansas is not one of the more affluent states, and the comparison of household income demonstrates that fact. The estimated household income for the United States for 1996 was $34,530, and that of Arkansas was $26,272. Comparing the 1996 estimated household income of the assessment area counties to the state, we find that three counties were below the state with estimated incomes of $21,204, $24,238, and $25,658. They were Dallas, Drew, and Cleveland, 1 41 FERGUSON & CO., LLP SECTION II. respectively. However, five of the eight counties had estimated household incomes that exceeded that of the state. They were Pulaski ($33,294), Ouachita ($26, 769), Grant ($26,166), Saline ($35,818), and Calhoun ($28,183). Going forward to 2001, the same pattern is developing in estimated household income as developed in population trends. Those that are above the state in 1996 are expected to be above the state in 2001, and those that are below are expected to be below in 2001, with one notable exception -- Cleveland County is estimated to increase its household income to a level that would exceed that of the State of Arkansas ($27,909 vs. $27,040). In the area of Household Income Distribution estimates for 2001, the distribution shows the traditional rural bias. All but two of the counties, Pulaski and Saline, will have a larger portion of their population making less than $15,000 than will the population of the United States. The State of Arkansas reflects the lower level bias as well. When looking at the upper levels of income distribution, Pulaski and Saline also exceed that of the state, while all the other counties have a lower percentage of their population making in excess of $100,000. These results are not unexpected, and when comparing the mid-level incomes in the assessment area to that of the state, there is evidence of real economic growth and stability in the area. Important to any financial institution that is in the business of financing homes is the growth in the number of households. Tables II.1 and II.1a show that the prospects for the establishment of new households in the trade area is excellent. From 1990 until 1996, five of the counties in the trade area experienced an increase in the number of households (Pulaski, Grant, Drew, Saline, and Cleveland). In addition all of those counties are estimating continued growth in households between 1996 and 2001. Two of the three counties that experienced a drop in the number of households were the least populated counties in the area. The exception was Ouachita County which experienced an 8.03% drop in the number of households and is estimating a further decrease of 2.90% between 1996 and 2001. When home ownership is compared to the Unites States, three out of the eight counties in the trade area have a higher incidence of home ownership than the United States, and the remainder compare favorably. In summary, the demographics of the assessment area are very favorable. The area has and is expected to have an overall growth in population. This growth in population is being accompanied with an anticipated increase in household income that is creating a more stable per capita income and an anticipated increase in the number of new households that will be created. These factors, coupled with a strong tradition of home ownership in the area, should translate into an increased number of housing units being built and a good market for previously owned housing. In addition, the modest level of Average Housing Value presents ample opportunity for affordable housing in the market area for both the first time home buyer and the other market participants. The principal sources of employment in Heartland Bank's trade area are shown in Table II.2. The major sources are trade and services: Manufacturing, Services, and Government. All but two of the counties in the delineated trade area exceed the state in the percentage of residents who are employed in manufacturing. Three of the counties compare favorably to the state in the percentage of employment attributed to services. Five of the counties in the area show 2 42 FERGUSON & CO., LLP SECTION II. significantly more employment in government than does the State of Arkansas. However, Pulaski County is the seat of the State Government. This information gives rise to understanding the other demographic information. With manufacturing services and government employing such high percentages of the population and contributing to the earnings of the citizenry, the concentration of incomes in the middle range is more clear as is the estimated increase in household incomes. Obviously, the assessment area of Heartland Bank is better employed than the state average. This should equate to continued economic growth which should translate into more home buyers, more consumer goods being purchased, and a growing and robust economy. Based on information publicly available on deposits as of June 30, 1995 (see Table II.3), the eight county area in which Heartland Bank, or its subsidiary, has branches had $5.364 billion in total deposits. Banks controlled $4.677 billion, credit unions $356.1 million, and other thrifts $203.7 million. As of that date, Heartland Bank had 2.37% of the total deposit market or $127.0 million. The inclusion of Pulaski County, the county of the state capital and the major banking center of the state, causes the impact of Heartland Bank to be understated. Adjusting the numbers for Pulaski County, we find that Heartland has 9.51% of the deposit base in the assessment area outside of Pulaski County. The Bank is a major player in many of the markets that are located within their delineated market area. The statistics reveal success and opportunities for the institution. Additional capital infused by the Conversion will assist the Bank in becoming more competitive. Growth opportunities for Heartland Bank can be assessed by reviewing economic factors in its market area. The salient factors include growth trends, economic trends, and competition from other financial institutions. We have reviewed these factors to assess the potential for the market area. In assessing the growth potential of Heartland Bank, we must also assess the willingness and flexibility of Management to respond to the competitive factors that exist in their market area. It is our analysis that the economic environment and the potential of the area is excellent, moreover, we feel that the current Management team can realize that economic potential. Our analysis of the economic potential and the potential of Management affects the valuation of the institution. 3 43 FERGUSON & CO., LLP SECTION II. TABLE II.1 - DEMOGRAPHIC TRENDS KEY ECONOMIC INDICATORS United States, Arkansas, and Pulaski, Ouachita, Dallas, Grant and Drew Counties
=================================================================================================================================== UNITED PULASKI OUACHITA DALLAS GRANT DREW KEY ECONOMIC INDICATOR STATES ARKANSAS COUNTY COUNTY COUNTY COUNTY CITY - ----------------------------------------------------------------------------------------------------------------------------------- Total Population, 2001 Est. 278,802,003 2,651,619 353,586 27,409 9,378 16,225 18,631 1996 - 2001 Percent Change, Est. 5.09 5.48 0.51 (2.80) (1.09) 6.66 3.10 Total Population, 1996 Est. 265,294,885 2,513,924 351,803 28,200 9,481 15,212 18,070 1990 - 96 Percent Change, Est. 6.67 6.94 0.61 (7.76) (1.38) 9.06 4.04 Total Population, 1990 248,709,873 2,350,725 349,660 30,574 9,614 13,948 17,369 - ----------------------------------------------------------------------------------------------------------------------------------- Household Income, 2001 Est. 33,189 27,040 33,460 28,525 20,325 31,162 25,851 1996 - 2001 Percent Change, Est. (3.88) 2.92 0.50 6.56 (4.15) 6.84 6.65 Household Income, 1996 Est. 34,530 26,272 33,294 26,769 21,204 29,166 24,238 - ----------------------------------------------------------------------------------------------------------------------------------- Per Capita Income, 1990 16,738 13,087 17,125 12,721 10,941 12,588 12,076 - ----------------------------------------------------------------------------------------------------------------------------------- Household Income Distribution-2001 Est. (%) $15,000 and less 20 27 19 29 36 25 29 $15,000 - $25,000 16 20 17 17 19 17 22 $25,000 - $50,000 34 34 34 34 30 38 32 $50,000 - $100,000 24 16 24 17 13 19 14 $100,000 - $150,000 4 2 4 2 1 1 2 $150,000 and over 2 1 2 1 1 1 1 - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Unemployment rate, 1990 6.24 6.69 5.15 8.21 6.64 5.45 7.85 - ----------------------------------------------------------------------------------------------------------------------------------- Median Age of Population, 1996 Est. 34.3 35.3 34.0 36.5 37.2 36.0 32.8 Median Age of Population, 1990 32.9 33.8 32.4 35.2 36.4 34.4 31.8 - ----------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------- Average Housing Value, 1990 79,098 55,138 73,636 46,171 39,177 47,724 44,629 - ----------------------------------------------------------------------------------------------------------------------------------- Total Households, 2001 Est. 103,293,062 1,008,845 138,686 10,460 3,507 5,961 6,836 1996 - 2001 Percent Change, Est. 5.14 5.64 0.47 (2.90) (1.13) 6.71 3.25 Total Households, 1996 98,239,161 955,003 138,038 10,772 3,547 5,586 6,621 1990 - 96 Percent Change, Est. 6.84 7.16 0.61 (8.03) (1.47) 9.14 4.40 Total Households, 1990 91,947,410 891,179 137,200 11,712 3,600 5,118 6,342 - ----------------------------------------------------------------------------------------------------------------------------------- Total Housing Units, 1990 101,641,260 1,000,667 151,538 13,204 4,049 5,540 7,159 % Vacant 10.07 10.94 9.46 11.30 11.09 7.62 11.41 % Occupied 89.93 89.06 90.54 88.70 88.91 92.38 88.59 % By Owner 57.78 61.95 54.62 64.91 69.23 76.57 63.77 % By Renter 32.15 27.11 35.92 23.79 19.68 15.81 24.82 ===================================================================================================================================
Source: Scan/US, Inc. 4 44 FERGUSON & CO., LLP SECTION II. TABLE II.1A - DEMOGRAPHIC TRENDS - CONTINUED KEY ECONOMIC INDICATORS United States, Arkansas, and Saline, Cleveland and Calhoun Counties
=============================================================================================================================== UNITED SALINE CLEVELAND CALHOUND KEY ECONOMIC INDICATOR STATES ARKANSAS COUNTY COUNTY COUNTY - ------------------------------------------------------------------------------------------------------------------------------- Total Population, 2001 Est. 278,802,003 2,651,619 85,168 8,471 5,813 1996 - 2001 Percent Change, Est. 5.09 5.48 12.30 3.75 (0.10) Total Population, 1996 Est. 265,294,885 2,513,924 75,842 8,165 5,819 1990 - 96 Percent Change, Est. 6.67 6.94 18.17 4.94 (0.12) Total Population, 1990 248,709,873 2,350,725 64,183 7,781 5,826 - ------------------------------------------------------------------------------------------------------------------------------- Household Income, 2001 Est. 33,189 27,040 37,731 27,909 28,700 1996 - 2001 Percent Change, Est. (3.88) 2.92 5.34 8.77 1.83 Household Income, 1996 Est. 34,530 26,272 35,818 25,658 28,183 - ------------------------------------------------------------------------------------------------------------------------------- Per Capita Income, 1990 16,738 13,087 14,768 11,771 12,078 - ------------------------------------------------------------------------------------------------------------------------------- Household Income Distribution-2001 Est. (%) $15,000 and less 20 27 16 30 26 $15,000 - $25,000 16 20 15 19 21 $25,000 - $50,000 34 34 41 35 36 $50,000 - $100,000 24 16 25 15 14 $100,000 - $150,000 4 2 3 2 2 $150,000 and over 2 1 1 1 1 - ------------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------- Unemployment rate, 1990 6.24 6.69 5.10 6.72 11.05 - ------------------------------------------------------------------------------------------------------------------------------- Median Age of Population, 1996 Est. 34.3 35.3 35.5 37.0 35.5 Median Age of Population, 1990 32.9 33.8 33.4 35.7 34.3 - ------------------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------------------- Average Housing Value, 1990 79,098 55,138 65,413 37,860 37,585 - ------------------------------------------------------------------------------------------------------------------------------- Total Households, 2001 Est. 103,293,062 1,008,845 30,641 3,119 2,179 1996 - 2001 Percent Change, Est. 5.14 5.64 12.46 3.72 (0.09) Total Households, 1996 98,239,161 955,003 27,245 3,007 2,181 1990 - 96 Percent Change, Est. 6.84 7.16 18.27 4.85 (0.18) Total Households, 1990 91,947,410 891,179 23,037 2,868 2,185 - ------------------------------------------------------------------------------------------------------------------------------- Total Housing Units, 1990 101,641,260 1,000,667 24,602 3,322 2,437 % Vacant 10.07 10.94 6.36 13.67 10.34 % Occupied 89.93 89.06 93.64 86.33 89.66 % By Owner 57.78 61.95 75.45 71.70 72.84 % By Renter 32.15 27.11 18.19 14.63 16.82 ===============================================================================================================================
Source: Scan/US, Inc. 5 45 FERGUSON & CO., LLP SECTION II. TABLE II.2 BREAKDOWN OF PERCENTAGE EARNINGS BY INDUSTRY
- ----------------------------------------------------------------------------------------------------------------------------- OUCHITA DALLAS CLEVELAND CALHOUN GRANT DREW PULASKI STATE OF COUNTY COUNTY COUNTY COUNTY COUNTY COUNTY COUNTY ARKANSAS - ----------------------------------------------------------------------------------------------------------------------------- Farm 0.92% 2.02% 25.51% 0.69% 3.43% 5.36% 0.08% 5.03% Agri Services 1.34% 0.80% N/S L N/S 2.19% 0.37% 0.86% Mining 1.80% 0.15% 0.17% N/S N/S L 0.22% 0.47% Construction 3.71% 4.11% 4.39% 2.02% 4.99% 1.85% 4.38% 5.00% Manufactoring 32.76% 40.57% 16.46% 68.73% 43.80% 35.99% 10.14% 23.88% Trans & Pub. Utilities 6.30% 6.29% 2.84% 7.77% 6.01% 3.10% 10.34% 8.29% Wholesale Trade 4.55% 2.57% 13.62% 0.39% 2.17% 3.76% 8.10% 5.25% Retail Trade 13.18% 11.42% 6.13% 2.14% 10.75% 10.63% 9.75% 11.37% Finance, Ins. & RE 3.11% 2.26% 1.76% N/S 2.23% 3.32% 8.29% 4.37% Services 13.09% 17.58% 8.12% 2.71% 8.92% 10.99% 27.34% 20.24% Government 19.24% 12.23% 21.00% 12.02% 16.47% 22.80% 20.99% 15.24% - ----------------------------------------------------------------------------------------------------------------------------- Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% - -----------------------------------------------------------------------------------------------------------------------------
N/S - Not shown to avoid disclosure of confidential information. L - Less than 10 jobs. Estimates are included in the totals. Source: Bureau of Ecomonic Analysis 6 46 FERGUSON & CO., LLP SECTION II. TABLE II.3 - COMPETITIVE DEPOSITS
'1993 '1994 '1995 ---------------------------------- ---------------------------------- ----------------------------------- Number Number Number Number Number Number Thrifts/County Deposits Institutions Branches Deposits Institutions Branches Deposits Institutions Branches - --------------- (000's) (000's) (000's) Ouachita Co. 10,248 2 2 - - - - Pulaski Co. 189,183 1 8 188,826 2 9 203,670 2 10 ---------------------------------- ---------------------------------- ----------------------------------- TOTAL THRIFTS 199,431 3 10 188,826 2 9 203,670 2 10 Banks/County - ------------ Ouchita Co. 204,475 4 12 214,192 5 13 214,964 5 13 Dallas, Cleveland & Cachoun, Counties 135,563 6 8 147,862 7 8 155,611 7 10 Grant County 96,637 3 5 105,336 3 5 113,172 3 3 Drew County 147,431 2 4 154,738 3 5 164,346 3 5 Pulaski County 3,836,188 14 123 3,955,167 14 123 4,028,978 14 125 ---------------------------------- ---------------------------------- ----------------------------------- TOTAL BANKS 4,420,294 29 152 4,577,295 32 154 4,677,071 32 156 CU's/County - ------------ Ouchita County 15,269 2 2 16,010 2 2 15,153 2 2 Pulaski County 293,576 36 36 322,311 36 36 340,979 36 36 ---------------------------------- ---------------------------------- ----------------------------------- TOTAL CREDIT UNIONS 308,845 38 38 338,321 38 38 356,132 38 38 Total Competition 4,928,570 70 200 5,104,442 72 201 5,236,873 72 204 Heartland Deposits 123,748 126,722 126,987 --------- --------- --------- Total Deposits 5,052,318 5,231,164 5,363,860 ========= ========= ========= HEARTLAND BANK MAKET SHARE 2.45% 2.42% 2.37% MARKET SHARE FOR AREA OUTSIDE OF ---------- PULASKI COUNTY 9.51% ----------
Source: Branch Source, Sheshunoff Information Services Inc. - June 1995 7 47 SECTION III COMPARISON WITH PUBLICLY TRADED THRIFTS 48 FERGUSON & CO., LLP SECTION III. III. COMPARISON WITH PUBLICLY TRADED THRIFTS COMPARATIVE DISCUSSION This section presents an analysis of Heartland Bank relative to a group of 12 publicly traded thrift institutions ("Comparative Group"). Such analysis is necessary to determine the adjustments that must be made to the pro forma market value of Heartland Bank's stock. Table III.1 presents a listing of the comparative group with general information about the group. Table III.2 presents key financial indicators relative to profitability, balance sheet composition and strength, and risk factors. Table III.3 presents a pro forma comparison of Heartland Bank to the comparative group. Exhibits III and IV contain selected financial information on Heartland Bank and the comparative group. This information is derived from quarterly TFR's filed with the OTS and call reports filed with the FDIC. The selection criteria and comparison with the Comparative Group are discussed below. SELECTION CRITERIA Ideally, the comparative group would consist of thrifts in the same geographic region with identical local economies, asset size, capital level, earnings performance, asset quality, etc. However, there are few comparably sized institutions with stock that is liquid enough to provide timely, meaningful market values. Therefore, we have selected a group of comparatives that are either listed on the New York Stock Exchange ("NYSE"), the American Stock Exchange ("AMEX"), or NASDAQ. We excluded companies that are apparent takeover targets and companies with unusual characteristics that tend to distort both mean and median calculations. For example, we have excluded all companies with losses during the trailing 12 months. We have also excluded mutual holding companies (see Exhibit II.1). Because of the limited number of similar size thrifts with sufficient trading volume, we looked for members of the comparative group among thrifts with assets between $100 million and $500 million. In addition, we wanted institutions that had ROAA's between 50 bp and 125 bp; non-performing loans greater than 50 bp, and institutions with loans to deposit ratios greater than 50% and less than 100%. The Southeast Region, which includes Arkansas, had only one thrift that met the aforementioned requirements. We found 16 thrifts that met the requirements by looking in the Midwest Region, the Mid-Atlantic, and the Southeast regions of the United States (we consider 10 to be the minimum number), we retained 12, and eliminated four for the following reasons: (a) one became a merger target between the time of selection and the final valuation report; (b) two were mortgage banking operations; and (c) one was a Mutual Holding Company (see Table II.4 for additional details). The principal source of data was SNL Securities, Charlottesville, Virginia. There are approximately 430 publicly traded thrifts listed on NYSE, AMEX, or NASDAQ. In developing statistics for the entire country, we eliminated certain institutions that skewed the results, in order to make the data more meaningful: - We eliminated companies with losses, - We eliminated indicated acquisition targets, - We eliminated companies with price/earnings ratios in excess of 25, - We eliminated companies that had not reported as a stock institution for one complete year, and - We eliminated mutual holding companies. 1 49 FERGUSON & CO., LLP SECTION III. The resulting group of approximately 259 publicly traded thrifts is included in Exhibit II.1. The selected group of comparatives has sufficient trading volume to provide meaningful price data. Four of the comparative group members are located in the Midwest, one in the Southeast, and the others are located in the Mid-Atlantic Region. Three of the group are located in Pennsylvania, two in Illinois, two in Maryland, and one each in Indiana, Georgia, New Jersey, New York, and Ohio. With total assets of approximately $173 million, Heartland Bank is well below the group selected, which has average assets of $275 million and median assets of $257 million. PROFITABILITY Using the comparison of profitability components as a percentage of average assets, Heartland was below the comparative group in return on assets, .69% to .81%; net interest income, 2.43% to 3.38%; and core income, .69% to 1.01%. Heartland Bank was below the comparative group in other operating income, .14% to .34%; but above the group in operating expense, 4.43% to 2.12%. After conversion, deployment of the proceeds will provide additional income, and Heartland Bank will compare more favorably with the comparative group in terms of return on average assets, with a return of .80% at the midpoint of the appraisal range. Pro forma return on average equity is 5.18% at the midpoint, versus a mean of 8.37% and median of 8.17% for the comparative group. BALANCE SHEET CHARACTERISTICS The general asset composition of the Bank is similar to that of the comparative group. Heartland Bank has only a slightly higher level of passive investments with 43.49% of its assets invested in cash, investments, and mortgage-backed securities, versus 43.02% for the comparative group. In the investment portfolio, the Bank has 11.79% in cash and investment securities and 31.70% in mortgage backed securities. The comparative group has a reverse mixture with 32.19% in cash and investments, and 10.83% in mortgage backed securities. Heartland Bank has a lower percentage of its assets in loans, at 51.65% versus 64.38% for the comparative group. The Bank's percentage of earning assets to interest costing liabilities is much lower than that of the group. Heartland Bank has 105.26%, and the comparative group averages 112.75%. After conversion, Heartland Bank's ratio will be in line with that of the group of comparatives. The liability side differs mainly in that Heartland Bank has a lower percentage of borrowings and higher percentage of deposits. The Bank's capital level is 7.79% versus 11.28% for the comparative group. The comparison between Heartland Bank's capital level and that of the comparative group will improve after conversion, but at the midpoint, equity to assets will be 15.98% compared to their average of 11.28% and median of 10.05%. RISK FACTORS Both Heartland Bank and the comparative group have reasonable and controllable levels of non-performing assets, with the Bank being slightly lower than the comparative group, 1.09% to 1.13% of assets. Heartland's loan loss allowance is 1.61% of net loans, which compares favorably with the comparative group's 1.08%. The single most glaring disparity between Heartland Bank and the comparative group is the negative one year gap to assets of 31.96%, compared to a positive 6.29% for the comparative group. However, the group average is based on information available for only six members of the comparative group. This high level of interest rate risk is at this time 2 50 FERGUSON & CO., LLP SECTION III. just lurking below the surface. In fact the high level of risk is undoubtedly adding to the Bank's profitability. However, such levels of IRR must be addressed and reduced. SUMMARY OF FINANCIAL COMPARISON Based on the above discussion of operational, balance sheet, and risk characteristics of Heartland Bank compared with the group, we believe that Heartland Bank's performance is equal to that of the comparative group, and we know that the interest rate risk management component is significantly higher than the group. While the Bank's profitability and capital levels are below the comparative group, the conversion proceeds will increase its income and capital levels to near comparable levels. The close management of interest rate risk is likely to have a continuing negative influence on the performance of Heartland Bank's earnings. However, in some analytical circles, the diminution of earnings is adequately offset by the reduced interest rate risk component. FUTURE PLANS Heartland Bank's future plans are to remain a well capitalized, profitable institution with good asset quality and a commitment to serving the needs of its trade area and emphasizing lending. The business plan emphasizes growth in consumer lending and commercial non-real estate lending. Management recognizes that it will take time to invest the proceeds of its capital infusion in a manner consistent with its historic performance and current policy. During that period of time, Management is willing to accept a lower return on assets as well as a lower return on equity capital. Heartland Bank has always adhered to a controlled growth policy, and in recent years, it has controlled its rates paid, its overall spreads, and has funded all recent growth with FHLB advances. The advances were used to control spreads and help control interest rate risk. The additional capital raised by the sale of Common Stock will initially be used to purchase short term investment securities. Adjustable rate and short term loans will continue to be emphasized. The Bank will continue to minimize long term, fixed rate loans. The Bank's business plan projects that it will experience growth in loans, savings deposits, and liquidity. Heartland Bank anticipates a generous growth rate and has established a subsidiary to hold properties for future expansion. The additional capital and the formation of a holding company would make the acquisition of branches a viable option, along with de nova branching. Increasing market penetration by increasing the number of services and products available, coupled with expanded marketing efforts, are the most likely methods to be employed to achieve growth. 3 51 FERGUSON & CO., LLP SECTION III. TABLE III.1-COMPARATIVES GENERAL
Total Current Current Number Assets Stock Market of ($000) Price Value Ticker Short Name City State Offices Mst RctQ IPO Date ($) ($M) ASBP ASB Financial Corp. Portsmouth OH 1 114,298 05/11/95 17.50 29.99 CBCI Calumet Bancorp, Inc. Dolton IL 5 492,779 02/20/92 32.63 77.55 CBCO CB Bancorp, Inc. Michigan City IN 3 200,008 12/28/92 24.13 28.04 EQSB Equitable Federal Savings Bank Wheaton MD 4 267,776 09/10/93 26.88 16.13 FGHC First Georgia Holding, Inc. Brunswick GA 7 144,022 02/11/87 8.63 17.45 FKFS First Keystone Financial Media PA 5 294,241 01/26/95 19.38 25.04 FSPG First Home Bancorp, Inc. Pennsville NJ 10 487,209 04/20/87 19.50 39.59 LARL Laurel Capital Group, Inc. Allison Park PA 6 201,911 02/20/87 15.88 24.06 SFED SFS Bancorp, Inc. Schenectady NY 3 166,030 06/30/95 14.75 18.86 SHEN First Shenango Bancorp, Inc. New Castle PA 4 384,088 04/06/93 22.75 51.37 WCBI Westco Bancorp Westchester IL 1 307,772 06/26/92 21.50 55.92 WSB Washington Savings Bank, FSB Waldorf MD 4 246,742 NA 5.00 21.10 Maximum 10 492,779 32.63 77.55 Minimum 1 114,298 5.00 16.13 Average 4 275,573 19.04 33.76 Median 4 257,259 19.44 26.54
Source: SNL Securities and F&C calculations. 4 52 FERGUSON & CO., LLP SECTION III. TABLE III.2 - KEY FINANCIAL INDICATORS
HEARTLAND COMMUNITY BANK COMPARATIVE CAMDEN, ARKANSAS GROUP PROFITABILITY -------------------- ------------- (% of average assets) Net income 0.69(*) 0.81 Net interest income 2.43 3.38 Loss provisions 0.3 0.15 Other operating income 0.14 0.34 Operating expense 4.43 2.12 Core income (excluding gains and losses on asset sales) 0.69 1.01 BALANCE SHEET FACTORS (% of assets) Cash and investments 11.79 32.19 Mortgage-backed securities 31.7 10.83 Loans 51.65 64.38 Savings deposits 85.08 76.15 Borrowings 5.78 10.89 Equity 7.79 11.28 Tangible equity 7.1 11.19 RISK FACTORS (%) IEA's/IBL's 105.26 112.75 Non-performing assets/assets 1.09 1.13 Loss allowance/non performing assets 145.59 71.91 Loss allowance/loans 1.61 1.08 One year gap/assets -31.96 6.29 (**)
(*) Appraisal Income (**) Six of the twelve comparables reported gap assets. Source: SNL Securities, F&C calculations and Offering Circular. Source: SNL Securities and F&C calculations. 5 53 FERGUSON & CO., LLP SECTION III. TABLE III.3 - PRO FORMA COMPARISON CONVERTING INSTITUTION TO THE COMPARATIVE GROUP Heartland Community Bank, Camden, Arkansas As of December 20, 1996
Ticker Name Price Mk Value PE P/Book P/TBook P/Assets Div Yld Assets Eq/A ($) ($Mil) (X) (%) (%) (%) (%) (%) Heartland Com. Bank Before Conversion N/A N/A N/A N/A N/A N/A N/A 172,972 7.79 SuperMax 10.000 26.45 15.34 73.46 76.01 13.53 3.00 195,498 18.42 Maximum 10.000 23.00 13.91 69.76 72.41 11.95 3.00 192,462 17.13 Midpoint 10.000 20.00 12.56 65.95 68.67 10.54 3.00 189,822 15.98 Minimum 10.000 17.00 11.10 61.40 64.19 9.08 3.00 187,182 14.79 Comparative Group Averages 19.042 33.76 14.15 114.72 116.45 12.85 1.95 275,573 11.28 Medians 19.438 26.54 13.23 112.55 112.55 12.02 2.06 257,259 10.05 Arkansas Public Thrifts Averages 16.083 45.98 10.30 109.88 109.88 13.54 2.61 352,305 12.75 Medians 15.750 28.74 10.30 108.77 108.77 15.93 2.95 381,562 15.94 Southeast Region Thrifts Averages 16.981 75.64 19.69 133.21 131.71 16.47 2.12 491,612 13.72 Medians 17.063 39.48 15.60 119.82 119.82 14.26 2.15 280,413 9.47 All Public Thrifts Averages 20.258 191.70 14.76 126.68 133.41 12.38 2.11 1,773,441 10.39 Medians 18.500 48.90 14.17 119.94 125.16 11.39 2.11 396,052 8.81 Comparative Group ASBP ASBFinancial-OH 17.500 29.99 28.69 110.62 110.62 26.24 2.29 114,298 22.18 CBCI Calumet Bancorp-IL 32.625 77.55 14.12 97.45 97.45 15.74 - 492,779 16.15 CBCO CBBancorp-IN 24.125 28.04 11.77 144.72 144.72 14.02 5.39 200,008 9.69 EQSB EquitableFSB-MD 26.875 16.13 8.59 113.68 113.68 6.02 - 267,776 5.30 FGHC FrstGeorgiaHldg-GA 8.625 17.45 15.97 145.69 163.66 12.12 0.93 144,022 8.30 FKFS FrstKeystoneFin-PA 19.375 25.04 12.34 108.48 108.48 8.51 1.03 294,241 7.85 FSPG FrstHomeBancorp-NJ 19.500 39.59 8.55 125.81 128.63 8.13 2.46 487,209 6.46 LARL LaurelCapitalGp-PA 15.875 24.06 9.28 114.46 114.46 11.91 2.77 201,911 10.40 SFED SFSBancorp-NY 14.750 18.86 14.60 89.07 89.07 11.36 1.63 166,030 12.75 SHEN FstShenangoBcp-PA 22.750 51.37 20.68 111.41 111.41 13.38 2.11 384,088 12.01 WCBI WestcoBancorp-IL 21.500 55.92 14.73 117.23 117.23 18.17 2.79 307,772 15.50 WSB WashingtonSvBk-MD 5.000 21.10 10.42 98.04 98.04 8.55 2.00 246,742 8.72
Note: Stock prices are closing prices or last trade. Pro forma calculations for Heartland are based on sales at $10 per share with a midpoint of $20,000,000. Sources: Heartlands' audited and unaudited financial statements, SNL Securities, and F&C calculations. Source: SNL Securities, Inc. and F&C calculations. 6 54 FERGUSON & CO., LLP SECTION III. TABLE III.3 - PRO FORMA COMPARISON CONVERTING INSTITUTION TO THE COMPARATIVE GROUP Heartland Community Bank, Camden, Arkansas As of December 20, 1996
Ticker Name TEq/A EPS ROAA ROAE (%) ($) (%) (%) Heartland Com. Bank Before Conversion N/A SuperMax 17.80 0.65 0.98 4.74 Maximum 16.50 0.72 0.95 4.96 Midpoint 15.34 0.80 0.93 5.18 Minimum 14.15 0.90 0.91 5.45 Comparative Group Averages 11.19 1.52 0.81 8.37 Medians 10.05 1.52 0.90 8.17 Arkansas Public Thrifts Averages 12.75 1.58 1.00 8.16 Medians 15.94 1.58 1.00 8.16 Southeast Region Thrifts Averages 13.65 0.97 0.66 3.25 Medians 9.27 1.14 0.70 5.56 All Public Thrifts Averages 10.13 1.48 0.78 7.99 Medians 8.28 1.30 0.75 6.84 Comparative Group ASBP ASBFinancial-OH 22.18 0.61 0.57 2.45 CBCI Calumet Bancorp-IL 16.15 2.31 0.99 5.97 CBCO CBBancorp-IN 9.69 2.05 1.11 11.67 EQSB EquitableFSB-MD 5.30 3.13 0.78 14.98 FGHC FrstGeorgiaHldg-GA 7.46 0.54 0.89 10.65 FKFS FrstKeystoneFin-PA 7.85 1.57 0.32 3.92 FSPG FrstHomeBancorp-NJ 6.32 2.28 0.91 14.00 LARL LaurelCapitalGp-PA 10.40 1.71 1.06 10.00 SFED SFSBancorp-NY 12.75 1.01 0.45 3.22 SHEN FstShenangoBcp-PA 12.01 1.10 0.75 5.65 WCBI WestcoBancorp-IL 15.50 1.46 0.99 6.33 WSB WashingtonSvBk-MD 8.72 0.48 0.91 11.60
Source: SNL Securities and F&C calculations. 7 55 FERGUSON & CO., LLP SECTION III. TABLE III.4 - SELECTION OF COMPARATIVES
Deposit Current Insurance Stock Agency Price Ticker Short Name City State Region (BIF/SAIF) Exchange IPO Date ($) ASBP ASB Financial Corp. Portsmouth OH MW SAIF NASDAQ 05/11/95 15.125 CBCI Calumet Bancorp, Inc. Dolton IL MW SAIF NASDAQ 02/20/92 30.500 CBCO CB Bancorp, Inc. Michigan City IN MW SAIF NASDAQ 12/28/92 25.500 EQSB Equitable Federal Savings Bank Wheaton MD MA SAIF NASDAQ 09/10/93 27.500 FGHC First Georgia Holding, Inc. Brunswick GA SE SAIF NASDAQ 02/11/87 6.250 FKFS First Keystone Financial Media PA MA SAIF NASDAQ 01/26/95 19.250 FSPG First Home Bancorp, Inc. Pennsville NJ MA SAIF NASDAQ 04/20/87 19.000 LARL Laurel Capital Group, Inc. Allison Park PA MA SAIF NASDAQ 02/20/87 15.750 SFED SFS Bancorp, Inc. Schenectady NY MA SAIF NASDAQ 06/30/95 16.000 SHEN First Shenango Bancorp, Inc. New Castle PA MA SAIF NASDAQ 04/06/93 22.063 WCBI Westco Bancorp Westchester IL MW SAIF NASDAQ 06/26/92 21.750 WSB Washington Savings Bank, FSB Waldorf MD MA SAIF AMSE NA 4.500 Maximum 30.500 Minimum 4.500 Average 18.915 Median 19.250 Rejects and Reasons ------------------- UFRM United Federal Savings Bank Rocky Mount NC SE SAIF NASDAQ 07/01/80 8.063 Mortgage banking operation. FLAG FLAG Financial Corp. LaGrange GA SE SAIF NASDAQ 12/11/86 11.500 Mortgage banking operation. PULB Pulaski Bank, Savings Bk, MHC St. Louis MO MW SAIF NASDAQ 05/11/94 14.500 Mutual Holding Company. FFWM First Financial-W. Maryland Cumberland MD MA SAIF NASDAQ 02/11/92 28.250 Merger Target.
