Super Regional and Midwest Terry McEvoy, CFA, Analyst 207-808-5025 207-632-1068 (cell)

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8/5/2016 Price Mkt Cap Assets EPS Price/FY EPS Efficiency Dividend Price Company Ticker ($) ($M) ($M) Rating 2015 2016E 2017E 2016E 2017E P/TBV Ratio ROA ROTCE Yield Target SUPER REGIONAL BANKS

BB&T Corp. BBT 37.97 30,922 212,405 EW $2.55 $2.73 $3.00 13.9x 12.7x 1.86x 60% 1.09% 13.4% 2.9% --- Comerica Inc. CMA 46.16 8,026 69,007 EW $2.85 $2.40 $3.40 19.2x 13.6x 1.16x 66% 0.35% 3.4% 1.8% --- Citizens Financial Group Inc. CFG 23.32 12,338 140,077 OW $1.55 $1.84 $2.05 12.7x 11.4x 0.96x 66% 0.64% 6.8% 1.8% $27.00 Fifth Third Bancorp FITB 19.43 14,886 142,430 OW $1.72 $1.63 $1.67 11.9x 11.6x 1.19x 64% 0.92% 10.1% 2.7% $21.00 First Repub FRC 73.36 10,683 62,103 EW $3.17 $3.85 $4.70 19.1x 15.6x 2.36x 61% 0.97% 11.8% 0.8% --- Huntington Bancshares Inc. HBAN 9.70 7,775 72,645 EW $0.81 $0.81 $0.89 12.0x 10.9x 1.37x 65% 0.96% 11.7% 2.8% --- KeyCorp KEY 12.22 10,298 98,402 OW $1.06 $0.98 $1.20 12.5x 10.2x 1.06x 67% 0.78% 7.7% 2.6% $13.00 PNC Financial Services Group PNC 86.00 42,259 360,985 OW $7.40 $7.05 $7.40 12.2x 11.6x 1.33x 62% 1.05% 10.6% 2.4% $100.00 Regions Financial Corp. RF 9.40 11,828 125,539 OW $0.75 $0.86 $0.91 10.9x 10.3x 1.06x 63% 0.87% 9.2% 2.6% $10.00 SunTrust Banks Inc. STI 43.02 21,571 194,158 EW $3.58 $3.48 $3.50 12.4x 12.3x 1.33x 64% 0.93% 10.5% 2.2% --- U.S. Bancorp USB 42.87 73,694 428,638 EW $3.16 $3.23 $3.34 13.3x 12.8x 2.39x 55% 1.33% 16.7% 2.4% --- Zions Bancorp. ZION 28.86 5,919 59,180 EW $1.21 $1.80 $2.20 16.0x 13.1x 1.02x 69% 0.62% 5.6% 0.8% ---

Super Regional Median 12.6x 12.0x 1.26x 64% 0.93% 10.3% 2.4%

MIDWEST BANKS

Associated Banc-Corp ASB 19.17 2,884 28,179 EW $1.19 $1.23 $1.35 15.6x 14.2x 1.55x 67% 0.58% 8.6% 2.2% --- Equity Bancshares Inc. EQBK 24.00 201 1,529 OW $1.55 $1.51 $2.00 15.9x 12.0x 1.45x 63% 0.83% 10.4% 0.0% $25.00 First Midwest Bancorp Inc. FMBI 19.17 1,559 10,729 OW $1.06 $1.16 $1.36 16.5x 14.1x 1.82x 69% 0.71% 8.6% 1.9% $20.00 FirstMerit Corp. FMER 21.64 3,596 26,063 EW $1.33 $1.30 --- 16.6x --- 1.71x 65% 0.81% 10.1% 3.1% --- Midland States Bancorp Inc. MSBI 22.50 266 2,898 OW $2.01 $2.05 $2.25 11.0x 10.0x 1.43x 70% 0.70% 11.9% 0.0% $25.00 Old National Bancorp ONB 13.63 1,840 11,932 OW $1.01 $1.05 $1.05 13.0x 13.0x 1.75x 70% 0.91% 12.2% 3.7% $15.00 PrivateBancorp Inc. PVTB 44.09 3,504 17,667 EW $2.32 $2.52 $2.75 17.5x 16.0x 2.09x 52% 1.13% 12.0% 0.1% --- TCF Financial Corp. TCB 14.12 2,415 21,321 OW $1.07 $1.14 $1.28 12.4x 11.0x 1.30x 70% 0.83% 9.4% 1.9% $15.00 Talmer Bancorp Inc. TLMR 21.88 1,470 6,714 EW $0.82 $1.20 --- 18.2x --- 2.00x 64% 1.27% 11.8% 0.7% --- Wintrust Financial Corp. WTFC 54.65 2,821 23,488 OW $2.94 $3.54 $3.65 15.4x 15.0x 1.60x 64% 0.82% 11.5% 0.8% $57.00

