2015 Bank M&A Review

Trusted Advisor for The Weekly Musings Community Banks and Investors January 4, 2016

2015 Bank M&A Review Chart of the Week: Deal Activity Remained Healthy Net Migration Between States

When the U.S. economy slowed during the recession, so Bank M&A activity slowed modestly in 2015, though re- did one of the major demographic shifts of the last sev- mained healthy with nearly 250 deals announced. Activi- eral decades. For a brief respite, the Northeast and Mid- ty remained concentrated among the smaller banks—a west stopped shedding quite so many to the burgeon- trend we expect to continue—though we did see a picking Sun Belt. That trend though has been picking back up in larger deals. Our Tables on Pages 3-7 provide sum- up as the chart below indicates. mary statistics and a geographic breakdown for Bank M&A activity.

We also review 2015 price performance of publicly traded bank stocks, as well as provide median price performance by Market Capitalization and Region.

Averages by size bucket via 2016 EPS estimates on: 12/31/2015

1-Week 2016 P/E Price-to- Market Cap ROTCE Change Multiple T.Book Large (1.3%) 13.3x 166% 12.4% Mid (1.5%) 15.5x 175% 12.2% Small (1.2%) 15.8x 146% 10.5% Micro 0.7% 12.4x 118% 8.7%

Source: FIG Partners Research, Washington Post

Research Director: Christopher Marinac, CFA FIG Partners LLC Analysts: David Bishop, CFA, Timothy Coffey, Brian Martin CFA, John Rodis Member of FINRA/SIPC Associate: Caitlin Van Zelfden

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2015 Bank M&A Review - Deal Activity Remained Healthy; Pricing Improved Modestly

Bank M&A activity slowed modestly in 2015 with ~7% fewer deals inked than in 2014. Excluding “investor group” deals, we count 248 transactions announced in 2015 with approximately $186 Billion in Assets purchased. Bank M&A activity remained concentrated among the smaller banks—a trend we expect to continue in 2016—though some pick up in larger bank deals was noted. The average Asset size of the Seller increased to $743 Million in 2015 versus $561 Million in 2014. In our view, the small decline in transactions announced in 2015 is less important than the fact that 2015 marked the fourth consecutive year with over 200 deals announced. Looking forward, we expect the pace of industry consolidation to remain brisk in 2016 as banks seek to increase scale to help offset profitability headwinds including: 1) NIM pressure due to the prolonged low rate environment, 2) elevated regulatory costs, and 3) fewer reserve releases.

Our Tables on Pages 3-7 provide summary statistics and a geographic breakdown for recent Bank M&A activity and highlight transactions done at a Premium to Tangible Book Value (at announcement), and the cheapest mergers (Price-to-Tangible Book Basis) and the most expensive deals (on a Price-to-Earnings ratio). We also reveal the transactions where the Buyer’s currency (i.e., valuation on current Tangible Book Value) is cheaper than the price paid to the Seller. The number of these deals has declined from the year ago period as industry valuations (buyers cur- rencies) have improved while pricing multiples have held relatively stable. We count 36 transactions in 2015 where the Buyers currency was cheaper than the price paid; down from 45 in 2014. An increase in large bank M&A was noted in 2015 and we highlight the largest deals an-

nounced. We also continue to examine Core Deposit Premiums, which have remained relatively stable at 5.9% compared to 5.5% during 2014.

Our M&A “Tale Of The Tape” in 2015

￭ 248 merger transactions worth over $26 Billion

￭ Total Assets purchased were $186 Billion

￭ Median Sizes = $32.3 Million on Deal Value & $178 Million on Assets of the Seller

￭ 142 transactions have available information on tangible book premium

￭ Average Price to Earnings 25.6x vs. 25.2x in 2014.

￭ Average Price-to-Tangible Book Value is 144% vs. 139% in 2014.

￭ Average Core Deposit Premium is 5.9% vs. 5.5% in 2014

￭ 36 transactions out of 248 had the Buyers’ currency trade at a lower price-to-tangible

book value than what was granted to the Seller (see Page 4). Source: FIG PartnersResearch, SNL Financial M&A Data