Criteria for Comparative Selection 1. Eliminate all R/E ratios in excess of 25. 2. Eliminate all that have not been converted for at least one year. 3. Eliminate all thrifts with losses in the last quarter. Eliminated BIF /SAIF assesment until all have reported. 4. Eliminate all thrifts less than $100 million and greater than $500 million. 5. Select institutions that have ROA,s between 50 BP and 125 BP. 6. Select institutions that have NPA's greater than 50 BP's. 7. Select institutions that have loan to deposit ratio greater than 50+- and = less than 100+-. 8. Eliminate all MHC's. Source: SNL Securities and F&C calculations. 8 56 FERGUSON & CO., LLP SECTION III. TABLE III.4 - SELECTION OF COMPARATIVES
Tangible Current Price/ Price/ Current Current Current Total Market LTM Core Price/ Price/ Tang Price/ Dividend Assets Value Core EPS EPS Book Value Book Value Assets Yield ($000) Ticker ($M) (x) (x) (%) (%) (%) (%) Mst RctQ ASBP 25.92 24.80 34.38 95.61 95.61 22.68 2.645 114,298 CBCI 72.50 13.20 12.71 91.10 91.10 14.71 - 492,779 CBCO 29.64 12.44 11.59 152.97 152.97 14.82 5.098 200,008 EQSB 16.50 8.79 8.09 116.33 116.33 6.16 - 267,776 FGHC 12.65 11.57 9.77 105.57 118.60 8.78 - 144,022 FKFS 24.88 14.15 10.94 108.57 108.57 8.56 1.039 290,549 FSPG 38.57 8.33 7.31 122.58 125.33 7.92 2.526 487,209 LARL 23.85 9.21 8.95 113.55 113.55 11.81 2.794 201,911 SFED 21.43 18.82 16.67 92.81 92.81 12.58 1.500 164,366 SHEN 49.82 20.06 NM 108.05 108.05 12.97 2.176 384,088 WCBI 56.57 14.90 12.95 118.59 118.59 18.38 2.207 307,772 WSB 18.99 9.38 7.03 88.24 88.24 7.70 2.222 246,742 Maximum 72.50 20.06 16.67 152.97 152.97 18.38 5.10 492,779 Minimum 12.65 8.33 7.03 88.24 88.24 6.16 - 144,022 Average 33.22 12.80 10.60 110.76 112.19 11.31 1.78 289,747 Median 24.88 12.44 10.36 108.57 113.55 11.81 2.18 267,776 UFRM 24.71 14.40 20.16 119.81 119.81 9.67 2.480 255,485 FLAG 23.41 14.56 17.97 107.28 107.28 10.24 2.957 228,710 PULB 30.36 23.02 25.89 132.66 132.66 16.92 6.897 179,457 FFWM 60.01 15.61 12.18 148.68 148.68 17.37 1.699 345,505
Source: SNL Securities and F&C calculations. 9 57 FERGUSON & CO., LLP SECTION III. TABLE III.4 - SELECTION OF COMPARATIVES
Tangible Return on Return on ROACE ROACE Equity/ Equity/ Core Core Avg Assets Avg Assets Before Before Assets Tang Assets EPS EPS Before Extra Before Extra Extra Extra (%) (%) ($) ($) (%) (%) (%) (%) Ticker Mst RctQ Mst RctQ LTM Mst RctQ LTM Mst RctQ LTM Mst RctQ ASBP 22.18 22.18 0.61 0.11 0.57 (0.62) 2.45 (2.76) CBCI 16.15 16.15 2.31 0.60 0.99 0.17 5.97 1.04 CBCO 9.69 9.69 2.05 0.55 1.11 0.52 11.68 5.33 EQSB 5.30 5.30 3.13 0.85 0.78 0.81 14.98 15.35 FGHC 8.30 7.46 0.54 0.16 0.89 0.94 10.65 11.17 FKFS 7.89 7.89 1.36 0.44 0.56 0.78 6.48 9.53 FSPG 6.46 6.32 2.28 0.65 0.91 0.72 14.00 11.21 LARL 10.40 10.40 1.71 0.44 1.06 0.14 10.00 1.28 SFED 13.56 13.56 0.85 0.24 0.69 0.71 4.88 5.15 SHEN 12.01 12.01 1.10 - 0.75 0.01 5.65 0.09 WCBI 15.50 15.50 1.46 0.42 0.99 0.14 6.33 0.89 WSB 8.72 8.72 0.48 0.16 0.91 1.13 11.60 13.38 Maximum 16.15 16.15 3.13 0.85 1.11 1.13 14.98 15.35 Minimum 5.30 5.30 0.48 - 0.56 0.01 4.88 0.09 Average 10.36 10.27 1.57 0.41 0.88 0.55 9.29 6.77 Median 9.69 9.69 1.46 0.44 0.91 0.71 10.00 5.33 UFRM 8.08 8.08 0.56 0.10 0.79 0.64 10.03 7.87 FLAG 9.55 9.55 0.79 0.16 0.87 0.75 9.35 8.15 PULB 12.75 12.75 0.63 0.14 0.88 0.76 7.15 5.99 FFWM 11.68 11.68 1.81 0.58 0.86 0.05 7.00 0.42
Source: SNL Securities and F&C calculations. 10 58 FERGUSON & CO., LLP SECTION III. TABLE III.4 - SELECTION OF COMPARATIVES
QTR: QTR: QTR: QTR: QTR: QTR: Loans NPAs/ Loans/ Loans/ Deposits/ Borrowings/ Serviced Merger Current Assets Deposits Assets Assets Assets For Others Target? Pricing (%) (%) (%) (%) (%) ($000) Ticker (Y/N) Date Mst RctQ Mst RctQ Mst RctQ Mst RctQ Mst RctQ Mst RctQ ASBP N 11/15/96 1.60 84.02 61.68 73.41 2.11 - CBCI N 11/15/96 1.29 102.17 76.37 74.75 7.48 2,368 CBCO N 11/15/96 NA 71.39 46.08 64.54 22.00 NA EQSB N 11/15/96 0.77 89.65 70.02 78.10 15.81 104,201 FGHC N 11/15/96 1.34 102.07 84.25 82.54 8.12 - FKFS N 11/15/96 2.53 76.07 58.03 76.29 13.64 129,023 FSPG N 11/15/96 0.78 95.90 54.18 56.49 36.33 63,200 LARL N 11/15/96 0.64 89.98 74.43 82.72 4.48 1,262 SFED N 11/15/96 0.67 79.88 67.74 84.80 - 4,499 SHEN N 11/15/96 0.50 98.09 67.21 68.52 18.51 586 WCBI N 11/15/96 0.53 87.13 71.62 82.19 - - WSB N 11/15/96 0.95 54.02 48.92 90.56 - 11,303 Maximum 2.53 102.17 84.25 90.56 36.33 129,023 Minimum 0.50 54.02 46.08 56.49 - - Average 1.00 86.03 65.35 76.50 11.49 31,644 Median 0.78 89.65 67.74 78.10 8.12 3,434 UFRM N 11/15/96 0.88 78.46 66.48 84.73 3.91 461,893 FLAG N 11/15/96 3.56 89.84 69.21 77.04 11.11 242,789 PULB N 11/15/96 NA 96.49 80.51 83.44 1.67 NA FFWM N 11/15/96 0.95 99.11 80.53 81.24 5.20 52,989
Source: SNL Securities and F&C calculations. 11 59 EXHIBITS 60 EXHIBIT I 61 FERGUSON & CO., LLP QUALIFICATIONS Ferguson & Co. (F&C) is a financial, economic, and regulatory consulting firm providing services to financial institutions. It is located in Irving, Texas. Its services to financial institutions include: - Mergers and acquisition services, - Business plans, - Fairness opinions and conversion appraisals, - Litigation support, - Loan review and valuation, - Operational and efficiency consulting, - Human resources evaluation and management, and - Regulatory consulting. F&C developed several financial institution databases of information derived from periodic financial reports filed with regulatory authorities by financial institutions. For example, F&C developed TAFS and BankSource. TAFS includes thrifts filing TFR's with the OTS and BankSource includes banks and savings banks filing call reports with the FDIC. Both databases of information include information from the periodic reports plus numerous calculations derived from F&C's analysis. In addition, both databases are interactive, permitting the user to conduct merger analysis, do peer group comparisons, and a number of other items. F&C recently sold its electronic publishing segment to Sheshunoff Information Services Inc., Austin, Texas. Brief biographical information is presented below on F&C's principals: WILLIAM C. FERGUSON Mr. Ferguson has approximately 30 years of experience providing various services to financial institutions. He was a partner in a CPA firm prior to founding F&C in 1984. Mr. Ferguson is a frequent speaker for financial institution seminars and he has testified before Congressional Committees several times on his analysis of the state of the thrift industry. Mr. Ferguson has a B.A. degree from Austin Peay University and an M.S. degree from the University of Tennessee. He is a CPA. 1 62 CHARLES M. HEBERT Mr. Hebert has over 30 years of experience providing services to and managing financial institutions. He spent 7 years as a national bank examiner, 14 years in bank management, 5 years in thrift management, and has spent the last 7 years on the F&C consulting staff. Mr. Hebert holds a B.S. degree from Louisiana State University. He is a certified commercial lender. ROBIN L. FUSSELL Mr. Fussell has over 25 years of experience providing professional services to and managing financial institutions. He worked on the audit staff of a "Big Six" accounting firm for 12 years, served as CFO of a thrift for 3 years, and has worked in financial institution consulting for the last 12 years. He is a co-founder of F&C. He holds a B.S. degree from East Carolina University. He is a CPA. 2 63 SECTION IV CORRELATION OF MARKET VALUE 64 FERGUSON & CO., LLP SECTION IV. IV. CORRELATION OF MARKET VALUE MARKETABILITY & LIQUIDITY OF STOCK TO BE ISSUED This section addresses the aforementioned factors and the estimated pro forma market. Certain factors must be considered to determine whether adjustments are required in correlating Heartland Bank's market value to the comparative group. Those factors include financial aspects, market area, management, dividends, liquidity, thrift equity market conditions, and subscription interest value of the to-be-issued common shares, and compares the resulting market value of the Bank to the members of its comparative group and the selected group of publicly held thrifts. FINANCIAL ASPECTS Section III includes a discussion regarding a comparison of Heartland Bank's earnings, balance sheet characteristics, and risk factors with its comparative group. Table III.2 presents a comparison of certain key indicators, and Table III.3 presents certain key indicators on a pro forma basis after conversion. As shown in Table III.2, from an earnings viewpoint, Heartland Bank is below its comparative group in return on assets and core income as a percentage of average assets, principally as a result of its net interest income level, which is lower because of the Bank's lower capital ratio, a lower ratio of interest earning assets ("IEA's") to interest bearing liabilities ("IBL's"), and a lower net interest margin. Heartland Bank's net interest income as a percent of assets is 2.43% versus 3.38% for the comparatives. After Heartland Bank completes its stock conversion, its return on average assets and core income as a percentage of average assets will increase, and will achieve parity with the comparable group principally in spite of the lower ratio of IEA's to IBL's, and a higher level of operating expense (4.43% vs. 2.12%). Table III.3 projects that Heartland Bank will exceed the group in return on assets with 0.93% at the midpoint, versus a mean of 0.81% and median of 0.90% for the comparative group. Heartland Bank's pro forma equity to assets ratio at the midpoint is 15.98%, versus a mean of 11.28% and median of 10.05% for the comparative group. Heartland Bank's pro forma return on equity is below the comparative group--5.18% at the midpoint versus a mean of 8.37% and median of 8.17% for the comparative group. This is an expected result considering the higher capital ratios of Heartland Bank in comparison to the group. In other words, higher capital, lower ROAE, and lower capital, higher ROAE - all other factors being equal. Heartland Bank's recorded earnings have been adjusted for appraisal purposes (see Table IV.1). The Bank recorded gains of $14 thousand from the sale of investments and also recorded $938 thousand in losses on the sale of investments. In addition, the Bank paid the SAIF special assessment of $882 thousand, and recorded in the same September 30, 1996, quarter was an additional provision for loan loss reserves of $560 thousand. 1 65 FERGUSON & CO., LLP SECTION IV. TABLE IV.1 - APPRAISAL EARNINGS ADJUSTMENTS FOR THE TWELVE MONTHS ENDING SEPTEMBER 30, 1996
(In Thousands) Year End 6-30-96 $ 231 3 Months End 9-30-95 330 -------- 561 3 Months End 9-30-96 (843) -------- (282) Add: Excess Loan Loss Provision 560 Special Assessment SAIF 882 Loss on Sale of MBS's 938 Deduct: Gain on Sale of Investment Securities (14) -------- Total Adjustments 2,366 -------- Tax Effect of Adjustments at 37% combined tax rate (875) -------- Net Adjustments 1,491 -------- Appraisal Earnings $ 1,209 ========
Source: Heartland Community Bank's audited and unaudited financial statements and F&C calculations. Heartland Bank's asset composition is similar to that of its comparative group-- marginally lending oriented, with a high percentage of total assets in investments and mortgage-backed securities. From the risk factor viewpoint, Heartland Bank is similar to the comparative group. Heartland Bank has nearly the same level of non performing assets(1.09% vs. 1.13%). Heartland Bank's loan loss allowance is 1.61% of net loans, comparing favorably with the comparative group, which is 1.08%. Its ratio of interest earning assets to interest bearing liabilities (105.26%) is well below the comparative group (112.75%). From an earnings perspective, this is a significant amount of difference, but Heartland Bank's ratio will be in line with the comparative group after conversion. From an interest rate risk factor, Heartland Bank is significantly interest rate sensitive and would suffer significant diminution of earnings in a rising rate environment. We believe that NO ADJUSTMENT is necessary relative to financial aspects of Heartland Bank. MARKET AREA Section II describes Heartland Bank's market area. We believe that AN UPWARD ADJUSTMENT is required for Heartland Bank's market area. 2 66 FERGUSON & CO., LLP SECTION IV. MANAGEMENT The CEO has served as President, CEO and Director since 1990 (a Director since 1983). The Executive Vice President has been with Heartland Bank since May 1966, however, he joins the Bank with in excess of 25 years experience in bank and thrift management and is well qualified for the position. The Chief Lending Officer of the Bank is also a recent addition to the staff, coming into employment with excellent credentials. All officers report directly to President Lampkin. The staff possesses the necessary intellect, skills, levels of expertise, and experience to maintain the integrity of the assets and to implement the goals of the organization. Heartland Bank's results compare well with the comparative group. Therefore, Heartland Bank's Management has done the same quality job as its selected comparatives. The Bank has no formal management succession plan in effect; however, that is not unusual for this size institution. The recent acquisition of additional senior officers has made the Bank less vulnerable to the loss of one or more senior managers, but more than two would create problems. We believe that NO ADJUSTMENT is required for Heartland Bank's Management. DIVIDENDS Table III.3 provides dividend information relative to the comparative group and the thrift industry as a whole. The comparative group is paying a mean yield on a market price of 1.95% and a median of 2.06%, while all public thrifts are paying a mean of 2.11% and median of 2.11%. Arkansas public thrifts are paying a mean of 2.61% and a median of 2.95%, but they are so few in number that they are not a significant analytical factor. Heartland Bank intends to pay a dividend at an initial annual rate of 3.0%, on an offering price of $10.00 per share. Even with market appreciation, Heartland Bank's dividend rate will be comparable. We believe that NO ADJUSTMENT is required relative to Heartland Bank's intention to pay dividends. LIQUIDITY The Holding Company has never issued capital stock to the public, and as a result, there is no existing market for the Common Stock. Although the Holding Company has applied to list its Common Stock on NASDAQ, there can be no assurance that a liquid trading market will develop. A public market having the desirable characteristics of depth, liquidity, and orderliness depends upon the presence in the market place of both willing buyers and sellers of the Common Stock. These characteristics are not within the control of the Bank or the market. The peer group includes companies with sufficient trading volume to develop meaningful pricing characteristics for the stock. The market value of the comparative group ranges from $77.55 million to $16.13 million, with a mean value of $33.76 million. The midpoint of Heartland Bank's valuation range is $20.0 million at $10.00 a share, or 2,000,000 shares. The modest size of the issue and the limited number of shares that are being issued should have a negative impact on the liquidity of the issue. We believe a DOWNWARD ADJUSTMENT is required relative to the liquidity of Heartland Bank's stock. 3 67 FERGUSON & CO., LLP SECTION IV. THRIFT EQUITY MARKET CONDITIONS The SNL Thrift Index has performed well since the end of 1990. The Index has grown as follows: year ended December 31, 1991--increased 49.0% from 96.6 to 143.9; year ended December 31, 1992--increased 39.7% to 201.1; year ended December 31, 1993--increased 25.6% to 252.5; year ended December 31, 1994--decreased 3.1% to 244.7; year ended December 31, 1995--increased 54.1% to 376.5. The SNL Index is market value weighted with a base value of 100 as of March 31, 1984. As shown in Figure IV.1, which is a graph of the SNL Thrift Index covering the period January 31, 1994 through December 20, 1996, the market, as depicted by the Index, has experienced fluctuations recently. It dipped in the latter part of 1994, but recovered during the first quarter of 1995. During 1995, the Index continued a more robust increase and moved from 244.7 at year end 1994 to 376.50 by December 31, 1995, an increase of 53.86%. Between December 30, 1995 and May 31, 1996, the Index moved up and down within a narrow band of performance. In May of 1996, the upward trend became recognizable and continuous. The Index has generally trended upward since that start. Overall, the market index has increased 25.74% (from 382.99 to 481.96) between the end of May and December 20, 1996. The increase in the SNL Index in general has been parallel with the increases in other equity markets with some interim fluctuations caused by changes or anticipated changes in interest rates or other economic conditions. Another factor, however, is also notable. In other markets, increased prices are responding to improved profits, with price to earnings ratios increasing as earnings potentials are anticipated. The thrift market has also been influenced by higher price earnings ratios. In addition, the thrift IPO market has been affected by speculation that conveys the notion that the majority of the converting institutions will sooner or later become viable consolidation candidates and sell at some expanded multiple of book value. Moreover, the number of conversions has decreased in recent months and the basics of supply and demand are affecting the pricing of some of the recent issues, as professional investor and regional speculators chase fewer viable issues of thrift equities. ARKANSAS ACQUISITIONS Table IV.2 provides information relative to acquisitions of financial institutions in Arkansas between January 1, 1995, and December 20, 1996. There were two thrift acquisitions and 17 bank acquisitions announced during that time frame. Currently, there are three publicly held thrifts in the State of Arkansas. There are 57 publicly held thrifts in the Southeast region of the country. Bank acquisitions in Arkansas since January 1, 1995, have averaged 174.93% of tangible book value and 15.00 times earnings. The median price has been 163.20% of tangible book value and 14.36 times earnings. Thrifts generally sell at lower price/book multiples than do banks. This data reflects the same, but the limited number of thrifts in the data base makes it dangerous to deduce that the price of thrifts are nearing the price of banks, especially when one of the recorded thrift purchases was the subject's purchase of its subsidiary. Thrifts in Arkansas (only two have sold during that period) have averaged 168.50% of tangible book value and 15.67 times earnings. Disparity between the price of thrifts and banks aside, there is ample data shown to conclude that speculators in thrift IPO stock have good reason to believe that, in the event of a sell out, there would be a generous profit to be made. Such knowledge and hope for profits have created a whole new level of professional investors (speculators) and that, in turn, has increased the demand for thrift IPO stocks. 4 68 FERGUSON & CO., LLP SECTION IV. EFFECT OF INTEREST RATES ON THRIFT STOCK The current interest rate environment and the anticipated rate environment will affect the pricing of thrift stocks and all other interest sensitive stocks. As the economy continues to drift, the fear of inflation can, and has to a degree been replaced by economic uncertainty. The Federal Reserve, in its resolve to curb inflation, has increased rates in the past, but has more recently relented to vagaries of the economy and passed an opportunity to increase rates. In some minds, this was an attempt to stimulate what is currently perceived as a fragile and irresolute economy (political rhetoric aside). Recent gains in thrift stocks are mainly due to the rise in other equity markets, the effect of supply and demand, and fewer conversions. Should the merger and acquisition levels drop, if there were a sharp and sustained rise in the interest rates, or if other equity markets have an adjustment, the market in thrift equities could adjust downward. What is likely to happen in the short to intermediate term is that rates will float around current levels and trend upward. The yield curve will continue to normalize. A slowly increasing yield curve will do little for the financial services industry in general and thrifts specifically, but the normalization of the yield curve will mitigate to some degree its impact on earnings by allowing money managers to play the spread. Thrift net interest margins will narrow if the cost of funds starts to rise more quickly. Even with portfolios replete with adjustable rate loans and MBS's, a quickly rising rate environment can cause the cost of funds to rise faster than the adjustable assets can accommodate, and accordingly, spreads would narrow. As clearly illustrated Figure IV.1, the SNL Thrift Index has performed well over the last five years. It moved in tandem with all interest sensitive stocks and reflected the weakness in the market as investors began to consider the importance of increases in rates and their impact on the net interest margins of thrifts. The clear implication is that eventually rising interest rates will have a negative impact on earnings, but until that occurs, it is likely that the market will continue to rise. Figure IV.2 graphically displays the rate environment since June 14, 1996. In June and most of July 1996, the yield curve was normal, with between 200 basis points ("BP") and 150 BP's difference between the federal funds rate and the 30 year treasury. Since that time, the yield curve has become flatter, with a 125 BP spread between the federal funds rate and the 30 year treasury rate at December 20, 1996. Mortgage rates follow closely the long term government obligations, giving asset managers less opportunity to maintain their spreads with the flatter yield curve. Increased cost of funds will serve to narrow the net interest margins of thrifts. A thrift's ability to maintain net interest margins through business cycles is important to investors, unless thrifts can offset the decline in net interest income by other sources of revenue or reductions in noninterest expense. The former is difficult and the latter is unlikely. Heartland Bank is vulnerable to interest rate risk. If current strategies to change the asset mix are completed in a timely manner, the changes in assets and the coming infusion of capital should improve, to some degree, the interest rate risk. But until then, the exposure is excessive. Table IV.3, which has information on recent conversions since June 6, 1996, shows that recent price appreciation has been as robust as it was in past periods. Table IV.3 provides information on 28 conversions completed since June 6, 1996. The average change in price since conversion is a gain of 35.16%, and the median change is a gain of 33.75%. All thrifts within that group have increased in value ranging from a low of 15.63% to a high of 62.5%. The average increase in value at one day, one week, and one month after conversion has been 12.99%, 13.86%, 5 69 FERGUSON & CO., LLP SECTION IV. and 15.68%, respectively. The median increase in value at one day, one week, and one month after conversion has been 11.88%, 14.38%, and 12.50%, respectively. A notable change in pricing patterns is that it is taking longer for the stocks to increase in value. In the recent past, it was not uncommon for a stock to gain 75% to 80% of its total price increase in the first day or week. This is possibly due to the trend toward higher price to pro forma book values at closings. Since October 1, 1996, no stock has closed at a price to pro forma book value of less than 71.70%, with the highest closing at 77.0%. Because of the lack of complete earnings information on recent conversions, a meaningful comparison of the price earnings ratios is difficult to make. However, there is sufficient information to review the price-to-book ratio. The average price-to-book ratio as of December 20, 1996, is 96.38%, and the median is 88.92%. That compares to the offering price to pro forma book, where the average was 69.52% and the median was 71.25%. We believe that a SLIGHT DOWNWARD ADJUSTMENT is required for the new issue discount. ADJUSTMENTS CONCLUSION ADJUSTMENTS SUMMARY
NO CHANGE UPWARD DOWN Financial Aspects X Market Area X Management X Dividends X Liquidity X Thrift Equity Market Conditions X
VALUATION APPROACH Typically, investors rely on the price/earnings ratio as the most appropriate indicator of value. We consider price/earnings to be one of the important pricing methods in valuing a thrift stock. Price/book is a well recognized yardstick for measuring the value of financial institution stocks in general. Another method of viewing thrift values is price/assets, which is more meaningful in situations where the subject is thinly capitalized. Given the healthy condition of the thrift industry today, more emphasis is placed on price/earnings and price/book. Generally, price/earnings and price/book should be considered in tandem. Table III.3 presents Heartland Bank's pro forma ratios and compares them to the ratios of its comparative group and the publicly held thrift industry as a whole. Heartland Bank's earnings for the 12 months ended September 30, 1996, were approximately $282,000 negative, with net adjustments of $2,366,000 ($1,491,000 after tax) required to determine appraisal earnings of $1,209,000 (see Table IV.1). Management has indicated an intention, through its diversification of deposit and loan products, to exhibit the flexibility in operations needed to serve both the public and the institution. The Bank is well positioned to manage interest rate variations. The Bank projects moderate growth. 6 70 FERGUSON & CO., LLP SECTION IV. The comparative group traded at an average of 14.15 times earnings at December 20, 1996, and at 114.72% of book value. The comparative group traded at a median of 13.23 times earnings and a median of 112.55% of book value. At the midpoint of the valuation range, Heartland Bank is priced at 12.56 times earnings and 65.95% of book value. At the maximum end of the range, Heartland Bank is priced at 13.91 times earnings and 69.76% of book value. At the supermaximum, Heartland Bank is priced at 15.34 times earnings and 73.46% of book value. The midpoint valuation of $20,000,000 represents a discount of 42.51% from the average and a discount of 41.40% from the median of the comparative group on a price/book basis. The price/earnings ratio for Heartland Bank at the midpoint represents a discount of 11.24% from the comparative group's mean and 5.06% from the median price/earnings ratio. The maximum valuation of $23,000,000 represents a discount of 39.16% from the average and 37.99% from the median of the comparative group on a price/book basis. The price/earnings ratio for Heartland Bank at the maximum represents a discount of 1.70% from the average and a premium of 5.14% over the median of the comparative group. As shown in Table IV.3, conversions closing since June 1, 1996, have closed at an average price to book ratio of 69.52% and median of 71.25%. Heartland Bank's pro forma price to book ratio is 65.95% at the midpoint, 69.76% at the maximum, and 73.46% at the supermaximum of the range. At the midpoint, Heartland Bank is 0.03% above the average and 5.30% below the median. At the maximum of the range, Heartland Bank is 0.24% above the average and 1.49% below the median. At the supermaximum of the range, Heartland Bank's pro forma price to book ratio is 3.94% above the average and 2.21% above the median. Addressing the discounts between the pro forma book value of Heartland and the current price to book values of the comparative group, there are some notable factors. First, all of these calculations were made from book value, and in the case of Heartland Bank, there is some goodwill, and tangible book values would certainly reduce the discounts. Second, the majority of the comparative group are mature institutions that on average are much larger than the subject. Consequently, they have grown into their infrastructure changes, and being larger, non-interest expense is generally a smaller percentage when compared to total assets, and profitability is slightly better. Third, at a midpoint pro forma book value of 65.95%, the discount from the average pro forma book value closing ratio for all of the recent conversions is 5.14%. Should the issue close at the maximum, which is likely, then it would be closing at a premium to the average of recent conversion. Finally, it must be realized that there is some point beyond which most knowledgeable investors will not travel as it relates to thrift IPO stock. This valuation provides for a 15% increase between midpoint and maximum and an additional 15% to supermaximum, which would take the value higher than all but two of the most recent conversions. VALUATION CONCLUSION We believe that as of December 20, 1996, the estimated pro forma market value of Heartland Bank was $20,000,000. The resulting valuation range was $17,000,000 at the minimum to $23,000,000 at the maximum, based on a range of 15% below and 15% above the midpoint valuation. The supermaximum is $26,450,000, based on 1.15 times the maximum. Pro forma comparisons with the comparative group are presented in Table III.3 based on calculations shown in Exhibit VII. 7 71 FERGUSON & CO., LLP SECTION IV TABLE IV.2 - ARKANSAS BANK AND THRIFT SALES
Buyer: Seller: 1:Total 1:Total Bank/ Bank/ Assets Assets Buyer ST Thrift Seller ST Thrift ($000) ($000) First Security Bncp AR Bank First Community Bank AR Bank 466,584 83,499 Arkansas Banking Co AR Bank Mercantile Bank AR Bank 219,199 42,168 First United Bncshrs AR Bank Carlisle Bancshares AR Bank 1,336,020 100,794 Southeast AR Bank AR Bank Wilmot State Bank AR Bank 35,439 11,384 Chambers Bancshares AR Bank ACME Holding Company AR Bank 299,478 25,675 Lonoke Bancshares AR Bank First State Bank AR Bank 67,631 27,751 Citizens National AR Bank Peoples Bancshrs AR Bank 209,376 27,933 Boatmen's Bancshares MO Bank Citizens Bancshares AR Bank 32,366,716 222,152 First Commercial Crp AR Bank FDH Bancshares AR Bank 4,347,541 386,724 Deposit Guaranty MS Bank First Merchants Finl AR Bank 5,153,250 282,447 First Commercial Crp AR Bank West-Ark Bancshares AR Bank 4,347,541 133,025 Simmons First Nat'l AR Bank DSB Bancshares Inc AR Bank 709,614 19,785 First TN Nat'l TN Bank Financial Investment AR Bank 10,522,411 349,612 Union Planters Corp TN Bank First Bncshrs NE AR AR Bank 10,015,069 64,827 Union Planters Corp TN Bank First Bnshrs-East AR AR Bank 10,015,069 57,427 First Security Bncp AR Bank Farmers Investment AR Bank 311,446 73,845 Riverside Bancshares AR Bank Sparkman Bancshares AR Bank NA 9,820 First Federal S&LA AR Thrift Heritage Banc Holdng AR Thrift 141,188 28,006 Mercantile Bancorp MO Bank Security Bank Conway AR Thrift 13,075,489 95,245 Maximum 32,366,716 386,724 Minimum 35,439 9,820 Average 5,202,170 107,480 Median 1,022,817 64,827 BANKS ONLY Maximum 32,366,716 386,724 Minimum 35,439 9,820 Average 5,026,399 112,875 Median 1,022,817 64,827 THRIFTS ONLY Maximum 13,075,489 95,245 Minimum 141,188 28,006 Average 6,608,339 61,626 Median 6,608,339 61,626
Source: SNL Securities, Inc. and F&C Calculations. 8 72 FERGUSON & CO., LLP SECTION IV TABLE IV.2 - ARKANSAS BANK AND THRIFT SALES
Ann'd Ann'd Completed/ Deal Deal Announce Terminated Value Pr/Bk Seller Date Status Date ($M) (%) First Community Bank 07/31/96 Pending NA NA NA Mercantile Bank 04/18/96 Completed 08/11/96 4.5 139.84 Carlisle Bancshares 04/01/96 Completed 08/30/96 13.0 185.00 Wilmot State Bank 02/20/96 Completed 07/01/96 NA NA ACME Holding Company 10/12/95 Terminated 09/01/96 2.3 105.94 First State Bank 08/01/95 Completed 01/01/96 3.6 139.10 Peoples Bancshrs 07/14/95 Completed 11/30/95 3.1 149.40 Citizens Bancshares 06/06/95 Completed 10/27/95 37.8 200.84 FDH Bancshares 05/30/95 Completed 11/30/95 34.9 160.94 First Merchants Finl 05/17/95 Completed 08/31/95 38.6 243.07 West-Ark Bancshares 05/17/95 Completed 11/30/95 15.9 217.45 DSB Bancshares Inc 04/25/95 Completed 08/01/95 2.4 115.66 Financial Investment 02/21/95 Completed 10/01/95 70.0 163.20 First Bncshrs NE AR 02/02/95 Completed 01/02/96 9.2 141.26 First Bnshrs-East AR 02/02/95 Completed 01/02/96 10.5 160.43 Farmers Investment 01/23/95 Completed 05/09/95 8.9 206.67 Sparkman Bancshares 01/16/95 Completed 07/31/95 0.7 205.26 Heritage Banc Holdng 02/22/96 Completed 05/03/96 3.3 161.21 Security Bank Conway 07/07/95 Completed 02/09/96 14.0 175.79 70.0 243.07 0.7 105.94 16.0 168.89 9.2 161.21 70.0 243.07 0.7 105.94 17.0 168.94 9.2 160.94 14.0 205.26 3.3 161.21 8.7 168.50 8.7 168.50
Source: SNL Securities, Inc. and F&C calculations. 9 73 FERGUSON & CO., LLP SECTION IV TABLE IV.2 - ARKANSAS BANK AND THRIFT SALES
Ann'd Ann'd Final Final Final Final Deal Pr/ Deal Pr/ Deal Deal Deal Pr/ Deal Pr/ Tg Bk 4-Qtr Value Pr/Bk Tg Bk 4-Qtr Seller (%) EPS (x) ($M) (%) (%) EPS (x) First Community Bank NA NA NA NA NA NA Mercantile Bank 151.11 29.03 4.5 141.64 152.70 24.86 Carlisle Bancshares 207.97 11.38 13.6 184.06 205.04 10.68 Wilmot State Bank NA NA NA NA NA NA ACME Holding Company 105.94 8.26 NA NA NA NA First State Bank 139.10 20.34 3.6 136.31 136.31 18.18 Peoples Bancshrs 149.40 8.12 3.1 143.19 143.19 7.43 Citizens Bancshares 203.29 18.48 42.3 214.60 217.11 22.88 FDH Bancshares 201.43 13.29 40.4 163.09 196.29 16.52 First Merchants Finl 243.07 23.42 41.6 240.96 240.96 26.50 West-Ark Bancshares 230.10 9.14 20.6 262.96 276.66 12.23 DSB Bancshares Inc 115.66 7.84 2.4 106.90 106.90 8.00 Financial Investment 163.20 14.36 71.2 157.34 157.34 15.64 First Bncshrs NE AR 141.26 16.79 9.2 137.77 137.77 28.57 First Bnshrs-East AR 160.43 24.76 10.7 151.32 151.32 21.53 Farmers Investment 206.67 11.31 8.5 189.79 189.79 11.06 Sparkman Bancshares 205.26 8.43 0.7 192.97 192.97 8.93 Heritage Banc Holdng 161.21 15.63 3.3 161.21 161.21 15.63 Security Bank Conway 175.79 15.70 14.8 169.65 169.65 14.29 243.07 29.03 71.2 262.96 276.66 28.57 105.94 7.84 0.7 106.90 106.90 7.43 174.17 15.08 18.2 172.11 177.20 16.43 163.20 14.36 10.0 162.15 165.43 15.64 243.07 29.03 71.20 262.96 276.66 28.57 105.94 7.84 0.70 106.90 106.90 7.43 174.93 15.00 19.46 173.06 178.88 16.64 163.20 13.29 9.95 160.22 173.57 16.08 205.26 15.70 4.80 192.97 192.97 15.63 161.21 15.63 3.30 161.21 161.21 14.29 168.50 15.67 9.05 165.43 165.43 14.96 168.50 15.67 9.05 165.43 165.43 14.96
Source: SNL Securities, Inc. and F&C calculations. 10 74 FERGUSON & CO., LLP SECTION IV TABLE IV.3 - RECENT CONVERSIONS SINCE JUNE 1, 1996
Price/ Price/ Conversion Gross Offering Pro-Forma Pro-Forma Assets Proceeds Price Book Value Earnings Ticker Short Name State IPO Date ($000) ($000) ($) (%) (x) LXMO Lexington B&L Financial Corp. MO 06/06/96 49,981 12,650 10.000 71.10 20.80 WWFC Westwood Financial Corporation NJ 06/07/96 NA NA NA NA NA CNSB CNS Bancorp, Inc. MO 06/12/96 85,390 16,531 10.000 71.30 24.40 CMSB Commonwealth Bancorp, Inc. PA 06/17/96 NA NA NA NA NA DIME Dime Community Bancorp, Inc. NY 06/26/96 665,187 145,475 10.000 71.10 15.50 MECH Mechanics Savings Bank CT 06/26/96 662,482 52,900 10.000 72.00 NA PRBC Prestige Bancorp, Inc. PA 06/27/96 91,841 9,630 10.000 63.50 28.80 WYNE Wayne Bancorp, Inc. NJ 06/27/96 207,997 22,314 10.000 62.10 18.90 PROV Provident Financial Holdings CA 06/28/96 570,691 51,252 10.000 62.40 19.90 EGLB Eagle BancGroup, Inc. IL 07/01/96 150,974 13,027 10.000 58.40 100.10 FLKY First Lancaster Bancshares KY 07/01/96 35,361 9,588 10.000 74.70 18.50 HWEN Home Financial Bancorp IN 07/02/96 33,462 5,059 10.000 68.00 11.40 OCFC Ocean Financial Corp. NJ 07/03/96 1,036,445 167,762 20.000 71.20 13.40 MBSP Mitchell Bancorp, Inc. NC 07/12/96 28,222 9,799 10.000 70.00 NA PWBK Pennwood Savings Bank PA 07/15/96 41,592 6,101 10.000 67.50 14.50 ANA Acadiana Bancshares, Inc. LA 07/16/96 225,248 32,775 12.000 71.90 NA PFED Park Bancorp, Inc. IL 08/12/96 158,939 27,014 10.000 66.70 26.20 PFFC Peoples Financial Corp. OH 09/13/96 78,078 14,910 10.000 64.30 28.60 HBEI Home Bancorp of Elgin, Inc. IL 09/27/96 304,520 70,093 10.000 72.60 24.90 CBES CBES Bancorp, Inc. MO 09/30/96 86,168 10,250 10.000 61.10 13.20 WEHO Westwood Homestead Fin. Corp. OH 09/30/96 96,638 28,434 10.000 73.80 NA AFED AFSALA Bancorp, Inc. NY 10/01/96 133,046 14,548 10.000 71.70 13.70 SSFC South Street Financial Corp. NC 10/03/96 166,978 44,965 10.000 76.30 26.10 CNBA Chester Bancorp, Inc. IL 10/08/96 134,781 21,821 10.000 72.10 18.80 FTNB Fulton Bancorp, Inc. MO 10/18/96 85,496 17,193 10.000 72.50 14.60 DCBI Delphos Citizens Bancorp, Inc. OH 11/21/96 88,022 20,387 10.000 72.20 14.60 CFNC Carolina Fincorp, Inc. NC 11/25/96 94,110 18,515 10.000 77.00 17.20 PSFI PS Financial, Inc. IL 11/27/96 53,520 21,821 10.000 71.90 17.20 Maximum 1,036,445 167,762 20.000 77.00 100.10 Minimum 28,222 5,059 10.000 58.40 11.40 Average 206,353 33,262 10.462 69.52 22.79 Median 95,374 19,451 10.000 71.25 18.65
Source: SNL Securities Inc., and F&C calculations. 11 75 FERGUSON & CO., LLP Section IV Table IV.3 - Recent Conversions Since June 1, 1996
% Increase % Increase Price/ Current Current Current Price One One Price One One Price One Adjusted Stock Price/ Price/Tang Day After Day After Week After Week After Month After Assets Price Book Value Book Value Conversion Conversion Conversion Conversion Conversion Ticker (%) ($) (%) (%) ($) (%) ($) (%) ($) LXMO 20.20 13.00 87.78 87.78 9.500 (5.00) 9.750 (2.50) 10.125 WWFC NA 16.50 111.79 127.51 10.750 NA 10.375 NA 10.625 CNSB 16.20 15.50 106.16 106.16 11.000 10.00 11.625 16.25 11.500 CMSB NA 14.88 117.40 152.88 10.500 NA 10.750 NA 10.000 DIME 17.90 14.75 99.73 114.70 11.687 16.87 12.000 20.00 11.875 MECH 7.40 15.75 116.84 116.84 11.500 15.00 11.500 15.00 11.250 PRBC 9.50 13.13 83.23 83.23 10.375 3.75 10.250 2.50 9.750 WYNE 9.70 14.50 90.06 90.06 11.125 11.25 11.375 13.75 11.250 PROV 8.20 13.88 83.74 83.74 10.970 9.70 10.810 8.10 10.125 EGLB 7.90 13.81 82.42 82.42 11.250 12.50 11.250 12.50 11.125 FLKY 21.30 14.63 103.87 103.87 13.500 35.00 13.375 33.75 13.750 HWEN 13.10 13.00 84.91 84.91 10.250 2.50 9.875 (1.25) 10.500 OCFC 13.90 25.50 93.65 93.65 21.250 6.25 20.125 0.63 21.000 MBSP 25.80 14.25 94.87 94.87 NA NA 10.625 6.25 11.000 PWBK 12.80 12.75 84.05 84.05 9.500 (5.00) 9.125 (8.75) 9.625 ANA 12.70 14.75 86.61 86.61 12.000 - 11.750 (2.08) 12.375 PFED 14.50 12.25 79.65 79.65 10.250 2.50 10.438 4.38 10.500 PFFC 16.00 13.25 NA NA 10.875 8.75 11.500 15.00 12.750 HBEI 18.70 13.00 92.07 92.07 11.813 18.13 12.500 25.00 12.625 CBES 10.60 13.75 83.03 83.03 12.625 26.25 13.438 34.38 13.250 WEHO 22.70 12.00 79.47 79.47 10.750 7.50 10.625 6.25 10.500 AFED 9.90 11.56 NA NA 11.375 13.75 11.313 13.13 11.563 SSFC 21.20 14.13 NA NA NA NA 12.500 25.00 12.375 CNBA 13.90 13.75 NA NA 12.938 29.38 12.625 26.25 12.625 FTNB 16.70 16.25 NA NA 12.500 25.00 12.875 28.75 14.750 DCBI 18.80 12.06 NA NA 12.125 21.25 12.125 21.25 12.063 CFNC 16.40 13.50 NA NA 13.000 30.00 13.000 30.00 13.500 PSFI 29.00 11.94 NA NA 11.641 16.41 11.688 16.88 NA ---------- ---------- Maximum 29.00 25.50 117.40 152.88 21.25 35.00 20.13 34.38 21.00 Minimum 7.40 11.56 79.47 79.47 9.50 (5.00) 9.13 (8.75) 9.63 Average 15.58 14.21 93.07 96.38 11.73 12.99 11.76 13.86 11.94 Median 15.25 13.78 88.92 88.92 11.31 11.88 11.50 14.38 11.50 ---------- ----------
Source: SNL Securities Inc., and F&C calculations. 12 76 FERGUSON & CO., LLP Section IV Table IV.3 - Recent Conversions Since June 1, 1996
% Increase % Increase One Since Month After Conversion Conversion Ticker (%) (%) LXMO 1.25 30.00 WWFC NA NA CNSB 15.00 55.00 CMSB NA NA DIME 18.75 47.50 MECH 12.50 57.50 PRBC (2.50) 31.25 WYNE 12.50 45.00 PROV 1.25 38.75 EGLB 11.25 38.13 FLKY 37.50 46.25 HWEN 5.00 30.00 OCFC 5.00 27.50 MBSP 10.00 42.50 PWBK (3.75) 27.50 ANA 3.13 22.92 PFED 5.00 22.50 PFFC 27.50 32.50 HBEI 26.25 30.00 CBES 32.50 37.50 WEHO 5.00 20.00 AFED 15.63 15.63 SSFC 23.75 41.25 CNBA 26.25 37.50 FTNB 47.50 62.50 DCBI 20.63 20.63 CFNC 35.00 35.00 PSFI NA 19.38 ------------------------- Maximum 47.50 62.50 Minimum (3.75) 15.63 Average 15.68 35.16 Median 12.50 33.75 -------------------------
Source: SNL Securities Inc., and F&C calculations. 13 77 FERGUSON & CO., LLP EXHIBIT IV.4 SECTION IV COMPARISON OF PRICING RATIOS
Group Percent Premium Compared to (Discount) Versus Investors ---------------- ------------------ Federal Average Median Average Median --------- ------- ------ ------- ------ COMPARISON OF PE RATIO AT MIDPOINT TO: - ----------------------------- Comparative group 12.56 14.15 13.23 (11.24) (5.06) Arkansas Thrifts 12.56 10.30 10.30 21.94 21.94 Southeast Region thrifts 12.56 19.69 15.60 (36.21) (19.49) All public thrifts 12.56 14.76 14.17 (14.91) (11.36) COMPARISON OF PE RATIO AT MAXIMUM TO: - ----------------------------- Comparative group 13.91 14.15 13.23 (1.70) 5.14 Arkansas Thrifts 13.91 10.30 10.30 35.05 35.05 Southeast Region thrifts 13.91 19.69 15.60 (29.36) (10.83) All public thrifts 13.91 14.76 14.17 (5.76) (1.83) COMPARISON OF PE RATIO AT SUPERMAXIMUM TO: - ----------------------------- Comparative group 15.34 14.15 13.23 8.41 15.95 Arkansas Thrifts 15.34 10.30 10.30 48.93 48.93 Southeast Region thrifts 15.34 19.69 15.60 (22.09) (1.67) All public thrifts 15.34 14.76 14.17 3.93 8.26 COMPARISON OF PB RATIO AT MIDPOINT TO: - ----------------------------- Comparative group 65.95 114.72 112.55 (42.51) (41.40) Arkansas Thrifts 65.95 109.88 108.77 (39.98) (39.37) Southeast Region thrifts 65.95 133.21 119.82 (50.49) (44.96) All public thrifts 65.95 126.68 119.94 (47.94) (45.01) COMPARISON OF PB RATIO AT MAXIMUM TO: - ----------------------------- Comparative group 69.79 114.72 112.55 (39.16) (37.99) Arkansas Thrifts 69.79 109.88 108.77 (36.49) (35.84) Southeast Region thrifts 69.79 133.21 119.82 (47.61) (41.75) All public thrifts 69.79 126.68 119.94 (44.91) (41.81) COMPARISON OF PB RATIO AT SUPERMAXIMUM TO: - ----------------------------- Comparative group 73.46 114.72 112.55 (35.97) (34.73) Arkansas Thrifts 73.46 109.88 108.77 (33.15) (32.46) Southeast Region thrifts 73.46 133.21 119.82 (44.85) (38.69) All public thrifts 73.46 126.68 119.94 (42.01) (38.75)
Source: SNL & F&C calculations 14 78 FERGUSON & CO., LLP.