Midwest Median 15.7x 13.5x 1.65x 66% 0.83% 11.0% 1.4% Source: FactSet Research Systems and Stephens estimates Pricing as of: 8/5/16

Source: Company Filings, FDIC, Federal Reserve, S&P Global Market, and Stephens Inc. 2 Note: Fifth Third uses adjusted EPS. Super Regional Banks – Fundamental Outlook

Second quarter ‘16 EPS were better than we expected at the Super Regional banks as strong growth in fee income and lower credit costs offset flat Q/Q net interest income trends. With bank stocks higher over the last four weeks, the market seems to be overlooking that the 10-year Treasury is back to ~1.5% and oil is now closer to $40/barrel. However, we recognize it has been a favorable environment for equity valuations overall. Super Regional banks are at 11.7x ’17 estimates and 1.2x TBV making it tough to argue that the sector is cheap, given the revenue headwinds and potential shift to more normalized credit trends over the next few years.

• Early Summer Roller Coaster Ride in Bank Stocks: Following some unsettling headlines (May job’s report, Brexit vote) and the subsequent flattening of the yield curve, bank stocks fell ~15% during June. Our fundamental view of the Super Regionals when the ten year was below 1.40% and global equity markets were under pressure was clearly on the cautious side. We felt economic and political uncertainty would impact borrower confidence and reduce expectations for 2H16 demand, all while the “low-for-longer” rate environment would grind margins downward. Essentially, consensus 2017 EPS estimates at that time appeared very much at risk of negative revisions.

• We Were Wrong: Bank stocks rebounded in July with the Bank ETF (KRE) now just 5% below the yearly high on June 2. Where we were wrong was that consensus 2017 estimates for the Super Regional banks came down 1.7% on average since before 2Q16 earnings were released. This modest decline in estimates was less than our original concerns. While our outlook for 2017 net interest income was reduced at most banks, tight expense controls and lower credit costs provided much of the offset. Ongoing share repurchase plans are another earnings level for the sector.

• What Are We Recommending? Given that we have removed higher rates from our models, we continue to look for banks that will outperform in a sustained low rate environment. Our Overweight rated names are FITB (monetization of Vantiv), RF (favorable markets and valuation), KEY (embedded earnings growth from M&A), CFG (ongoing revenue and expense initiatives), and PNC (defensible name with valuable asset management exposure).

Source: Company Filings, FDIC, Federal Reserve, S&P Global Market, and Stephens Inc. 3 Midwest Banks – Fundamental Outlook

Reported 2Q16 results for the Midwest banks showed strong loan growth, robust credit metrics outside of agriculture, and continued M&A activity. However, margins began to re-compress in the absence of a second rate hike, reflecting the continued low rate environment. The Midwestern economy continues to exhibit resilience in the face of a global economic slowdown and U.S. dollar volatility. Economic activity has increased after a slow start to the year. Manufacturing growth has moderated, but the sector continues to expand. The consumer sector is healthy, with strength in housing and auto. Unemployment (4.2%) continues to decline and remains well below the national average (4.9%), which has led to increasing signs of wage pressures in the region.

Overweight Midwest Midwest Banks: Banks: Analyst Analyst McEvoy McEvoy Unemployment (Seasonally Adjusted)

Unemployment Rate (%) – First Midwest Bancorp Inc. – FMBI ($20 PT) 06/30/16 04/29/16 05/29/15 – Equity Bancshares Inc. – EQBK ($25 PT) Illinois 6.2 6.6 5.9 – Midland States Bancorp Inc. – MSBI ($25 PT) Indiana 4.8 5.2 4.8 – Old National Bancorp – ONB ($15 PT) Iowa 4.0 3.9 3.6 – TCF Financial Corp. – TCB ($15 PT) Kansas 3.8 3.8 4.2 – Wintrust Financial Corp. – WTFC ($57 PT) Kentucky 5.0 5.4 5.3 Michigan 4.6 4.8 5.5 Minnesota 3.8 3.8 3.6