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Core M&A Deals In Price-to- Tang. 2015 Done At A Announce Deal Value Tangible Deposit Premium To Tan- Date Buyer Ticker State Target Ticker State ($M) Book (%) Premium gible Book 04/01/2015 First Financial Bankshares, Inc. FFIN TX FBC Bancshares, Inc. TX 59.3 389.2 15.0 12/08/2015 BOK Financial Corporation BOKF OK MBT Bancshares, Inc. MO 102.5 347.2 14.2 (Ranked By Highest 03/02/2015 PacWest Bancorp PACW CA Square 1 Financial, Inc. SQBK NC 847.4 262.5 19.8 to Lowest) 01/22/2015 Royal Bank of Canada RY City National Corporation CYN CA 5,332.5 262.1 12.3 04/07/2015 Pinnacle Financial Partners, Inc. PNFP TN CapitalMark Bank & Trust TN 187.2 243.0 18.4 10/01/2015 Ameris Bancorp ABCB GA Jacksonville Bancorp, Inc. JAXB FL 96.6 237.4 17.0 12/03/2015 Charter Financial Corporation CHFN GA CBS Financial Corporation GA 58.7 231.0 12.9 12/07/2015 BBCN Bancorp, Inc. BBCN CA Wilshire Bancorp, Inc. WIBC CA 1,027.4 224.1 22.9 03/09/2015 Western Alliance Bancorporation WAL AZ Bridge Capital Holdings BBNK CA 423.9 222.1 15.6 01/06/2015 Chemical Financial Corporation CHFC MI Lake Michigan Financial Corporation MI 188.1 220.8 18.0 08/17/2015 BB&T Corporation BBT NC National Penn Bancshares, Inc. NPBC PA 1,815.2 219.4 15.4 11/22/2015 MB Financial, Inc. MBFI IL American Chartered Bancorp, Inc. IL 449.0 218.8 11.3 Each of these trans- 11/09/2015 United Bankshares, Inc. UBSI WV Bank of Georgetown DC 269.0 217.9 20.5 11/09/2015 Bank of the Ozarks, Inc. OZRK AR C1 Financial, Inc. BNK FL 402.5 202.8 18.3 actions in 2015 was 02/24/2015 Community Bank System, Inc. CBU NY Oneida Financial Corp. ONFC NY 142.1 202.1 11.6 priced above the 09/22/2015 Alerus Financial Corporation ALRS ND Beacon Bank MN 46.0 200.0 8.2 11/23/2015 WSFS Financial Corporation WSFS DE Penn Liberty Financial Corp. PA 101.6 199.0 10.6 Seller’s Tangible 10/19/2015 Bank of the Ozarks, Inc. OZRK AR Community & Southern Holdings, Inc. GA 799.5 198.7 18.3 Book Value. 07/23/2015 Independent Bank Group, Inc. IBTX TX Grand Bank TX 79.0 195.7 8.5 10/13/2015 Yadkin Financial Corporation YDKN NC NewBridge Bancorp NBBC NC 452.3 195.3 13.5 12/17/2015 TowneBank TOWN VA Monarch Financial Holdings, Inc. MNRK VA 220.2 191.3 13.4 Deposit Premiums 06/17/2015 Home BancShares, Inc. HOMB AR Florida Business BancGroup, Inc. FL 102.3 189.8 15.5 08/14/2015 BNC Bancorp BNCN NC Southcoast Financial Corporation SOCB SC 95.5 189.3 14.8 varied widely as our 01/06/2015 First Merchants Corporation FRME IN C Financial Corporation OH 14.5 186.9 7.7 03/24/2015 Overton Financial Corporation TX Vision Bank - Texas TX 33.0 179.7 10.9 list illustrates. 08/06/2015 Prosperity Bancshares, Inc. PB TX Tradition Bancshares, Inc. TX 76.5 178.3 8.7 12/03/2015 First Busey Corporation BUSE IL Pulaski Financial Corp. PULB MO 211.8 177.1 13.5 04/22/2015 United Community Banks, Inc. UCBI GA Palmetto Bancshares, Inc. PLMT SC 237.6 176.4 12.2 03/25/2015 Atlantic Capital Bancshares, Inc. GA First Security Group, Inc. FSGI TN 159.0 175.4 9.9 04/23/2015 Heritage Commerce Corp HTBK CA Focus Business Bank FCSB CA 54.8 172.9 7.7 03/09/2015 Veritex Holdings, Inc. VBTX TX IBT Bancorp, Inc. TX 20.5 172.8 9.1 08/04/2015 F.N.B. Corporation FNB PA Metro Bancorp, Inc. METR PA 473.5 172.3 9.4 04/08/2015 Adams Community Bank MA Lenox National Bank MA 14.3 170.7 14.3 10/14/2015 CVB Financial Corp. CVBF CA County Commerce Bank CNYB CA 41.3 170.5 9.5 05/27/2015 Valley National Bancorp VLY NJ CNLBancshares, Inc. CNLB FL 208.1 169.3 8.2 10/01/2015 Pacific Premier Bancorp, Inc. PPBI CA Security California Bancorp SCAF CA 119.0 169.2 11.0 06/29/2015 First Merchants Corporation FRME IN Ameriana Bancorp ASBI IN 68.9 168.8 8.3 10/30/2015 KeyCorp KEY OH First Niagara Financial Group, Inc. FNFG NY 4,171.8 168.4 6.7 01/21/2015 Cathay General Bancorp CATY CA Asia Bancshares, Inc. NY 126.0 167.4 17.1 05/29/2015 Heartland Financial USA, Inc. HTLF IA Premier Valley Bank PVLY CA 95.0 164.0 7.0 04/28/2015 Pinnacle Financial Partners, Inc. PNFP TN Magna Bank MGBK TN 82.5 163.5 9.1 Source: FIG Partners Research, SNL Financial