SNL Index --------- Date Index ================ 1/31/94 258.47 2/28/94 249.53 3/31/94 241.57 4/29/94 248.31 5/31/94 263.34 6/30/94 269.58 7/29/94 276.69 8/31/94 287.18 9/30/94 279.69 10/31/94 236.12 11/30/94 245.84 12/30/94 244.73 1/31/95 256.10 2/28/95 277.00 3/31/95 278.40 4/28/95 295.44 5/31/95 307.60 6/23/95 313.95 7/31/95 328.20 8/31/95 355.50 9/29/95 362.29 10/31/95 354.05 11/30/95 370.17 12/29/95 376.51 1/31/95 370.69 2/29/96 373.64 3/29/96 382.13 4/30/96 377.24 5/31/96 382.99 6/28/96 387.18 7/30/96 388.38 8/30/96 408.34 9/13/96 416.01 9/20/96 419.50 9/30/96 429.28 10/30/96 456.70 11/15/96 468.06 11/29/96 485.83 12/13/96 473.64 12/20/96 481.56
[CHART]
PERCENT CHANGE SINCE ================================================================================ SNL Prev. Date Index Date 12/31/94 9/20/96 - -------------------------------------------------------------------------------- 12/31/94 244.70 3/31/95 278.40 13.77% 13.77% 6/30/95 313.50 12.61% 28.12% 9/30/95 362.30 15.57% 48.06% 10/31/95 354.10 -2.26% 44.71% 11/30/95 370.20 4.55% 51.29% 12/31/95 376.50 1.70% 53.86% 1/12/96 372.40 -1.09% 52.19% 1/31/96 370.70 -0.46% 51.49% 2/29/96 373.60 0.78% 52.68% 3/29/96 382.10 2.28% 56.15% 4/30/96 377.20 -1.28% 54.15% 5/31/96 382.99 1.53% 56.51% 6/28/96 387.18 1.09% 58.23% 7/30/96 371.62 -4.02% 51.87% 8/30/96 408.34 9.88% 66.87% 9/20/96 419.50 2.73% 71.43% 9/30/96 429.28 2.33% 75.43% 2.33% 10/30/96 456.70 6.39% 86.64% 8.87% 11/29/96 485.83 6.38% 98.54% 15.81% 12/13/96 473.64 -2.51% 93.56% 12.91% 12/20/96 481.56 1.67% 96.80% 14.79% ================================================================================
FIGURE IV.1 - SNL INDEX Source: SNL Securities, Inc., and F&C calculations. Section IV 15 79 FERGUSON & CO., LLP RATES FROM JUNE 14, 1996 THROUGH DECEMBER 20, 1996
1 Year 5 Year 10 Year 30 Year Fed Fds (*) T-bill Treas. Treas. Treas. 6/14/96 5.24 5.84 6.77 6.99 7.23 6/28/96 5.21 5.79 6.63 6.86 7.08 7/15/96 5.26 5.93 6.77 7.00 7.20 7/26/96 5.25 5.53 6.62 6.85 7.05 8/16/96 5.10 5.59 6.30 6.55 6.79 8/23/96 5.18 5.63 6.50 6.63 6.87 8/30/96 5.21 5.80 6.60 6.84 7.07 9/6/96 5.39 5.94 6.73 6.95 7.17 9/13/96 5.16 5.90 6.69 6.93 7.16 9/27/96 5.34 5.75 6.53 6.77 6.96 10/17/96 5.25 5.56 6.28 6.55 6.86 10/25/96 5.22 5.52 6.25 6.53 6.81 11/18/96 5.21 5.39 5.96 6.19 6.46 11/29/96 5.30 5.41 5.90 6.12 6.41 12/13/96 5.22 5.45 6.03 6.27 6.53 12/20/96 5.38 5.51 6.15 6.40 6.63
(*) Seven-day average for week ending two days earlier than date shown. RATE GRAPH JUNE 14, 1996 THROUGH DECEMBER 20, 1996 [CHART] CURRENT YIELD CURVE
1 YEAR 5 YEAR 10 YEAR 30 YEAR FED FDS T-BILL TREAS. TREAS. TREAS. 12/20/96 5.38 5.51 6.15 6.40 6.63
[CHART] FIGURE IV.2 - RATE ENVIRONMENT Source: Federal Reserve Bank of St. Louis, Missouri Section IV 16 80 EXHIBIT II 81 FERGUSON & CO., LLP EXHIBIT II.1 - PUBLICLY TRADED THRIFTS - SELECT
Deposit Ticker Short Name City State Region (BIF/SAIF) Exchange IPO Date Insurance Agency AADV Advantage Bancorp, Inc. Kenosha WI MW SAIF NASDAQ 03/23/92 ABBK Abington Savings Bank Abington MA NE BIF NASDAQ 06/10/86 ABCW Anchor BanCorp Wisconsin Madison WI MW SAIF NASDAQ 07/16/92 AFFFZ America First Financial Fund San Francisco CA WE SAIF NASDAQ NA AHM Ahmanson & Company (H.F.) Irwindale CA WE SAIF NYSE 10/25/72 ALBK ALBANK Financial Corporation Albany NY MA SAIF NASDAQ 04/01/92 AMFB American Federal Bank, FSB Greenville SC SE SAIF NASDAQ 01/19/89 ANBK American National Bancorp Baltimore MD MA SAIF NASDAQ 10/31/95 ANDB Andover Bancorp, Inc. Andover MA NE BIF NASDAQ 05/08/86 ASBI Ameriana Bancorp New Castle IN MW SAIF NASDAQ 03/02/87 ASFC Astoria Financial Corporation Lake Success NY MA SAIF NASDAQ 11/18/93 BANC BankAtlantic Bancorp, Inc. Fort Lauderdale FL SE SAIF NASDAQ 11/29/83 BDJI First Federal Bancorporation Bemidji MN MW SAIF NASDAQ 04/04/95 BFSB Bedford Bancshares, Inc. Bedford VA SE SAIF NASDAQ 08/22/94 BKC American Bank of Connecticut Waterbury CT NE BIF AMSE 12/01/81 BKCO Bankers Corp. Perth Amboy NJ MA BIF NASDAQ 03/16/90 BKCT Bancorp Connecticut, Inc. Southington CT NE BIF NASDAQ 07/03/86 BKUNA BankUnited Financial Corp. Coral Gables FL SE SAIF NASDAQ 12/11/85 BSBC Branford Savings Bank Branford CT NE BIF NASDAQ 11/04/86 BVFS Bay View Capital Corp. San Mateo CA WE SAIF NASDAQ 05/09/86 CAFI Camco Financial Corp. Cambridge OH MW SAIF NASDAQ NA CAPS Capital Savings Bancorp, Inc. Jefferson City MO MW SAIF NASDAQ 12/29/93 CARV Carver Bancorp, Inc. New York NY MA SAIF NASDAQ 10/25/94 CASB Cascade Financial Corp. Everett WA WE SAIF NASDAQ 09/16/92 CASH First Midwest Financial, Inc. Storm Lake IA MW SAIF NASDAQ 09/20/93 CBCI Calumet Bancorp, Inc. Dolton IL MW SAIF NASDAQ 02/20/92 CBCO CB Bancorp, Inc. Michigan City IN MW SAIF NASDAQ 12/28/92 CBIN Community Bank Shares New Albany IN MW SAIF NASDAQ 04/10/95 CBNH Community Bankshares, Inc. Concord NH NE BIF NASDAQ 05/08/86 CBSA Coastal Bancorp, Inc. Houston TX SW SAIF NASDAQ NA CEBK Central Co-operative Bank Somerville MA NE BIF NASDAQ 10/24/86 CENF CENFED Financial Corp. Pasadena CA WE SAIF NASDAQ 10/25/91 CFB Commercial Federal Corporation Omaha NE MW SAIF NYSE 12/31/84 CFCP Coastal Financial Corp. Myrtle Beach SC SE SAIF NASDAQ 09/26/90 CFFC Community Financial Corp. Staunton VA SE SAIF NASDAQ 03/30/88 CFSB CFSB Bancorp, Inc. Lansing MI MW SAIF NASDAQ 06/22/90 CFX CFX Corporation Keene NH NE BIF AMSE 02/12/87 CIBI Community Investors Bancorp Bucyrus OH MW SAIF NASDAQ 02/07/95 CKFB CKF Bancorp, Inc. Danville KY MW SAIF NASDAQ 01/04/95 CMRN Cameron Financial Corp Cameron MO MW SAIF NASDAQ 04/03/95 CNIT CENIT Bancorp, Inc. Norfolk VA SE SAIF NASDAQ 08/06/92 CNSK Covenant Bank for Savings Haddonfield NJ MA BIF NASDAQ NA COFD Collective Bancorp, Inc. Egg Harbor City NJ MA SAIF NASDAQ 02/07/84 COFI Charter One Financial Cleveland OH MW SAIF NASDAQ 01/22/88 CSA Coast Savings Financial Los Angeles CA WE SAIF NYSE 12/23/85 CTBK Center Banks Incorporated Skaneateles NY MA BIF NASDAQ 06/02/86 CTZN CitFed Bancorp, Inc. Dayton OH MW SAIF NASDAQ 01/23/92 CVAL Chester Valley Bancorp Inc. Downingtown PA MA SAIF NASDAQ 03/27/87 CZF CitiSave Financial Corp Baton Rouge LA SW SAIF AMSE 07/14/95 DIBK Dime Financial Corp. Wallingford CT NE BIF NASDAQ 07/09/86 DME Dime Bancorp, Inc. New York NY MA BIF NYSE 08/19/86 DNFC D & N Financial Corp. Hancock MI MW SAIF NASDAQ 02/13/85 DSL Downey Financial Corp. Newport Beach CA WE SAIF NYSE 01/01/71 EBSI Eagle Bancshares Tucker GA SE SAIF NASDAQ 04/01/86 EFBI Enterprise Federal Bancorp West Chester OH MW SAIF NASDAQ 10/17/94 EGFC Eagle Financial Corp. Bristol CT NE SAIF NASDAQ 02/03/87 EIRE Emerald Isle Bancorp, Inc. Quincy MA NE BIF NASDAQ 09/08/86 EQSB Equitable Federal Savings Bank Wheaton MD MA SAIF NASDAQ 09/10/93
SOURCE: SNL SECURITIES AND F&C CALCULATIONS. 1 82 FERGUSON & CO., LLP EXHIBIT II.1 - PUBLICLY TRADED THRIFTS - SELECT
Deposit Ticker Short Name City State Region (BIF/SAIF) Exchange IPO Date Insurance Agency AADV Advantage Bancorp, Inc. Kenosha WI MW SAIF NASDAQ 03/23/92 ETFS East Texas Financial Services Tyler TX SW SAIF NASDAQ 01/10/95 FBBC First Bell Bancorp, Inc. Pittsburgh PA MA SAIF NASDAQ 06/29/95 FBCI Fidelity Bancorp, Inc. Chicago IL MW SAIF NASDAQ 12/15/93 FBHC Fort Bend Holding Corp. Rosenberg TX SW SAIF NASDAQ 06/30/93 FBSI First Bancshares, Inc. Mountain Grove MO MW SAIF NASDAQ 12/22/93 FCIT First Citizens Financial Corp. Gaithersburg MD MA SAIF NASDAQ 12/17/86 FCME First Coastal Corporation Westbrook ME NE BIF NASDAQ NA FED FirstFed Financial Corp. Santa Monica CA WE SAIF NYSE 12/16/83 FESX First Essex Bancorp, Inc. Andover MA NE BIF NASDAQ 08/04/87 FFBI First Financial Bancorp, Inc. Belvidere IL MW SAIF NASDAQ 10/04/93 FFBS FFBS BanCorp, Inc. Columbus MS SE SAIF NASDAQ 07/01/93 FFBZ First Federal Bancorp, Inc. Zanesville OH MW SAIF NASDAQ 07/13/92 FFCH First Financial Holdings Inc. Charleston SC SE SAIF NASDAQ 11/10/83 FFES First Federal of East Hartford East Hartford CT NE SAIF NASDAQ 06/23/87 FFFC FFVA Financial Corp. Lynchburg VA SE SAIF NASDAQ 10/12/94 FFFG F.F.O. Financial Group, Inc. St. Cloud FL SE SAIF NASDAQ 10/13/88 FFHC First Financial Corp. Stevens Point WI MW SAIF NASDAQ 12/24/80 FFHH FSF Financial Corp. Hutchinson MN MW SAIF NASDAQ 10/07/94 FFHS First Franklin Corporation Cincinnati OH MW SAIF NASDAQ 01/26/88 FFKY First Federal Financial Corp. Elizabethtown KY MW SAIF NASDAQ 07/15/87 FFLC FFLC Bancorp, Inc. Leesburg FL SE SAIF NASDAQ 01/04/94 FFSL First Independence Corp. Independence KS MW SAIF NASDAQ 10/08/93 FFSW FirstFederal Financial Svcs Wooster OH MW SAIF NASDAQ 03/31/87 FFWC FFW Corp. Wabash IN MW SAIF NASDAQ 04/05/93 FFWD Wood Bancorp, Inc. Bowling Green OH MW SAIF NASDAQ 08/31/93 FFYF FFY Financial Corp. Youngstown OH MW SAIF NASDAQ 06/28/93 FGHC First Georgia Holding, Inc. Brunswick GA SE SAIF NASDAQ 02/11/87 FIBC Financial Bancorp, Inc. Long Island City NY MA SAIF NASDAQ 08/17/94 FISB First Indiana Corporation Indianapolis IN MW SAIF NASDAQ 08/02/83 FKFS First Keystone Financial Media PA MA SAIF NASDAQ 01/26/95 FKKY Frankfort First Bancorp, Inc. Frankfort KY MW SAIF NASDAQ 07/10/95 FLFC First Liberty Financial Corp. Macon GA SE SAIF NASDAQ 12/06/83 FMCO FMS Financial Corporation Burlington NJ MA SAIF NASDAQ 12/14/88 FMSB First Mutual Savings Bank Bellevue WA WE BIF NASDAQ 12/17/85 FNGB First Northern Capital Corp. Green Bay WI MW SAIF NASDAQ 12/29/83 FOBC Fed One Bancorp Wheeling WV SE SAIF NASDAQ 01/19/95 FRC First Republic Bancorp San Francisco CA WE BIF NYSE NA FSBI Fidelity Bancorp, Inc. Pittsburgh PA MA SAIF NASDAQ 06/24/88 FSFC First Southeast Financial Corp Anderson SC SE SAIF NASDAQ 10/08/93 FSPG First Home Bancorp, Inc. Pennsville NJ MA SAIF NASDAQ 04/20/87 FTF Texarkana First Financial Corp Texarkana AR SE SAIF AMSE 07/07/95 FTFC First Federal Capital Corp. La Crosse WI MW SAIF NASDAQ 11/02/89 FTSB Fort Thomas Financial Corp. Fort Thomas KY MW SAIF NASDAQ 06/28/95 GBCI Glacier Bancorp, Inc. Kalispell MT WE SAIF NASDAQ 03/30/84 GDW Golden West Financial Oakland CA WE SAIF NYSE 05/29/59 GFCO Glenway Financial Corp. Cincinnati OH MW SAIF NASDAQ 11/30/90 GFSB GFS Bancorp, Inc. Grinnell IA MW SAIF NASDAQ 01/06/94 GLBK Glendale Co-Operative Bank Everett MA NE BIF NASDAQ 01/10/94 GLN Glendale Federal Bank, FSB Glendale CA WE SAIF NYSE 10/01/83 GPT GreenPoint Financial Corp. Flushing NY MA BIF NYSE 01/28/94 GRTR Greater New York Savings Bank New York NY MA BIF NASDAQ 06/17/87 GSBC Great Southern Bancorp, Inc. Springfield MO MW SAIF NASDAQ 12/14/89 GSLC Guaranty Financial Corp. Charlottesville VA SE SAIF NASDAQ NA GTFN Great Financial Corporation Louisville KY MW SAIF NASDAQ 03/31/94 GUPB GFSB Bancorp, Inc. Gallup NM SW SAIF NASDAQ 06/30/95 GWF Great Western Financial Chatsworth CA WE SAIF NYSE NA HALL Hallmark Capital Corp. West Allis WI MW SAIF NASDAQ 01/03/94
SOURCE: SNL SECURITIES AND F&C CALCULATIONS. 2 83 FERGUSON & CO., LLP EXHIBIT II.1 - PUBLICLY TRADED THRIFTS - SELECT
Deposit Ticker Short Name City State Region (BIF/SAIF) Exchange IPO Date Insurance Agency AADV Advantage Bancorp, Inc. Kenosha WI MW SAIF NASDAQ 03/23/92 HARL Harleysville Savings Bank Harleysville PA MA SAIF NASDAQ 08/04/87 HAVN Haven Bancorp, Inc. Woodhaven NY MA SAIF NASDAQ 09/23/93 HBFW Home Bancorp Fort Wayne IN MW SAIF NASDAQ 03/30/95 HBS Haywood Bancshares, Inc. Waynesville NC SE BIF AMSE 12/18/87 HFFC HF Financial Corp. Sioux Falls SD MW SAIF NASDAQ 04/08/92 HFGI Harrington Financial Group Richmond IN MW SAIF NASDAQ NA HFSA Hardin Bancorp, Inc. Hardin MO MW SAIF NASDAQ 09/29/95 HHFC Harvest Home Financial Corp. Cheviot OH MW SAIF NASDAQ 10/10/94 HIFS Hingham Instit. for Savings Hingham MA NE BIF NASDAQ 12/20/88 HMCI HomeCorp, Inc. Rockford IL MW SAIF NASDAQ 06/22/90 HMNF HMN Financial, Inc. Spring Valley MN MW SAIF NASDAQ 06/30/94 HOMF Home Federal Bancorp Seymour IN MW SAIF NASDAQ 01/23/88 HPBC Home Port Bancorp, Inc. Nantucket MA NE BIF NASDAQ 08/25/88 HRBF Harbor Federal Bancorp, Inc. Baltimore MD MA SAIF NASDAQ 08/12/94 HRZB Horizon Financial Corp. Bellingham WA WE BIF NASDAQ 08/01/86 HTHR Hawthorne Financial Corp. El Segundo CA WE SAIF NASDAQ NA HVFD Haverfield Corporation Cleveland OH MW SAIF NASDAQ 03/19/85 IBSF IBS Financial Corp. Cherry Hill NJ MA SAIF NASDAQ 10/13/94 IFSB Independence Federal Savings Washington DC MA SAIF NASDAQ 06/06/85 INBI Industrial Bancorp Bellevue OH MW SAIF NASDAQ 08/01/95 IPSW Ipswich Savings Bank Ipswich MA NE BIF NASDAQ 05/26/93 IROQ Iroquois Bancorp, Inc. Auburn NY MA BIF NASDAQ 01/22/86 ISBF ISB Financial Corporation New Iberia LA SW SAIF NASDAQ 04/07/95 IWBK InterWest Bancorp, Inc. Oak Harbor WA WE SAIF NASDAQ NA JSBA Jefferson Savings Bancorp Ballwin MO MW SAIF NASDAQ 04/08/93 JSBF JSB Financial, Inc. Lynbrook NY MA BIF NASDAQ 06/27/90 KNK Kankakee Bancorp, Inc. Kankakee IL MW SAIF AMSE 01/06/93 KSAV KS Bancorp, Inc. Kenly NC SE SAIF NASDAQ 12/30/93 KSBK KSB Bancorp, Inc. Kingfield ME NE BIF NASDAQ 06/24/93 KYF Kentucky First Bancorp, Inc. Cynthiana KY MW SAIF AMSE 08/29/95 LARK Landmark Bancshares, Inc. Dodge City KS MW SAIF NASDAQ 03/28/94 LARL Laurel Capital Group, Inc. Allison Park PA MA SAIF NASDAQ 02/20/87 LIFB Life Bancorp, Inc. Norfolk VA SE SAIF NASDAQ 10/11/94 LISB Long Island Bancorp, Inc. Melville NY MA SAIF NASDAQ 04/18/94 LOGN Logansport Financial Corp. Logansport IN MW SAIF NASDAQ 06/14/95 LSBI LSB Financial Corp. Lafayette IN MW BIF NASDAQ 02/03/95 LSBX Lawrence Savings Bank North Andover MA NE BIF NASDAQ 05/02/86 LVSB Lakeview Financial West Paterson NJ MA SAIF NASDAQ 12/22/93 MAFB MAF Bancorp, Inc. Clarendon Hills IL MW SAIF NASDAQ 01/12/90 MARN Marion Capital Holdings Marion IN MW SAIF NASDAQ 03/18/93 MASB MASSBANK Corp. Reading MA NE BIF NASDAQ 05/28/86 MBB MSB Bancorp, Inc. Goshen NY MA BIF AMSE 09/03/92 MBB MSB Bancorp, Inc. Goshen NY MA BIF AMSE NA MBLF MBLA Financial Corp. Macon MO MW SAIF NASDAQ 06/24/93 MCBN Mid-Coast Bancorp, Inc. Waldoboro ME NE SAIF NASDAQ 11/02/89 MCBS Mid Continent Bancshares Inc. El Dorado KS MW SAIF NASDAQ 06/27/94 MDBK Medford Savings Bank Medford MA NE BIF NASDAQ 03/18/86 MERI Meritrust Federal SB Thibodaux LA SW SAIF NASDAQ NA MFBC MFB Corp. Mishawaka IN MW SAIF NASDAQ 03/25/94 MFFC Milton Federal Financial Corp. West Milton OH MW SAIF NASDAQ 10/07/94 MFLR Mayflower Co-operative Bank Middleboro MA NE BIF NASDAQ 12/23/87 MFSL Maryland Federal Bancorp Hyattsville MD MA SAIF NASDAQ 06/02/87 MGNL Magna Bancorp, Inc. Hattiesburg MS SE SAIF NASDAQ 03/13/91 MIDC MidConn Bank Kensington CT NE BIF NASDAQ 09/11/86 MIFC Mid-Iowa Financial Corp. Newton IA MW SAIF NASDAQ 10/14/92 MIVI Mississippi View Holding Co. Little Falls MN MW SAIF NASDAQ 03/24/95 MLBC ML Bancorp, Inc. Villanova PA MA SAIF NASDAQ 08/11/94
SOURCE: SNL SECURITIES AND F&C CALCULATIONS. 3 84 FERGUSON & CO., LLP EXHIBIT II.1 - PUBLICLY TRADED THRIFTS - SELECT
Deposit Ticker Short Name City State Region (BIF/SAIF) Exchange IPO Date Insurance Agency AADV Advantage Bancorp, Inc. Kenosha WI MW SAIF NASDAQ 03/23/92 MSBF MSB Financial, Inc. Marshall MI MW SAIF NASDAQ 02/06/95 MWBI Midwest Bancshares, Inc. Burlington IA MW SAIF NASDAQ 11/12/92 MWBX MetroWest Bank Framingham MA NE BIF NASDAQ 10/10/86 MWFD Midwest Federal Financial Baraboo WI MW SAIF NASDAQ 07/08/92 NASB North American Savings Bank Grandview MO MW SAIF NASDAQ 09/27/85 NEIB Northeast Indiana Bancorp Huntington IN MW SAIF NASDAQ 06/28/95 NFSL Newnan Holdings, Inc. Newnan GA SE SAIF NASDAQ 03/01/86 NHTB New Hampshire Thrift Bncshrs New London NH NE SAIF NASDAQ 05/22/86 NMSB NewMil Bancorp, Inc. New Milford CT NE BIF NASDAQ 02/01/86 NSLB NS&L Bancorp, Inc. Neosho MO MW SAIF NASDAQ 06/08/95 NSSB Norwich Financial Corp. Norwich CT NE BIF NASDAQ 11/14/86 NSSY Norwalk Savings Society Norwalk CT NE BIF NASDAQ 06/16/94 NTMG Nutmeg Federal S&LA Danbury CT NE SAIF NASDAQ NA NWEQ Northwest Equity Corp. Amery WI MW SAIF NASDAQ 10/11/94 NYB New York Bancorp Inc. Douglaston NY MA SAIF NYSE 01/28/88 OFCP Ottawa Financial Corp. Holland MI MW SAIF NASDAQ 08/19/94 OHSL OHSL Financial Corp. Cincinnati OH MW SAIF NASDAQ 02/10/93 PALM Palfed, Inc. Aiken SC SE SAIF NASDAQ 12/15/85 PBCI Pamrapo Bancorp, Inc. Bayonne NJ MA SAIF NASDAQ 11/14/89 PBKB People's Bancshares, Inc. South Easton MA NE BIF NASDAQ 10/23/86 PBNB People's Savings Financial Cp. New Britain CT NE BIF NASDAQ 08/20/86 PCBC Perry County Financial Corp. Perryville MO MW SAIF NASDAQ 02/13/95 PCCI Pacific Crest Capital Agoura Hills CA WE BIF NASDAQ NA PFDC Peoples Bancorp Auburn IN MW SAIF NASDAQ 07/07/87 PFNC Progress Financial Corporation Blue Bell PA MA SAIF NASDAQ 07/18/83 PFSB PennFed Financial Services,Inc West Orange NJ MA SAIF NASDAQ 07/15/94 PHBK Peoples Heritage Finl Group Portland ME NE BIF NASDAQ 12/04/86 PKPS Poughkeepsie Savings Bank, FSB Poughkeepsie NY MA SAIF NASDAQ 11/19/85 PLE Pinnacle Bank Jasper AL SE SAIF AMSE 12/17/86 POBS Portsmouth Bank Shares Portsmouth NH NE BIF NASDAQ 02/09/88 PSAB Prime Bancorp, Inc. Philadelphia PA MA SAIF NASDAQ 11/21/88 PSBK Progressive Bank, Inc. Fishkill NY MA BIF NASDAQ 08/01/84 PTRS Potters Financial Corp. East Liverpool OH MW SAIF NASDAQ 12/31/93 PULS Pulse Bancorp South River NJ MA SAIF NASDAQ 09/18/86 PVFC PVF Capital Corp. Bedford Heights OH MW SAIF NASDAQ 12/30/92 PVSA Parkvale Financial Corporation Monroeville PA MA SAIF NASDAQ 07/16/87 PWBC PennFirst Bancorp, Inc. Ellwood City PA MA SAIF NASDAQ 06/13/90 QCBC Quaker City Bancorp, Inc. Whittier CA WE SAIF NASDAQ 12/30/93 QCFB QCF Bancorp, Inc. Virginia MN MW SAIF NASDAQ 04/03/95 QCSB Queens County Bancorp, Inc. Flushing NY MA BIF NASDAQ 11/23/93 RARB Raritan Bancorp Inc. Raritan NJ MA BIF NASDAQ 03/01/87 RCSB RCSB Financial, Inc. Rochester NY MA BIF NASDAQ 04/29/86 RELY Reliance Bancorp, Inc. Garden City NY MA SAIF NASDAQ 03/31/94 RFED Roosevelt Financial Group Chesterfield MO MW SAIF NASDAQ 01/23/87 ROSE TR Financial Corp. Garden City NY MA BIF NASDAQ 06/29/93 SBCN Suburban Bancorporation, Inc. Cincinnati OH MW SAIF NASDAQ 09/30/93 SCCB S. Carolina Community Bancshrs Winnsboro SC SE SAIF NASDAQ 07/07/94 SECP Security Capital Corporation Milwaukee WI MW SAIF NASDAQ 01/03/94 SFED SFS Bancorp, Inc. Schenectady NY MA SAIF NASDAQ 06/30/95 SFFC StateFed Financial Corporation Des Moines IA MW SAIF NASDAQ 01/05/94 SFSB SuburbFed Financial Corp. Flossmoor IL MW SAIF NASDAQ 03/04/92 SFSL Security First Corp. Mayfield Heights OH MW SAIF NASDAQ 01/22/88 SHEN First Shenango Bancorp, Inc. New Castle PA MA SAIF NASDAQ 04/06/93 SISB SIS Bancorp, Inc. Springfield MA NE BIF NASDAQ 02/08/95 SMBC Southern Missouri Bancorp, Inc Poplar Bluff MO MW SAIF NASDAQ 04/13/94 SMFC Sho-Me Financial Corp. Mt. Vernon MO MW SAIF NASDAQ 07/01/94 SOPN First Savings Bancorp, Inc. Southern Pines NC SE SAIF NASDAQ 01/06/94
SOURCE: SNL SECURITIES AND F&C CALCULATIONS. 4 85 FERGUSON & CO., LLP EXHIBIT II.1 - PUBLICLY TRADED THRIFTS - SELECT
Deposit Ticker Short Name City State Region (BIF/SAIF) Exchange IPO Date Insurance Agency AADV Advantage Bancorp, Inc. Kenosha WI MW SAIF NASDAQ 03/23/92 SOSA Somerset Savings Bank Somerville MA NE BIF NASDAQ 07/09/86 SPBC St. Paul Bancorp, Inc. Chicago IL MW SAIF NASDAQ 05/18/87 SSBK Strongsville Savings Bank Strongsville OH MW SAIF NASDAQ NA STFR St. Francis Capital Corp. Milwaukee WI MW SAIF NASDAQ 06/21/93 STND Standard Financial, Inc. Chicago IL MW SAIF NASDAQ 08/01/94 STSA Sterling Financial Corp. Spokane WA WE SAIF NASDAQ NA SVRN Sovereign Bancorp, Inc. Wyomissing PA MA SAIF NASDAQ 08/12/86 SWBI Southwest Bancshares Hometown IL MW SAIF NASDAQ 06/24/92 SWCB Sandwich Co-operative Bank Sandwich MA NE BIF NASDAQ 07/25/86 TBK Tolland Bank Tolland CT NE BIF AMSE 12/19/86 TCB TCF Financial Corp. Minneapolis MN MW SAIF NYSE 06/17/86 THR Three Rivers Financial Corp. Three Rivers MI MW SAIF AMSE 08/24/95 THRD TF Financial Corporation Newtown PA MA SAIF NASDAQ 07/13/94 TRIC Tri-County Bancorp, Inc. Torrington WY WE SAIF NASDAQ 09/30/93 TSH Teche Holding Co. Franklin LA SW SAIF AMSE 04/19/95 TWIN Twin City Bancorp Bristol TN SE SAIF NASDAQ 01/04/95 UBMT United Financial Corp. Great Falls MT WE SAIF NASDAQ 09/23/86 UFRM United Federal Savings Bank Rocky Mount NC SE SAIF NASDAQ 07/01/80 VFFC Virginia First Financial Corp. Petersburg VA SE SAIF NASDAQ 01/01/78 WAMU Washington Mutual Inc. Seattle WA WE BIF NASDAQ 03/11/83 WBST Webster Financial Corporation Waterbury CT NE SAIF NASDAQ 12/12/86 WCBI Westco Bancorp Westchester IL MW SAIF NASDAQ 06/26/92 WEFC Wells Financial Corp. Wells MN MW SAIF NASDAQ 04/11/95 WFCO Winton Financial Corp. Cincinnati OH MW SAIF NASDAQ 08/04/88 WFSL Washington Federal, Inc. Seattle WA WE SAIF NASDAQ 11/17/82 WRNB Warren Bancorp, Inc. Peabody MA NE BIF NASDAQ 07/09/86 WSB Washington Savings Bank, FSB Waldorf MD MA SAIF AMSE NA WSFS WSFS Financial Corporation Wilmington DE MA BIF NASDAQ 11/26/86 WSTR WesterFed Financial Corp. Missoula MT WE SAIF NASDAQ 01/10/94 WVFC WVS Financial Corporation Pittsburgh PA MA SAIF NASDAQ 11/29/93 YFED York Financial Corp. York PA MA SAIF NASDAQ 02/01/84
Maximum Minimum Average Median Removed: Merger Targets. Stock with PE ratio greater than 25 MHC SOURCE: SNL SECURITIES AND F&C CALCULATIONS. 5 86 FERGUSON & CO., LLP EXHIBIT II.1 - PUBLICLY TRADED THRIFTS - SELECT