Missouri 4.5 4.3 5.1 Overweight Midwest Midwest Banks: Banks: Analyst Analyst Zwick Zwick Nebraska 3.0 3.0 2.9 North Dakota 3.2 3.2 2.8 – County Bancorp – ICBK ($25 PT) Ohio 5.0 5.2 4.9 – First Busey Corp. – BUSE ($24 PT) South Dakota 2.7 2.5 3.2 – First Merchants Corp. – FRME ($29 PT) Wisconsin 4.2 4.4 4.6 – Great Western Bancorp – GWB ($36 PT) Midwest Average 4.2 4.3 4.3 United States 4.9 5.0 5.5 – Horizon Bancorp – HBNC ($29 PT) – MainSource Financial Group – MSFG ($25 PT) Source: Bureau of Labor Statistics, FactSet Research Systems

Source: Company Filings, FDIC, Federal Reserve, S&P Global Market, and Stephens Inc. 4 Beginning Outpace Deposit Growth – Checking Costs Rising

Sequential Growth in Loans and Deposits Checking Deposit Costs

3.5%

3.0%

2.5%

2.0%

1.5%

1.0%

0.5%

0.0% 6/14 7/14 8/14 9/14 10/1411/1412/14 1/15 2/15 3/15 4/15 5/15 6/15 7/15 8/15 9/15 10/1511/1512/15 1/16 2/16 3/16 4/16 5/16 6/16

Median Super Regional Loan Q/Q Growth Median Super Regional Deposit Q/Q Growth Source: S&P Global Market Source: BanRate.com As of July month-end

The Super Regional Banks (>$50 bil. in total assets) have started to grow loans quicker than deposits. At the same time, these banks are required to hold higher levels of retail deposits through new regulations. While not showing up in margins yet, we are starting to see signs of increasing competition for deposits.

5 Efficiency Improvements Remain in Focus

Trends in Expenses of the Super Regional Banks

Efficiency Ratio Compensation Occupancy Core Expenses Name Ticker 2Q16 ∆ Q/Q Q/Q Y/Y Q/Q Y/Y Q/Q Y/Y BB&T Corporation* BBT 59.2% (0.3%) 10.8% 16.8% (18.5%) (7.2%) 11.9% 3.1% Comerica Incorporated CMA 65.3% (0.1%) (0.4%) (1.6%) 3.9% 1.9% 1.3% 0.6% Fifth Third Bancorp FITB 65.8% 4.7% (4.0%) 4.8% (1.9%) (7.9%) 0.0% 2.8% Huntington Bancshares Incorporated HBAN 63.3% 1.7% 3.3% 4.4% (3.1%) 2.4% 3.7% 2.7% KeyCorp KEY 63.9% (2.6%) 1.0% (3.9%) (2.4%) (9.1%) (0.7%) 4.0% PNC Financial Services Group, Inc. PNC 60.8% (1.0%) 7.1% 2.2% 0.0% 3.4% 3.5% (0.3%) Regions Financial Corporation RF 64.1% 0.6% 1.1% 0.6% 0.6% 0.0% 5.5% 3.5% SunTrust Banks, Inc. STI 61.1% (2.4%) (1.4%) 0.9% (4.0%) (5.5%) 0.5% (0.3%) U.S. Bancorp USB 56.0% 3.7% 0.4% 4.4% (2.0%) (1.6%) 3.4% 6.0% Zions Bancorporation ZION 64.1% (7.4%) (6.6%) (3.9%) - - (2.9%) (3.4%) M&T Bank Corporation* MTB 55.1% (5.3%) (6.5%) 10.2% 2.9% 12.8% (3.4%) 7.6% Citizens Financial Group, Inc. CFG 64.9% (2.2%) 1.6% 6.7% (0.7%) 0.0% 2.0% 3.2% Wells Fargo & Company WFC 59.4% 0.3% (3.2%) 3.9% (2.4%) 2.5% (1.2%) 3.2% Median 63.3% -0.32% 0.4% 3.9% -1.9% 0.0% 1.3% 3.1% *Includes a merger in the Q/Q or Y/Y period

Last month, we heard details into another efficiency improvement plan at a Super Regional bank. While we have heard plans detailed by Comerica, Zions, and PNC, most Super Regional banks have actively looked at opportunities to manage expenses in recent years given the challenging revenue environment. Higher regulatory, compliance and technology costs have been another factor in these banks finding ways to become more efficient.