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Lowest Priced Deals in 2015

Core Price-to- Tang. Announce Deal Value Tangible Deposit Date Buyer Ticker State Target Ticker State ($M) Book (%) Premium

02/10/2015 Hill Road Financial Holdings LLC Citizens First State Bank of Walnut IL 1.3 39.3 (4.2) 11/04/2015 CNB Bancshares, Inc. TN National Bank of Tennessee TN 3.7 44.2 (4.0) 02/26/2015 F&T Financial Services, Inc. FTFS CA Pan American Bank PAMB CA 4.0 71.5 (8.5) 09/30/2015 Citizens National Corporation CZNL KY Alliance Banking Company KY 4.0 75.0 (4.0) 03/31/2015 AmeriBancShares, Inc. TX Northern Bancshares, Inc. TX 5.9 75.7 (6.3) 05/13/2015 Madison County Financial, Inc. MCBK NE Winside Bancshares, Incorporated NE 4.2 83.9 (4.6) 08/31/2015 CSBO Holdings, Inc. CO Citizens State Bank of Ouray CO 7.4 91.6 (0.9) 10/13/2015 Hamilton Bancorp, Inc. HBK MD Fraternity Community Bancorp, Inc. FRTR MD 26.9 97.6 (0.5) 04/17/2015 Coastal Financial Corporation WA Prime Pacific Financial Services PPFS WA 13.0 98.6 (0.3) 01/30/2015 National Bank Holdings Corporation NBHC CO Pine River Bank Corp. CO 14.0 100.5 0.1 03/03/2015 Howard Bancorp, Inc. HBMD MD Patapsco Bancorp, Inc. PATD MD 10.1 101.2 0.1 Source: FIG Partners Research, SNL Financial

Buyers Who Paid More Than Their Currency (Price-to-Tang. Book Ratio) These 12 deals had the Buyer’s stock price trading for less than what they offered to the Seller.

Price-to- Price-to-TB: Price-to-TB: Deal value Tangible 1-Day Prior PAID (to Buyer Ticker State Target Ticker State ($M) Book (%) (Buyer) Seller)

Southern BancShares (N.C.), Inc. SBNC NC Heritage Bankshares, Inc. HBKS VA 50.2 144.8 78 145 Hamilton State Bancshares, Inc. HMBH GA Highland Financial Services, Inc. GA 20.1 143.4 94 143 Sunshine Bancorp, Inc. SBCP FL Community Southern Holdings, Inc. CMUY FL 30.8 128.6 85 129 Chemical Financial Corporation CHFC MI Lake Michigan Financial Corporation MI 188.1 220.8 146 221 Revere Bank REVB MD BlueRidge Bank MD 20.0 120.2 81 120 Northwest Bancorporation, Inc. NBCT WA Fairfield Financial Holdings Corp. WA 20.8 138.5 97 138 KeyCorp KEY OH First Niagara Financial Group, Inc. FNFG NY 4,171.8 168.4 120 168 Oak Valley Bancorp OVLY CA Mother Lode Bank MOLB CA 7.4 143.5 103 143 Beneficial Bancorp, Inc. BNCL PA Conestoga Bank PA 100.1 160.0 117 160 Premier Financial Bancorp, Inc. PFBI WV First National Bankshares Corp. FBSW WV 26.5 147.0 113 147 First Financial Bankshares, Inc. FFIN TX FBC Bancshares, Inc. TX 59.3 389.2 302 389 ESSA Bancorp, Inc. ESSA PA Eagle National Bancorp, Inc. PA 25.3 112.0 92 112 Source: FIG Partners Research, SNL Financial

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2015’s Highest Price-to-LTM Earnings We highlight the Highest Price-to- Deal value Deal Value/ LTM Earnings deals announced in Buyer Target ($M) LTM Earnings 2015.