Current Current Price/ Current Current Current Ticker ($) ($M) (x) (%) (%) (%) (%) Stock Market LTM Price/ Price/ Tang Price/ Dividend Price Value Core EPS Book Value Book Value Assets Yield AADV 32.000 108.57 14.88 127.59 138.35 10.68 1.00 ABBK 19.500 36.79 13.36 113.57 127.70 7.60 2.05 ABCW 35.375 163.64 12.28 148.14 152.22 8.66 1.41 AFFFZ 28.750 172.80 11.32 115.74 118.17 7.76 5.57 AHM 32.875 3,468.19 17.03 174.31 207.81 6.86 2.68 ALBK 31.625 414.00 14.44 131.94 153.67 11.80 1.90 AMFB 19.125 209.82 12.26 193.18 209.02 15.02 2.09 ANBK 12.000 43.24 18.18 92.81 92.81 8.89 1.00 ANDB 25.250 129.54 10.65 139.50 139.50 10.78 2.38 ASBI 15.625 51.22 15.32 117.75 117.92 12.81 3.84 ASFC 38.000 817.43 16.03 144.38 176.25 11.25 1.16 BANC 13.250 194.01 13.95 139.62 150.23 8.99 1.10 BDJI 18.250 12.79 19.84 103.75 103.75 11.92 - BFSB 17.500 20.01 11.74 103.24 103.24 15.71 2.74 BKC 28.125 64.43 15.29 140.91 147.95 11.76 4.84 BKCO 20.250 250.66 10.66 133.66 136.18 10.76 3.16 BKCT 22.500 59.43 13.98 137.36 137.36 14.90 3.56 BKUNA 9.063 49.43 18.50 115.45 122.14 6.27 - BSBC 4.000 20.72 15.38 163.27 163.27 14.91 2.00 BVFS 41.500 275.57 17.01 142.27 150.74 8.04 1.45 CAFI 16.250 33.73 10.69 117.67 117.67 8.92 2.95 CAPS 13.000 24.39 12.87 124.88 124.88 10.55 1.85 CARV 8.375 19.38 20.43 55.98 58.65 5.31 - CASB 16.000 32.81 22.22 159.36 159.36 9.64 - CASH 25.000 48.64 14.45 113.95 122.01 13.00 2.16 CBCI 32.625 77.55 14.12 97.45 97.45 15.74 - CBCO 24.125 28.04 11.77 144.72 144.72 14.02 5.39 CBIN 12.750 25.29 12.88 99.30 99.53 10.78 2.67 CBNH 20.250 49.19 14.06 125.70 125.70 8.96 3.16 CBSA 23.000 114.17 10.41 127.49 154.78 3.99 1.74 CEBK 17.750 34.88 18.88 108.90 123.61 10.70 1.80 CENF 28.500 145.39 10.96 133.49 133.74 6.73 1.26 CFB 47.125 674.27 12.30 181.53 203.21 9.79 0.89 CFCP 21.000 72.16 19.27 261.19 261.19 15.94 2.10 CFFC 21.000 26.71 12.73 119.39 119.39 16.61 2.48 CFSB 20.000 96.51 13.99 153.49 153.49 11.89 2.40 CFX 15.375 197.88 13.85 152.99 164.97 13.01 5.72 CIBI 16.250 10.83 12.31 95.64 95.64 11.42 2.46 CKFB 19.750 18.59 24.38 117.56 117.56 31.04 2.23 CMRN 15.625 44.53 15.94 96.09 96.09 25.33 1.79 CNIT 40.250 65.75 16.63 136.21 149.52 9.58 2.48 CNSK 14.250 39.08 21.27 182.93 182.93 10.09 - COFD 33.875 690.10 12.36 189.56 202.48 13.14 2.95 COFI 40.750 1,899.19 12.46 209.19 226.39 13.78 2.26 CSA 36.875 685.27 17.90 165.80 168.46 8.02 - CTBK 16.250 15.41 11.44 96.84 96.84 6.35 2.46 CTZN 32.750 281.05 15.60 160.62 183.47 10.23 0.98 CVAL 19.000 31.08 12.93 123.70 123.70 10.93 2.32 CZF 13.750 13.23 15.63 109.04 109.04 17.49 2.91 DIBK 17.250 88.48 6.87 148.96 155.55 12.79 1.86 DME 15.125 1,610.01 12.93 157.55 159.04 8.18 - DNFC 16.313 123.77 10.73 160.56 162.80 8.79 - DSL 18.875 480.55 14.63 125.25 127.36 9.70 1.70 EBSI 14.500 66.01 11.07 114.90 114.90 10.28 4.14 EFBI 15.250 31.56 23.46 100.13 100.33 14.79 - EGFC 29.000 131.49 16.29 129.99 177.26 9.35 3.17 EIRE 19.000 33.55 13.77 125.16 125.16 8.55 1.84 EQSB 26.875 16.13 8.59 113.68 113.68 6.02 -
SOURCE: SNL SECURITIES AND F&C CALCULATIONS. 6 87 FERGUSON & CO., LLP EXHIBIT II.1 - PUBLICLY TRADED THRIFTS - SELECT
Current Current Price/ Current Current Current Ticker ($) ($M) (x) (%) (%) (%) (%) Stock Market LTM Price/ Price/ Tang Price/ Dividend Price Value Core EPS Book Value Book Value Assets Yield AADV 32.000 108.57 14.88 127.59 138.35 10.68 1.00 ETFS 16.375 17.67 21.55 85.11 85.11 16.10 1.22 FBBC 13.500 104.74 11.64 98.47 98.47 18.15 2.96 FBCI 17.000 48.72 15.89 99.77 100.12 10.24 1.41 FBHC 25.000 20.48 16.23 117.70 127.42 7.27 1.12 FBSI 16.625 20.06 14.33 88.01 88.15 13.00 1.20 FCIT 18.250 53.42 14.15 135.09 135.09 7.99 - FCME 7.625 10.35 2.38 126.24 126.24 7.59 - FED 23.125 243.22 20.46 132.22 134.37 5.80 - FESX 13.500 81.80 11.84 126.52 126.52 9.41 3.56 FFBI 15.875 7.18 22.36 95.63 95.63 7.39 - FFBS 23.000 36.12 20.18 138.39 138.39 28.73 2.17 FFBZ 16.000 25.12 14.16 193.94 194.17 13.62 1.50 FFCH 22.750 144.63 12.30 152.58 152.58 9.35 3.17 FFES 23.000 60.14 10.04 104.31 104.55 6.38 2.61 FFFC 21.250 106.73 16.73 125.96 128.63 20.13 1.88 FFFG 2.938 24.77 13.35 131.75 131.75 7.96 - FFHC 28.500 853.08 12.50 212.53 220.08 15.24 2.63 FFHH 14.750 48.73 22.01 95.16 95.16 14.47 3.39 FFHS 16.000 18.53 14.95 93.79 94.56 8.49 2.00 FFKY 20.250 84.98 17.31 172.63 184.59 23.78 2.37 FFLC 20.500 51.13 16.80 95.00 95.00 15.41 1.95 FFSL 19.625 11.45 12.50 88.04 88.04 10.55 2.04 FFSW 39.750 143.60 18.32 263.77 322.91 12.93 1.21 FFWC 21.750 15.27 9.98 98.68 98.68 9.88 2.76 FFWD 16.250 24.34 14.64 121.27 121.27 15.97 2.22 FFYF 25.875 132.41 17.48 129.50 129.50 21.97 2.71 FGHC 8.625 17.45 15.97 145.69 163.66 12.12 0.93 FIBC 15.000 26.86 12.82 104.17 104.75 10.07 2.00 FISB 25.375 210.47 20.46 155.67 157.80 14.17 2.21 FKFS 19.375 25.04 12.34 108.48 108.48 8.51 1.03 FKKY 10.875 37.41 24.17 110.52 110.52 29.06 3.31 FLFC 18.750 113.81 15.37 164.62 194.50 11.36 2.13 FMCO 17.375 42.65 10.04 126.73 129.66 8.27 1.15 FMSB 18.000 44.15 12.41 166.82 166.82 11.02 1.11 FNGB 16.250 71.19 15.63 102.59 102.59 11.71 3.69 FOBC 15.750 38.87 11.93 94.77 99.87 11.50 3.68 FRC 17.000 125.15 15.04 105.99 106.12 5.90 - FSBI 19.000 26.09 11.66 119.80 120.03 8.21 1.68 FSFC 9.375 41.14 13.20 124.17 124.17 12.49 2.13 FSPG 19.500 39.59 8.55 125.81 128.63 8.13 2.46 FTF 15.250 28.74 9.47 108.77 108.77 17.34 2.95 FTFC 23.500 144.07 14.24 155.63 165.03 9.87 2.72 FTSB 14.625 23.02 17.84 106.36 106.36 25.90 1.71 GBCI 24.000 81.03 13.19 207.97 208.15 19.65 2.67 GDW 65.375 3,750.95 8.85 165.21 165.21 10.13 0.67 GFCO 20.500 23.60 13.85 89.60 91.44 8.32 3.32 GFSB 20.500 10.30 11.45 104.54 104.54 12.09 1.95 GLBK 20.000 4.95 20.83 82.47 82.47 13.38 - GLN 23.625 1,114.29 24.11 160.50 173.08 7.38 - GPT 48.875 2,329.19 19.63 144.22 261.22 17.37 1.64 GRTR 13.625 183.52 20.34 122.20 122.20 7.13 1.47 GSBC 18.000 157.14 16.07 235.91 235.91 23.89 2.22 GSLC 8.750 8.09 14.58 127.00 127.00 6.98 1.14 GTFN 29.125 412.23 22.58 151.14 157.69 14.59 1.65 GUPB 16.000 14.42 20.25 97.80 97.80 18.09 2.50 GWF 29.625 4,079.67 14.17 166.06 188.81 9.35 3.38 HALL 17.625 25.43 13.25 93.65 93.65 6.56 -
SOURCE: SNL SECURITIES AND F&C CALCULATIONS. 7 88 FERGUSON & CO., LLP EXHIBIT II.1 - PUBLICLY TRADED THRIFTS - SELECT
Current Current Price/ Current Current Current Ticker ($) ($M) (x) (%) (%) (%) (%) Stock Market LTM Price/ Price/ Tang Price/ Dividend Price Value Core EPS Book Value Book Value Assets Yield AADV 32.000 108.57 14.88 127.59 138.35 10.68 1.00 HARL 19.000 24.55 10.00 125.16 125.16 7.78 2.32 HAVN 28.750 124.28 9.55 132.31 133.10 7.94 2.09 HBFW 18.500 49.07 21.02 109.08 109.08 16.91 1.08 HBS 18.250 21.92 16.29 109.15 113.64 16.75 3.07 HFFC 17.250 50.18 12.87 104.80 105.12 9.06 2.09 HFGI 10.125 32.97 16.07 142.01 142.01 6.17 - HFSA 12.000 11.46 17.65 81.86 81.86 13.74 3.33 HHFC 9.250 8.65 14.68 67.72 67.72 11.32 4.32 HIFS 18.250 23.68 12.33 126.39 126.39 12.26 1.97 HMCI 18.500 20.88 19.89 102.21 102.21 6.13 - HMNF 18.125 84.59 16.78 101.26 101.26 14.98 - HOMF 36.000 80.15 12.00 155.17 161.00 12.65 1.67 HPBC 16.500 30.39 10.00 154.78 154.78 16.11 4.85 HRBF 15.250 26.75 24.60 97.38 97.38 12.51 2.62 HRZB 13.375 86.39 12.16 108.92 108.92 17.36 2.99 HTHR 8.125 21.12 14.01 66.33 66.33 2.55 - HVFD 18.500 35.27 13.31 127.85 128.03 10.06 2.92 IBSF 15.500 166.69 22.46 115.50 115.50 22.46 2.07 IFSB 7.750 9.92 19.87 59.52 68.71 4.00 2.84 INBI 12.375 68.74 14.73 113.32 113.32 21.45 3.23 IPSW 12.000 14.21 10.62 152.09 152.09 8.98 1.67 IROQ 16.750 39.54 9.63 137.63 153.67 8.35 1.91 ISBF 18.000 126.92 17.48 105.32 108.56 18.51 1.89 IWBK 32.625 258.33 15.25 232.70 238.84 15.09 1.72 JSBA 23.250 97.23 13.52 107.69 130.69 8.62 1.38 JSBF 37.688 368.53 15.97 112.17 112.17 24.23 3.18 KNK 24.000 33.96 16.78 96.04 103.18 9.62 1.67 KSAV 20.875 13.85 12.89 100.22 100.31 14.40 2.87 KSBK 23.000 9.45 6.85 101.32 108.85 7.05 0.87 KYF 11.250 15.62 15.85 81.64 81.64 18.16 4.44 LARK 18.625 34.51 19.61 106.55 106.55 16.15 2.15 LARL 15.875 24.06 9.28 114.46 114.46 11.91 2.77 LIFB 17.938 176.63 15.60 121.45 125.62 12.57 2.45 LISB 34.125 840.98 21.20 162.04 162.04 15.68 1.17 LOGN 11.250 14.88 13.39 93.44 93.44 18.66 3.56 LSBI 19.500 17.90 24.07 99.19 99.19 10.06 1.64 LSBX 7.938 33.74 7.22 124.42 124.42 10.21 - LVSB 24.750 61.56 16.50 127.12 159.57 13.02 1.01 MAFB 34.625 363.06 12.06 150.15 175.49 11.48 1.04 MARN 20.000 36.85 15.63 93.02 93.02 21.11 4.00 MASB 38.000 101.99 11.95 116.60 116.60 11.60 2.53 MBB 19.000 53.84 18.45 96.99 246.75 6.35 3.16 MBB 19.000 53.84 18.45 96.99 246.75 6.35 3.16 MBLF 19.000 25.73 17.59 91.92 91.92 11.31 2.11 MCBN 18.750 4.31 13.99 87.78 87.78 7.71 2.77 MCBS 25.250 50.92 13.02 132.48 132.55 14.99 1.58 MDBK 26.000 117.89 12.38 130.20 141.92 11.69 2.62 MERI 31.625 24.48 12.65 145.94 145.94 10.60 2.21 MFBC 16.875 33.31 21.92 88.68 88.68 14.75 1.90 MFFC 14.188 32.19 22.52 96.12 96.12 17.80 3.95 MFLR 16.750 14.90 15.65 129.84 132.41 12.81 2.87 MFSL 34.125 106.80 17.06 117.59 119.44 9.47 1.93 MGNL 19.500 267.95 12.83 212.88 223.37 20.58 3.08 MIDC 19.750 38.24 16.74 109.72 130.28 10.67 3.04 MIFC 6.250 10.36 10.42 97.35 97.50 9.13 1.28 MIVI 12.000 10.53 13.19 85.59 85.59 15.75 1.33 MLBC 14.750 172.04 14.46 117.53 121.40 9.27 2.58
SOURCE: SNL SECURITIES AND F&C CALCULATIONS. 8 89 FERGUSON & CO., LLP EXHIBIT II.1 - PUBLICLY TRADED THRIFTS - SELECT
Current Current Price/ Current Current Current Ticker ($) ($M) (x) (%) (%) (%) (%) Stock Market LTM Price/ Price/ Tang Price/ Dividend Price Value Core EPS Book Value Book Value Assets Yield AADV 32.000 108.57 14.88 127.59 138.35 10.68 1.00 MSBF 19.000 12.42 12.34 98.60 98.60 19.76 2.63 MWBI 27.125 9.48 10.43 104.53 104.53 6.88 2.21 MWBX 5.250 72.92 11.41 190.22 190.22 14.62 1.91 MWFD 18.000 29.42 16.82 176.64 184.80 14.83 1.67 NASB 33.250 75.41 9.64 149.71 155.59 10.19 1.88 NEIB 13.625 25.48 15.31 95.35 95.35 16.63 2.35 NFSL 25.250 40.08 10.61 173.90 224.64 15.66 1.74 NHTB 11.750 19.95 13.20 103.89 103.89 7.56 4.26 NMSB 8.750 35.37 16.51 109.92 109.92 11.55 2.74 NSLB 13.625 11.49 23.09 86.07 86.07 20.06 3.67 NSSB 19.750 106.35 18.81 142.09 156.87 15.31 2.43 NSSY 23.750 56.80 18.70 128.87 134.33 8.91 0.84 NTMG 7.500 5.33 22.73 105.93 105.93 5.68 2.00 NWEQ 12.500 11.62 15.24 92.25 92.25 12.16 3.20 NYB 36.875 409.27 12.59 269.36 269.36 13.92 2.44 OFCP 17.000 88.05 17.71 116.84 147.83 10.64 2.12 OHSL 20.813 25.45 15.08 101.13 101.13 11.70 3.65 PALM 14.438 75.48 19.78 142.95 149.93 11.44 0.55 PBCI 19.000 61.39 13.87 112.36 113.30 16.91 4.74 PBKB 10.625 36.07 14.17 125.15 131.82 7.03 3.01 PBNB 27.750 52.85 13.88 117.49 126.14 11.49 3.32 PCBC 17.000 14.49 18.09 96.05 96.05 18.03 1.77 PCCI 11.500 34.04 12.37 141.98 141.98 12.84 - PFDC 19.500 45.35 10.89 106.27 106.27 16.19 3.08 PFNC 8.250 30.77 11.30 164.67 165.66 8.38 0.97 PFSB 20.125 97.67 11.50 99.48 123.92 8.55 1.39 PHBK 26.250 740.81 12.32 175.47 195.02 14.84 2.59 PKPS 5.250 65.90 3.55 93.92 93.92 7.66 1.91 PLE 16.875 15.02 9.99 101.35 105.07 7.83 4.27 POBS 14.000 80.35 16.87 120.07 120.07 29.91 4.29 PSAB 19.500 72.64 12.26 126.30 134.58 10.72 3.49 PSBK 22.750 88.03 9.44 121.98 139.40 10.01 2.34 PTRS 18.750 9.49 21.31 92.14 92.14 7.56 1.49 PULS 15.875 48.42 11.26 125.89 125.89 9.64 4.41 PVFC 15.250 35.43 7.66 157.70 157.70 10.26 - PVSA 26.125 105.59 11.77 154.04 154.59 11.42 1.99 PWBC 13.500 52.61 13.37 107.83 118.94 7.53 2.67 QCBC 16.375 62.23 18.40 93.36 93.68 8.43 - QCFB 18.000 25.67 11.92 98.15 98.15 17.31 - QCSB 48.375 370.88 16.34 179.50 179.50 27.99 2.07 RARB 23.375 35.80 11.81 128.93 131.62 10.11 2.57 RCSB 29.250 450.03 12.94 141.78 145.89 11.23 2.05 RELY 19.375 172.66 13.27 115.46 171.01 9.44 2.89 RFED 18.125 785.54 10.66 168.45 177.70 8.45 3.42 ROSE 31.875 285.25 12.26 132.65 132.65 9.09 2.51 SBCN 15.250 22.49 19.55 85.87 85.87 10.71 3.93 SCCB 15.000 11.03 22.06 89.07 89.07 25.51 4.00 SECP 73.500 676.61 18.15 129.17 129.17 19.36 1.22 SFED 14.750 18.86 14.60 89.07 89.07 11.36 1.63 SFFC 17.250 13.62 14.50 93.39 93.39 16.80 2.32 SFSB 20.250 25.36 15.34 99.90 100.45 6.49 1.58 SFSL 15.250 75.82 10.74 136.28 139.02 12.64 2.89 SHEN 22.750 51.37 20.68 111.41 111.41 13.38 2.11 SISB 22.750 130.19 5.29 129.93 129.93 10.13 - SMBC 14.375 23.54 15.63 93.40 93.40 14.70 3.48 SMFC 21.625 35.60 15.45 108.34 108.34 12.19 - SOPN 18.750 70.20 18.20 104.75 104.75 26.67 3.63
SOURCE: SNL SECURITIES AND F&C CALCULATIONS. 9 90 FERGUSON & CO., LLP EXHIBIT II.1 - PUBLICLY TRADED THRIFTS - SELECT
Current Current Price/ Current Current Current Ticker ($) ($M) (x) (%) (%) (%) (%) Stock Market LTM Price/ Price/ Tang Price/ Dividend Price Value Core EPS Book Value Book Value Assets Yield AADV 32.000 108.57 14.88 127.59 138.35 10.68 1.00 SOSA 2.000 33.30 13.33 114.94 114.94 6.52 - SPBC 28.000 506.29 14.07 136.25 136.72 11.84 1.71 SSBK 21.250 53.78 12.80 128.32 130.85 9.92 2.26 STFR 26.000 142.36 14.53 112.46 117.97 10.14 1.85 STND 20.500 332.04 19.71 126.08 126.31 14.19 1.56 STSA 15.000 83.06 22.06 142.45 174.01 5.42 - SVRN 12.875 635.17 16.30 165.91 242.01 6.78 0.65 SWBI 18.500 49.12 13.70 125.76 125.76 13.05 4.11 SWCB 28.750 54.32 14.38 143.32 151.80 11.79 4.17 TBK 12.000 13.89 12.24 96.54 100.50 6.09 1.00 TCB 44.000 1,534.29 16.00 293.72 306.62 21.57 1.71 THR 14.125 12.02 17.66 95.05 95.44 13.76 2.55 THRD 16.125 69.15 15.07 89.09 102.64 10.43 1.98 TRIC 18.000 10.96 17.31 86.50 86.50 13.79 2.78 TSH 13.750 48.69 14.03 93.16 93.16 12.83 3.64 TWIN 17.250 14.84 14.14 110.72 110.72 13.87 3.71 UBMT 19.250 23.55 15.04 96.78 96.78 21.82 4.78 UFRM 8.125 24.90 19.82 126.16 126.16 9.45 2.46 VFFC 13.125 75.38 13.53 123.36 127.18 9.65 0.76 WAMU 42.750 3,084.61 14.49 213.00 236.45 13.76 2.25 WBST 38.188 289.61 13.84 153.61 198.48 7.77 1.89 WCBI 21.500 55.92 14.73 117.23 117.23 18.17 2.79 WEFC 13.000 27.02 14.44 97.31 97.31 13.42 - WFCO 11.500 22.84 11.06 108.39 111.22 8.08 3.65 WFSL 26.625 1,083.52 12.74 187.50 196.78 21.18 3.46 WRNB 16.000 58.51 10.46 180.18 180.18 16.52 2.75 WSB 5.000 21.10 10.42 98.04 98.04 8.55 2.00 WSFS 10.125 140.15 7.67 173.67 175.48 10.73 - WSTR 17.875 78.56 16.71 100.36 100.36 13.88 2.13 WVFC 24.000 41.69 12.00 121.70 121.70 15.68 3.33 YFED 16.750 124.21 13.29 135.41 135.41 10.76 3.58 Maximum 73.500 4,079.67 24.60 293.72 322.91 31.04 5.72 Minimum 2.000 4.31 2.38 55.98 58.65 2.55 - Average 20.258 191.70 14.76 126.68 133.41 12.38 2.11 Median 18.500 48.90 14.17 119.94 125.16 11.39 2.11
Removed: Merger Targets. Stock with PE ratio MHC SOURCE: SNL SECURITIES AND F&C CALCULATIONS. 10 91 FERGUSON & CO., LLP EXHIBIT II.1 - PUBLICLY TRADED THRIFTS - SELECT
Tangible Return on ROACE Total Equity/ Equity/ Core Avg Assets Before Ticker Mst RctQ Mst RctQ Mst RctQ LTM LTM LTM (Y/N) Date Assets Assets Tang Assets EPS Before Extra Extra Merger Current ($000) (%) (%) ($) (%) (%) Target? Pricing AADV 1,016,385 8.74 8.12 2.15 0.31 3.18 N 12/20/96 ABBK 484,071 6.69 6.00 1.46 0.72 10.87 N 12/20/96 ABCW 1,891,584 5.84 5.70 2.88 0.68 9.99 N 12/20/96 AFFFZ 2,227,591 6.89 6.76 2.54 0.45 6.61 N 12/20/96 AHM 50,588,224 4.89 4.28 1.93 0.23 2.91 N 12/20/96 ALBK 3,509,729 8.95 7.78 2.19 0.76 7.71 N 12/20/96 AMFB 1,394,874 7.76 7.22 1.56 1.05 13.04 N 12/20/96 ANBK 486,639 9.15 9.15 0.66 0.15 1.44 N 12/20/96 ANDB 1,198,787 7.73 7.73 2.37 1.06 13.77 N 12/20/96 ASBI 399,721 10.88 10.87 1.02 0.61 5.10 N 12/20/96 ASFC 7,266,185 7.79 6.47 2.37 0.50 6.03 N 12/20/96 BANC 2,170,480 6.44 6.01 0.95 0.85 10.90 N 12/20/96 BDJI 107,256 11.49 11.49 0.92 0.31 2.20 N 12/20/96 BFSB 127,360 14.31 14.31 1.49 1.10 6.98 N 12/20/96 BKC 547,987 8.35 7.98 1.84 1.25 14.02 N 12/20/96 BKCO 2,330,150 8.05 7.91 1.90 1.07 11.65 N 12/20/96 BKCT 402,397 10.85 10.85 1.61 1.18 10.89 N 12/20/96 BKUNA 824,360 8.38 8.11 0.49 0.36 1.23 N 12/20/96 BSBC 175,993 9.15 9.15 0.26 0.97 11.08 N 12/20/96 BVFS 3,428,175 5.65 5.35 2.44 - (0.01)N 12/20/96 CAFI 378,078 7.58 7.58 1.52 0.78 9.63 N 12/20/96 CAPS 231,245 8.44 8.44 1.01 0.63 6.28 N 12/20/96 CARV 365,056 9.48 9.09 0.41 (0.03) (0.32)N 12/20/96 CASB 340,380 6.05 6.05 0.72 0.49 7.74 N 12/20/96 CASH 342,095 11.41 10.74 1.73 1.06 8.14 N 12/20/96 CBCI 492,779 16.15 16.15 2.31 0.99 5.97 N 12/20/96 CBCO 200,008 9.69 9.69 2.05 1.11 11.67 N 12/20/96 CBIN 234,600 10.85 10.83 0.99 0.59 5.03 N 12/20/96 CBNH 548,724 7.16 7.16 1.44 0.85 11.58 N 12/20/96 CBSA 2,859,448 3.17 2.63 2.21 0.24 7.11 N 12/20/96 CEBK 325,915 9.83 8.76 0.94 0.53 5.35 N 12/20/96 CENF 2,160,973 5.04 5.03 2.60 0.53 10.75 N 12/20/96 CFB 6,667,758 5.39 4.85 3.83 0.61 10.29 N 12/20/96 CFCP 452,809 6.10 6.10 1.09 1.04 17.09 N 12/20/96 CFFC 160,791 13.92 13.92 1.65 1.02 7.45 N 12/20/96 CFSB 811,964 7.74 7.74 1.43 0.70 8.52 N 12/20/96 CFX 1,520,677 8.51 7.94 1.11 0.70 7.44 N 12/20/96 CIBI 94,799 11.94 11.94 1.32 0.68 5.03 N 12/20/96 CKFB 59,898 25.22 25.22 0.81 1.28 4.70 N 12/20/96 CMRN 175,841 26.35 26.35 0.98 1.60 5.77 N 12/20/96 CNIT 685,962 7.04 6.45 2.42 0.40 5.61 N 12/20/96 CNSK 387,177 7.28 7.28 0.67 0.42 5.35 N 12/20/96 COFD 5,252,483 6.93 6.52 2.74 0.89 12.81 N 12/20/96 COFI 13,826,085 6.59 6.12 3.27 0.19 2.92 N 12/20/96 CSA 8,549,032 4.83 4.76 2.06 0.12 2.40 N 12/20/96 CTBK 241,905 6.56 6.56 1.42 0.64 9.18 N 12/20/96 CTZN 2,747,617 6.37 5.62 2.10 0.46 6.79 N 12/20/96 CVAL 284,386 8.83 8.83 1.47 0.60 6.55 N 12/20/96 CZF 75,635 16.00 15.99 0.88 0.78 4.30 N 12/20/96 DIBK 691,830 8.59 8.26 2.51 1.76 21.99 N 12/20/96 DME 19,683,465 5.19 5.14 1.17 0.37 7.59 N 12/20/96 DNFC 1,408,131 5.55 5.48 1.52 0.71 12.54 N 12/20/96 DSL 4,954,337 7.74 7.63 1.29 0.43 5.28 N 12/20/96 EBSI 642,136 8.94 8.94 1.31 0.65 7.78 N 12/20/96 EFBI 213,876 14.77 14.75 0.65 0.92 5.39 N 12/20/96 EGFC 1,406,583 7.19 5.38 1.78 1.00 13.82 N 12/20/96 EIRE 392,382 6.83 6.83 1.38 0.59 8.86 N 12/20/96 EQSB 267,776 5.30 5.30 3.13 0.78 14.98 N 12/20/96
SOURCE: SNL SECURITIES AND F&C CALCULATIONS. 11 92 FERGUSON & CO., LLP EXHIBIT II.1 - PUBLICLY TRADED THRIFTS - SELECT
Tangible Return on ROACE Total Equity/ Equity/ Core Avg Assets Before Ticker Mst RctQ Mst RctQ Mst RctQ LTM LTM LTM (Y/N) Date Assets Assets Tang Assets EPS Before Extra Extra Merger Current ($000) (%) (%) ($) (%) (%) Target? Pricing AADV 1,016,385 8.74 8.12 2.15 0.31 3.18 N 12/20/96 ETFS 115,339 18.91 18.91 0.76 0.81 4.17 N 12/20/96 FBBC 576,981 18.43 18.43 1.16 1.40 6.71 N 12/20/96 FBCI 475,862 10.26 10.23 1.07 0.50 4.08 N 12/20/96 FBHC 281,694 6.18 5.73 1.54 0.27 3.81 N 12/20/96 FBSI 154,306 14.77 14.75 1.16 0.67 4.00 N 12/20/96 FCIT 668,459 5.92 5.92 1.29 0.45 7.38 N 12/20/96 FCME 136,429 6.01 6.01 3.20 1.49 45.72 N 12/20/96 FED 4,196,726 4.38 4.32 1.13 0.06 1.28 N 12/20/96 FESX 869,168 7.44 7.44 1.14 0.98 13.15 N 12/20/96 FFBI 97,143 7.73 7.73 0.71 0.12 1.28 N 12/20/96 FFBS 125,727 19.59 19.59 1.14 1.09 5.51 N 12/20/96 FFBZ 184,467 7.59 7.58 1.13 0.81 10.65 N 12/20/96 FFCH 1,546,149 6.13 6.13 1.85 0.48 7.55 N 12/20/96 FFES 942,648 6.12 6.10 2.29 0.44 6.89 N 12/20/96 FFFC 530,095 14.85 14.59 1.27 0.99 6.28 N 12/20/96 FFFG 311,028 6.05 6.05 0.22 0.21 3.28 N 12/20/96 FFHC 5,595,612 7.17 6.94 2.28 0.92 12.71 N 12/20/96 FFHH 354,636 13.44 13.44 0.67 0.51 3.25 N 12/20/96 FFHS 218,329 9.05 8.98 1.07 0.28 2.94 N 12/20/96 FFKY 357,281 13.80 13.02 1.17 1.25 8.80 N 12/20/96 FFLC 335,993 16.22 16.22 1.22 0.63 3.72 N 12/20/96 FFSL 108,539 11.98 11.98 1.57 0.78 6.20 N 12/20/96 FFSW 1,110,723 7.42 6.50 2.17 0.92 13.44 N 12/20/96 FFWC 154,551 10.01 10.01 2.18 0.89 8.31 N 12/20/96 FFWD 152,374 13.17 13.17 1.11 0.89 6.32 N 12/20/96 FFYF 602,557 16.97 16.97 1.48 0.83 4.59 N 12/20/96 FGHC 144,022 8.30 7.46 0.54 0.89 10.65 N 12/20/96 FIBC 266,763 9.67 9.62 1.17 0.47 4.31 N 12/20/96 FISB 1,485,436 9.10 8.99 1.24 0.90 10.11 N 12/20/96 FKFS 294,241 7.85 7.85 1.57 0.32 3.92 N 12/20/96 FKKY 128,710 26.30 26.30 0.45 0.79 2.44 N 12/20/96 FLFC 991,226 7.66 6.67 1.22 1.03 14.22 N 12/20/96 FMCO 518,540 6.52 6.39 1.73 0.52 7.86 N 12/20/96 FMSB 400,600 6.61 6.61 1.45 1.02 15.40 N 12/20/96 FNGB 607,977 11.42 11.42 1.04 0.53 4.25 N 12/20/96 FOBC 341,528 11.68 11.14 1.32 0.70 5.72 N 12/20/96 FRC 2,122,168 5.56 5.56 1.13 0.54 9.52 N 12/20/96 FSBI 317,874 6.85 6.84 1.63 0.44 6.00 N 12/20/96 FSFC 329,336 10.06 10.06 0.71 (0.03) (0.19) N 12/20/96 FSPG 487,209 6.46 6.32 2.28 0.91 14.00 N 12/20/96 FTF 165,747 15.94 15.94 1.61 1.46 7.34 N 12/20/96 FTFC 1,469,422 6.34 6.00 1.65 0.71 10.18 N 12/20/96 FTSB 88,874 24.35 24.35 0.82 1.33 5.39 N 12/20/96 GBCI 412,042 9.45 9.44 1.82 1.36 14.25 N 12/20/96 GDW 37,011,423 6.13 6.13 7.39 1.00 15.60 N 12/20/96 GFCO 283,727 9.28 9.12 1.48 0.25 2.66 N 12/20/96 GFSB 85,206 11.57 11.57 1.79 0.91 7.59 N 12/20/96 GLBK 36,947 16.23 16.23 0.96 0.77 4.84 N 12/20/96 GLN 15,104,367 6.21 5.85 0.98 0.06 (0.86) N 12/20/96 GPT 13,410,291 10.58 6.13 2.49 0.82 7.83 N 12/20/96 GRTR 2,566,626 7.98 7.98 0.67 0.71 7.37 N 12/20/96 GSBC 657,659 10.12 10.12 1.12 1.36 13.40 N 12/20/96 GSLC 115,229 5.50 5.50 0.60 0.44 7.22 N 12/20/96 GTFN 2,830,684 9.66 9.30 1.29 0.71 6.48 N 12/20/96 GUPB 79,708 18.50 18.50 0.79 0.80 3.53 N 12/20/96 GWF 43,548,593 6.01 5.37 2.09 0.48 7.52 N 12/20/96 HALL 387,671 7.01 7.01 1.33 0.41 5.33 N 12/20/96
SOURCE: SNL SECURITIES AND F&C CALCULATIONS. 12 93 FERGUSON & CO., LLP EXHIBIT II.1 - PUBLICLY TRADED THRIFTS - SELECT
Tangible Return on ROACE Total Equity/ Equity/ Core Avg Assets Before Ticker Mst RctQ Mst RctQ Mst RctQ LTM LTM LTM (Y/N) Date Assets Assets Tang Assets EPS Before Extra Extra Merger Current ($000) (%) (%) ($) (%) (%) Target? Pricing AADV 1,016,385 8.74 8.12 2.15 0.31 3.18 N 12/20/96 HARL 315,495 6.22 6.22 1.90 0.55 8.07 N 12/20/96 HAVN 1,564,697 6.00 5.97 3.01 0.58 9.07 N 12/20/96 HBFW 315,901 15.50 15.50 0.88 0.84 4.99 N 12/20/96 HBS 130,859 15.34 14.83 1.12 0.70 4.57 N 12/20/96 HFFC 554,139 8.99 8.96 1.34 0.59 6.55 N 12/20/96 HFGI 534,576 4.35 4.35 0.63 0.25 5.91 N 12/20/96 HFSA 87,807 16.78 16.78 0.68 0.44 2.39 N 12/20/96 HHFC 76,399 16.71 16.71 0.63 0.75 4.14 N 12/20/96 HIFS 193,193 9.70 9.70 1.48 1.07 10.62 N 12/20/96 HMCI 340,449 6.00 6.00 0.93 0.10 1.57 N 12/20/96 HMNF 565,385 14.80 14.80 1.08 0.81 4.92 N 12/20/96 HOMF 633,395 8.16 7.88 3.00 0.99 11.96 N 12/20/96 HPBC 188,647 10.41 10.41 1.65 1.75 15.74 N 12/20/96 HRBF 213,804 12.85 12.85 0.62 0.27 1.73 N 12/20/96 HRZB 500,340 15.94 15.94 1.10 1.52 9.40 N 12/20/96 HTHR 827,784 5.25 5.25 0.58 0.89 16.58 N 12/20/96 HVFD 350,603 7.87 7.86 1.39 0.40 4.77 N 12/20/96 IBSF 742,051 19.44 19.44 0.69 0.61 2.98 N 12/20/96 IFSB 247,888 6.73 5.88 0.39 0.13 1.98 N 12/20/96 INBI 320,372 18.93 18.93 0.84 0.73 3.31 N 12/20/96 IPSW 158,116 5.91 5.91 1.13 1.33 21.97 N 12/20/96 IROQ 473,684 7.05 6.46 1.74 0.75 10.86 N 12/20/96 ISBF 685,827 16.38 15.97 1.03 0.80 4.34 N 12/20/96 IWBK 1,712,151 6.48 6.33 2.14 0.82 11.48 N 12/20/96 JSBA 1,128,339 7.24 6.04 1.72 0.23 3.21 N 12/20/96 JSBF 1,518,830 21.60 21.60 2.36 1.65 7.60 N 12/20/96 KNK 352,926 10.02 9.39 1.43 0.42 4.16 N 12/20/96 KSAV 96,150 14.37 14.36 1.62 0.82 5.30 N 12/20/96 KSBK 134,079 6.96 6.51 3.36 0.93 13.70 N 12/20/96 KYF 86,009 22.25 22.25 0.71 0.89 3.68 N 12/20/96 LARK 213,734 15.15 15.15 0.95 0.70 4.20 N 12/20/96 LARL 201,911 10.40 10.40 1.71 1.06 10.00 N 12/20/96 LIFB 1,404,760 10.35 10.05 1.15 0.65 4.87 N 12/20/96 LISB 5,363,791 9.68 9.68 1.61 0.64 6.16 N 12/20/96 LOGN 79,726 19.98 19.98 0.84 1.24 4.78 N 12/20/96 LSBI 177,840 9.40 9.40 0.81 0.50 4.77 N 12/20/96 LSBX 330,288 8.21 8.21 1.10 1.48 19.04 N 12/20/96 LVSB 472,698 10.24 8.33 1.50 1.24 11.87 N 12/20/96 MAFB 3,162,622 7.65 6.62 2.87 0.56 8.42 N 12/20/96 MARN 174,597 22.69 22.69 1.28 1.13 4.76 N 12/20/96 MASB 879,132 9.95 9.95 3.18 1.08 10.62 N 12/20/96 MBB 848,255 8.01 4.21 1.03 0.17 0.83 N 12/20/96 MBB 848,255 8.01 4.21 1.03 0.17 0.83 N 12/20/96 MBLF 227,391 12.31 12.31 1.08 0.58 4.07 N 12/20/96 MCBN 55,956 8.78 8.78 1.34 0.34 3.83 N 12/20/96 MCBS 339,731 10.83 10.83 1.94 1.07 8.54 N 12/20/96 MDBK 1,008,200 8.98 8.30 2.10 1.04 11.57 N 12/20/96 MERI 231,058 7.26 7.26 2.50 0.55 7.27 N 12/20/96 MFBC 225,809 16.63 16.63 0.77 0.47 2.58 N 12/20/96 MFFC 180,831 18.51 18.51 0.63 0.67 3.28 N 12/20/96 MFLR 116,263 9.86 9.69 1.07 0.91 9.29 N 12/20/96 MFSL 1,130,517 8.05 7.94 2.00 0.74 8.98 N 12/20/96 MGNL 1,302,239 9.66 9.25 1.52 1.37 13.79 N 12/20/96 MIDC 358,429 9.72 8.31 1.18 0.51 5.36 N 12/20/96 MIFC 115,260 9.38 9.36 0.60 0.93 10.00 N 12/20/96 MIVI 69,322 18.40 18.40 0.91 1.31 6.73 N 12/20/96 MLBC 1,888,847 7.31 7.09 1.02 0.75 9.17 N 12/20/96