Source: S&P Global Market 6 Continued Diversification of Revenue

Growth in Core Fee Income in 2Q16 Year-over-Year Growth in Deposit Fees Q/Q Y/Y BBT 65.5% 8.0% CMA 37.2% 5.1% 4% FITB - - 3% HBAN 47.3% -4.0% KEY 28.8% -3.3% 2% 1% PNC 55.7% 2.4% 1% RF 21.1% 5.3% 0% STI 35.3% -1.2% USB 41.6% 4.3% ZION 19.4% -2.8% -2% -2% -2% MTB 22.1% -1.6% CFG 41.0% 0.6% -3% WFC -6.5% 1.6% 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 Median 36.3% 1.1% YoY Growth in Deposit Fees

Growing and diversifying fee income has taken on greater importance at the Super Regional banks in recent years, given the challenging interest rate environment. Notably, this marked the third straight quarter where the banks were able to grow deposit service charges. This revenue source had come under regulatory pressure in recent years, resulting in declining fees until 4Q15.

Source: S&P Global Market 7 A Familiar Foe: Margin Pressure Returns

Sequential Trends in the Net Margin

NIM (%) Loan Yields (%) Cost of Funds (%) Institution Name Ticker Yield Q/Q Yield Q/Q Yield Q/Q BB&T Corporation BBT 3.40 (0.01) 4.31 (0.04) 0.40 (0.03) Citizens Financial Group, Inc. CFG 2.85 (0.01) 3.49 0.02 0.41 0.02 Comerica Incorporated CMA 2.71 (0.08) 3.24 (0.07) 0.18 0.02 Fifth Third Bancorp FITB 2.86 (0.03) 3.45 (0.01) 0.47 0.02 Huntington Bancshares Incorporated HBAN 3.04 (0.05) 3.64 (0.04) 0.37 0.03 KeyCorp KEY 2.75 (0.13) 3.76 (0.03) 0.41 0.02 M&T Bank Corporation MTB 3.11 (0.05) 3.99 0.00 0.41 0.02 PNC Financial Services Group, Inc. PNC 2.71 (0.05) 3.56 (0.04) 0.42 0.01 Regions Financial Corporation RF 3.13 (0.04) 3.82 (0.05) 0.29 0.02 SunTrust Banks, Inc. STI 2.97 (0.05) 3.48 (0.02) 0.32 0.01 U.S. Bancorp USB 3.01 (0.05) 4.03 (0.04) 0.45 0.02 Wells Fargo & Company WFC 2.86 (0.04) 4.13 0.00 0.35 0.02 Zions Bancorporation ZION 3.37 0.04 4.16 0.02 0.17 (0.00) Median 2.97 (0.05) 3.76 (0.03) 0.40 0.02

With the flattening of the yield curve that occurred during 2Q16 and the issuance of debt at certain companies the Q/Q compression in the net interest margin (NIM) at the Super Regional banks was not a surprise. The recent increase in LIBOR may help the margin at C&I lenders in 3Q16 if it remains at these levels. We will be watching deposit costs closely in 2H16 and would note the increase last month in interest checking (up 13bps M/M).

Source: S&P Global Market 8 Our Thoughts on Bank M&A

Accelerating M&A Activity in the Midwest and Southeast

WA - $94.2 ME - $0.0 MT - $46.9 ND - $0.0 MN - $0.0 VT - OR - $0.0 $0.0 NH - $143.9 WI - $617.2 SD - $4.7 MA - $141.7 ID - $0.0 NY - $417.5 MI - $1,177.5 RI - $0.0 WY - $0.0 CT - $0.0 IA - $90.4 PA - $87.0 NV - $0.0 NE - $15.4 OH - $3,503.0 NJ - IN - $658.1 DE - $0.0 IL - $4,365.3 $355.3 WV - UT - $0.0 $48.9 MD - $65.1 CO - $203.7 KS - $35.8 VA - $175.5 MO - $38.4 CA - $902.1 KY - $0.0 DC - $0.0 NC - $1,573.4 TN - $323.0 OK - $0.0 AR - $68.2 SC - $29.6 AZ - $29.6 NM - $0.0 MS - $0.0 GA - $451.1 AL - $0.0 TX - $16.0

LA - $0.0

FL - $78.5

Note: Cumulative Deal Values on Bank M&A announced between 1/1/16 and 8/1/16

As we look ahead in 2016, we expect continued consolidation amongst the banking sector. We believe, for the most part, CCAR banks are out of the market due to a mixture of regulatory and market reactions to recent large deals.