California Bank of Commerce Pan Pacific Bank 24.3 68.8 Fidelity Southern Corporation American Enterprise Bankshares, Inc. 26.9 66.3 Median Price-to-LTM Earnings for Professional Holding Corp. FirstCity Bank of Commerce 6.8 63.6 MainSource Financial Group, Inc. Cheviot Financial Corp. 107.4 60.2 2015 was 22.6x vs. 21.8x for all of Achieva Credit Union Calusa Financial Corporation, Inc. 23.2 55.2 2014. The average was slightly First Midwest Bancorp, Inc. NI Bancshares Corporation 73.4 53.8 higher at 25.6x and 25.2x, respec- Atlantic Capital Bancshares, Inc. First Security Group, Inc. 159.0 53.0 Merchants Bancshares, Inc. NUVO Bank & Trust Company 21.7 51.9 tively. Preferred Bank United International Bank 22.1 50.8 Pacific Commerce Bancorp ProAmérica Bank 29.8 50.0 HCBF Holding Company, Inc. OGS Investments, Inc. 23.5 48.9 County Bancorp, Inc. Fox River Valley Bancorp, Inc. 28.9 48.3 Bank of the Ozarks, Inc. Community & Southern Holdings, Inc. 799.5 47.4 Kentucky Bancshares, Inc. Madison Financial Corporation 7.2 45.2 Heartland Financial USA, Inc. Community Bancorporation of New Mexico, Inc. 11.3 44.8 Heritage Commerce Corp Focus Business Bank 54.8 42.1 BNH Financial Community Guaranty Corporation 12.9 41.8 Suncrest Bank Sutter Community Bank 9.4 39.4 Revere Bank BlueRidge Bank 20.0 38.5 Independent Bank Group, Inc. Grand Bank 79.0 37.6 WSFS Financial Corporation Alliance Bancorp, Inc. of Pennsylvania 93.4 35.5 Liberty Bank Naugatuck Valley Financial Corporation 77.8 35.5 Seacoast Banking Corporation of Florida Floridian Financial Group, Inc. 77.4 33.5 PBB Bancorp First Mountain Bank 13.4 33.0 CenterState Banks, Inc. Community Bank of South Florida, Inc. 66.6 31.9 WSFS Financial Corporation Penn Liberty Financial Corp. 101.6 31.8 First Merchants Corporation Ameriana Bancorp 68.9 31.3 FNB Bancorp America California Bank 21.5 30.1 Andover Bancorp, Inc. Community National Bank of Northwestern Penn. 19.0 29.9 Wintrust Financial Corporation North Bank 17.0 29.6 BNC Bancorp High Point Bank Corporation 141.4 28.4 Northwest Bancorporation, Inc. Fairfield Financial Holdings Corp. 20.8 28.4 Bank of the Ozarks, Inc. C1 Financial, Inc. 402.5 28.4 United Bankshares, Inc. Bank of Georgetown 269.0 27.6 Community Bank System, Inc. Oneida Financial Corp. 142.1 27.4 Source: FIG Partners Research, SNL Financial