SOURCE: SNL SECURITIES AND F&C CALCULATIONS. 13 94 FERGUSON & CO., LLP EXHIBIT II.1 - PUBLICLY TRADED THRIFTS - SELECT
Tangible Return on ROACE Total Equity/ Equity/ Core Avg Assets Before Ticker Mst RctQ Mst RctQ Mst RctQ LTM LTM LTM (Y/N) Date Assets Assets Tang Assets EPS Before Extra Extra Merger Current ($000) (%) (%) ($) (%) (%) Target? Pricing AADV 1,016,385 8.74 8.12 2.15 0.31 3.18 N 12/20/96 MSBF 62,832 20.05 20.05 1.54 1.40 6.19 N 12/20/96 MWBI 137,707 6.58 6.58 2.60 0.66 9.51 N 12/20/96 MWBX 498,738 7.68 7.68 0.46 1.31 17.12 N 12/20/96 MWFD 194,707 8.39 8.05 1.07 1.04 11.26 N 12/20/96 NASB 740,298 6.81 6.57 3.45 1.26 17.33 N 12/20/96 NEIB 160,032 17.44 17.44 0.89 1.02 4.97 N 12/20/96 NFSL 255,946 9.00 7.11 2.38 2.09 18.60 N 12/20/96 NHTB 264,016 7.27 7.27 0.89 0.40 5.25 N 12/20/96 NMSB 306,177 10.51 10.51 0.53 0.78 7.06 N 12/20/96 NSLB 57,288 23.31 23.31 0.59 0.97 4.08 N 12/20/96 NSSB 694,443 10.77 9.86 1.05 0.87 8.10 N 12/20/96 NSSY 637,156 7.21 6.94 1.27 0.81 10.27 N 12/20/96 NTMG 93,924 5.84 5.84 0.33 0.32 4.83 N 12/20/96 NWEQ 95,501 12.14 12.14 0.82 0.71 5.18 N 12/20/96 NYB 2,940,907 5.17 5.17 2.93 1.16 20.26 N 12/20/96 OFCP 827,275 9.11 7.34 0.96 0.40 3.11 N 12/20/96 OHSL 217,627 11.56 11.56 1.38 0.57 4.60 N 12/20/96 PALM 659,902 8.00 7.66 0.73 0.37 4.46 N 12/20/96 PBCI 362,975 15.05 14.94 1.37 0.85 5.44 N 12/20/96 PBKB 513,421 5.61 5.35 0.75 0.76 13.20 N 12/20/96 PBNB 459,966 9.78 9.17 2.00 0.96 8.99 N 12/20/96 PCBC 80,394 18.77 18.77 0.94 0.88 4.36 N 12/20/96 PCCI 265,125 9.04 9.04 0.93 1.17 16.14 N 12/20/96 PFDC 280,012 15.24 15.24 1.79 1.15 7.50 N 12/20/96 PFNC 367,171 5.09 5.06 0.73 0.60 11.58 N 12/20/96 PFSB 1,142,473 7.89 6.43 1.75 0.53 5.83 N 12/20/96 PHBK 4,456,244 8.46 7.68 2.13 1.12 13.11 N 12/20/96 PKPS 860,853 8.15 8.15 1.48 1.48 17.88 N 12/20/96 PLE 191,659 7.73 7.48 1.69 0.50 6.40 N 12/20/96 POBS 268,654 24.91 24.91 0.83 2.32 9.50 N 12/20/96 PSAB 677,306 8.49 8.01 1.59 0.73 7.97 N 12/20/96 PSBK 886,043 8.21 7.26 2.41 1.12 13.12 N 12/20/96 PTRS 125,497 8.21 8.21 0.88 0.03 0.27 N 12/20/96 PULS 502,500 7.65 7.65 1.41 0.74 7.02 N 12/20/96 PVFC 345,279 6.51 6.51 1.99 0.94 14.18 N 12/20/96 PVSA 924,365 7.42 7.39 2.22 0.73 10.23 N 12/20/96 PWBC 700,794 6.98 6.37 1.01 0.42 5.47 N 12/20/96 QCBC 737,999 9.03 9.01 0.89 0.22 2.24 N 12/20/96 QCFB 148,321 17.64 17.64 1.51 1.24 6.18 N 12/20/96 QCSB 1,325,872 15.59 15.59 2.96 1.80 10.69 N 12/20/96 RARB 354,176 7.84 7.69 1.98 0.84 11.12 N 12/20/96 RCSB 4,006,755 7.92 7.72 2.26 1.03 12.44 N 12/20/96 RELY 1,829,440 8.17 5.67 1.46 0.50 5.19 N 12/20/96 RFED 9,047,562 5.59 5.35 1.70 0.44 8.52 N 12/20/96 ROSE 3,140,494 6.35 6.35 2.60 0.97 15.05 N 12/20/96 SBCN 209,942 12.09 12.09 0.78 0.17 1.28 N 12/20/96 SCCB 43,232 28.65 28.65 0.68 0.85 2.96 N 12/20/96 SECP 3,494,427 15.89 15.89 4.05 0.84 4.99 N 12/20/96 SFED 166,030 12.75 12.75 1.01 0.45 3.22 N 12/20/96 SFFC 81,059 17.99 17.99 1.19 0.98 4.97 N 12/20/96 SFSB 390,910 6.50 6.46 1.32 0.23 3.21 N 12/20/96 SFSL 599,822 9.27 9.11 1.42 0.90 9.69 N 12/20/96 SHEN 384,088 12.01 12.01 1.10 0.75 5.65 N 12/20/96 SISB 1,284,566 7.56 7.56 4.30 2.06 28.71 N 12/20/96 SMBC 160,124 15.74 15.74 0.92 0.67 4.04 N 12/20/96 SMFC 292,094 10.20 10.20 1.40 0.69 5.95 N 12/20/96 SOPN 263,203 25.46 25.46 1.03 1.27 4.89 N 12/20/96
SOURCE: SNL SECURITIES AND F&C CALCULATIONS. 14 95 FERGUSON & CO., LLP EXHIBIT II.1 - PUBLICLY TRADED THRIFTS - SELECT
Tangible Return on ROACE Total Equity/ Equity/ Core Avg Assets Before Ticker Mst RctQ Mst RctQ Mst RctQ LTM LTM LTM (Y/N) Date Assets Assets Tang Assets EPS Before Extra Extra Merger Current ($000) (%) (%) ($) (%) (%) Target? Pricing AADV 1,016,385 8.74 8.12 2.15 0.31 3.18 N 12/20/96 SOSA 510,715 5.69 5.69 0.15 0.48 8.66 N 12/20/96 SPBC 4,276,208 8.69 8.66 1.99 0.59 6.44 N 12/20/96 SSBK 542,191 7.73 7.59 1.66 0.64 7.74 N 12/20/96 STFR 1,404,116 8.92 8.54 1.79 0.81 8.04 N 12/20/96 STND 2,339,731 11.25 11.24 1.04 0.55 4.39 N 12/20/96 STSA 1,531,295 5.51 4.83 0.68 0.14 0.43 N 12/20/96 SVRN 9,364,636 4.91 3.74 0.79 0.57 12.10 N 12/20/96 SWBI 376,277 10.38 10.38 1.35 0.82 6.79 N 12/20/96 SWCB 460,876 8.17 7.75 2.00 0.91 11.17 N 12/20/96 TBK 228,055 6.31 6.07 0.98 0.63 10.17 N 12/20/96 TCB 7,114,466 7.34 7.06 2.75 1.19 16.00 N 12/20/96 THR 87,369 14.48 14.43 0.80 0.52 3.43 N 12/20/96 THRD 663,092 10.81 9.52 1.07 0.63 4.49 N 12/20/96 TRIC 79,475 15.94 15.94 1.04 0.66 3.82 N 12/20/96 TSH 379,590 13.77 13.77 0.98 0.72 4.29 N 12/20/96 TWIN 107,067 12.53 12.53 1.22 0.78 5.78 N 12/20/96 UBMT 107,945 22.53 22.53 1.28 1.20 5.24 N 12/20/96 UFRM 263,582 7.49 7.49 0.41 0.27 3.38 N 12/20/96 VFFC 781,358 7.82 7.60 0.97 1.43 17.98 N 12/20/96 WAMU 22,413,697 7.47 6.89 2.95 0.98 14.34 N 12/20/96 WBST 3,984,454 5.44 4.34 2.76 0.55 9.96 N 12/20/96 WCBI 307,772 15.50 15.50 1.46 0.99 6.33 N 12/20/96 WEFC 201,316 13.79 13.79 0.90 0.56 3.82 N 12/20/96 WFCO 282,833 7.45 7.28 1.04 0.94 12.39 N 12/20/96 WFSL 5,114,978 11.29 10.82 2.09 1.63 13.85 N 12/20/96 WRNB 353,935 9.17 9.17 1.53 1.74 19.52 N 12/20/96 WSB 246,742 8.72 8.72 0.48 0.91 11.60 N 12/20/96 WSFS 1,306,714 6.17 6.12 1.32 1.47 24.49 N 12/20/96 WSTR 566,109 13.83 13.83 1.07 0.58 4.25 N 12/20/96 WVFC 265,820 12.88 12.88 2.00 1.24 8.69 N 12/20/96 YFED 1,154,446 7.95 7.95 1.26 0.61 7.21 N 12/20/96 Maximum 50,588,224 28.65 28.65 7.39 2.32 45.72 Minimum 36,947 3.17 2.63 0.15 (0.03) (0.86) Average 1,773,441 10.39 10.13 1.48 0.78 7.99 Median 396,052 8.81 8.28 1.30 0.75 6.84
Removed: Merger Targets Stock with PE ratio MHC SOURCE: SNL SECURITIES AND F&C CALCULATIONS. 15 96 FERGUSON & CO., LLP EXHIBIT II.1 - PUBLICLY TRADED THRIFTS - SELECT
Return on ROACE NPAs/ Price/ Core Avg Assets Before Ticker Mst RctQ (x) Mst RctQ Mst RctQ Mst RctQ Assets Core EPS Before Extra Extra (%) EPS ($) (%) (%) AADV 0.47 14.29 0.56 (1.47) (15.89) ABBK 0.25 11.61 0.42 0.76 11.53 ABCW 0.75 12.63 0.70 0.02 0.24 AFFFZ 0.58 39.93 0.18 (0.99) (14.18) AHM 2.14 11.74 0.70 (0.65) (17.34) ALBK 0.83 12.96 0.61 0.20 2.08 AMFB 0.51 11.38 0.42 0.28 3.66 ANBK NA 15.00 0.20 (0.58) (6.00) ANDB 1.30 7.43 0.85 1.29 16.83 ASBI 0.41 13.47 0.29 (0.23) (2.12) ASFC 0.58 11.73 0.81 (0.18) (2.28) BANC 0.72 12.74 0.26 0.21 3.06 BDJI 0.23 16.90 0.27 (0.73) (5.98) BFSB - 9.31 0.47 0.40 2.72 BKC 2.39 10.49 0.67 1.25 14.43 BKCO 1.11 9.20 0.55 0.90 10.83 BKCT 1.45 12.78 0.44 1.27 12.04 BKUNA 0.85 12.59 0.18 (0.08) (6.05) BSBC 2.19 12.50 0.08 1.18 13.08 BVFS 0.69 8.65 1.20 (0.25) (4.14) CAFI 0.23 11.61 0.35 (0.34) (4.23) CAPS 0.12 11.61 0.28 (0.22) (2.50) CARV 0.47 16.11 0.13 (0.86) (9.03) CASB 0.51 22.22 0.18 (0.43) (6.95) CASH 0.20 12.50 0.50 1.09 9.16 CBCI 1.29 13.59 0.60 0.17 1.04 CBCO 1.70 10.97 0.55 0.52 5.32 CBIN 0.13 11.38 0.28 (0.21) (1.90) CBNH 0.37 12.05 0.42 0.93 13.10 CBSA 0.57 10.27 0.56 (0.30) (8.95) CEBK 1.69 13.45 0.33 0.81 8.23 CENF 1.34 5.24 1.36 0.24 4.73 CFB 1.07 13.09 0.90 (0.25) (4.10) CFCP 0.07 17.50 0.30 1.10 18.12 CFFC 0.20 11.67 0.45 0.23 1.68 CFSB 0.20 12.82 0.39 (0.15) (1.82) CFX 0.73 11.31 0.34 0.12 1.36 CIBI 0.88 12.31 0.33 (0.44) (3.61) CKFB 0.57 22.44 0.22 1.38 5.34 CMRN 0.37 15.63 0.25 1.56 5.88 CNIT 0.77 12.74 0.79 (0.07) (0.96) CNSK 1.17 44.53 0.08 (0.41) (9.65) COFD 0.43 11.60 0.73 0.34 4.73 COFI 0.31 11.20 0.91 0.15 2.16 CSA 1.53 15.36 0.60 (0.76) (15.06) CTBK 1.37 9.45 0.43 0.67 10.33 CTZN 0.91 15.16 0.54 (0.28) (4.29) CVAL 0.76 11.88 0.40 (0.29) (3.17) CZF 0.22 20.22 0.17 (0.45) (2.73) DIBK 0.99 6.96 0.62 1.84 22.10 DME 2.45 9.00 0.42 0.34 6.72 DNFC 0.66 14.57 0.28 (0.31) (5.44) DSL 1.36 12.42 0.38 (0.52) (6.67) EBSI 1.06 14.50 0.25 (0.09) (0.94) EFBI 0.04 20.07 0.19 0.77 5.09 EGFC 1.22 12.72 0.57 (0.07) (0.95) EIRE 0.23 10.80 0.44 0.76 11.28 EQSB 0.77 7.90 0.85 0.81 15.35
SOURCE: SNL SECURITIES AND F&C CALCULATIONS. 16 97 FERGUSON & CO., LLP EXHIBIT II.1 - PUBLICLY TRADED THRIFTS - SELECT
Return on ROACE NPAs/ Price/ Core Avg Assets Before Ticker Mst RctQ (x) Mst RctQ Mst RctQ Mst RctQ Assets Core EPS Before Extra Extra (%) EPS ($) (%) (%) AADV 0.47 14.29 0.56 (1.47) (15.89) ETFS 0.23 21.55 0.19 0.74 3.82 FBBC 0.10 10.55 0.32 0.77 4.11 FBCI 0.67 15.18 0.28 (0.18) (1.65) FBHC 1.31 14.88 0.42 (0.86) (13.34) FBSI 0.08 10.14 0.41 0.09 0.57 FCIT 2.58 10.14 0.45 (0.31) (5.05) FCME 2.24 7.63 0.25 0.89 18.95 FED 2.15 13.14 0.44 (0.50) (11.10) FESX 0.55 8.65 0.39 1.19 15.88 FFBI 0.22 19.84 0.20 (0.70) (8.84) FFBS 0.33 17.42 0.33 0.33 1.70 FFBZ 0.49 16.00 0.25 (0.19) (2.44) FFCH 1.20 12.10 0.47 (0.37) (5.90) FFES 0.54 6.46 0.89 0.10 1.66 FFFC 0.44 15.18 0.35 0.27 1.79 FFFG 2.94 14.69 0.05 (0.63) (9.56) FFHC 0.29 12.95 0.55 (0.26) (3.60) FFHH 0.06 16.76 0.22 0.12 0.86 FFHS 0.44 14.81 0.27 (0.75) (8.09) FFKY 0.06 18.08 0.28 0.32 2.29 FFLC 0.23 15.07 0.34 (0.27) (1.60) FFSL 0.40 11.15 0.44 (0.16) (1.31) FFSW 0.16 11.04 0.90 0.29 2.45 FFWC 0.10 9.06 0.60 0.21 2.04 FFWD 0.04 11.95 0.34 0.07 0.52 FFYF 0.84 17.48 0.37 (0.34) (1.94) FGHC 1.34 13.48 0.16 0.94 11.17 FIBC 3.37 9.87 0.38 (0.51) (5.06) FISB 1.76 NM - 0.01 0.06 FKFS 2.28 9.69 0.50 (0.39) (4.89) FKKY - 33.98 0.08 (0.32) (1.21) FLFC 1.22 14.65 0.32 1.05 14.39 FMCO 1.18 8.35 0.52 (0.36) (5.45) FMSB 0.02 10.98 0.41 1.03 15.58 FNGB 0.12 12.31 0.33 (0.26) (2.22) FOBC 0.14 10.64 0.37 (0.16) (1.36) FRC 2.05 13.71 0.31 0.63 11.28 FSBI 0.50 8.64 0.55 (0.30) (4.36) FSFC 0.06 11.16 0.21 (0.35) (3.49) FSPG 0.78 7.50 0.65 0.72 11.21 FTF 0.08 9.08 0.42 0.52 2.89 FTFC 0.12 10.49 0.56 (0.02) (0.25) FTSB 1.27 18.28 0.20 1.28 5.28 GBCI 0.09 13.33 0.45 0.82 8.66 GDW 1.37 4.37 3.74 1.50 24.71 GFCO 0.41 13.49 0.38 (0.62) (6.61) GFSB 1.63 11.65 0.44 0.17 1.45 GLBK - 18.52 0.27 0.74 4.59 GLN 1.76 17.90 0.33 (0.54) (11.49) GPT 2.91 15.67 0.78 1.00 9.50 GRTR 7.81 22.71 0.15 0.78 8.45 GSBC 1.83 18.75 0.24 0.30 2.89 GSLC NA 12.15 0.18 (0.12) (2.08) GTFN 0.42 23.49 0.31 (0.05) (0.56) GUPB 0.25 18.18 0.22 0.18 0.93 GWF 1.79 12.14 0.61 (0.36) (7.23) HALL 0.04 12.59 0.35 (0.06) (0.84)
SOURCE: SNL SECURITIES AND F&C CALCULATIONS. 17 98 FERGUSON & CO., LLP EXHIBIT II.1 - PUBLICLY TRADED THRIFTS - SELECT
Return on ROACE NPAs/ Price/ Core Avg Assets Before Ticker Mst RctQ (x) Mst RctQ Mst RctQ Mst RctQ Assets Core EPS Before Extra Extra (%) EPS ($) (%) (%) AADV 0.47 14.29 0.56 (1.47) (15.89) HARL - 8.80 0.54 (0.19) (3.00) HAVN 1.01 6.14 1.17 0.02 0.32 HBFW - 17.79 0.26 0.90 5.64 HBS 2.33 13.04 0.35 (0.04) (0.26) HFFC 0.59 11.06 0.39 (0.27) (2.98) HFGI 0.23 12.05 0.21 0.10 2.07 HFSA 0.19 17.65 0.17 (0.60) (3.53) HHFC 0.19 14.45 0.16 0.74 4.33 HIFS 0.78 11.41 0.40 1.11 11.37 HMCI 3.22 12.17 0.38 (0.89) (14.33) HMNF 0.08 17.43 0.26 (0.10) (0.68) HOMF 0.45 9.68 0.93 0.27 3.31 HPBC 0.29 9.82 0.42 1.68 15.86 HRBF 0.43 15.89 0.24 (0.28) (2.08) HRZB 0.01 13.38 0.25 1.49 9.28 HTHR 10.58 NM (0.10) (1.09) (32.90) HVFD 0.28 13.21 0.35 (0.71) (8.22) IBSF 0.11 20.39 0.19 (0.46) (2.34) IFSB NA 12.11 0.16 (0.55) (8.17) INBI 0.18 30.94 0.10 (1.85) (9.57) IPSW 1.81 10.71 0.28 1.24 21.28 IROQ 0.89 7.75 0.54 0.25 2.52 ISBF NA 17.31 0.26 (0.11) (0.68) IWBK 0.54 13.82 0.59 (0.10) (1.51) JSBA 1.02 11.40 0.51 (1.01) (13.85) JSBF 1.30 14.96 0.63 1.72 8.08 KNK 0.56 13.95 0.43 (0.03) (0.30) KSAV 0.55 9.66 0.54 0.05 0.32 KSBK 1.37 5.81 0.99 0.85 12.28 KYF - 17.58 0.16 0.07 0.31 LARK 0.05 12.25 0.38 0.13 0.84 LARL 0.64 9.02 0.44 0.14 1.28 LIFB 0.38 12.46 0.36 0.05 0.43 LISB NA 23.70 0.36 (0.14) (1.46) LOGN 0.36 11.72 0.24 0.41 1.81 LSBI 1.37 13.18 0.37 0.79 8.31 LSBX 0.85 5.84 0.34 1.76 22.36 LVSB 1.21 12.63 0.49 0.30 2.94 MAFB 0.40 11.10 0.78 (0.04) (0.55) MARN 0.95 14.29 0.35 0.29 1.25 MASB 0.27 11.31 0.84 1.12 11.46 MBB 0.78 17.59 0.27 (0.41) (8.02) MBB 0.78 17.59 0.27 (0.41) (8.02) MBLF 0.19 13.57 0.35 0.20 1.51 MCBN 0.41 14.20 0.33 (0.53) (6.07) MCBS 0.15 11.07 0.57 0.57 4.95 MDBK 0.53 12.50 0.52 1.01 11.37 MERI 0.30 16.14 0.49 (0.79) (10.14) MFBC NA 19.18 0.22 (0.36) (2.09) MFFC 0.19 25.34 0.14 (0.27) (1.45) MFLR 1.11 14.96 0.28 0.94 9.59 MFSL 0.40 15.51 0.55 0.68 8.33 MGNL 2.52 12.19 0.40 0.54 5.56 MIDC 1.65 12.04 0.41 (0.06) (0.60) MIFC 0.05 7.44 0.21 1.28 13.87 MIVI 0.46 12.50 0.24 1.13 6.04 MLBC 0.61 7.53 0.49 0.87 11.86
SOURCE: SNL SECURITIES AND F&C CALCULATIONS. 18 99 FERGUSON & CO., LLP EXHIBIT II.1 - PUBLICLY TRADED THRIFTS - SELECT
Return on ROACE NPAs/ Price/ Core Avg Assets Before Ticker Mst RctQ (x) Mst RctQ Mst RctQ Mst RctQ Assets Core EPS Before Extra Extra (%) EPS ($) (%) (%) AADV 0.47 14.29 0.56 (1.47) (15.89) MSBF 0.24 11.88 0.40 0.27 1.30 MWBI 0.47 9.83 0.69 (0.54) (8.05) MWBX 1.63 10.94 0.12 1.36 17.31 MWFD 0.24 17.31 0.26 0.21 2.45 NASB 3.12 9.13 0.91 1.33 18.85 NEIB 0.20 12.62 0.27 0.57 3.16 NFSL NA 10.52 0.60 1.17 11.18 NHTB 0.94 12.77 0.23 (0.37) (5.03) NMSB 1.76 15.63 0.14 0.79 7.49 NSLB - 20.04 0.17 0.97 4.14 NSSB 1.66 15.93 0.31 1.01 9.72 NSSY 1.99 11.00 0.54 0.82 11.66 NTMG NA 26.79 0.07 (0.67) (12.87) NWEQ 1.19 16.45 0.19 0.05 0.41 NYB 1.18 10.36 0.89 0.74 13.83 OFCP 0.18 15.18 0.28 (0.56) (5.68) OHSL 0.01 17.34 0.30 (0.37) (3.14) PALM 3.44 18.05 0.20 (0.60) (7.35) PBCI 2.38 16.96 0.28 (0.41) (2.68) PBKB 1.02 12.65 0.21 0.75 13.71 PBNB 0.61 13.60 0.51 0.92 9.15 PCBC NA 17.00 0.25 0.55 2.83 PCCI 2.24 17.97 0.16 1.08 12.98 PFDC 0.37 9.38 0.52 0.12 0.75 PFNC 0.98 14.73 0.14 (0.68) (12.79) PFSB 0.86 9.68 0.52 (0.28) (3.34) PHBK 1.03 10.76 0.61 1.29 15.23 PKPS 3.81 13.13 0.10 (0.28) (3.32) PLE 0.83 8.79 0.48 (0.55) (6.91) POBS 0.17 15.91 0.22 2.19 9.00 PSAB 1.34 10.37 0.47 (0.06) (0.71) PSBK 1.03 8.89 0.64 1.13 14.08 PTRS 2.20 23.44 0.20 (1.06) (12.06) PULS 1.07 10.44 0.38 (0.45) (5.69) PVFC 0.56 3.63 1.05 (0.01) (0.20) PVSA 0.26 10.89 0.60 (0.34) (4.66) PWBC 0.59 12.05 0.28 (0.16) (2.33) QCBC 1.81 20.47 0.20 (0.69) (7.47) QCFB NA 10.23 0.44 0.39 2.11 QCSB 0.53 15.71 0.77 1.72 11.06 RARB 0.44 10.63 0.55 0.70 9.20 RCSB 0.63 10.75 0.68 1.09 14.78 RELY 0.96 10.09 0.48 (0.31) (3.73) RFED 0.74 11.62 0.39 0.08 0.80 ROSE NA 9.84 0.81 1.07 16.91 SBCN 0.13 21.18 0.18 (0.52) (4.22) SCCB NA 20.83 0.18 0.15 0.52 SECP 0.10 15.31 1.20 0.33 2.04 SFED 0.61 10.24 0.36 (0.30) (2.31) SFFC 0.43 12.68 0.34 0.34 1.82 SFSB 0.27 11.25 0.45 (0.47) (6.93) SFSL 0.21 9.53 0.40 0.19 2.04 SHEN 0.50 NM - 0.01 0.09 SISB 0.50 3.13 1.82 3.35 46.25 SMBC 0.71 14.38 0.25 (0.25) (1.52) SMFC 0.06 11.75 0.46 0.26 2.42 SOPN 0.10 16.74 0.28 0.46 1.80
SOURCE: SNL SECURITIES AND F&C CALCULATIONS. 19 100 FERGUSON & CO., LLP EXHIBIT II.1 - PUBLICLY TRADED THRIFTS - SELECT
Return on ROACE NPAs/ Price/ Core Avg Assets Before Ticker Mst RctQ (x) Mst RctQ Mst RctQ Mst RctQ Assets Core EPS Before Extra Extra (%) EPS ($) (%) (%) AADV 0.47 14.29 0.56 (1.47) (15.89) SOSA 8.41 12.50 0.04 0.48 8.47 SPBC 0.47 12.28 0.57 (0.33) (3.67) SSBK 0.08 14.76 0.36 (0.31) (3.88) STFR 0.28 16.67 0.39 (0.13) (1.34) STND 0.16 16.02 0.32 (0.17) (1.53) STSA 0.58 NM - (0.88) (24.96) SVRN 0.55 NM - - (1.62) SWBI 0.22 14.02 0.33 (0.16) (1.43) SWCB 0.77 11.59 0.62 0.93 11.68 TBK 2.78 23.08 0.13 0.66 10.67 TCB 0.76 16.18 0.68 0.31 4.03 THR 1.22 16.05 0.22 (0.42) (2.89) THRD 0.32 13.90 0.29 (0.15) (1.16) TRIC 0.07 17.31 0.26 (0.13) (0.83) TSH NA 11.85 0.29 (0.27) (1.88) TWIN 0.40 12.68 0.34 (0.18) (1.42) UBMT 0.62 15.04 0.32 0.14 0.60 UFRM 1.01 NM (0.02) (1.32) (16.96) VFFC 2.32 12.15 0.27 0.10 1.25 WAMU 0.56 13.53 0.79 0.72 10.16 WBST 0.85 11.64 0.82 0.50 9.06 WCBI 0.53 12.80 0.42 0.14 0.89 WEFC 0.27 11.61 0.28 (0.29) (2.07) WFCO 0.40 9.58 0.30 0.87 11.34 WFSL 0.79 11.28 0.59 1.13 9.78 WRNB 1.75 10.26 0.39 1.81 19.74 WSB 0.95 7.81 0.16 1.13 13.38 WSFS 2.76 5.39 0.47 1.92 32.02 WSTR 0.06 15.96 0.28 (0.13) (0.91) WVFC 0.36 11.11 0.54 0.37 2.91 YFED 1.62 19.94 0.21 (0.56) (6.82) Maximum 10.58 44.53 3.74 3.35 46.25 Minimum - - (0.10) (1.85) (32.90) Average 0.88 13.26 0.42 0.20 1.74 Median 0.57 12.61 0.36 0.09 0.55
Removed: Merger Targets Stock with PE ratio MHC SOURCE: SNL SECURITIES AND F&C CALCULATIONS. 20 101 FERGUSON & CO., LLP EXHIBIT II.2-ALL SOUTHEAST REGION THRIFTS
Deposit Insurance Agency Ticker Short Name City State Region (BIF/SAIF) Exchange AMFB American Federal Bank, FSB Greenville SC SE SAIF NASDAQ BANC BankAtlantic Bancorp, Inc. Fort Lauderdale FL SE SAIF NASDAQ BFSB Bedford Bancshares, Inc. Bedford VA SE SAIF NASDAQ BKUNA BankUnited Financial Corp. Coral Gables FL SE SAIF NASDAQ CCFH CCF Holding Company Jonesboro GA SE SAIF NASDAQ CFCP Coastal Financial Corp. Myrtle Beach SC SE SAIF NASDAQ CFFC Community Financial Corp. Staunton VA SE SAIF NASDAQ CFNC Carolina Fincorp, Inc. Rockingham NC SE SAIF NASDAQ CFTP Community Federal Bancorp Tupelo MS SE SAIF NASDAQ CMSV Community Savings, MHC North Palm Beach FL SE SAIF NASDAQ CNIT CENIT Bancorp, Inc. Norfolk VA SE SAIF NASDAQ COOP Cooperative Bankshares, Inc. Wilmington NC SE SAIF NASDAQ EBSI Eagle Bancshares Tucker GA SE SAIF NASDAQ ESX Essex Bancorp, Inc. Norfolk VA SE SAIF AMSE FFBH First Federal Bancshares of AR Harrison AR SE SAIF NASDAQ FFBS FFBS BanCorp, Inc. Columbus MS SE SAIF NASDAQ FFCH First Financial Holdings Inc. Charleston SC SE SAIF NASDAQ FFFC FFVA Financial Corp. Lynchburg VA SE SAIF NASDAQ FFFG F.F.O. Financial Group, Inc. St. Cloud FL SE SAIF NASDAQ FFFL Fidelity FSB of Florida, MHC West Palm Beach FL SE SAIF NASDAQ FFLC FFLC Bancorp, Inc. Leesburg FL SE SAIF NASDAQ FFML First Family Financial Corp. Eustis FL SE SAIF NASDAQ FFPB First Palm Beach Bancorp, Inc. West Palm Beach FL SE SAIF NASDAQ FFPC Florida First Bancorp, Inc. Panama City FL SE SAIF NASDAQ FFRV Fidelity Financial Bankshares Richmond VA SE SAIF NASDAQ FGHC First Georgia Holding, Inc. Brunswick GA SE SAIF NASDAQ FLAG FLAG Financial Corp. LaGrange GA SE SAIF NASDAQ FLFC First Liberty Financial Corp. Macon GA SE SAIF NASDAQ FOBC Fed One Bancorp Wheeling WV SE SAIF NASDAQ FSFC First Southeast Financial Corp Anderson SC SE SAIF NASDAQ FTF Texarkana First Financial Corp Texarkana AR SE SAIF AMSE GSFC Green Street Financial Corp. Fayetteville NC SE SAIF NASDAQ GSLC Guaranty Financial Corp. Charlottesville VA SE SAIF NASDAQ HARB Harbor Federal Savings Bk, MHC Fort Pierce FL SE SAIF NASDAQ HBS Haywood Bancshares, Inc. Waynesville NC SE BIF AMSE HFNC HFNC Financial Corp. Charlotte NC SE SAIF NASDAQ KSAV KS Bancorp, Inc. Kenly NC SE SAIF NASDAQ LIFB Life Bancorp, Inc. Norfolk VA SE SAIF NASDAQ MBSP Mitchell Bancorp, Inc. Spruce Pine NC SE SAIF NASDAQ MGNL Magna Bancorp, Inc. Hattiesburg MS SE SAIF NASDAQ NFSL Newnan Holdings, Inc. Newnan GA SE SAIF NASDAQ OCWN Ocwen Financial Corporation West Palm Beach FL SE SAIF NASDAQ PALM Palfed, Inc. Aiken SC SE SAIF NASDAQ PDB Piedmont Bancorp, Inc. Hillsborough NC SE SAIF AMSE PERT Perpetual Bank, MHC Anderson SC SE SAIF NASDAQ PFSL Pocahontas FS&LA, MHC Pocahontas AR SE SAIF NASDAQ PLE Pinnacle Bank Jasper AL SE SAIF AMSE SCCB S. Carolina Community Bancshrs Winnsboro SC SE SAIF NASDAQ SOPN First Savings Bancorp, Inc. Southern Pines NC SE SAIF NASDAQ SRN Southern Banc Company, Inc Gadsden AL SE SAIF AMSE SSB Scotland Bancorp, Inc Laurinburg NC SE SAIF AMSE SSFC South Street Financial Corp. Albemarle NC SE SAIF NASDAQ SSM Stone Street Bancorp, Inc. Mocksville NC SE SAIF AMSE SZB SouthFirst Bancshares, Inc. Sylacauga AL SE SAIF AMSE
SOURCE: SNL SECURITIES AND F&C CALCULATIONS. 21 102 FERGUSON & CO., LLP EXHIBIT II.2-ALL SOUTHEAST REGION THRIFTS
Deposit Insurance Agency Ticker Short Name City State Region (BIF/SAIF) Exchange TWIN Twin City Bancorp Bristol TN SE SAIF NASDAQ UFRM United Federal Savings Bank Rocky Mount NC SE SAIF NASDAQ VABF Virginia Beach Fed. Financial Virginia Beach VA SE SAIF NASDAQ VFFC Virginia First Financial Corp. Petersburg VA SE SAIF NASDAQ Maximum Minimum Average Median
SOURCE: SNL SECURITIES AND F&C CALCULATIONS. 22 103 FERGUSON & CO., LLP EXHIBIT II.2-ALL SOUTHEAST REGION THRIFTS