Source: S&P Global Market and Stephens Inc. 9 Super Regional Bank Stock Selection

10 U.S. Super Regional Banks – Valuation

Price to EPSe Price to ROA 16 ROA 17 Dividend Ticker Price FY15 FY16 FY17 BV TBV 2016 2017 Yield MTB $114.27 15.9 14.5 13.3 1.18 1.71 1.03% 1.05% 2.5% CMA $44.80 15.7 18.7 13.2 1.01 1.11 0.63% 0.79% 2.1% USB $42.06 13.3 13.0 12.6 1.73 2.28 1.33% 1.28% 2.4% ZION $27.65 22.8 15.4 12.6 0.82 0.96 0.68% 0.74% 1.2% BBT $37.05 14.5 13.6 12.3 1.13 1.88 1.08% 1.13% 3.2% STI $41.94 11.7 12.1 12.0 0.91 1.23 0.91% 0.87% 2.3% FITB $18.97 11.0 11.6 11.4 0.94 1.12 0.92% 0.85% 2.7% PNC $83.86 11.3 11.9 11.3 0.98 1.25 1.02% 0.99% 2.6% CFG $22.63 14.1 12.3 11.0 0.60 0.88 0.68% 0.69% 2.1% HBAN $9.37 11.6 11.6 10.5 1.15 1.29 0.91% 0.97% 3.0% RF $9.05 12.1 10.5 9.9 0.69 0.98 0.85% 0.86% 2.9% KEY $11.70 11.0 11.9 9.7 0.89 0.99 0.84% 0.93% 2.9%

Regional Bank median: 12.7 12.2 11.7 0.96 1.18 0.91% 0.90% 2.5%

Pricing as of: 8/4/2016 Source: FactSet Research Systems and Stephens Inc.

MTB is a non-covered companies. Stephens Inc. estimates used for covered companies. FactSet Research Systems Inc. consensus estimates for non-covered companies. FITB valuation used our published adjusted EPS. 11 U.S. Super Regional Banks – Pricing Map (P/TBV vs. ROATCE)

2.2x

2.0x USB

1.8x BBT MTB 1.6x

1.4x HBAN STI 1.2x PNC CMA FITB KEY 1.0x RF

FactSet P/TBV as of 2017Yasof P/TBV FactSet ZION CFG 0.8x

0.6x 5.1% 7.1% 9.1% 11.1% 13.1% 15.1% 17.1% R² = 88% FactSet ROATCE as of 2017Y

Source: Company Filings and FactSet Research Systems 12 Midwest Banks ($5-$30B) – Valuation

Price to EPSe Price to ROAA Dividend Price FY15 FY16 FY17 BV TBV 2016 2017 Yield CBSH $47.44 18.5 17.3 16.3 1.9 2.1 1.10% 1.09% 1.9% UMBF $55.01 22.5 17.8 15.8 1.4 1.6 0.78% 0.80% 1.8% PRK $89.41 17.0 16.7 16.1 1.9 2.1 1.10% 1.11% 4.2% TLMR $21.18 25.8 17.7 16.0 1.9 1.9 1.23% 1.24% 0.9% FMER $21.04 15.8 16.2 14.3 1.2 1.6 0.88% 0.87% 3.2% MBFI $38.12 18.5 16.5 14.5 1.4 2.2 1.09% 1.13% 2.0% WTFC $52.89 18.0 14.9 14.5 1.2 1.5 0.79% 0.78% 0.9% FMBI $18.67 17.6 16.1 13.7 1.2 1.7 0.89% 0.97% 1.9% SRCE $33.96 15.6 15.2 14.5 1.3 1.5 1.08% 1.08% 2.1% PVTB $44.01 19.0 17.5 16.0 1.9 2.0 1.14% 1.13% 0.1% FFBC $21.17 17.5 15.3 14.7 1.5 2.1 1.05% 1.05% 3.0% ASB $18.61 15.6 15.1 13.8 1.0 1.5 0.65% 0.66% 2.4% CHFC $41.86 16.5 15.1 13.5 1.5 2.2 1.15% 1.27% 2.5% GWB $32.40 16.8 14.9 12.7 1.2 2.1 1.18% 1.26% 1.7% FRME $26.42 15.4 13.9 13.2 1.2 1.7 1.12% 1.13% 2.1% ONB $13.30 13.2 12.7 12.7 1.0 1.6 0.89% 0.93% 3.9% HTLF $36.37 12.9 11.6 11.8 1.3 1.7 0.93% 0.92% 1.1% TCB $13.62 12.7 11.9 10.6 1.1 1.3 0.99% 0.99% 2.2% MSBI $22.68 11.3 11.1 10.1 1.1 1.3 - - -