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2015’s Largest Deals

Price-to- Core Tang. Deal value Tangible Deposit We highlight the Largest Deals Buyer Ticker State Seller Ticker State ($M) Book (%) Premium announced in 2015. Royal Bank of Canada RY City National Corporation CYN CA 5,332.5 262.1 12.3 KeyCorp KEY OH First Niagara Financial Group, Inc. FNFG NY 4,171.8 168.4 6.7 The Top 5 Largest Deals of New York Community Bancorp, Inc. NYCB NY Astoria Financial Corporation AF NY 1,944.2 145.9 7.3 BB&T Corporation BBT NC National Penn Bancshares, Inc. NPBC PA 1,815.2 219.4 15.4 2015 involved Sellers’ in the BBCN Bancorp, Inc. BBCN CA Wilshire Bancorp, Inc. WIBC CA 1,027.4 224.1 22.9 Northeast and Western Regions. PacWest Bancorp PACW CA Square 1 Financial, Inc. SQBK NC 847.4 262.5 19.8 Bank of the Ozarks, Inc. OZRK AR Community & Southern Holdings, Inc. GA 799.5 198.7 18.3 F.N.B. Corporation FNB PA Metro Bancorp, Inc. METR PA 473.5 172.3 9.4 Yadkin Financial Corporation YDKN NC NewBridge Bancorp NBBC NC 452.3 195.3 13.5 MB Financial, Inc. MBFI IL American Chartered Bancorp, Inc. IL 449.0 218.8 11.3 Western Alliance Bancorporation WAL AZ Bridge Capital Holdings BBNK CA 423.9 222.1 15.6 Bank of the Ozarks, Inc. OZRK AR C1 Financial, Inc. BNK FL 402.5 202.8 18.3 Capital Bank Financial Corp. CBF FL CommunityOne Bancorp COB NC 350.2 131.0 5.2 United Bankshares, Inc. UBSI WV Bank of Georgetown DC 269.0 217.9 20.5 Univest Corporation of Pennsylvania UVSP PA Fox Chase Bancorp, Inc. FXCB PA 244.3 134.3 10.5 United Community Banks, Inc. UCBI GA Palmetto Bancshares, Inc. PLMT SC 237.6 176.4 12.2 TowneBank TOWN VA Monarch Financial Holdings, Inc. MNRK VA 220.2 191.3 13.4 First Busey Corporation BUSE IL Pulaski Financial Corp. PULB MO 211.8 177.1 13.5 Valley National Bancorp VLY NJ CNLBancshares, Inc. CNLB FL 208.1 169.3 8.2 Chemical Financial Corporation CHFC MI Lake Michigan Financial Corporation MI 188.1 220.8 18.0 Pinnacle Financial Partners, Inc. PNFP TN CapitalMark Bank & Trust TN 187.2 243.0 18.4 Atlantic Capital Bancshares, Inc. GA First Security Group, Inc. FSGI TN 159.0 175.4 9.9 Community Bank System, Inc. CBU NY Oneida Financial Corp. ONFC NY 142.1 202.1 11.6 Nicolet Bankshares, Inc. NCBS WI Baylake Corp. BYLK WI 141.7 143.7 6.2 BNC Bancorp BNCN NC High Point Bank Corporation HPTB NC 141.4 147.4 8.6 Great Western Bancorp, Inc. GWB SD HF Financial Corp. HFFC SD 139.5 134.9 NA Green Bancorp, Inc. GNBC TX Patriot Bancshares, Inc. TX 139.4 156.9 7.4 Camden National Corporation CAC ME SBM Financial, Inc. ME 134.9 157.3 8.7 Cathay General Bancorp CATY CA Asia Bancshares, Inc. NY 126.0 167.4 17.1 Pacific Premier Bancorp, Inc. PPBI CA Security California Bancorp SCAF CA 119.0 169.2 11.0 MainSource Financial Group, Inc. MSFG IN Cheviot Financial Corp. CHEV OH 107.4 123.4 5.4 BOK Financial Corporation BOKF OK MBT Bancshares, Inc. MO 102.5 347.2 14.2 Home BancShares, Inc. HOMB AR Florida Business BancGroup, Inc. FL 102.3 189.8 15.5 WSFS Financial Corporation WSFS DE Penn Liberty Financial Corp. PA 101.6 199.0 10.6 Beneficial Bancorp, Inc. BNCL PA Conestoga Bancorp, Inc. PA 100.1 160.0 9.2 Ameris Bancorp ABCB GA Jacksonville Bancorp, Inc. JAXB FL 96.6 237.4 17.0 BNC Bancorp BNCN NC Southcoast Financial Corporation SOCB SC 95.5 189.3 14.8 Source: FIG Partners Research, SNL Financial

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Summary Statistics By Region in 2015 The Midwest & Southeast accounted for 58% of Core all 2015 M&A deals. Deal Value- Price-to- Deposit # M&A Transactions Deal Value to-LTM Tang. Book Premium Earnings (%) (%) The 4 most active states for M&A deals in 2015 Mid Atlantic 9 $49.6 28.0 132 4.7 were Florida, California, Texas all with 19 ,and Midwest 79 $63.6 23.7 143 4.9 Illinois with 24. Northeast 38 $338.5 28.3 136 6.3 Southeast 66 $107.4 24.9 148 7.0 Southwest 25 $48.0 23.4 198 7.4 The Northeast & West accounted for ~70% of To- West 31 $280.5 25.1 135 4.9 tal Deal Value in 2015. This is largely attributa- Source: FIG Partners Research, SNL Financial M&A Database ble to the RBC acquisition of CYN, valued at $5.3 Billion and the Keycorp acquisition of First Niaga- Historical M&A Statistics ra valued at $4.1 Billion.

Averages The Mid Atlantic Region had the lowest valuation Co re Deal Value- Price-to - Depo sit in terms of Price/TBV and was also the lowest on # M&A Transactions Deal Value to -LTM Tang. Premium Earnings Bo o k (%) Core Deposit Premium. Conversely, the South- (%) west region had the highest valuation in terms of 2015 248 $162.3 25.6 144 5.9 Price/TBV and was at the top on Core Deposit 2014 268 $111.5 25.2 139 5.4 2013 209 $96.0 21.4 121 3.2 Premium. 2012 232 $91.1 21.2 117 2.3 2011 152 $168.4 28.2 109 2.1 2010 168 $92.6 25.7 118 4.0 Source: FIG Partners Research, SNL Financial M&A Database The total number of M&A deals decreased ~7% from 2014 to 2015 though deal value increased by ~45% to $26.5Billion. Importantly, this is the fourth consecutive year of 200 or more deals.