Current Current Price/ Current Current ($) ($M) (x) (%) (%) (%) Stock Market LTM Price/ Price/ Tang Price/ Ticker IPO Date Price Value Core EPS Book Value Book Value Assets AMFB 01/19/89 19.125 209.82 12.26 193.18 209.02 15.02 BANC 11/29/83 13.250 194.01 13.95 139.62 150.23 8.99 BFSB 08/22/94 17.500 20.01 11.74 103.24 103.24 15.71 BKUNA 12/11/85 9.063 49.43 18.50 115.45 122.14 6.27 CCFH 07/12/95 15.188 13.91 NA 102.21 102.21 21.65 CFCP 09/26/90 21.000 72.16 19.27 261.19 261.19 15.94 CFFC 03/30/88 21.000 26.71 12.73 119.39 119.39 16.61 CFNC 11/25/96 13.500 25.00 NA NA NA NA CFTP 03/26/96 16.875 72.26 NA 107.69 107.69 35.42 CMSV 10/24/94 18.000 88.12 16.36 116.96 116.96 14.03 CNIT 08/06/92 40.250 65.75 16.63 136.21 149.52 9.58 COOP 08/21/91 20.250 30.21 NM 119.82 119.82 9.23 EBSI 04/01/86 14.500 66.01 11.07 114.90 114.90 10.28 ESX NA 1.938 2.04 NM NM NM 1.19 FFBH 05/03/96 15.750 81.17 NA 97.40 97.40 15.93 FFBS 07/01/93 23.000 36.12 20.18 138.39 138.39 28.73 FFCH 11/10/83 22.750 144.63 12.30 152.58 152.58 9.35 FFFC 10/12/94 21.250 106.73 16.73 125.96 128.63 20.13 FFFG 10/13/88 2.938 24.77 13.35 131.75 131.75 7.96 FFFL 01/07/94 18.000 121.03 23.08 150.75 152.28 14.12 FFLC 01/04/94 20.500 51.13 16.80 95.00 95.00 15.41 FFML 10/22/92 22.000 11.99 18.03 137.76 137.76 7.02 FFPB 09/29/93 23.125 117.78 70.08 111.71 114.76 7.90 FFPC 11/06/86 11.375 38.63 14.58 185.87 185.87 13.00 FFRV 05/01/86 25.000 57.47 18.66 207.13 207.13 17.45 FGHC 02/11/87 8.625 17.45 15.97 145.69 163.66 12.12 FLAG 12/11/86 10.750 21.90 107.50 108.70 108.70 9.57 FLFC 12/06/83 18.750 113.81 15.37 164.62 194.50 11.36 FOBC 01/19/95 15.750 38.87 11.93 94.77 99.87 11.50 FSFC 10/08/93 9.375 41.14 13.20 124.17 124.17 12.49 FTF 07/07/95 15.250 28.74 9.47 108.77 108.77 17.34 GSFC 04/04/96 15.500 66.62 NA 107.12 107.12 37.80 GSLC NA 8.750 8.09 14.58 127.00 127.00 6.98 HARB 01/06/94 34.250 169.01 14.57 199.24 208.08 15.98 HBS 12/18/87 18.250 21.92 16.29 109.15 113.64 16.75 HFNC 12/29/95 18.000 309.47 NA 124.91 124.91 36.62 KSAV 12/30/93 20.875 13.85 12.89 100.22 100.31 14.40 LIFB 10/11/94 17.938 176.63 15.60 121.45 125.62 12.57 MBSP 07/12/96 14.250 13.96 NA 94.87 94.87 39.92 MGNL 03/13/91 19.500 267.95 12.83 212.88 223.37 20.58 NFSL 03/01/86 25.250 40.08 10.61 173.90 224.64 15.66 OCWN NA 27.250 728.69 NA 421.83 NA 33.11 PALM 12/15/85 14.438 75.48 19.78 142.95 149.93 11.44 PDB 12/08/95 10.625 29.23 NA 78.47 78.47 22.13 PERT 10/26/93 24.250 36.49 18.37 125.45 NA 17.39 PFSL 04/05/94 17.250 28.02 11.13 123.48 123.48 7.34 PLE 12/17/86 16.875 15.02 9.99 101.35 105.07 7.83 SCCB 07/07/94 15.000 11.03 22.06 89.07 89.07 25.51 SOPN 01/06/94 18.750 70.20 18.20 104.75 104.75 26.67 SRN 10/05/95 13.125 18.14 NA 92.30 93.28 16.81 SSB 04/01/96 14.250 26.22 NA 105.79 105.79 38.21 SSFC 10/03/96 14.125 63.51 NA NA NA NA SSM 04/01/96 20.000 36.50 NA 97.61 97.61 34.32 SZB 02/14/95 12.875 10.80 37.87 85.15 85.15 12.27
SOURCE: SNL SECURITIES AND F&C CALCULATIONS. 23 104 FERGUSON & CO., LLP EXHIBIT II.2-ALL SOUTHEAST REGION THRIFTS
Current Current Price/ Current Current Stock Market LTM Price/ Price/ Tang Price/ Price Value Core EPS Book Value Book Value Assets Ticker IPO Date ($) ($M) (x) (%) (%) (%) TWIN 01/04/95 17.250 14.84 14.14 110.72 110.72 13.87 UFRM 07/01/80 8.125 24.90 19.82 126.16 126.16 9.45 VABF 11/01/80 9.375 46.57 34.72 116.75 116.75 7.71 VFFC 01/01/78 13.125 75.38 13.53 123.36 127.18 9.65 Maximum 40.250 728.69 107.50 421.83 261.19 39.92 Minimum 1.938 2.04 9.47 78.47 78.47 1.19 Average 16.981 75.64 19.69 133.21 131.71 16.47 Median 17.063 39.48 15.60 119.82 119.82 14.26
SOURCE: SNL SECURITIES AND F&C CALCULATIONS. 24 105 FERGUSON & CO., LLP EXHIBIT II.2-ALL SOUTHEAST REGION THRIFTS
Tangible Return on ROACE Current Total Equity/ Equity/ Core Avg Assets Before Dividend Assets Assets Tang Assets EPS Before Extra Extra Yield ($000) (%) (%) ($) (%) (%) Ticker (%) Mst RctQ Mst RctQ Mst RctQ LTM LTM LTM AMFB 2.09 1,394,874 7.76 7.22 1.56 1.05 13.04 BANC 1.10 2,170,480 6.44 6.01 0.95 0.85 10.90 BFSB 2.74 127,360 14.31 14.31 1.49 1.10 6.98 BKUNA - 824,360 8.38 8.11 0.49 0.36 1.23 CCFH 2.63 79,325 21.19 21.19 NA 0.97 4.91 CFCP 2.10 452,809 6.10 6.10 1.09 1.04 17.09 CFFC 2.48 160,791 13.92 13.92 1.65 1.02 7.45 CFNC - 94,110 9.18 9.18 NA 0.64 NA CFTP 1.78 204,022 32.91 32.91 NA 1.15 4.38 CMSV 4.44 626,045 11.99 11.99 1.10 0.88 7.10 CNIT 2.48 685,962 7.04 6.45 2.42 0.40 5.61 COOP - 327,198 7.70 7.70 (0.18) (1.14) (12.26) EBSI 4.14 642,136 8.94 8.94 1.31 0.65 7.78 ESX - 171,498 8.65 8.52 (4.78) (2.57) (143.45) FFBH - 509,605 16.35 16.35 NA NA NA FFBS 2.17 125,727 19.59 19.59 1.14 1.09 5.51 FFCH 3.17 1,546,149 6.13 6.13 1.85 0.48 7.55 FFFC 1.88 530,095 14.85 14.59 1.27 0.99 6.28 FFFG - 311,028 6.05 6.05 0.22 0.21 3.28 FFFL 4.44 857,366 9.37 9.28 0.78 0.39 3.90 FFLC 1.95 335,993 16.22 16.22 1.22 0.63 3.72 FFML - 170,718 5.10 5.10 1.22 0.41 7.37 FFPB 2.60 1,490,020 7.08 6.90 0.33 0.04 0.52 FFPC 2.11 297,244 7.00 7.00 0.78 0.59 8.60 FFRV 0.80 329,233 8.43 8.42 1.34 0.66 7.73 FGHC 0.93 144,022 8.30 7.46 0.54 0.89 10.65 FLAG 3.16 228,914 8.80 8.80 0.10 (0.07) (0.75) FLFC 2.13 991,226 7.66 6.67 1.22 1.03 14.22 FOBC 3.68 341,528 11.68 11.14 1.32 0.70 5.72 FSFC 2.13 329,336 10.06 10.06 0.71 (0.03) (0.19) FTF 2.95 165,747 15.94 15.94 1.61 1.46 7.34 GSFC 2.58 176,231 35.28 35.28 NA 1.23 3.31 GSLC 1.14 115,229 5.50 5.50 0.60 0.44 7.22 HARB 3.50 1,057,443 8.02 7.71 2.35 0.91 10.51 HBS 3.07 130,859 15.34 14.83 1.12 0.70 4.57 HFNC 1.56 845,074 29.32 29.32 NA 1.04 3.52 KSAV 2.87 96,150 14.37 14.36 1.62 0.82 5.30 LIFB 2.45 1,404,760 10.35 10.05 1.15 0.65 4.87 MBSP - 34,980 42.08 42.08 NA NA NA MGNL 3.08 1,302,239 9.66 9.25 1.52 1.37 13.79 NFSL 1.74 255,946 9.00 7.11 2.38 2.09 18.60 OCWN - 2,200,772 7.85 NA NA NA NA PALM 0.55 659,902 8.00 7.66 0.73 0.37 4.46 PDB 3.77 132,067 28.19 28.19 NA 1.25 4.77 PERT - 209,827 13.86 NA 1.32 0.73 6.02 PFSL 4.87 381,562 5.95 5.95 1.55 0.54 8.98 PLE 4.27 191,659 7.73 7.48 1.69 0.50 6.40 SCCB 4.00 43,232 28.65 28.65 0.68 0.85 2.96 SOPN 3.63 263,203 25.46 25.46 1.03 1.27 4.89 SRN 2.67 107,874 18.22 18.06 NA 0.22 1.20 SSB 2.11 68,622 36.13 36.13 NA 1.18 4.31 SSFC - 217,954 9.57 9.57 NA 0.27 NA SSM 2.20 106,373 35.14 35.14 NA NA NA SZB 3.88 90,542 14.41 14.41 0.34 0.57 3.50
SOURCE: SNL SECURITIES AND F&C CALCULATIONS. 25 106 FERGUSON & CO., LLP EXHIBIT II.2-ALL SOUTHEAST REGION THRIFTS
Tangible Return on ROACE Current Total Equity/ Equity/ Core Avg Assets Before Dividend Assets Assets Tang Assets EPS Before Extra Extra Yield ($000) (%) (%) ($) (%) (%) TWIN 3.71 107,067 12.53 12.53 1.22 0.78 5.78 UFRM 2.46 263,582 7.49 7.49 0.41 0.27 3.38 VABF 1.71 604,060 6.60 6.60 0.27 0.03 0.51 VFFC 0.76 781,358 7.82 7.60 0.97 1.43 17.98 Maximum 4.87 2,200,772 42.08 42.08 2.42 2.09 18.60 Minimum - 34,980 5.10 5.10 (4.78) (2.57) (143.45) Average 2.12 491,612 13.72 13.65 0.97 0.66 3.25 Median 2.15 280,413 9.47 9.27 1.14 0.70 5.56
SOURCE: SNL SECURITIES AND F&C CALCULATIONS. 26 107 FERGUSON & CO., LLP EXHIBIT II.2-ALL SOUTHEAST REGION THRIFTS
Return on ROACE NPAs/ Price/ Core Avg Assets Before Merger Current Assets Core EPS Before Extra Extra Target? Pricing (%) EPS ($) (%) (%) Ticker (Y/N) Date Mst RctQ (x) Mst RctQ Mst RctQ Mst RctQ AMFB N 12/20/96 0.51 11.38 0.42 0.28 3.66 BANC N 12/20/96 0.72 12.74 0.26 0.21 3.06 BFSB N 12/20/96 - 9.31 0.47 0.40 2.72 BKUNA N 12/20/96 0.85 12.59 0.18 (0.08) (6.05) CCFH N 12/20/96 0.92 21.09 0.18 0.97 4.58 CFCP N 12/20/96 0.07 17.50 0.30 1.10 18.12 CFFC N 12/20/96 0.20 11.67 0.45 0.23 1.68 CFNC N 12/20/96 0.06 NA NA NA NA CFTP N 12/20/96 0.35 21.09 0.20 0.61 1.84 CMSV N 12/20/96 0.53 10.98 0.41 1.14 9.55 CNIT N 12/20/96 0.77 12.74 0.79 (0.07) (0.96) COOP N 12/20/96 0.22 NM (0.64) (5.36) (58.34) EBSI N 12/20/96 1.06 14.50 0.25 (0.09) (0.94) ESX N 12/20/96 3.41 NM (0.60) (1.18) (614.26) FFBH N 12/20/96 0.15 14.06 0.28 (0.21) (1.25) FFBS N 12/20/96 0.33 17.42 0.33 0.33 1.70 FFCH N 12/20/96 1.20 12.10 0.47 (0.37) (5.90) FFFC N 12/20/96 0.44 15.18 0.35 0.27 1.79 FFFG N 12/20/96 2.94 14.69 0.05 (0.63) (9.56) FFFL N 12/20/96 0.40 20.45 0.22 (0.44) (4.55) FFLC N 12/20/96 0.23 15.07 0.34 (0.27) (1.60) FFML Y 12/20/96 0.43 55.00 0.10 (1.27) (23.12) FFPB N 12/20/96 NA NM (1.07) (2.01) (26.81) FFPC Y 12/20/96 0.78 14.97 0.19 (0.46) (6.51) FFRV Y 12/20/96 1.14 18.38 0.34 (0.28) (3.28) FGHC N 12/20/96 1.34 13.48 0.16 0.94 11.17 FLAG N 12/20/96 3.67 NM (0.46) (2.81) (30.67) FLFC N 12/20/96 1.22 14.65 0.32 1.05 14.39 FOBC N 12/20/96 0.14 10.64 0.37 (0.16) (1.36) FSFC N 12/20/96 0.06 11.16 0.21 (0.35) (3.49) FTF N 12/20/96 0.08 9.08 0.42 0.52 2.89 GSFC N 12/20/96 0.20 17.61 0.22 0.80 2.25 GSLC N 12/20/96 NA 12.15 0.18 (0.12) (2.08) HARB N 12/20/96 0.50 12.59 0.68 0.15 1.82 HBS N 12/20/96 2.33 13.04 0.35 (0.04) (0.26) HFNC N 12/20/96 1.15 25.00 0.18 0.38 1.26 KSAV N 12/20/96 0.55 9.66 0.54 0.05 0.32 LIFB N 12/20/96 0.38 12.46 0.36 0.05 0.43 MBSP N 12/20/96 2.56 NA NA 0.49 1.20 MGNL N 12/20/96 2.52 12.19 0.40 0.54 5.56 NFSL N 12/20/96 NA 10.52 0.60 1.17 11.18 OCWN N 12/20/96 5.35 19.46 0.35 2.07 24.85 PALM N 12/20/96 3.44 18.05 0.20 (0.60) (7.35) PDB N 12/20/96 0.55 13.28 0.20 0.56 1.95 PERT N 12/20/96 NA 18.95 0.32 (0.14) (1.12) PFSL N 12/20/96 0.16 7.44 0.58 0.45 7.51 PLE N 12/20/96 0.83 8.79 0.48 (0.55) (6.91) SCCB N 12/20/96 NA 20.83 0.18 0.15 0.52 SOPN N 12/20/96 0.10 16.74 0.28 0.46 1.80 SRN N 12/20/96 - 23.44 0.14 (0.80) (4.30) SSB N 12/20/96 - 17.81 0.20 0.67 1.87 SSFC N 12/20/96 NA NA NA (0.19) NA SSM N 12/20/96 0.01 15.63 0.32 1.01 2.84 SZB N 12/20/96 0.13 24.76 0.13 0.84 5.69
SOURCE: SNL SECURITIES AND F&C CALCULATIONS 27 108 FERGUSON & CO., LLP EXHIBIT II.2-ALL SOUTHEAST REGION THRIFTS
Return on ROACE NPAs/ Price/ Core Avg Assets Before Merger Current Assets Core EPS Before Extra Extra Target? Pricing (%) EPS ($) (%) (%) Ticker (Y/N) Date Mst RctQ (x) Mst RctQ Mst RctQ Mst RctQ TWIN N 12/20/96 0.40 12.68 0.34 (0.18) (1.42) UFRM N 12/20/96 1.01 NM (0.02) (1.32) (16.96) VABF N 12/20/96 1.42 18.03 0.13 (0.90) (13.45) VFFC N 12/20/96 2.32 12.15 0.27 0.10 1.25 Maximum 5.35 55.00 0.79 2.07 24.85 Minimum - 7.44 (1.07) (5.36) (614.26) Average 0.96 15.70 0.23 (0.05) (12.55) Median 0.52 14.28 0.28 0.05 0.48
SOURCE: SNL SECURITIES AND F&C CALCULATIONS 28 109 FERGUSON & CO., LLP EXHIBIT II.2A-SOUTHEAST THRIFTS - SELECT
Deposit Ticker Short Name City State Region (BIF/SAIF) Exchange IPO Date Insurance Agency AMFB American Federal Bank, FSB Greenville SC SE SAIF NASDAQ 01/19/89 BANC BankAtlantic Bancorp, Inc. Fort Lauderdale FL SE SAIF NASDAQ 11/29/83 BFSB Bedford Bancshares, Inc. Bedford VA SE SAIF NASDAQ 08/22/94 BKUNA BankUnited Financial Corp. Coral Gables FL SE SAIF NASDAQ 12/11/85 CFCP Coastal Financial Corp. Myrtle Beach SC SE SAIF NASDAQ 09/26/90 CFFC Community Financial Corp. Staunton VA SE SAIF NASDAQ 03/30/88 CNIT CENIT Bancorp, Inc. Norfolk VA SE SAIF NASDAQ 08/06/92 EBSI Eagle Bancshares Tucker GA SE SAIF NASDAQ 04/01/86 FFBS FFBS BanCorp, Inc. Columbus MS SE SAIF NASDAQ 07/01/93 FFCH First Financial Holdings Inc. Charleston SC SE SAIF NASDAQ 11/10/83 FFFC FFVA Financial Corp. Lynchburg VA SE SAIF NASDAQ 10/12/94 FFFG F.F.O. Financial Group, Inc. St. Cloud FL SE SAIF NASDAQ 10/13/88 FFLC FFLC Bancorp, Inc. Leesburg FL SE SAIF NASDAQ 01/04/94 FGHC First Georgia Holding, Inc. Brunswick GA SE SAIF NASDAQ 02/11/87 FLFC First Liberty Financial Corp. Macon GA SE SAIF NASDAQ 12/06/83 FOBC Fed One Bancorp Wheeling WV SE SAIF NASDAQ 01/19/95 FSFC First Southeast Financial Corp Anderson SC SE SAIF NASDAQ 10/08/93 FTF Texarkana First Financial Corp Texarkana AR SE SAIF AMSE 07/07/95 GSLC Guaranty Financial Corp. Charlottesville VA SE SAIF NASDAQ NA HBS Haywood Bancshares, Inc. Waynesville NC SE BIF AMSE 12/18/87 KSAV KS Bancorp, Inc. Kenly NC SE SAIF NASDAQ 12/30/93 LIFB Life Bancorp, Inc. Norfolk VA SE SAIF NASDAQ 10/11/94 MGNL Magna Bancorp, Inc. Hattiesburg MS SE SAIF NASDAQ 03/13/91 NFSL Newnan Holdings, Inc. Newnan GA SE SAIF NASDAQ 03/01/86 PALM Palfed, Inc. Aiken SC SE SAIF NASDAQ 12/15/85 PLE Pinnacle Bank Jasper AL SE SAIF AMSE 12/17/86 SCCB S. Carolina Community Bancshrs Winnsboro SC SE SAIF NASDAQ 07/07/94 SOPN First Savings Bancorp, Inc. Southern Pines NC SE SAIF NASDAQ 01/06/94 TWIN Twin City Bancorp Bristol TN SE SAIF NASDAQ 01/04/95 UFRM United Federal Savings Bank Rocky Mount NC SE SAIF NASDAQ 07/01/80 VFFC Virginia First Financial Corp. Petersburg VA SE SAIF NASDAQ 01/01/78 Maximum Minimum Average Median
SOURCE: SNL SECURITIES AND F&C CALCULATIONS 29 110 FERGUSON & CO., LLP EXHIBIT II.2A-ALL SOUTHEAST THRIFTS - SELECT
Current Current Price/ Current Current Current Ticker ($) ($M) (x) (%) (%) (%) (%) Stock Market LTM Price/ Price/ Tang Price/ Dividend Price Value Core EPS Book Value Book Value Assets Yield AMFB 19.125 209.82 12.26 193.18 209.02 15.02 2.09 BANC 13.250 194.01 13.95 139.62 150.23 8.99 1.10 BFSB 17.500 20.01 11.74 103.24 103.24 15.71 2.74 BKUNA 9.063 49.43 18.50 115.45 122.14 6.27 - CFCP 21.000 72.16 19.27 261.19 261.19 15.94 2.10 CFFC 21.000 26.71 12.73 119.39 119.39 16.61 2.48 CNIT 40.250 65.75 16.63 136.21 149.52 9.58 2.48 EBSI 14.500 66.01 11.07 114.90 114.90 10.28 4.14 FFBS 23.000 36.12 20.18 138.39 138.39 28.73 2.17 FFCH 22.750 144.63 12.30 152.58 152.58 9.35 3.17 FFFC 21.250 106.73 16.73 125.96 128.63 20.13 1.88 FFFG 2.938 24.77 13.35 131.75 131.75 7.96 - FFLC 20.500 51.13 16.80 95.00 95.00 15.41 1.95 FGHC 8.625 17.45 15.97 145.69 163.66 12.12 0.93 FLFC 18.750 113.81 15.37 164.62 194.50 11.36 2.13 FOBC 15.750 38.87 11.93 94.77 99.87 11.50 3.68 FSFC 9.375 41.14 13.20 124.17 124.17 12.49 2.13 FTF 15.250 28.74 9.47 108.77 108.77 17.34 2.95 GSLC 8.750 8.09 14.58 127.00 127.00 6.98 1.14 HBS 18.250 21.92 16.29 109.15 113.64 16.75 3.07 KSAV 20.875 13.85 12.89 100.22 100.31 14.40 2.87 LIFB 17.938 176.63 15.60 121.45 125.62 12.57 2.45 MGNL 19.500 267.95 12.83 212.88 223.37 20.58 3.08 NFSL 25.250 40.08 10.61 173.90 224.64 15.66 1.74 PALM 14.438 75.48 19.78 142.95 149.93 11.44 0.55 PLE 16.875 15.02 9.99 101.35 105.07 7.83 4.27 SCCB 15.000 11.03 22.06 89.07 89.07 25.51 4.00 SOPN 18.750 70.20 18.20 104.75 104.75 26.67 3.63 TWIN 17.250 14.84 14.14 110.72 110.72 13.87 3.71 UFRM 8.125 24.90 19.82 126.16 126.16 9.45 2.46 VFFC 13.125 75.38 13.53 123.36 127.18 9.65 0.76 Maximum 40.250 267.95 22.06 261.19 261.19 28.73 4.27 Minimum 2.938 8.09 9.47 89.07 89.07 6.27 - Average 17.032 68.47 14.90 132.51 138.53 14.07 2.32 Median 17.500 41.14 14.14 124.17 126.16 12.57 2.45
SOURCE: SNL SECURITIES AND F&C CALCULATIONS 30 111 FERGUSON & CO., LLP EXHIBIT II.2A-ALL SOUTHEAST THRIFTS - SELECT
Tangible Return on ROACE Total Equity/ Equity/ Core Avg Assets Before Ticker Mst RctQ Mst RctQ Mst RctQ LTM LTM LTM (Y/N) Date Assets Assets Tang Assets EPS Before Extra Extra Merger Current ($000) (%) (%) ($) (%) (%) Target? Pricing AMFB 1,394,874 7.76 7.22 1.56 1.05 13.04 N 12/20/96 BANC 2,170,480 6.44 6.01 0.95 0.85 10.90 N 12/20/96 BFSB 127,360 14.31 14.31 1.49 1.10 6.98 N 12/20/96 BKUNA 824,360 8.38 8.11 0.49 0.36 1.23 N 12/20/96 CFCP 452,809 6.10 6.10 1.09 1.04 17.09 N 12/20/96 CFFC 160,791 13.92 13.92 1.65 1.02 7.45 N 12/20/96 CNIT 685,962 7.04 6.45 2.42 0.40 5.61 N 12/20/96 EBSI 642,136 8.94 8.94 1.31 0.65 7.78 N 12/20/96 FFBS 125,727 19.59 19.59 1.14 1.09 5.51 N 12/20/96 FFCH 1,546,149 6.13 6.13 1.85 0.48 7.55 N 12/20/96 FFFC 530,095 14.85 14.59 1.27 0.99 6.28 N 12/20/96 FFFG 311,028 6.05 6.05 0.22 0.21 3.28 N 12/20/96 FFLC 335,993 16.22 16.22 1.22 0.63 3.72 N 12/20/96 FGHC 144,022 8.30 7.46 0.54 0.89 10.65 N 12/20/96 FLFC 991,226 7.66 6.67 1.22 1.03 14.22 N 12/20/96 FOBC 341,528 11.68 11.14 1.32 0.70 5.72 N 12/20/96 FSFC 329,336 10.06 10.06 0.71 (0.03) (0.19) N 12/20/96 FTF 165,747 15.94 15.94 1.61 1.46 7.34 N 12/20/96 GSLC 115,229 5.50 5.50 0.60 0.44 7.22 N 12/20/96 HBS 130,859 15.34 14.83 1.12 0.70 4.57 N 12/20/96 KSAV 96,150 14.37 14.36 1.62 0.82 5.30 N 12/20/96 LIFB 1,404,760 10.35 10.05 1.15 0.65 4.87 N 12/20/96 MGNL 1,302,239 9.66 9.25 1.52 1.37 13.79 N 12/20/96 NFSL 255,946 9.00 7.11 2.38 2.09 18.60 N 12/20/96 PALM 659,902 8.00 7.66 0.73 0.37 4.46 N 12/20/96 PLE 191,659 7.73 7.48 1.69 0.50 6.40 N 12/20/96 SCCB 43,232 28.65 28.65 0.68 0.85 2.96 N 12/20/96 SOPN 263,203 25.46 25.46 1.03 1.27 4.89 N 12/20/96 TWIN 107,067 12.53 12.53 1.22 0.78 5.78 N 12/20/96 UFRM 263,582 7.49 7.49 0.41 0.27 3.38 N 12/20/96 VFFC 781,358 7.82 7.60 0.97 1.43 17.98 N 12/20/96 Maximum 2,170,480 28.65 28.65 2.42 2.09 18.60 Minimum 43,232 5.50 5.50 0.22 (0.03) (0.19) Average 544,994 11.33 11.06 1.20 0.82 7.56 Median 329,336 9.00 8.94 1.22 0.82 6.28
SOURCE: SNL SECURITIES AND F&C CALCULATIONS 31 112 FERGUSON & CO., LLP EXHIBIT II.2A-ALL SOUTHEAST THRIFTS - SELECT
Return on ROACE NPAs/ Price/ Core Avg Assets Before Ticker Mst RctQ (x) Mst RctQ Mst RctQ Mst RctQ Assets Core EPS Before Extra Extra (%) EPS ($) (%) (%) AMFB 0.51 11.38 0.42 0.28 3.66 BANC 0.72 12.74 0.26 0.21 3.06 BFSB - 9.31 0.47 0.40 2.72 BKUNA 0.85 12.59 0.18 (0.08) (6.05) CFCP 0.07 17.50 0.30 1.10 18.12 CFFC 0.20 11.67 0.45 0.23 1.68 CNIT 0.77 12.74 0.79 (0.07) (0.96) EBSI 1.06 14.50 0.25 (0.09) (0.94) FFBS 0.33 17.42 0.33 0.33 1.70 FFCH 1.20 12.10 0.47 (0.37) (5.90) FFFC 0.44 15.18 0.35 0.27 1.79 FFFG 2.94 14.69 0.05 (0.63) (9.56) FFLC 0.23 15.07 0.34 (0.27) (1.60) FGHC 1.34 13.48 0.16 0.94 11.17 FLFC 1.22 14.65 0.32 1.05 14.39 FOBC 0.14 10.64 0.37 (0.16) (1.36) FSFC 0.06 11.16 0.21 (0.35) (3.49) FTF 0.08 9.08 0.42 0.52 2.89 GSLC NA 12.15 0.18 (0.12) (2.08) HBS 2.33 13.04 0.35 (0.04) (0.26) KSAV 0.55 9.66 0.54 0.05 0.32 LIFB 0.38 12.46 0.36 0.05 0.43 MGNL 2.52 12.19 0.40 0.54 5.56 NFSL NA 10.52 0.60 1.17 11.18 PALM 3.44 18.05 0.20 (0.60) (7.35) PLE 0.83 8.79 0.48 (0.55) (6.91) SCCB NA 20.83 0.18 0.15 0.52 SOPN 0.10 16.74 0.28 0.46 1.80 TWIN 0.40 12.68 0.34 (0.18) (1.42) UFRM 1.01 NM (0.02) (1.32) (16.96) VFFC 2.32 12.15 0.27 0.10 1.25 Maximum 3.44 20.83 0.79 1.17 18.12 Minimum - 8.79 (0.02) (1.32) (16.96) Average 0.93 13.17 0.33 0.10 0.56 Median 0.64 12.64 0.34 0.05 0.43
SOURCE: SNL SECURITIES AND F&C CALCULATIONS 32 113 FERGUSON & CO., LLP EXHIBIT II.3-ARKANSAS THRIFTS
Deposit Insurance Agency Ticker Short Name City State Region (BIF/SAIF) Exchange IPO Date FFBH First Federal Bancshares of AR Harrison AR SE SAIF NASDAQ 05/03/96 FTF Texarkana First Financial Corp Texarkana AR SE SAIF AMSE 07/07/95 PFSL Pocahontas FS&LA, MHC Pocahontas AR SE SAIF NASDAQ 04/05/94 Maximum Minimum Average Median
SOURCE: SNL SECURITIES AND F&C CALCULATIONS 33 114 FERGUSON & CO., LLP EXHIBIT II.3-ARKANSAS THRIFTS
Current Current Price/ Current Current Current Stock Market LTM Price/ Price/ Tang Price/ Dividend Price Value Core EPS Book Value Book Value Assets Yield Ticker ($) ($M) (x) (%) (%) (%) (%) FFBH 15.750 81.17 NA 97.40 97.40 15.93 - FTF 15.250 28.74 9.47 108.77 108.77 17.34 2.95 PFSL 17.250 28.02 11.13 123.48 123.48 7.34 4.87 Maximum 17.250 81.17 11.13 123.48 123.48 17.34 4.87 Minimum 15.250 28.02 9.47 97.40 97.40 7.34 - Average 16.083 45.98 10.30 109.88 109.88 13.54 2.61 Median 15.750 28.74 10.30 108.77 108.77 15.93 2.95
SOURCE: SNL SECURITIES AND F&C CALCULATIONS 34 115 FERGUSON & CO., LLP EXHIBIT II.3-ARKANSAS THRIFTS
Tangible Return on ROACE Total Equity/ Equity/ Core Avg Assets Before Assets Assets Tang Assets EPS Before Extra Extra Merger Current ($000) (%) (%) ($) (%) (%) Target? Pricing Ticker Mst RctQ Mst RctQ Mst RctQ LTM LTM LTM (Y/N) Date FFBH 509,605 16.35 16.35 NA NA NA N 12/20/96 FTF 165,747 15.94 15.94 1.61 1.46 7.34 N 12/20/96 PFSL 381,562 5.95 5.95 1.55 0.54 8.98 N 12/20/96 Maximum 509,605 16.35 16.35 1.61 1.46 8.98 Minimum 165,747 5.95 5.95 1.55 0.54 7.34 Average 352,305 12.75 12.75 1.58 1.00 8.16 Median 381,562 15.94 15.94 1.58 1.00 8.16
SOURCE: SNL SECURITIES AND F&C CALCULATIONS 35 116 FERGUSON & CO., LLP EXHIBIT II.3-ARKANSAS THRIFTS
Return on ROACE NPAs/ Price/ Core Avg Assets Before Assets Core EPS Before Extra Extra (%) EPS ($) (%) (%) Ticker Mst RctQ (x) Mst RctQ Mst RctQ Mst RctQ FFBH 0.15 14.06 0.28 (0.21) (1.25) FTF 0.08 9.08 0.42 0.52 2.89 PFSL 0.16 7.44 0.58 0.45 7.51 Maximum 0.16 14.06 0.58 0.52 7.51 Minimum 0.08 7.44 0.28 (0.21) (1.25) Average 0.13 10.19 0.43 0.25 3.05 Median 0.15 9.08 0.42 0.45 2.89
SOURCE: SNL SECURITIES AND F&C CALCULATIONS 36 117 FERGUSON & CO., LLP EXHIBIT II.4-COMPARATIVES GENERAL
Total Current Current Number Assets Stock Market of ($000) Price Value Ticker Short Name City State Offices Mst RctQ IPO Date ($) ($M) ASBP ASB Financial Corp. Portsmouth OH 1 114,298 05/11/95 17.50 29.99 CBCI Calumet Bancorp, Inc. Dolton IL 5 492,779 02/20/92 32.63 77.55 CBCO CB Bancorp, Inc. Michigan City IN 3 200,008 12/28/92 24.13 28.04 EQSB Equitable Federal Savings Bank Wheaton MD 4 267,776 09/10/93 26.88 16.13 FGHC First Georgia Holding, Inc. Brunswick GA 7 144,022 02/11/87 8.63 17.45 FKFS First Keystone Financial Media PA 5 294,241 01/26/95 19.38 25.04 FSPG First Home Bancorp, Inc. Pennsville NJ 10 487,209 04/20/87 19.50 39.59 LARL Laurel Capital Group, Inc. Allison Park PA 6 201,911 02/20/87 15.88 24.06 SFED SFS Bancorp, Inc. Schenectady NY 3 166,030 06/30/95 14.75 18.86 SHEN First Shenango Bancorp, Inc. New Castle PA 4 384,088 04/06/93 22.75 51.37 WCBI Westco Bancorp Westchester IL 1 307,772 06/26/92 21.50 55.92 WSB Washington Savings Bank, FSB Waldorf MD 4 246,742 NA 5.00 21.10 Maximum 10 492,779 32.63 77.55 Minimum 1 114,298 5.00 16.13 Average 4 275,573 19.04 33.76 Median 4 257,259 19.44 26.54
SOURCE: SNL SECURITIES AND F&C CALCULATIONS 37 118 FERGUSON & CO., LLP EXHIBIT II.5-COMPARATIVES OPERATIONS
Net Income Loan Average Before Return on Return on Loss Assets Net Income Extra Items Avg Assets Avg Equity Provision ($000) ($000) ($000) (%) (%) ($000) Short Name LTM LTM LTM LTM LTM LTM ASBP ASB Financial Corp. 111,536 637 637 0.57 2.45 22 CBCI Calumet Bancorp, Inc. 500,479 4,932 4,932 0.99 5.97 800 CBCO CB Bancorp, Inc. 196,644 2,182 2,182 1.11 11.67 1,292 EQSB Equitable Federal Savings Bank 252,797 1,980 1,980 0.78 14.98 (185) FGHC First Georgia Holding, Inc. 137,234 1,220 1,220 0.89 10.65 180 FKFS First Keystone Financial 275,687 885 885 0.32 3.92 1,250 FSPG First Home Bancorp, Inc. 464,865 4,248 4,248 0.91 14.00 400 LARL Laurel Capital Group, Inc. 194,503 2,056 2,056 1.06 10.00 28 SFED SFS Bancorp, Inc. 165,379 738 738 0.45 3.22 120 SHEN First Shenango Bancorp, Inc. 353,275 2,663 2,663 0.75 5.65 907 WCBI Westco Bancorp 308,064 3,041 3,041 0.99 6.33 - WSB Washington Savings Bank, FSB 259,001 2,354 2,354 0.91 11.60 182 Maximum 500,479 4,932 4,932 1.11 14.98 1,292 Minimum 111,536 637 637 0.32 2.45 (185) Average 268,289 2,245 2,245 0.81 8.37 416 Median 255,899 2,119 2,119 0.90 8.17 181
SOURCE: SNL SECURITIES AND F&C CALCULATIONS 38 119 FERGUSON & CO., LLP EXHIBIT II.5 - COMPARATIVES OPERATIONS
Loan Loss Total Total Net Loan Common Dividend Interest Interest Provision Noninterest Noninterest Chargeoffs/ LTM EPS Dividends Payout Income/ Expense/ as a % of AA Income Expense Avg Loans After Extra Per Share Ratio Avg Assets Avg Assets (%) ($000) ($000) (%) ($) ($) (%) (%) (%) LTM LTM LTM LTM LTM LTM LTM LTM LTM ASBP 0.02 181 2,458 0.05 0.39 0.35 89.74 7.36 3.94 CBCI 0.16 1,154 8,925 0.05 1.79 - - 7.79 4.21 CBCO 0.66 1,363 4,141 0.26 1.73 - - 7.99 3.96 EQSB (0.07) 896 4,461 NA 3.14 - - 7.32 4.86 FGHC 0.13 1,041 4,274 0.10 0.58 0.07 11.50 8.61 4.84 FKFS 0.45 1,103 6,906 0.07 0.74 - - 7.20 3.97 FSPG 0.09 1,019 8,530 0.06 2.07 0.48 23.19 7.67 4.50 LARL 0.01 564 3,765 0.01 1.32 0.35 26.52 7.63 3.76 SFED 0.07 355 4,256 0.06 0.54 0.06 11.11 7.22 3.78 SHEN 0.26 816 6,425 0.56 1.15 0.44 38.26 7.51 4.03 WCBI - 749 5,298 - 1.05 0.47 44.44 7.49 3.99 WSB 0.07 628 4,120 0.07 0.52 0.14 26.92 8.29 5.66 Maximum 0.66 1,363 8,925 0.56 3.14 0.48 89.74 8.61 5.66 Minimum (0.07) 181 2,458 - 0.39 - - 7.20 3.76 Average 0.15 822 5,297 0.12 1.25 0.20 22.64 7.67 4.29 Median 0.08 856 4,368 0.06 1.10 0.10 17.35 7.57 4.01