Midwest Bank median: 16.8 15.2 14.3 1.3 1.7 1.06% 1.07% 2.1%

Pricing as of: 8/4/2016 Source: FactSet Research Systems and Stephens Inc.

Stephens Inc. estimates used for covered companies. FactSet Research Systems Inc. provides consensus estimates for non-covered companies. 13 Regions Financial Corp. (RF) – Overweight – $10.00 PT

While 2Q16 EPS were $0.01 ahead of consensus, the bar was high for RF given the strong move up in price for the prior three weeks before earnings. The strength in Region’s consumer businesses (loans, credit trends and fee income) was the real bright spot of the quarter with some softness in commercial pipelines. The weakness in price after releasing earnings reflected the increase in non-energy criticized loans and a few loans that went “sideways” in 2Q16, which bumped up operating expenses.

A key focus at Regions is to not only grow revenue, but also to diversify the sources. During 2Q16 roughly 62% of total revenue was net interest income with the remainder coming from fees. Total adjusted fees increased 5% YoY and 2% from the prior quarter. Wealth management, capital markets and card/ATM income stood out again in 2Q16. Mortgage banking income was up 21% Q/Q (75% purchase/25% refinance). For all of 2016 management expects fee income to be at the high end of their 4%-6% growth range.

We view Regions as a concentrated Southeast U.S. banking franchise well positioned to benefit from the positive demographic trends in the region. The Company has a number one market share in Alabama, number two market share in Tennessee, and number five in Florida (353 branches and $19 bil. in deposits).

Greater confidence in the near- to mid-term earnings power of Regions, which should coincide with strengthening investor confidence, will drive multiple expansion at RF. A balance sheet that is well positioned for higher rates and well capitalized supports a more favorable fundamental view of the stock relative to RF’s current valuation vs. peers.

14 KeyCorp – Overweight – $13.00 PT

Second quarter ’16 core earnings at Key were a bit soft with, challenging market conditions impacting revenue and the net interest margin. Looking out into 2017 we think the cost savings coming from the FNFG deal (closing 8/1/16) provide a unique earnings lever not available to many peer banks. Key will also be in the market repurchasing stock following the close of the merger. Admittedly, the real EPS boost from the deal comes in 2018, which over the next year should be the catalyst for improving KEY’s currently depressed valuation.

The First Niagara deal closed in 3Q16. This deal is expected to produce $400 mil. in cost savings and improve the efficiency ratio by ~300bps. Much of the cost saves will come from the fact FNFG outsourced many services that KeyCorp can do in-house. In our model, we have KeyCorp's ROTCE increasing from 9.7% in 2015 to 10.5% in 2017.

While there was some skepticism on if the deal would close on time due to compliance issues at First Niagara and political pushback, the deal has proceeded on the timeline initially telegraphed by management. KeyCorp has repeated that there are three important Day 1's: Legal Day 1, Customer Day 1, and Employee Day 1. Now that KeyCorp has received the Fed approval, we look forward to the OCC approval to merge the banks. The merger of the banks is expected to occur in 4Q16, which would allow for the Customer and Employee Day 1's to happen that quarter.

We continue to believe that investors should own this name for the embedded earnings growth and profitability improvements arising from the deal while the industry faces earnings headwinds from the current interest rate environment.