Price to Earnings and Price/Tang. Book Value multiples increased slightly from 2014 to ~25.6x & 145%, respectively.

The Core Deposit Premium multiple increased modestly in 2015 to 5.9%, vs. the significant increase experienced in 2014. During 2015, about 35% of all Bank M&A deals had a Core Deposit Premium exceeding 5%.

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THE LAST WORD: 2015 Bank Stock Price Performance Review

With 2015 now in the books, we review the price performance of stocks with Market Capitalizations exceeding $75 Million . Our tables below highlight the Top 20 Price Performance Winners and Losers in 2015. We also provide median price performance by Market Capitalization and Region for all publicly traded banks. We break down the banks in our study into five market-cap groups and six regions.

We note that 62% of the 938 banks reviewed outperformed the NASDAQ Bank Index in 2015—which appreciated 6.6%. Further we note that a strong percentage of stocks at all market capitalizations have outperformed the sector.

Top 20 Total Return Winners Top 20 Total Return Losers Performance By Region & Market Cap

2015 2015 Current Current Current Current Market Cap No . o f Median Total Institution Name Ticker To tal Institution Name Ticker To tal Mkt Cap Yield Mkt Cap Yield Banks Return in 2015 Return Return LARGE (Abo ve $5B) 27 1.6% Southcoast Finl Cp SOCB 111.2 0.0 122.1% OFG Bancorp OFG 321.1 3.3 (54.6%) MID ($1 to $5B) 81 7.8% High Point Bank Co HPTB 138.0 1.0 100.5% MidSouth Bncp Inc MSL 103.2 4.0 (46.1%) SMALL ($250M to $1B) 123 10.2% Carolina Bk Hldgs CLBH 92.4 0.0 91.0% First BanCorp FBP 698.8 0.0 (44.6%) MICRO ($50M to $250M) 302 11.0% Franklin Finl FSB 330.3 0.0 81.4% Bancorp Inc TBBK 240.5 0.0 (41.5%) NANO-Cap. (Sub-$50M) 405 11.2% Security CA Bncp SCAF 123.8 0.0 76.4% Peoples Bncp Inc PEBO 346.8 3.2 (25.3%) All Banks 938 9.9% River Valley Bncp RIVR 89.1 2.6 74.0% Peoples Finl Svcs PFIS 282.8 3.3 (20.9%) Frst Internet Bncp INBK 128.6 0.8 73.1% Indepdnt Bk Grp IBTX 588.9 1.0 (17.4%) Carolina Finl Corp CARO 216.4 0.7 55.6% UMB Financial Corp UMBF 2,294.7 2.1 (16.6%) Jacksonville Bcp JAXB 108.6 0.0 52.5% Popular Inc BPOP 2,935.6 2.1 (15.9%) Regio n No . o f Median Total WashingtonFirst WFBI 275.8 1.1 51.4% EverBank Finl EVER 1,996.8 1.5 (15.3%) Banks Return in 2015 BNC Bncp BNCN 1,034.8 0.8 48.9% Hancock Holding CoHBHC 1,948.1 3.8 (15.2%) Mid-Atlantic 234 8.4% Monarch Finl Hldgs MNRK 213.7 2.0 47.9% State St Corp STT 26,775.3 2.0 (13.9%) Midwest 252 11.5% Atlantic Coast ACFC 90.9 0.0 47.6% Boston Private BPFH 948.6 3.2 (13.3%) No rtheast 47 8.4% Flagstar Bancorp FBC 1,304.4 0.0 46.9% IBERIABANK IBKC 2,265.2 2.5 (13.2%) So utheast 212 14.0% NASB Financial NASB 237.2 2.5 46.4% Frst Nat Cmty Bncp FNCB 86.6 0.0 (12.5%) Old Second Bncp OSBC 231.2 0.0 46.0% Cullen/Frost Bkrs CFR 3,739.2 3.5 (12.4%) So uthwest 43 3.6% Enterprise Finl EFSC 567.7 1.1 45.3% MVB Financial MVBF 105.6 0.6 (12.1%) West 177 9.7% Malvern Bancorp MLVF 115.2 0.0 45.2% TrustCo Bnk Corp TRST 583.9 4.3 (11.9%) FS Bancorp FSBW 84.3 1.1 44.2% Prosperity Bcshs PB 3,350.8 2.5 (11.7%) First Mid-IL Bcshs FMBH 219.1 2.3 44.1% WesBanco Inc WSBC 1,156.1 3.1 (11.2%)

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Price Change Forward Estimates Market Market