SOURCE: SNL SECURITIES AND F&C CALCULATIONS 39 120 FERGUSON & CO., LLP EXHIBIT II.5-COMPARATIVES OPERATIONS
Net Interest Gain on Real Noninterest G&A Noninterest Net Oper Total Amortization Income/ Sale/ Estate Income/ Expense/ Expense/ Expenses/ Nonrecurring of Avg Assets Avg Assets Expense Avg Assets Avg Assets Avg Assets Avg Assets Expense Intangibles (%) (%) ($000) (%) (%) (%) (%) ($000) ($000) LTM LTM LTM LTM LTM LTM LTM LTM LTM ASBP 3.42 - (24) 0.16 2.23 2.20 2.06 551 - CBCI 3.58 - (918) 0.23 1.97 1.78 1.74 2,300 - CBCO 4.03 0.06 - 0.69 2.11 2.11 1.41 723 - EQSB 2.46 0.01 (815) 0.35 2.09 1.76 1.73 - - FGHC 3.77 - 14 0.76 3.00 3.11 2.25 - 137 FKFS 3.23 0.07 (2) 0.40 2.51 2.51 2.11 1,737 - FSPG 3.17 0.04 180 0.22 1.79 1.83 1.58 1,564 8 LARL 3.87 0.02 - 0.29 1.94 1.94 1.65 1,059 - SFED 3.44 0.01 (6) 0.21 2.58 2.57 2.36 930 - SHEN 3.48 0.06 210 0.23 1.76 1.82 1.53 1,666 - WCBI 3.51 (0.01) - 0.24 1.72 1.72 1.48 1,610 - WSB 2.62 0.11 (478) 0.24 1.78 1.59 1.53 - - Maximum 4.03 0.11 210 0.76 3.00 3.11 2.36 2,300 137 Minimum 2.46 (0.01) (918) 0.16 1.72 1.59 1.41 - - Average 3.38 0.03 (153) 0.34 2.12 2.08 1.79 1,012 12 Median 3.46 0.02 (1) 0.24 2.03 1.89 1.69 995 -
SOURCE: SNL SECURITIES AND F&C CALCULATIONS 40 121 FERGUSON & CO., LLP EXHIBIT II.5 - COMPARATIVES OPERATIONS
Core Yield on Cost of Interest Tax Efficiency Income/ Int Earning Int Bearing Effective Yield Provision Ratio Avg Assets Assets Liabilities Tax Rate Spread ($000) (%) (%) (%) (%) (%) (%) LTM LTM LTM LTM LTM LTM LTM ASBP 333 62.03 0.89 7.58 5.24 34.33 2.34 CBCI 2,377 51.59 1.25 8.15 5.21 32.52 2.94 CBCO 1,080 44.54 1.31 8.52 4.74 33.11 3.78 EQSB 871 74.24 0.78 7.64 5.18 30.55 2.46 FGHC 659 66.38 0.83 8.96 5.28 35.07 3.68 FKFS (567) 69.02 0.68 7.45 4.42 (178.30) 3.03 FSPG 1,944 52.92 1.00 7.87 4.84 31.40 3.03 LARL 1,216 46.57 1.40 7.80 4.45 37.16 3.35 SFED 26 70.43 0.80 7.36 4.45 3.40 2.91 SHEN 1,676 47.41 1.02 7.71 4.76 38.63 2.95 WCBI 1,578 45.86 1.33 7.71 4.87 34.16 2.84 WSB 1,049 61.95 0.84 8.48 6.20 30.83 2.28 Maximum 2,377 74.24 1.40 8.96 6.20 38.63 3.78 Minimum (567) 44.54 0.68 7.36 4.42 (178.30) 2.28 Average 1,020 57.75 1.01 7.94 4.97 13.57 2.97 Median 1,065 57.44 0.95 7.76 4.86 32.82 2.95
SOURCE: SNL SECURITIES AND F&C CALCULATIONS 41 122 FERGUSON & CO.,LLP EXHIBIT II.6 - COMPARATIVES PRICING
Current Current Current Current Stock Market Price/ Price/ Price/ Tang Price Value M Core EPS Book Value Book Value Ticker Name City State ($) ($M) (x) (%) (%) ASBP ASBFinancial-OH Portsmouth OH 17.500 29.99 28.69 110.62 110.62 CBCI Calumet Bancorp-IL Dolton IL 32.625 77.55 14.12 97.45 97.45 CBCO CBBancorp-IN Michigan City IN 24.125 28.04 11.77 144.72 144.72 EQSB EquitableFSB-MD Wheaton MD 26.875 16.13 8.59 113.68 113.68 FGHC FrstGeorgiaHldg-GA Brunswick GA 8.625 17.45 15.97 145.69 163.66 FKFS FrstKeystone-PA Media PA 19.375 25.04 12.34 108.48 108.48 FSPG FrstHomeBancorp-NJ Pennsville NJ 19.500 39.59 8.55 125.81 128.63 LARL LaurelCapitalGp-PA Allison Park PA 15.875 24.06 9.28 114.46 114.46 SFED SFSBancorp-NY Schenectady NY 14.750 18.86 14.60 89.07 89.07 SHEN FstShenangoBcp-PA New Castle PA 22.750 51.37 20.68 111.41 111.41 WCBI WestcoBancorp-IL Westchester IL 21.500 55.92 14.73 117.23 117.23 WSB WashingtonSvBk-MD Waldorf MD 5.000 21.10 10.42 98.04 98.04 Maximum 32.625 77.55 28.69 145.69 163.66 Minimum 5.000 16.13 8.55 89.07 89.07 Average 19.042 33.76 14.15 114.72 116.45 Median 19.438 26.54 13.23 112.55 112.55
SOURCE: SNL SECURITIES AND F&C CALCULATIONS 42 123 FERGUSON & CO.,LLP EXHIBIT II.6 - COMPARATIVES PRICING
Tangible Return on ROACE Current Total Equity/ Equity/ Core Avg Assets Before Price/ Dividend Assets Assets Tang Assets EPS Before Extra Extra Merger Assets Yield ($000) (%) (%) ($) (%) (%) Target? Ticker (%) (%) Mst RctQ Mst RctQ Mst RctQ LTM LTM LTM (Y/N) ASBP 26.24 2.29 114,298 22.18 22.18 0.61 0.57 2.45 N CBCI 15.74 - 492,779 16.15 16.15 2.31 0.99 5.97 N CBCO 14.02 5.39 200,008 9.69 9.69 2.05 1.11 11.67 N EQSB 6.02 - 267,776 5.30 5.30 3.13 0.78 14.98 N FGHC 12.12 0.93 144,022 8.30 7.46 0.54 0.89 10.65 N FKFS 8.51 1.03 294,241 7.85 7.85 1.57 0.32 3.92 N FSPG 8.13 2.46 487,209 6.46 6.32 2.28 0.91 14.00 N LARL 11.91 2.77 201,911 10.40 10.40 1.71 1.06 10.00 N SFED 11.36 1.63 166,030 12.75 12.75 1.01 0.45 3.22 N SHEN 13.38 2.11 384,088 12.01 12.01 1.10 0.75 5.65 N WCBI 18.17 2.79 307,772 15.50 15.50 1.46 0.99 6.33 N WSB 8.55 2.00 246,742 8.72 8.72 0.48 0.91 11.60 N Maximum 26.24 5.39 492,779 22.18 22.18 3.13 1.11 14.98 Minimum 6.02 - 114,298 5.30 5.30 0.48 0.32 2.45 Average 12.85 1.95 275,573 11.28 11.19 1.52 0.81 8.37 Median 12.02 2.06 257,259 10.05 10.05 1.52 0.90 8.17
SOURCE: SNL SECURITIES AND F&C CALCULATIONS 43 124 FERGUSON & CO.,LLP EXHIBIT II.6 - COMPARATIVES PRICING
Return on ROACE NPAs/ Price/ Core Avg Assets Before Current Assets Core EPS Before Extra Extra Pricing (%) EPS ($) (%) (%) Ticker Date Mst RctQ (x) Mst RctQ Mst RctQ Mst RctQ ASBP 12/20/96 1.60 39.77 0.11 (0.62) (2.76) CBCI 12/20/96 1.29 13.59 0.60 0.17 1.04 CBCO 12/20/96 1.70 10.97 0.55 0.52 5.32 EQSB 12/20/96 0.77 7.90 0.85 0.81 15.35 FGHC 12/20/96 1.34 13.48 0.16 0.94 11.17 FKFS 12/20/96 2.28 9.69 0.50 (0.39) (4.89) FSPG 12/20/96 0.78 7.50 0.65 0.72 11.21 LARL 12/20/96 0.64 9.02 0.44 0.14 1.28 SFED 12/20/96 0.61 10.24 0.36 (0.30) (2.31) SHEN 12/20/96 0.50 NM - 0.01 0.09 WCBI 12/20/96 0.53 12.80 0.42 0.14 0.89 WSB 12/20/96 0.95 7.81 0.16 1.13 13.38 Maximum 2.28 39.77 0.85 1.13 15.35 Minimum 0.50 7.50 - (0.62) (4.89) Average 1.08 11.90 0.40 0.27 4.15 Median 0.87 10.24 0.43 0.16 1.16
SOURCE: SNL SECURITIES AND F&C CALCULATIONS 44 125 FERGUSON & CO.,LLP EXHIBIT II.7 - COMPARATIVES BALANCE SHEET
Total Cash & Inv Mortgage- MBS's Investment & Total Cash and as a % of Backed as a % of Net Foreclosed Assets Investments Tot. Assets Securities Tot. Assets Loans Real Estate ($000) ($000) (%) ($000) (%) ($000) ($000) Short Name Mst RctQ Mst RctQ Mst RctQ Mst RctQ Mst RctQ ASBP ASB Financial Corp. 114,298 41,418 36.24 10,283 9.00 69,610 663 CBCI Calumet Bancorp, Inc. 492,779 96,618 19.61 18,012 3.66 370,861 19,000 CBCO CB Bancorp, Inc. 200,008 99,755 49.88 8,690 4.34 88,726 333 EQSB Equitable Federal Savings Bank 267,776 70,867 26.47 58,917 22.00 186,835 2,019 FGHC First Georgia Holding, Inc. 144,022 17,582 12.21 3,161 2.19 120,343 20 FKFS First Keystone Financial 294,241 113,995 38.74 46,865 15.93 167,530 1,557 FSPG First Home Bancorp, Inc. 487,209 216,570 44.45 13,546 2.78 259,226 653 LARL Laurel Capital Group, Inc. 201,911 49,679 24.60 15,058 7.46 146,807 150 SFED SFS Bancorp, Inc. 166,030 45,120 27.18 21,222 12.78 117,200 88 SHEN First Shenango Bancorp, Inc. 384,088 120,176 31.29 28,626 7.45 251,981 939 WCBI Westco Bancorp 307,772 83,237 27.05 - - 219,535 - WSB Washington Savings Bank, FSB 246,742 119,878 48.58 104,492 42.35 119,196 2,019 Maximum 492,779 216,570 49.88 104,492 42.35 370,861 19,000 Minimum 114,298 17,582 12.21 - - 69,610 - Average 275,573 89,575 32.19 27,406 10.83 176,488 2,287 Median 257,259 89,928 29.23 16,535 7.46 157,169 658
SOURCE: SNL SECURITIES AND F&C CALCULATIONS 45 126 FERGUSON & CO.,LLP EXHIBIT II.7 - COMPARATIVES BALANCE SHEET
Loan Servicing Total Other Total Total Other Total Common Total Rights Intangibles Assets Deposits Borrowings Liabilities Liabilities Equity Equity ($000) ($000) ($000) ($000) ($000) ($000) ($000) ($000) ($000) Mst RctQ Mst RctQ Mst RctQ Mst RctQ Mst RctQ Mst RctQ Mst RctQ Mst RctQ Mst RctQ ASBP - - 2,607 83,903 2,406 2,636 88,945 25,353 25,353 CBCI - - 6,300 368,332 36,850 8,014 413,196 79,583 79,583 CBCO - - 9,630 129,086 44,000 7,542 180,628 19,380 19,380 EQSB - - 7,969 209,145 42,340 2,109 253,594 14,182 14,182 FGHC - 1,309 4,768 118,877 11,692 1,498 132,067 11,955 11,955 FKFS 232 - 8,480 219,205 46,740 5,212 271,157 23,084 23,084 FSPG - 695 9,084 275,240 177,011 3,502 455,753 31,456 31,456 LARL - - 3,698 167,019 9,047 4,837 180,903 21,008 21,008 SFED - - 3,622 141,866 - 2,990 144,856 21,174 21,174 SHEN - - 7,519 263,167 71,110 3,693 337,970 46,118 46,118 WCBI - - 5,000 252,969 - 7,103 260,072 47,700 47,700 WSB - - 5,292 223,454 - 1,782 225,236 21,505 21,505 Maximum 232 1,309 9,630 368,332 177,011 8,014 455,753 79,583 79,583 Minimum - - 2,607 83,903 - 1,498 88,945 11,955 11,955 Average 19 167 6,164 204,355 36,766 4,243 245,365 30,208 30,208 Median - - 5,796 214,175 24,271 3,598 239,415 22,295 22,295
SOURCE: SNL SECURITIES AND F&C CALCULATIONS 46 127 FERGUSON & CO.,LLP EXHIBIT II.7 - COMPARATIVES BALANCE SHEET
Regulatory Regulatory Regulatory Loan Loss Tangible Core Total Tangible Core Risk-Based NPAs/ Reserves/ Reserves/ Capital Capital Capital Capital/ Capital/ Capital/ Assets Assets NPLs ($000) ($000) ($000) Tangible Adj Tangible Risk-Weightd (%) (%) (%) Mst RctQ Mst RctQ Mst RctQ Assets (%) Assets (%) Assets (%) Mst RctQ Mst RctQ Mst RctQ ASBP 17,191 17,191 17,501 16.25 16.25 37.57 1.60 0.77 75.75 CBCI 48,878 48,878 52,636 10.18 10.18 17.33 1.29 1.11 122.43 CBCO 17,009 17,009 18,539 8.59 8.59 16.87 1.70 0.93 335.61 EQSB 14,182 14,182 14,742 5.30 5.30 11.51 0.77 0.22 NM FGHC 10,697 12,007 12,999 7.49 8.33 10.66 1.34 0.69 52.05 FKFS 22,608 22,608 24,328 7.86 7.86 18.07 2.28 0.89 50.92 FSPG 31,200 31,200 33,676 6.31 6.31 16.32 0.78 0.77 118.95 LARL NA 20,761 22,102 NA NA NA 0.64 0.94 168.31 SFED 17,263 17,263 18,340 10.61 10.61 21.21 0.61 0.39 69.84 SHEN 37,572 37,572 40,205 10.31 10.31 19.89 0.50 0.70 274.59 WCBI 38,536 38,536 39,419 12.69 12.69 31.00 0.53 0.29 54.54 WSB 19,958 19,958 20,379 8.00 8.00 22.42 0.95 0.47 87.64 Maximum 48,878 48,878 52,636 16.25 16.25 37.57 2.28 1.11 335.61 Minimum 10,697 12,007 12,999 5.30 5.30 10.66 0.50 0.22 50.92 Average 25,009 24,764 26,239 9.42 9.49 20.26 1.08 0.68 128.24 Median 19,958 20,360 21,241 8.59 8.59 18.07 0.87 0.74 87.64
SOURCE: SNL SECURITIES AND F&C CALCULATIONS 47 128 FERGUSON & CO.,LLP EXHIBIT II.7 - COMPARATIVES BALANCE SHEET
Publicly Tangible Earn Assets/ Full-Time Loans Reported Publicly Rep Int Bearing Equivalent Serviced Book Value Book Value Liabilities Employees For Others ($) ($) (%) (Actual) ($000) Mst RctQ Mst RctQ Mst RctQ Mst RctQ Mst RctQ ASBP 15.82 15.82 128.23 23 - CBCI 33.48 33.48 118.23 130 2,368 CBCO 16.67 16.67 112.62 51 2,083 EQSB 23.64 23.64 102.31 71 104,201 FGHC 5.92 5.27 109.41 75 - FKFS 17.86 17.86 106.88 74 127,289 FSPG 15.50 15.16 104.25 115 63,200 LARL 13.87 13.87 115.82 50 1,262 SFED 16.56 16.56 114.54 60 4,342 SHEN 20.42 20.42 114.69 105 586 WCBI 18.34 18.34 118.98 55 - WSB 5.10 5.10 107.00 72 11,303 Maximum 33.48 33.48 128.23 130 127,289 Minimum 5.10 5.10 102.31 23 - Average 16.93 16.85 112.75 73 26,386 Median 16.62 16.62 113.58 72 2,226
SOURCE: SNL SECURITIES AND F&C CALCULATIONS 48 129 FERGUSON & CO.,LLP EXHIBIT II.8 - COMPARATIVES RISK CHARACTERISTICS
NPAs + Loans Net Loan NPAs/ 90+ Pst Due/ NPAs/ Reserves/ Reserves/ Chargeoffs/ Loans/ Assets Assets Equity Loans NPAs Avg Loans Assets (%) (%) (%) (%) (%) (%) (%) Short Name Mst RctQ Mst RctQ Mst RctQ Mst RctQ Mst RctQ Mst RctQ Mst RctQ ASBP ASB Financial Corp. 1.60 1.89 7.22 1.25 48.31 0.13 61.68 CBCI Calumet Bancorp, Inc. 1.29 1.29 7.99 1.45 86.03 0.05 76.37 CBCO CB Bancorp, Inc. 1.70 1.70 17.54 2.02 54.88 0.03 46.08 EQSB Equitable Federal Savings Bank 0.77 1.00 14.49 0.31 28.03 NA 70.02 FGHC First Georgia Holding, Inc. 1.34 1.34 16.11 0.82 51.51 0.11 84.25 FKFS First Keystone Financial 2.28 2.28 29.07 1.52 39.11 0.05 58.66 FSPG First Home Bancorp, Inc. 0.78 0.78 12.12 1.42 98.58 0.01 54.18 LARL Laurel Capital Group, Inc. 0.64 0.64 6.11 1.27 148.64 - 74.43 SFED SFS Bancorp, Inc. 0.61 0.66 4.78 0.55 63.77 0.03 70.98 SHEN First Shenango Bancorp, Inc. 0.50 0.50 4.16 1.04 140.23 0.34 67.21 WCBI Westco Bancorp 0.53 0.53 3.39 0.40 54.54 - 71.62 WSB Washington Savings Bank, FSB 0.95 0.95 10.90 0.96 49.34 0.25 48.92 Maximum 2.28 2.28 29.07 2.02 148.64 0.34 84.25 Minimum 0.50 0.50 3.39 0.31 28.03 - 46.08 Average 1.08 1.13 11.16 1.08 71.91 0.09 65.37 Median 0.87 0.98 9.45 1.15 54.71 0.05 68.62
SOURCE: SNL SECURITIES AND F&C CALCULATIONS 49 130 FERGUSON & CO.,LLP EXHIBIT II.8 - COMPARATIVES RISK CHARACTERISTICS
Intangible One Year Earn Assets/ Assets/ Cum Gap/ Net Int Bearing Equity Assets Loans Liabilities (%) (%) ($000) (%) Short Name Mst RctQ Mst RctY Mst RctQ Mst RctQ ASB Financial Corp. - NA 69,610 128.23 Calumet Bancorp, Inc. - 17.57 370,861 118.23 CB Bancorp, Inc. - NA 88,726 112.62 Equitable Federal Savings Bank - 1.41 186,835 102.31 First Georgia Holding, Inc. 10.95 13.14 120,343 109.41 First Keystone Financial - NA 167,530 106.88 First Home Bancorp, Inc. 2.21 (0.82) 259,226 104.25 Laurel Capital Group, Inc. - (4.37) 146,807 115.82 SFS Bancorp, Inc. - NA 117,200 114.54 First Shenango Bancorp, Inc. - 9.17 251,981 114.69 Westco Bancorp - NA 219,535 118.98 Washington Savings Bank, FSB - 7.96 119,196 107.00 10.95 17.57 370,861 128.23 - (4.37) 69,610 102.31 1.10 6.29 176,488 112.75 - 7.96 157,169 113.58
SOURCE: SNL SECURITIES AND F&C CALCULATIONS 50 131 EXHIBIT III 132 FERGUSON & CO., LLP HEARTLAND COMMUNITY BANK CAMDEN, ARKANSAS
12/31/95 3/31/96 6/30/96 9/30/96 Num of Quarters Open for Period 2 2 2 2 FINANCIAL HIGHLIGHTS (All $ Amounts in Thousands) BALANCE SHEET: Total Assets 169,194 171,746 175,261 177,747 % Change in Assets 4.27 1.51 2.05 1.42 Total Loans 82,064 81,538 84,917 90,515 Deposits 141,151 143,641 146,621 148,302 Broker Originated Deposits 100 100 100 0 CAPITAL: Equity Capital 16,330 16,599 17,711 17,079 Tangible Capital 16,767 16,970 15,412 14,092 Core Capital 16,767 16,970 15,412 14,092 Risk-Based Capital 17,569 17,747 16,263 14,198 Equity Capital/Total Assets 9.65 9.66 10.11 9.61 Core Capital/Risk Based Assets 24.37 23.53 21.12 17.82 Core Capital/Adj Tang Assets 9.88 9.86 7.72 6.92 Tangible Cap/Tangible Assets 9.88 9.86 7.72 6.92 Risk-Based Cap/Risk-Wt Assets 25.53 24.61 22.29 17.95 PROFITABILITY: Net Income(Loss) 164 233 (376) (753) Ret on Avg Assets Bef Ext Item 0.40 0.55 (0.87) (1.71) Return on Average Equity 3.98 5.66 (8.77) (17.32) Net Interest Income/Avg Assets 2.47 2.55 2.39 2.36 Noninterest Income/Avg Assets (0.34) (0.10) (1.02) (0.14) Noninterest Expense/Avg Assets 1.57 1.68 2.73 4.36 Yield/Cost Spread 2.09 2.22 2.17 2.27 LIQUIDITY: Int Earn Assets/Int Bear Liab 108.42 107.94 104.92 104.53 Brokered Deposits/Tot Deposits 0.07 0.07 0.07 0.00 ASSET QUALITY: Nonperf Lns+REO/Total Lns+REO 1.39 1.54 1.35 1.25 Nonaccrual Loans/Gross Loans 0.29 0.26 0.20 0.17 Nonaccrual Lns/Ln Loss Reserve 28.39 26.63 20.77 18.14 Repos Assets/Tot Assets 0.04 0.09 0.04 0.03 Net Chrg-Off/Av Adj Lns 0.01 0.18 0.01 0.00 Nonmtg 1-4 Constr&Conv Lns/TA 12.97 12.94 12.59 13.36
NOTE: This information will not agree with the information shown in the audited and unaudited financial statements. Source: TAFS, Sheshunoff Information Services Inc. 1 133 EXHIBIT IV 134 FERGUSON & CO., LLP AMERICAN SAVINGS BANK, FSB ASBP PORTSMOUTH, OHIO
1993 1994 1995 YTD 9/96 Num of Quarters Open for Period - - 4 4 FINANCIAL HIGHLIGHTS (All $ Amounts in Thousands) BALANCE SHEET: Total Assets - - 103,979 108,344 % Change in Assets - - - 4.20 Total Loans - - 65,442 69,799 Deposits - - 82,731 84,906 Broker Originated Deposits - - - - CAPITAL: Equity Capital - - 18,203 17,367 Tangible Capital - - 17,931 17,191 Core Capital - - 17,931 17,191 Risk-Based Capital - - 18,498 17,801 Equity Capital/Total Assets - - 17.51 16.03 Core Capital/Risk Based Assets - - 39.51 35.18 Core Capital/Adj Tang Assets - - 17.29 15.89 Tangible Cap/Tangible Assets - - 17.29 15.89 Risk-Based Cap/Risk-Wt Assets - - 40.76 36.43 PROFITABILITY: Net Income(Loss) - - 851 234 Ret on Avg Assets Bef Ext Item - - 0.85 0.29 Return on Average Equity - - 5.62 1.77 Net Interest Income/Avg Assets - - 3.24 3.25 Noninterest Income/Avg Assets - - 0.15 0.22 Noninterest Expense/Avg Assets - - 2.04 2.99 Yield/Cost Spread - - 2.71 2.58 LIQUIDITY: Int Earn Assets/Int Bear Liab - - 118.84 118.54 Brokered Deposits/Tot Deposits - - - - ASSET QUALITY: Nonperf Lns+REO/Total Lns+REO - - 3.46 3.96 Nonaccrual Loans/Gross Loans - - 1.88 1.62 Nonaccrual Lns/Ln Loss Reserve - - 141.21 132.01 Repos Assets/Tot Assets - - 0.50 0.61 Net Chrg-Off/Av Adj Lns - - 0.00 0.06 Nonmtg 1-4 Constr&Conv Lns/TA - - 11.22 12.55
Source: TAFS and Bank Source, by Sheshunoff Information Services Inc., September 30, 1996. 1 135 FERGUSON & CO., LLP CALUMET FS&LA CBCI DOLTON, ILLINOIS
1993 1994 1995 YTD 9/96 Num of Quarters Open for Period 4 4 4 3 FINANCIAL HIGHLIGHTS (All $ Amounts in Thousands) BALANCE SHEET: Total Assets 497,970 476,710 484,238 471,450 % Change in Assets 17.26 (4.27) 1.58 (2.64) Total Loans 327,465 360,580 375,463 370,889 Deposits 409,290 347,945 362,629 366,392 Broker Originated Deposits 20,245 9,870 8,095 8,085 CAPITAL: Equity Capital 54,580 50,919 58,373 52,046 Tangible Capital 49,964 47,433 56,116 48,878 Core Capital 49,964 47,433 56,116 48,878 Risk-Based Capital 53,403 51,166 59,943 52,636 Equity Capital/Total Assets 10.96 10.68 12.05 11.04 Core Capital/Risk Based Assets 18.22 15.91 18.38 16.34 Core Capital/Adj Tang Assets 10.15 10.05 11.68 10.45 Tangible Cap/Tangible Assets 10.15 10.05 11.68 10.45 Risk-Based Cap/Risk-Wt Assets 19.48 17.16 19.64 17.60 PROFITABILITY: Net Income(Loss) 9,838 7,131 5,674 3,172 Ret on Avg Assets Bef Ext Item 1.81 1.46 1.20 0.89 Return on Average Equity 14.73 13.52 10.34 7.60 Net Interest Income/Avg Assets 3.73 3.77 3.60 3.53 Noninterest Income/Avg Assets 1.02 0.45 0.15 0.57 Noninterest Expense/Avg Assets 1.80 1.84 1.80 2.67 Yield/Cost Spread 3.52 3.63 3.29 3.14 LIQUIDITY: Int Earn Assets/Int Bear Liab 109.23 108.65 111.96 110.84 Brokered Deposits/Tot Deposits 4.95 2.84 2.23 2.21 ASSET QUALITY: Nonperf Lns+REO/Total Lns+REO 3.31 2.71 2.44 1.90 Nonaccrual Loans/Gross Loans 1.32 1.27 1.46 1.11 Nonaccrual Lns/Ln Loss Reserve 93.14 108.08 118.21 78.39 Repos Assets/Tot Assets 0.82 0.44 0.27 0.33 Net Chrg-Off/Av Adj Lns 0.11 0.35 0.10 0.00 Nonmtg 1-4 Constr&Conv Lns/TA 24.71 32.05 34.23 34.88
Source: TAFS and Bank Source, by Sheshunoff Information Services Inc., September 30, 1996. 2 136 FERGUSON & CO., LLP COMMUNITY BANK, A FSB CBCO MICHIGAN CITY, INDIANA
1993 1994 1995 YTD 9/96 Num of Quarters Open for Period 4 4 4 3 FINANCIAL HIGHLIGHTS (All $ Amounts in Thousands) BALANCE SHEET: Total Assets 174,977 136,639 197,672 199,842 % Change in Assets 30.35 (21.91) 44.67 1.10 Total Loans 79,345 84,631 90,910 90,301 Deposits 114,131 110,125 122,841 129,162 Broker Originated Deposits - - - - CAPITAL: Equity Capital 12,589 13,657 15,537 17,009 Tangible Capital 12,589 13,657 15,532 17,008 Core Capital 12,589 13,657 15,532 17,008 Risk-Based Capital 13,158 14,287 16,433 18,539 Equity Capital/Total Assets 7.19 10.00 7.86 8.51 Core Capital/Risk Based Assets 14.48 18.32 14.66 15.23 Core Capital/Adj Tang Assets 7.22 10.02 7.81 8.51 Tangible Cap/Tangible Assets 7.22 10.02 7.81 8.51 Risk-Based Cap/Risk-Wt Assets 15.14 19.16 15.51 16.60 PROFITABILITY: Net Income(Loss) 2,229 1,625 2,444 1,460 Ret on Avg Assets Bef Ext Item 1.44 1.04 1.47 0.98 Return on Average Equity 19.50 12.38 16.63 11.89 Net Interest Income/Avg Assets 3.58 3.09 3.82 3.92 Noninterest Income/Avg Assets 0.79 0.63 0.73 0.83 Noninterest Expense/Avg Assets 2.01 2.04 2.00 2.57 Yield/Cost Spread 3.78 3.34 4.05 4.09 LIQUIDITY: Int Earn Assets/Int Bear Liab 101.74 101.01 100.03 106.73 Brokered Deposits/Tot Deposits - - - - ASSET QUALITY: Nonperf Lns+REO/Total Lns+REO 1.10 0.79 1.36 2.42 Nonaccrual Loans/Gross Loans 0.54 0.35 1.00 1.78 Nonaccrual Lns/Ln Loss Reserve 76.13 45.64 100.99 88.16 Repos Assets/Tot Assets - 0.02 - 0.17 Net Chrg-Off/Av Adj Lns 0.02 (0.00) 0.01 0.34 Nonmtg 1-4 Constr&Conv Lns/TA 2.69 5.24 4.05 5.89
Source: TAFS and Bank Source, by Sheshunoff Information Services Inc., September 30, 1996. 3 137 FERGUSON & CO., LLP EQUITABLE FSB EQSB WHEATON, MARYLAND
1993 1994 1995 YTD 9/96 Num of Quarters Open for Period 4 4 4 3 FINANCIAL HIGHLIGHTS (All $ Amounts in Thousands) BALANCE SHEET: Total Assets 190,637 218,869 255,200 278,774 % Change in Assets (5.37) 14.81 16.60 9.24 Total Loans 153,777 161,074 173,404 198,149 Deposits 169,706 181,089 200,560 218,290 Broker Originated Deposits - - - - CAPITAL: Equity Capital 9,120 10,551 13,205 13,804 Tangible Capital 9,120 10,551 13,205 13,804 Core Capital 9,120 10,551 13,205 13,804 Risk-Based Capital 9,670 11,211 13,765 14,396 Equity Capital/Total Assets 4.78 4.82 5.17 4.95 Core Capital/Risk Based Assets 8.08 9.32 10.75 10.29 Core Capital/Adj Tang Assets 4.79 4.82 5.18 4.95 Tangible Cap/Tangible Assets 4.79 4.82 5.18 4.95 Risk-Based Cap/Risk-Wt Assets 8.57 9.90 11.20 10.73 PROFITABILITY: Net Income(Loss) 1 1,432 2,655 599 Ret on Avg Assets Bef Ext Item 0.00 0.70 1.13 0.30 Return on Average Equity 0.01 14.56 21.90 5.80 Net Interest Income/Avg Assets 1.96 2.53 2.60 2.40 Noninterest Income/Avg Assets 0.72 0.81 0.60 0.51 Noninterest Expense/Avg Assets 2.74 2.46 1.79 2.47 Yield/Cost Spread 2.42 2.79 2.77 2.47 LIQUIDITY: Int Earn Assets/Int Bear Liab 98.05 99.57 100.23 101.74 Brokered Deposits/Tot Deposits - - - - ASSET QUALITY: Nonperf Lns+REO/Total Lns+REO 3.77 2.58 1.90 1.68 Nonaccrual Loans/Gross Loans 0.43 0.26 0.12 0.04 Nonaccrual Lns/Ln Loss Reserve 56.51 61.58 36.35 12.74 Repos Assets/Tot Assets 2.41 1.51 0.78 0.71 Net Chrg-Off/Av Adj Lns 0.09 0.39 (0.39) (0.01) Nonmtg 1-4 Constr&Conv Lns/TA 7.31 4.80 4.51 4.38
Source: TAFS and Bank Source, by Sheshunoff Information Services Inc., September 30, 1996. 4 138 FERGUSON & CO., LLP FIRST GEORGIA BANK FGHC BRUNSWICK, GEORGIA