15 Fifth Third Bancorp – Overweight – $21.00 PT

When we upgraded the stock in March, one of our main points was that Fifth Third would start to unlock substantial shareholder value through the monetization and distribution to shareholders of their Vantiv holding. Early in 3Q16, management engaged in a contract by which they have locked in annual TRA cash flows in 3Q16 and then from 1Q17 through 4Q18.

Cumulatively, we estimate this will add $249 mil. after tax in after tax capital distributions to shareholders during the 2016 CCAR period, which represents a 38% increase from their CCAR approval. On Vantiv's earnings conference call, the Company disclosed that there is roughly $1.2 bil. of additional TRAs that can be generated as Fifth Third exercises and sells their shares. We continue to believe Fifth Third's monetization of the Vantiv holding will provide meaningful benefits to shareholders.

Outside of Vantiv monetization, we are optimistic about the future financial performance of Fifth Third. Management continues to execute on strategies that they believe over time will generate a 1.1% to 1.3% return on average assets accompanied with a 12% to 14% return on tangible common equity. When asked about investments for the future, management stated that bank M&A is at the "lowest level of our priority" while increasing operating leverage is the "top priority."

Fifth Third’s improving level of future profitability combined with their ability to return capital to shareholders well in excess of their peers reinforces are both key catalysts for why we think Fifth Third will outperform.

16 PNC Financial Services Group – Overweight – $100.00 PT

Earning headwinds at PNC coming from the runoff of purchase accounting accretion is now almost a thing of the past (accretion was only 3% of net interest income in 2Q16) and excess cash will provide an earning lever as funds are ultimately moved into loans/securities. Asset management stocks are well off their recent lows with PNC’s interest in BLK growing in value. PNC has underperformed their peers by ~650bps YTD and we now see the stock as undervalued at 11.4x our ’17 estimate.

We believe PNC has several attractive features that will bolster financial performance. The first is the level of liquidity PNC currently maintains. As a percentage of assets, PNC held 8.5% cash on the balance sheet in 2Q16 and historically has had the highest level among Super Regional peers, who held ~3% on median last quarter. This optionality provides the ability to PNC to mitigate margin headwinds experienced by the industry over the near-term as they increase the mix of assets into loans/securities.

PNC has had a financial relationship with Blackrock going back to 1992. Today, PNC maintains a 22% economic interest in BlackRock. We believe this investment provides an attractive income stream to PNC, which deserves a higher multiple relative to the core banking franchise. Additionally, with the S&P 500 at all-time highs, we find PNC's exposure to asset management an attractive part of their business.

With the acquisition of RBC Bank (USA) in 2012, PNC expanded meaningfully into the Southeastern region of the U.S. We view the Southeast as an attractive banking market, due to both demographic and economic trends. However, historically we have been disappointed by the level of details provided on the Company's progress in the region. On the 2Q16 call, management stated that the Southeast continues to outperform the legacy franchise by a fair margin in terms of loan, fee, and client growth across the commercial and retail businesses.

17 Overweight Midwest Banks

EquityEquity BancsharesBancshares Inc.Inc. –– EQBKEQBK ($25($25 PT)PT) • Second quarter 2016 results at Equity Banc. showed the organic side of the Company's two-pronged growth strategy with loans up $42 mil., or 4.5% Q/Q. This growth is not coming at the expense of credit quality, with YTD net charge-offs of just 16 bps and non-performing assets below 1%. The pending deal with Community First is expected to close in 4Q16. We feel comfortable with the integration plans given management's M&A history and the growth prospects of the pro forma bank.

FirstFirst Midwest Midwest Bancorp Bancorp Inc. Inc. – – FMBI FMBI ($20 ($20 PT) PT) • Broad-based revenue growth and slightly lower core operating expenses offset a higher loan loss provision and tax rate at First Midwest in 2Q16. Overall, this was a strong quarter for FMBI that combined with the pending acquisition of Standard Banc bodes well for performance over the next 12-18 months. The fundamental outlook from management on the earnings call was upbeat as it relates to 2H16 loan and fee income growth.

OldOld NationalNational BancorpBancorp –– ONBONB ($14($15 PT)PT) • The financial benefits of the acquisition of Anchor Bank and the sale on ONB (both closed in 2Q16) helped Old National’s 2Q16 results in multiple ways. Despite the closing of the Anchor deal, TBV increased 5.5% due to the insurance business sale thus alleviating some investor concerns around Anchor. We should also point out that the loan mark was lower than expected. Loan and core fee income growth also stood out last quarter.