Institution Name Ticker One One Three Institution Name Ticker P/E Forward Cheapest Cap Cap P/E P/TB ROTCE Week Month Month Farmers Natl Banc FMNB 232 5.8% 2.3% 4.6% Popular Inc BPOP 2,936 8.1x 63% 8.8% WTB Finl Corp WTBFB 516 5.3% 6.5% 5.9% MidSouth Bncp Inc MSL 103 9.2x 81% 9.0% Republic Frst Bncp FRBK 164 3.3% -6.1% 16.4% Citigroup Inc C 154,163 9.5x 83% 9.2%

Hills Bncp HBIA 420 3.3% 2.9% 6.5% Capital One Finl COF 38,403 10.0x 125% 12.8% WeekPerformance

- Wash Trst Bncp Inc WASH 672 3.2% -3.3% 2.8% Frst NBC Bk Hldg FNBC 713 10.5x 153% 15.6% MutualFirst MFSF 183 3.0% 4.2% 6.0% Flagstar Bancorp FBC 1,304 10.6x 105% 10.1%

FrstConnBncp FBNK 276 3.0% -4.6% 8.0% JPMorgan Chase JPM 243,065 11.1x 134% 12.9%

Citizens Finl Svcs CZFS 164 2.9% 5.9% 1.8% Heartland Finl USA HTLF 702 11.2x 149% 13.3% Best OneBest

Southern National SONA 159 2.9% 5.7% 15.7% HomeStreet Inc HMST 479 11.4x 114% 9.7%

Price Change Forward Estimates Book Tangible Fwd. Cheapest Market Market Institution Name Ticker Institution Name Ticker Cap One One Three Cap P/E P/TB ROTCE Week Month Month Monarch Finl Hldgs MNRK 214 0.6% 37.5% 59.7% First BanCorp FBP 699 25.3x 43% 1.7% Fox Chase Bancorp FXCB 235 -0.4% 11.2% 16.9% OFG Bancorp OFG 321 146.4x 49% 0.3% Heritage Comm Corp HTBK 384 2.0% 10.7% 5.5% Popular Inc BPOP 2,936 8.1x 65% 8.8%

NASB Financial NASB 237 1.6% 8.5% 10.3% MidSouth Bncp Inc MSL 103 9.2x 82% 9.0% MonthPerformance

- Canandaigua Natl CNND 268 0.0% 7.6% -1.0% Citigroup Inc C 154,163 9.5x 84% 9.1% WTB Finl Corp WTBFB 516 5.3% 6.5% 5.9% Republic Bncp KY RBCAA 551 16.5x 97% 5.9% Citizens Finl Svcs CZFS 164 2.9% 5.9% 1.8% Zions Bancorp ZION 5,577 22.7x 98% 4.4%

Pacific Mercantile PMBC 163 1.0% 5.8% 5.9% Comerica Inc CMA 7,377 14.4x 105% 7.4% Best OneBest Southern National SONA 159 2.9% 5.7% 15.7% Charter Finl CHFN 210 31.5x 105% 3.4%

Price Change Forward Estimates

Market Market ROTCE Estimated Highest Institution Name Ticker Institution Name Ticker Cap One One Three Cap P/E P/TB ROTCE Week Month Month Monarch Finl Hldgs MNRK 214 0.6% 37.5% 59.7% Prosperity Bcshs PB 3,351 11.7x 220% 19.8% NewBridge Bncp NBBC 476 -1.5% -5.1% 42.8% Bk of NY Mellon BK 45,052 14.6x 276% 18.9% Franklin Finl FSB 330 1.1% -3.4% 40.4% Home BcShrs Inc HOMB 2,842 19.9x 354% 18.7%

C1 Finl Inc BNK 390 0.2% -0.1% 27.1% US Bancorp USB 74,637 13.5x 237% 18.3% MonthPerformance - Old Second Bncp OSBC 231 -2.9% 1.2% 25.8% State St Corp STT 26,775 13.5x 226% 17.3% CommunityOne Bncrp COB 327 -3.6% -4.5% 23.9% W Alliance Bncp WAL 3,669 18.2x 290% 17.0% Bear State Finl BSF 411 0.8% 1.7% 21.7% PacWest Bncp PACW 5,222 15.1x 245% 16.3%

Banc of Cal Inc BANC 553 -0.7% -2.7% 19.2% First Finl Bkshrs FFIN 1,990 19.1x 302% 16.2%

Best ThreeBest Ameris Bancorp ABCB 1,094 -0.5% -0.6% 18.2% BofI Holding BOFI 1,326 16.1x 251% 15.9%