1993 1994 1995 YTD 9/96 Num of Quarters Open for Period 4 4 4 3 FINANCIAL HIGHLIGHTS (All $ Amounts in Thousands) BALANCE SHEET: Total Assets 134,691 135,835 135,582 147,083 % Change in Assets (5.31) 0.85 (0.19) 8.48 Total Loans 109,685 115,837 113,894 122,547 Deposits 108,222 107,127 108,948 122,005 Broker Originated Deposits - - - - CAPITAL: Equity Capital 9,361 10,397 11,384 11,896 Tangible Capital 7,573 8,752 10,009 10,619 Core Capital 9,361 10,397 11,384 11,896 Risk-Based Capital 10,363 11,300 12,392 12,851 Equity Capital/Total Assets 6.95 7.65 8.40 8.09 Core Capital/Risk Based Assets 8.78 9.13 10.46 9.73 Core Capital/Adj Tang Assets 6.95 7.65 8.40 8.09 Tangible Cap/Tangible Assets 5.70 6.52 7.46 7.28 Risk-Based Cap/Risk-Wt Assets 9.72 9.92 11.38 10.51 PROFITABILITY: Net Income(Loss) 920 1,204 1,250 513 Ret on Avg Assets Bef Ext Item 0.51 0.89 0.91 0.48 Return on Average Equity 7.87 12.19 11.39 5.81 Net Interest Income/Avg Assets 3.71 3.48 3.64 3.69 Noninterest Income/Avg Assets 0.28 0.85 0.97 0.82 Noninterest Expense/Avg Assets 3.03 3.03 3.01 3.80 Yield/Cost Spread 4.10 3.86 3.92 3.90 LIQUIDITY: Int Earn Assets/Int Bear Liab 98.55 99.93 102.02 102.28 Brokered Deposits/Tot Deposits - - - - ASSET QUALITY: Nonperf Lns+REO/Total Lns+REO 2.46 3.47 1.98 1.75 Nonaccrual Loans/Gross Loans 1.80 2.89 1.44 1.59 Nonaccrual Lns/Ln Loss Reserve 200.70 376.41 167.76 204.19 Repos Assets/Tot Assets 0.40 0.23 0.18 0.08 Net Chrg-Off/Av Adj Lns 0.19 0.09 0.11 0.09 Nonmtg 1-4 Constr&Conv Lns/TA 22.33 27.57 28.63 25.20
Source: TAFS and Bank Source, by Sheshunoff Information Services Inc., September 30, 1996. 5 139 FERGUSON & CO., LLP FIRST KEYSTONE FSB FKFS MEDIA, PENNSYLVANIA
1993 1994 1995 YTD 9/96 Num of Quarters Open for Period 4 4 4 3 FINANCIAL HIGHLIGHTS (All $ Amounts in Thousands) BALANCE SHEET: Total Assets 235,498 253,168 272,821 294,219 % Change in Assets (0.83) 7.50 7.76 7.84 Total Loans 138,160 150,221 165,800 171,679 Deposits 219,131 220,596 220,804 220,246 Broker Originated Deposits - - - - CAPITAL: Equity Capital 12,032 11,763 23,271 22,114 Tangible Capital 12,032 11,744 23,254 22,608 Core Capital 12,032 11,744 23,254 22,608 Risk-Based Capital 13,164 13,130 24,664 24,327 Equity Capital/Total Assets 5.11 4.65 8.53 7.52 Core Capital/Risk Based Assets 10.31 9.33 16.91 16.02 Core Capital/Adj Tang Assets 5.11 4.64 8.52 7.67 Tangible Cap/Tangible Assets 5.11 4.64 8.52 7.67 Risk-Based Cap/Risk-Wt Assets 11.28 10.43 17.93 17.24 PROFITABILITY: Net Income(Loss) 1,630 493 1,040 704 Ret on Avg Assets Bef Ext Item 0.44 0.20 0.39 0.33 Return on Average Equity 9.18 4.14 4.83 4.16 Net Interest Income/Avg Assets 2.63 2.63 2.89 3.10 Noninterest Income/Avg Assets 0.91 0.55 0.48 0.51 Noninterest Expense/Avg Assets 2.94 2.84 2.80 3.03 Yield/Cost Spread 2.70 2.67 2.76 2.99 LIQUIDITY: Int Earn Assets/Int Bear Liab 102.85 102.64 107.42 105.64 Brokered Deposits/Tot Deposits - - - - ASSET QUALITY: Nonperf Lns+REO/Total Lns+REO 5.44 4.18 4.11 4.82 Nonaccrual Loans/Gross Loans 3.76 2.02 1.85 2.96 Nonaccrual Lns/Ln Loss Reserve 460.85 217.30 214.92 203.70 Repos Assets/Tot Assets 0.45 0.16 0.16 0.53 Net Chrg-Off/Av Adj Lns 0.03 0.03 0.02 0.07 Nonmtg 1-4 Constr&Conv Lns/TA 7.57 6.62 6.49 6.20
Source: TAFS and Bank Source, by Sheshunoff Information Services Inc., September 30, 1996. 6 140 FERGUSON & CO., LLP FIRST HOME SAVINGS BANK, FSB FSPG PENNSVILLE, NEW JERSEY
1993 1994 1995 YTD 9/96 Num of Quarters Open for Period 4 4 4 3 FINANCIAL HIGHLIGHTS (All $ Amounts in Thousands) BALANCE SHEET: Total Assets 351,176 388,655 453,180 486,270 % Change in Assets 11.30 10.67 16.60 7.30 Total Loans 217,340 241,557 256,825 261,788 Deposits 227,227 238,988 270,126 274,997 Broker Originated Deposits 12,910 17,647 15,734 18,564 CAPITAL: Equity Capital 22,874 23,051 30,103 30,851 Tangible Capital 22,743 26,144 29,222 31,200 Core Capital 22,743 26,144 29,222 31,200 Risk-Based Capital 24,772 28,319 31,672 33,678 Equity Capital/Total Assets 6.51 5.93 6.64 6.34 Core Capital/Risk Based Assets 13.70 14.43 14.47 15.36 Core Capital/Adj Tang Assets 6.49 6.68 6.47 6.41 Tangible Cap/Tangible Assets 6.49 6.68 6.47 6.41 Risk-Based Cap/Risk-Wt Assets 14.92 15.63 15.68 16.58 PROFITABILITY: Net Income(Loss) 4,621 4,179 4,711 3,148 Ret on Avg Assets Bef Ext Item 1.22 1.13 1.11 0.89 Return on Average Equity 19.57 18.20 17.54 13.86 Net Interest Income/Avg Assets 3.63 3.39 3.09 3.12 Noninterest Income/Avg Assets 0.48 0.25 0.54 0.26 Noninterest Expense/Avg Assets 1.97 1.70 1.76 2.24 Yield/Cost Spread 3.73 3.45 3.06 3.07 LIQUIDITY: Int Earn Assets/Int Bear Liab 102.41 102.93 103.85 103.47 Brokered Deposits/Tot Deposits 5.68 7.38 5.82 6.75 ASSET QUALITY: Nonperf Lns+REO/Total Lns+REO 2.94 2.40 1.53 1.68 Nonaccrual Loans/Gross Loans 1.07 1.63 1.11 1.18 Nonaccrual Lns/Ln Loss Reserve 88.88 121.19 82.03 82.73 Repos Assets/Tot Assets 0.59 0.24 0.11 0.13 Net Chrg-Off/Av Adj Lns 0.05 0.10 0.16 0.03 Nonmtg 1-4 Constr&Conv Lns/TA 4.21 4.30 3.46 3.32
Source: TAFS and Bank Source, by Sheshunoff Information Services Inc., September 30, 1996. 7 141 FERGUSON & CO., LLP LAUREL SVG BK LARL ALLISON PARK, PENNSYLVANIA
1993 1994 1995 YTD 9/96 Number of Open Quarters 4 3 FINANCIAL HIGHLIGHTS ($'s in Thousands) BALANCE SHEET: Total Assets % Change in Assets - - 192,698 201,987 Securities-Book Value - - - 4.82 Securities-Fair Value - - 32,839 45,654 Total Loans & Leases - - 32,927 45,636 Total Deposits - - 146,566 150,291 Loan/Deposit Ratio - - 164,943 168,616 Provision for Loan Losses - - 89 89 - - 68 20 CAPITAL: Equity Capital Total Qualifying Capital(Est) - - 19,921 20,821 Equity Capital/Average Assets - - 20,320 22,090 Tot Qual Cap/Rk Bsd Asts(Est) - - 10.63 10.61 Tier 1 Cap/Rsk Bsed Asts(Est) - - 19.68 20.89 T1 Cap/Avg Assets(Lev Est) - - 18.43 19.63 Dividends Declared/Net Income - - 9.98 10.34 - - - 20.53 PROFITABILITY: Net Income(Loss) Return on Average Assets - - 2,525 1,393 Return on Average Equity Cap - - 1.35 0.95 Net Interest Margin - - 13.55 9.02 Net Int Income/Avg Assets - - 4.07 3.93 Noninterest Income/Avg Assets - - 4.01 3.89 Noninterest Exp/Avg Assets - - 0.21 0.24 - - 2.05 2.63 ASSET QUALITY: NPL+Frcl RE/Lns+Frcl RE NPA's/Equity + LLR - - 0.73 0.59 LLR/Nonperf & Restrcd Lns - - 4.94 3.89 Foreclosed RE/Total Assets - - 237.34 260.16 90+ Day Del Loans/Total Loans - - 0.15 0.07 Loan Loss Reserves/Total Lns - - - - Net Charge-Offs/Average Loans - - 1.29 1.27 Dom Risk R/E Lns/Tot Dom Lns - - 0.03 0.00 - - 8.51 7.68 LIQUIDITY: Brokered Dep/Total Dom Deps $100M+ Time Dep/Total Dom Dep - - - - Int Earn Assets/Int Bear Liab - - 3.32 3.88 Pledged Sec/Total Sec - - 115.84 116.87 Fair Value Sec/Amort Cost Sec - - - 2.19 - - 101.46 100.16
Source: TAFS and Bank Source, by Sheshunoff Information Services Inc., September 30, 1996. 8 142 FERGUSON & CO., LLP SCHENECTADY FEDERAL SAVINGS SFED SCHENECTADY, NEW YORK
1993 1994 1995 YTD 9/96 Num of Quarters Open for Period 4 4 4 3 FINANCIAL HIGHLIGHTS (All $ Amounts in Thousands) BALANCE SHEET: Total Assets 146,326 150,896 166,557 166,070 % Change in Assets (1.48) 3.12 10.38 (0.29) Total Loans 92,964 94,299 101,585 117,941 Deposits 134,425 138,132 139,555 141,790 Broker Originated Deposits - - - - CAPITAL: Equity Capital 9,642 10,046 17,030 17,305 Tangible Capital 9,642 10,046 16,942 17,263 Core Capital 9,642 10,046 16,942 17,263 Risk-Based Capital 10,446 10,907 17,514 17,909 Equity Capital/Total Assets 6.59 6.66 10.22 10.42 Core Capital/Risk Based Assets 12.98 13.25 20.79 19.64 Core Capital/Adj Tang Assets 6.59 6.66 10.18 10.40 Tangible Cap/Tangible Assets 6.59 6.66 10.18 10.40 Risk-Based Cap/Risk-Wt Assets 14.06 14.38 21.49 20.37 PROFITABILITY: Net Income(Loss) 406 511 724 321 Ret on Avg Assets Bef Ext Item 0.28 0.34 0.44 0.26 Return on Average Equity 4.30 5.19 5.09 2.47 Net Interest Income/Avg Assets 3.00 3.17 3.05 3.16 Noninterest Income/Avg Assets 0.40 0.06 0.21 0.27 Noninterest Expense/Avg Assets 2.81 2.66 2.43 3.28 Yield/Cost Spread 2.97 3.11 2.86 2.88 LIQUIDITY: Int Earn Assets/Int Bear Liab 105.49 105.77 110.21 109.98 Brokered Deposits/Tot Deposits - - - - ASSET QUALITY: Nonperf Lns+REO/Total Lns+REO 3.16 2.67 1.94 1.62 Nonaccrual Loans/Gross Loans 1.54 1.34 0.79 0.79 Nonaccrual Lns/Ln Loss Reserve 178.61 147.39 139.09 143.19 Repos Assets/Tot Assets 0.23 0.14 0.12 0.05 Net Chrg-Off/Av Adj Lns 0.40 0.07 0.68 0.02 Nonmtg 1-4 Constr&Conv Lns/TA 5.69 5.05 3.58 3.06
Source: TAFS and Bank Source, by Sheshunoff Information Services Inc., September 30, 1996. 9 143 FERGUSON & CO., LLP FIRST FSB OF NEW CASTLE SHEN NEW CASTLE, PENNSYLVANIA
1993 1994 1995 YTD 9/96 Num of Quarters Open for Period 4 4 4 3 FINANCIAL HIGHLIGHTS (All $ Amounts in Thousands) BALANCE SHEET: Total Assets 286,863 302,306 327,253 379,719 % Change in Assets 4.01 5.38 8.25 16.03 Total Loans 201,372 215,811 228,834 256,283 Deposits 252,596 250,246 256,268 261,293 Broker Originated Deposits - - - - CAPITAL: Equity Capital 31,095 33,256 36,935 37,087 Tangible Capital 31,075 33,542 36,248 37,572 Core Capital 31,075 33,542 36,248 37,572 Risk-Based Capital 33,240 35,709 38,608 40,205 Equity Capital/Total Assets 10.84 11.00 11.29 9.77 Core Capital/Risk Based Assets 17.72 19.40 18.98 17.67 Core Capital/Adj Tang Assets 10.83 11.08 11.10 9.88 Tangible Cap/Tangible Assets 10.83 11.08 11.10 9.88 Risk-Based Cap/Risk-Wt Assets 18.95 20.65 20.22 18.90 PROFITABILITY: Net Income(Loss) 2,412 2,099 2,810 1,645 Ret on Avg Assets Bef Ext Item 0.70 0.71 0.89 0.62 Return on Average Equity 7.82 6.52 8.07 5.94 Net Interest Income/Avg Assets 3.15 3.21 3.28 3.30 Noninterest Income/Avg Assets 0.33 0.21 0.27 0.27 Noninterest Expense/Avg Assets 2.09 2.11 1.82 2.33 Yield/Cost Spread 3.02 2.94 2.89 3.04 LIQUIDITY: Int Earn Assets/Int Bear Liab 109.85 110.23 111.01 109.31 Brokered Deposits/Tot Deposits - - - - ASSET QUALITY: Nonperf Lns+REO/Total Lns+REO 2.55 2.08 1.80 1.49 Nonaccrual Loans/Gross Loans 1.41 1.00 0.31 0.35 Nonaccrual Lns/Ln Loss Reserve 130.77 81.37 28.76 34.26 Repos Assets/Tot Assets 0.07 0.10 0.29 0.25 Net Chrg-Off/Av Adj Lns 0.19 0.19 0.48 0.24 Nonmtg 1-4 Constr&Conv Lns/TA 6.68 6.40 7.13 6.48
Source: TAFS and Bank Source, by Sheshunoff Information Services Inc., September 30, 1996. 10 144 FERGUSON & CO., LLP FIRST FS&LA OF WESTCHESTER WCBI WESTCHESTER, ILLINOIS
1993 1994 1995 YTD 9/96 Num of Quarters Open for Period 4 4 4 3 FINANCIAL HIGHLIGHTS (All $ Amounts in Thousands) BALANCE SHEET: Total Assets 297,753 294,220 302,011 301,159 % Change in Assets (1.24) (1.19) 2.65 (0.28) Total Loans 189,984 205,299 209,316 220,063 Deposits 252,982 248,864 256,737 257,137 Broker Originated Deposits - - - - CAPITAL: Equity Capital 39,392 39,785 40,345 38,894 Tangible Capital 39,173 39,477 40,013 38,536 Core Capital 39,173 39,477 40,013 38,536 Risk-Based Capital 40,021 40,325 40,896 39,419 Equity Capital/Total Assets 13.23 13.52 13.36 12.91 Core Capital/Risk Based Assets 35.38 33.33 32.42 29.24 Core Capital/Adj Tang Assets 13.18 13.45 13.28 12.81 Tangible Cap/Tangible Assets 13.18 13.45 13.28 12.81 Risk-Based Cap/Risk-Wt Assets 36.14 34.05 33.14 29.91 PROFITABILITY: Net Income(Loss) 4,054 3,929 3,970 2,024 Ret on Avg Assets Bef Ext Item 1.35 1.33 1.35 0.90 Return on Average Equity 10.93 9.92 10.27 6.99 Net Interest Income/Avg Assets 3.38 3.39 3.56 3.48 Noninterest Income/Avg Assets 0.36 0.33 0.29 0.28 Noninterest Expense/Avg Assets 1.70 1.67 1.76 2.41 Yield/Cost Spread 3.11 3.07 3.20 3.09 LIQUIDITY: Int Earn Assets/Int Bear Liab 113.09 114.00 113.44 113.41 Brokered Deposits/Tot Deposits - - - - ASSET QUALITY: Nonperf Lns+REO/Total Lns+REO 0.45 0.58 0.54 0.73 Nonaccrual Loans/Gross Loans 0.40 0.15 0.54 0.73 Nonaccrual Lns/Ln Loss Reserve 83.60 34.88 129.22 183.35 Repos Assets/Tot Assets 0.03 0.15 - - Net Chrg-Off/Av Adj Lns - 0.02 - - Nonmtg 1-4 Constr&Conv Lns/TA 6.69 9.23 9.31 10.53
Source: TAFS and Bank Source, by Sheshunoff Information Services Inc., September 30, 1996. 11 145 FERGUSON & CO., LLP WASHINGTON SVGS BK, FSB WSB WALDORF, MARYLAND
1993 1994 1995 YTD 9/96 Num of Quarters Open for Period 4 4 4 3 FINANCIAL HIGHLIGHTS (All $ Amounts in Thousands) BALANCE SHEET: Total Assets 216,112 214,903 270,598 248,525 % Change in Assets 9.80 (0.56) 25.92 (8.16) Total Loans 75,902 93,706 119,528 126,341 Deposits 197,815 193,278 248,243 225,199 Broker Originated Deposits - 2,682 8,133 6,768 CAPITAL: Equity Capital 16,195 17,557 21,088 20,638 Tangible Capital 15,568 16,732 18,859 19,004 Core Capital 15,568 16,732 18,859 19,004 Risk-Based Capital 16,354 17,656 19,985 19,487 Equity Capital/Total Assets 7.49 8.17 7.79 8.30 Core Capital/Risk Based Assets 24.86 22.64 19.70 20.12 Core Capital/Adj Tang Assets 7.23 7.84 7.04 7.70 Tangible Cap/Tangible Assets 7.23 7.84 7.04 7.70 Risk-Based Cap/Risk-Wt Assets 26.12 23.89 20.88 20.63 PROFITABILITY: Net Income(Loss) 3,415 1,679 2,402 611 Ret on Avg Assets Bef Ext Item 1.51 0.78 0.92 0.32 Return on Average Equity 21.41 9.95 12.77 3.88 Net Interest Income/Avg Assets 2.65 2.63 2.45 2.59 Noninterest Income/Avg Assets 1.79 0.75 0.82 0.46 Noninterest Expense/Avg Assets 1.95 2.11 1.82 2.66 Yield/Cost Spread 2.40 2.43 2.25 2.35 LIQUIDITY: Int Earn Assets/Int Bear Liab 106.16 105.45 105.14 105.03 Brokered Deposits/Tot Deposits - 1.39 3.28 3.01 ASSET QUALITY: Nonperf Lns+REO/Total Lns+REO 4.38 5.58 3.90 3.64 Nonaccrual Loans/Gross Loans 1.53 1.08 0.88 0.93 Nonaccrual Lns/Ln Loss Reserve 137.35 129.88 109.77 117.99 Repos Assets/Tot Assets 0.49 0.72 0.45 0.50 Net Chrg-Off/Av Adj Lns (0.02) 0.40 0.00 0.08 Nonmtg 1-4 Constr&Conv Lns/TA 10.61 11.42 9.20 9.77
Source: TAFS and Bank Source, by Sheshunoff Information Services Inc., September 30, 1996. 12 146 EXHIBIT V 147 FERGUSON & CO., LLP EXHIBIT V. - PRO FORMA ASSUMPTIONS 1. Net proceeds from the conversion were invested at the beginning of the period at 5.40%, which was the approximate rate on the one-year treasury bill on December 20, 1996. This rate was selected because it is considered more representative of the rate the Bank is likely to earn. 2. Heartland Community Bank's ESOP will acquire 8% of the conversion stock with loan proceeds obtained from the Holding Company; therefore, there will be no interest expense. We assumed that the ESOP expense is 10% annually of the initial ESOP expense. 3. Heartland Community Bank's RP will acquire 4% of the stock through open market purchases at $10 per share and the expense is recognized ratably over five years as the shares vest. 4. All pro forma income and expense items are adjusted for income taxes at a combined state and federal rate of 37%. 5. In calculating the pro forma adjustments to net worth, the ESOP and RP are deducted in accordance with generally accepted accounting principles. 6. Earnings per share calculations have ignored AICPA OP 93-6. Calculating earnings per share under SOP 93-6 and assuming 10% of the ESOP shares are committed to be released and allocated to individual accounts at the beginning of the period would yield earnings per share of $0.97, $0.86, $0.77 and $0.70, and a price to earnings ratio of 10.30, 11.66, 12.91 and 14.23, at the minimum, midpoint, maximum and super maximum, respectively. 1 148 EXHIBIT V PRO FORMA EFFECT OF CONVERSION PROCEEDS AT THE MINIMUM OF THE CONVERSION VALUATION RANGE 12/20/1996 HEARTLAND BANK, CAMDEN, ARKANSAS - ---------------------------------------------------------------------- 1. Conversion Proceeds Pro Forma Market Value (Minimum) $ 17,000,000 Less: Estimated Expenses (750,000) ------------------ Net Conversion Proceeds $ 16,250,000 2. Estimated Additional Income From Conversion Proceeds Net Conversion Proceeds $ 16,250,000 Less: ESOP Contributions (1,360,000) MRP Contributions (680,000) ------------------ Net Conversion Proceeds after ESOP & MRP $ 14,210,000 Estimated Incremental Rate of Return(1) 3.47% ------------------ Estimated Additional Income $ 493,272 Less: ESOP Expense (85,680) MRP Expense (85,680) ------------------ $ 321,912 ================== 3. Pro Forma Calculations
Before Conversion After Period Conversion Results Conversion ------------------------------------------------------------ a. Pro Forma Earnings Twelve Months Ended 9/30/96 $ 1,209,000 $ 321,912 $ 1,530,912 b. Pro Forma Net Worth 9/30/96 $ 13,478,001 $ 14,210,000 $ 27,688,001 c. Pro Forma Net Assets 9/30/96 $ 172,971,826 $ 14,210,000 $ 187,181,826
(1) Investment rate of 5.40%, subject to an effective tax rate of 37%. 2 149 EXHIBIT V PRO FORMA EFFECT OF CONVERSION PROCEEDS AT THE MIDPOINT OF THE CONVERSION VALUATION RANGE 12/20/1996 HEARTLAND BANK, CAMDEN, ARKANSAS - ------------------------------------------------------------------- 1. Conversion Proceeds Pro Forma Market Valuation (Midpoint) $ 20,000,000 Less: Estimated Expenses (750,000) --------------------- Net Conversion Proceeds $ 19,250,000 2. Estimated Additional Income From Conversion Proceeds Net Conversion Proceeds $ 19,250,000 Less: ESOP Contributions (1,600,000) MRP Contributions (800,000) --------------------- Net Conversion Proceeds after ESOP & MRP $ 16,850,000 Estimated Incremental Rate of Return(1) 3.47% --------------------- Estimated Additional Income $ 584,914 Less: ESOP Expense (100,800) MRP Expense (100,800) --------------------- $ 383,314 ===================== 3. Pro Forma Calculations
Before Conversion After Period Conversion Results Conversion -------------------------------------------------- a. Pro Forma Earnings Twelve Months Ended 9/30/96 $ 1,209,000 $ 383,314 $ 1,592,314 b. Pro Forma Net Worth 9/30/96 $ 13,478,001 $ 16,850,000 $ 30,328,001 c. Pro Forma Net Assets 9/30/96 $ 172,971,826 $ 16,850,000 $ 189,821,826
(1) Investment rate of 5.40%, subject to an effective tax rate of 37%. 3 150 Exhibit V Pro Forma Effect of Conversion Proceeds At the Maximum of the Conversion Valuation Range 12/20/1996 Heartland Bank, Camden, Arkansas - ---------------------------------------------------------------------- 1. Conversion Proceeds Pro Forma Market Valuation (Maximum) $ 23,000,000 Less: Estimated Expenses (750,000) ---------------------- Net Conversion Proceeds $ 22,250,000 2. Estimated Additional Income From Conversion Proceeds ---------------------- Net Conversion Proceeds $ 22,250,000 Less: ESOP Contributions (1,840,000) MRP Contributions (920,000) ---------------------- Net Conversion Proceeds after ESOP & MRP $ 19,490,000 Estimated Incremental Rate of Return(1) 3.47% ---------------------- Estimated Additional Income $ 676,556 Less: ESOP Expense (115,920) MRP Expense (115,920) ---------------------- $ 444,716 ====================== 3. Pro Forma Calculations
Before Conversion After Period Conversion Results Conversion --------------------------------------------------------------- a. Pro Forma Earnings Twelve Months Ended 9/30/96 $ 1,209,000 $ 444,716 $ 1,653,716 b. Pro Forma Net Worth 9/30/96 $ 13,478,001 $ 19,490,000 $ 32,968,001 c. Pro Forma Net Assets 9/30/96 $ 172,971,826 $ 19,490,000 $ 192,461,826
(1) Investment rate of 5.40%, subject to an effective tax rate of 37%. 4 151 EXHIBIT V PRO FORMA EFFECT OF CONVERSION PROCEEDS AT THE SUPERMAX OF THE CONVERSION VALUATION RANGE 12/20/1996 HEARTLAND BANK, CAMDEN, ARKANSAS - --------------------------------------------------------------------- 1. Conversion Proceeds Pro Forma Market Valuation (Final) $ 26,450,000 Less: Estimated Expenses $ (750,000) ----------------- Net Conversion Proceeds $ 25,700,000 2. Estimated Additional Income From Conversion Proceeds Net Conversion Proceeds $ 25,700,000 Less: ESOP Contributions $ (2,116,000) MRP Contributions $ (1,058,000) ----------------- Net Conversion Proceeds after ESOP & MRP $ 22,526,000 Estimated Incremental Rate of Return(1) 3.47% ----------------- Estimated Additional Income $ 781,945 Less: ESOP Expense $ (133,308) MRP Expense $ (133,308) ----------------- $ 515,329 ================= 3. Pro Forma Calculations
Before Conversion After Period Conversion Results Conversion -------------------------------------------------------------- a. Pro Forma Earnings Twelve Months Ended 9/30/96 $ 1,209,000 $ 515,329 $ 1,724,329 b. Pro Forma Net Worth 9/30/96 $ 13,478,001 $ 22,526,000 $ 36,004,001 c. Pro Forma Net Assets 9/30/96 $ 172,971,826 $ 22,526,000 $ 195,497,826
(1) Investment rate of 5.40%, subject to an effective tax rate of 37%. 5 152 EXHIBIT V PRO FORMA ANALYSIS SHEET Name of Association: HEARTLAND BANK, CAMDEN, ARKANSAS Date of Letter to Ass: 'January 13 , 1997 Date of Market Prices: 12/20/1996
Southeast Publicly All Publicly Comparatives Held Thrifts Held Thrifts ------------ ------------ ------------ SYMBOLS VALUE Mean Median Mean Median Mean Median ------------------------- ---- ------ ---- ------ ---- ------ Price-Earnings Ratio P/E - -------------------- Last Twelve Months N/A At Minimum of Range 11.10 At Midpoint of Range 12.56 14.15 13.23 19.69 15.60 14.76 14.17 At Maximum of Range 13.91 At SuperMax of Range 15.34 Price-Book Ratio P/B - ---------------- Last Twelve Months N/A At Minimum of Range 61.40% At Midpoint of Range 65.95% 114.72 112.55 133.21 119.82 126.68 119.94 At Maximum of Range 69.76% At SuperMax of Range 73.46% Price-Asset Ratio P/A - ----------------- Last Twelve Months N/A At Minimum of Range 9.08% At Midpoint of Range 10.54% 12.85 12.02 18.47 14.26 12.38 11.39 At Maximum of Range 11.95% At SuperMax of Range 13.53% Twelve Mo. Earnings Base Y $ 1,209,000 Period Ended 9/30/96 Book Value B $ 13,478,001 As of 9/30/96 Total Assets A $ 172,971,826 As of 9/30/96 Return on Money (1) R 3.47% Conversion Expense X $ 750,000 Underwriting Commission C 0.00% Percentage Underwritten S 0.00% Estimate Dividend Dollar Amount DA $ 0 Yield DY ESOP Contributions P $ 1,600,000 MRP Contributions I $ 800,000 ESOP Annual Expense E $ 100,800 MRP Annual Contributions M $ 100,800 Cost of ESOP Borrowings F 0.00%
(1) Investment rate of 5.40%, subject to an effective tax rate of 37%. 6 153 EXHIBIT V PRO FORMA ANALYSIS SHEET Calculation of Estimated Value (V) at Midpoint Value 1. V= P/A(A-X-P-I) $ 20,000,000 ------------------------------- 1-P/A(1-(CxS)) 2. V= P/B(B-X-P-I) $ 20,000,000 ------------------------------- 1-P/B(1-(CxX)) 3. V= P/E(Y-R(X+P+I)-(E+M+ST)) $ 20,000,000 --------------------------------- 1-P/E(R(1-(CxX))
Value Estimated Value Per Share Total Shares Date ------------------------- --------------- ---------------- --------------- $20,000,000 $10.00 2,000,000 12/20/1996
Range of Value $20 million x 1.15 = $23 million or 2,300,000 shares at $10.00 per share. $20 million x .085 = $17 million or 1,700,000 shares at $10.00 per share. 7 -----END PRIVACY-ENHANCED MESSAGE-----