TCFTCF FinancialFinancial Corp.Corp. –– TCBTCB ($15($15 PT)PT) • Better-than-expected 2Q16 results and stable credit trends within TCF’s auto portfolio are encouraging and reflective of the operating model that is now firmly in place. We see the valuation gap between TCB and peers closing as the Company continues to deliver more predictable earnings and strong profitability consistent with what occurred in 1H16.

WintrustWintrust FinancialFinancial Corp.Corp. –– WTFCWTFC ($57($57 PT)PT) • Second quarter ’16 results demonstrated Wintrust Financial’s ability to leverage their expense infrastructure, as shown by the impressive balance sheet growth. Trends within several fee-generating businesses were positive, although this success did drive salaries higher. The pending portfolio purchase of over $500 mil. of restaurant finance loans should occur in 3Q16 and is included in our estimates.

18 Companies Mentioned

Covered Companies Non-Covered Companies

Name Ticker Price Name Ticker Price Associated Banc-Corp ASB $ 18.69 Chemical Financial Corporation CHFC $ 41.78 BB&T Corporation BBT $ 36.97 First Busey Corporation BUSE $ 22.94 Heartland Financial USA, Inc. HTLF $ 36.11 Commerce Bancshares, Inc. CBSH $ 47.33 MB Financial, Inc. MBFI $ 38.11 Citizens Financial Group, Inc. CFG $ 22.61 M&T Bank Corporation MTB $ 113.97 Comerica Incorporated CMA $ 44.83 1st Source Corporation SRCE $ 34.15 Equity Bancshares, Inc. Class A EQBK $ 23.90 First Financial Bancorp. FFBC $ 21.17 Vantiv, Inc. Class A VNTV $ 54.80 Fifth Third Bancorp FITB $ 18.87 Wells Fargo & Company WFC $ 47.84 First Midwest Bancorp, Inc. FMBI $ 18.71 FirstMerit Corporation FMER $ 21.00 First Republic Bank FRC $ 71.39 First Merchants Corporation FRME $ 26.36 Great Western Bancorp, Inc. GWB $ 32.48 Huntington Bancshares Incorporated HBAN $ 9.35 Horizon Bancorp HBNC $ 26.76 County Bancorp Inc ICBK $ 20.26 KeyCorp KEY $ 11.73 Midland States Bancorp, Inc. MSBI $ 22.46 MainSource Financial Group, Inc. MSFG $ 22.29 Old National Bancorp ONB $ 13.28 PNC Financial Services Group, Inc. PNC $ 83.88 Park National Corporation PRK $ 89.53 PrivateBancorp, Inc. PVTB $ 44.07 Regions Financial Corporation RF $ 9.04 SunTrust Banks, Inc. STI $ 41.95 TCF Financial Corporation TCB $ 13.65 Talmer Bancorp, Inc. Class A TLMR $ 21.16 UMB Financial Corporation UMBF $ 55.28 U.S. Bancorp USB $ 42.03 Wintrust Financial Corporation WTFC $ 53.10 Zions Bancorporation ZION $ 27.73

Source: FactSet Research Systems Price as of 8/4/16 19 Disclosures

REQUIRED DISCLOSURES

The research analyst principally responsible for preparation of this presentation has received compensation that is based on the firm’s overall revenue which includes investment banking revenue.

Rating Definitions:

Company Stock Ratings: OVERWEIGHT (O) – The stock’s total return is expected to be greater than the total return of the company’s industry sector, on a risk-adjusted basis, over the next 12 months. EQUAL-WEIGHT (E) – The stock’s total return is expected to be equivalent to the total return of the company’s industry sector, on a risk-adjusted basis, over the next 12 months. UNDERWEIGHT (U) – The stock’s total return is expected to be less than the total return of the company’s industry sector, on a risk-adjusted basis, over the next 12 months. VOLATILE (V) – The stock’s price volatility is potentially higher than that of the company’s industry sector. The company stock ratings may reflect the analyst’s subjective assessment of risk factors that could impact the company’s business.

Distribution of Stephens Inc.'s Ratings (as of 8/5/16)

% Investment Banking Clients Rating % (Past 12 Months) BUY 55 19 HOLD 43 11 SELL 2 0

OTHER DISCLOSURES

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