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Weekly Musings | 1-4-16

The Week In Review Cumulative Weekly Gain Yield Curve 3.5 S&P Bank S&P 500 3.0 Index Value 1- Wk. Chg. Bonds Value 1- Wk. Chg. 5.0% Current 4.0% 2.5 S&P 500 2,005.55 (0.34%) Prime Rate 3.50% unch 3.0% Last Year 2.0 NASDAQ 4,923.08 (0.21%) Fed Funds 0.36% -1 bps 2.0% DJIA 17,128.55 (0.79%) 2 Year Treasury 1.09% +5 bps 1.0% 1.5 S&P Bank Index 231.00 0.47% 5 Year Treasury 1.81% +2 bps 0.0% KBW Bank Index 71.96 (0.07%) 10 Year Treasury 2.32% unch (1.0%) 1.0 SNL U.S. Bank & Thrift 408.70 0.24% 30 Year Treasury 3.04% +1 bps (2.0%) 0.5 Russell 2000 1,121.02 (0.23%) 5Yr - 3Mo Swap +68 bps -3 bps (3.0%) Russell 3000 1,184.08 (0.34%) 5Yr - 1Mo Swap #VALUE! +1 bps (4.0%) 0.0 Thu Mon Tue Wed Thu 3M 6M 2Y 3Y 5Y 10Y 30Y

FIG Partners LLC Distribution of Ratings Research Report Disclosures

￭ No employee of the investment banking department has reviewed or Hold / ￭ The research analyst and a member of the analyst’s household has a approved this report prior to publication. Buy / Market- Sell / financial interest in the common stock of Citigroup and Northwestern ￭ The report has not been approved by the subject company, but may have Mutual Life. Outperform Perform Underperform been reviewed for factual accuracy except for the research summary, ￭ At the prior month end, neither FIG Partners LLC nor any of its partners research rating and price target. % Rated 40.7% 59.3% 0.0% or officers owned more than 1% of the outstanding equity securities of ￭ The subject company has not been promised directly or indirectly IB Client % in Category 30.0% 17.8% 0.0% the subject companies. favorable research, a specific rating or a specific price target nor has the ￭ There are no material conflicts of interest of the analyst or FIG Partners subject company been threatened with a change in research as an LLC at the time of this report. inducement for business or compensation. ￭ FIG has been a manager or co-manager of a public offering of certain ￭ Additional information is available by request. companies in this report within the last three years. Equity Rating System as of July 1, 2003 ￭ The information contained herein has been prepared from sources and ￭ FIG has received investment banking compensation from certain data we believe to be reliable but we make no representation as to its Buy/Outperform FIG expects that total return of the subject companies in this report in the last three years. accuracy or completeness. The opinions expressed herein are our own stock will outperform the industry ￭ FIG intends to seek investment banking compensation from certain benchmark (BIX) over the next 12 months unless otherwise noted and are subject to change without notice. The companies in this report in the next three months. price and value of the securities mentioned herein will fluctuate; past Hold/Market-Perform FIG expects that total return of the subject ￭ Certain companies in this report are clients of FIG. performance is no guarantee of future results. stock will perform inline with the industry ￭ Neither the analyst nor anyone at FIG serves as an officer, director, or ￭ This report is published solely for informational purposes and should benchmark (BIX) over the next 12 months advisory board member of any company in this report. not be construed as an offer to buy or sell, or a solicitation of an offer to

￭ FIG may make a market in the subject securities and may have been buy or sell, any security. The securities discussed herein are not suitable Sell/Underperform FIG expects that total return of the subject for everyone; each investor should assess his or her own particular stock will under perform the industry making a market in the subject securities at the time of this report’s benchmark (BIX) over the next 12 months publication (see www.figpartners.com for our market making list). financial condition and investment objectives before making any ￭ All analysts are compensated based on a number of factors including investment decisions. the overall profits of FIG Partners LLC which includes investment ￭ FIG Partners LLC may act as principal for its own account or as agent for For purposes of FINRA rule 2711, outperform is classified as a buy, market- banking revenues, but no analyst receives any compensation which is both buyer and seller in connection with the purchase or sale of any perform is a hold and underperform is a sell. The industry benchmark that used based on a specific investment banking service or transaction. security discussed herein. is the S&P Bank Index, referred to as the “BIX.” ￭ To determine price target, our analysts utilize a variety of valuation ￭ Reproduction or redistribution of this report in any form is prohibited techniques including but not limited to: peer analysis, absolute P/E, except with the written permission of FIG Partners LLC. The author is relative P/E, projected P/E, absolute P/B, relative P/B, projected P/B, employed by FIG Partners LLC, a broker-dealer. Deposit premium, and a discounted cash flow model. ￭ Data sources for the report are Bloomberg Financial L.P., SNL Financial ￭ This research report reflects the analyst’s actual opinion. LC, Stockcharts.com, Thompson Financial and regulatory filings. ￭ No research analyst is subject to the supervision or control of any employee of the member’s investment banking department.

FIG Partners LLC 10