The Weekly Musings

Trusted Advisor for and Investors February 21, 2017

How Will Deposits React to Higher Rates? Chart of the Week:

Examining The Composition Of Deposits At 4Q16 State-by-State Guide To Taxes On Retirees Foundation the Tax and CCH Departments, Tax State Research, FIG Partners Source:

With two rate hikes in the books and more expected prospectively the Our Chart below shows the best and worst states to protect your retire- days of cheap funding are likely over. Price competition is expected to ment nest egg from taxes. An analysis of 2016 state taxes shows that intensify as customers seek better returns. Nobody knows for sure how the Southeast remains the most tax friendly region, while the Northeast their Deposit Base will react to higher rates; however, Banks with better and the West are the least tax friendly. Notably, 50% of the Top 10 Core Deposits should be better positioned entering a rising rate cycle. most tax friendly states are in the Southeast.

We reviewed the Deposit Composition of all publicly traded banks with Assets between $1—$50 Billion highlighting Core Deposit levels and funding cost data. We also examined recent trends in Deposit Betas.

Averages by size bucket via 2016 EPS estimates on: 2/17/2017

1-Week 2016 P/E Price-to- Market Cap ROTCE Change Multiple T.Book Large 3.0% 19.3x 220% 12.4% Mid 2.8% 21.3x 238% 11.9% Small 2.8% 19.5x 196% 9.5% Micro 1.2% 19.6x 149% 7.6%

See Our Last Word Analysis On Differentiating Core

Deposits Via Page 6

Please see important disclosures regarding FIG Partners’ equity ratings, distribution of ratings, and other report disclosures on the last Page of this report.

www.figpartners.com | 404-601-7200 Atlanta | Chicago | Jacksonville | Los Angeles | New York | Raleigh | San Francisco

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

Weekly Musings | 2-21-17

How Will Banks Deposit Bases React to a Rising Rate Environment? Examining The Composition Of Banks Deposits At 4Q16. Plus Recent Trends in Deposit Betas

 In anticipation of further rate increases, we examine the composition of Deposits at Banks sorting them by Core Deposits  All else equal, Banks with the greatest level of Core Deposits are expected to fare better entering a Rising Rate Cycle  We also examine funding costs and recent trends in Deposit Betas

In our view, great Banks have great Deposits. With two rate increases under our belt (December 2015/2016) and more expected in 2017 as the economy continues to strengthen, the days of cheap funding appear to slowly be coming to an end. To date, most Banks have largely held off on passing the benefit of higher rates along to their customers as many of them have been awash with funding. The Loan-to-Deposit ratio for the in- dustry at 4Q16 approximated 77% versus a higher mid 90’s level a decade ago.

Going forward, pricing competition for Deposits is expected to intensify as customers increasingly look for better returns on their funds. This is expected to result in some Deposit runoff or migration of Deposits from non maturity sources to Time Deposits. Non Maturity Deposits as a per- centage of Total Deposits have jumped since the financial crisis given little incentive to hold Time Deposits which offered similar yields given the low rate environment. Nobody knows for sure how their Deposit Base will react to higher rates; however, we believe Banks with greater levels of Core Deposits (Deposits sans CD’s) are better positioned entering a rising rate cycle.

In this week’s Musings, we reviewed at all publicly traded Banks with Total Assets between $1 and $50 Billion breaking out their Deposits into five

segments; Noninterest bearing, Now, Savings, Money Market, an CDs. We then broke out the Banks into four size buckets: Large, Mid, Small and Source: FIG Partners Research, SNL Financial Financial SNL Research, FIG Partners Source: Micro sorting them by levels of Core Deposits. We also examined funding costs and recent trends in Deposit Betas. We calculate Deposit Betas by dividing the change in Deposit Rate since late 2015 by the change in Fed Funds Rate over the same period. See our tables and charts on Pages 3-5 for additional analysis. Our Appendix on Pages 7-10 highlights the top 25 Banks by Asset Size sorted by the greatest level of Core Deposits. Medians

Medians Core Deposit Core % of # of Banks Growth Deposit Beta Total # of Core % of Core Deposit Deposit (YR/YR) Banks Total Growth (YR/YR) Beta MID-ATLANTIC 92 77% 13% 6% LARGE 36 91% 7% 4% MIDWEST 113 78% 9% 6% MID 94 82% 11% 8% NORTHEAST 36 71% 11% 5% SMALL 140 79% 12% 4% SOUTHEAST 92 77% 11% 4% MICRO 137 71% 10% 2% SOUTHWEST 31 81% 8% 8%

*Buckets Broken Down: Large > $5B, Mid $1B-$5B, Small $200M-$1B, Micro < $200M WEST 59 85% 13% 0%

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Weekly Musings | 2-21-17

4Q16 Deposit Segment Medians By Asset Size 100%

90%

80%

70% Source: FIG Partners Research, SNL Financial Financial SNL Research, FIG Partners Source: 60%

50%

40%

30%

20%

10%

0% Non-Interest Now & Other MMDA CD's Core Adjusted Core Bearing Savings (Core Minus MM)

LARGE MID SMALL MICRO

Non- Adjusted Other Interest NOW MMDA CD's Core Core (Core Savings Bearing Minus MM) LARGE 30.5% 1.4% 10.6% 52.7% 9.1% 90.9% 38.2% MID 25.8% 2.5% 18.0% 43.0% 17.7% 82.4% 39.4% SMALL 20.6% 2.9% 22.1% 30.4% 21.6% 78.4% 48.0% MICRO 17.9% 5.1% 19.7% 20.6% 30.4% 70.6% 50.0%

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Weekly Musings | 2-21-17

Funding Costs—4Q16

0.40

0.35

0.30

Source: FIG Partners Research, SNL Financial Financial SNL Research, FIG Partners Source: 0.25

0.20

0.15

0.10

0.05

0.00

Above 70bps 50 to 70bps 30 to 50bps 10 to 30 bps Below 10bps

Interest Deposit Costs Cost of Funds

Our Table above highlights all Banks in our study (389) sorted by Cost of Interest Bearing Deposits and Cost of Funds.

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Weekly Musings | 2-21-17

Deposit Mix Change Since 2005

Median Deposit Totals 40%

35%

Source: FIG Partners Research, SNL Financial Financial SNL Research, FIG Partners Source: 30%

25%

20%

15%

10%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Non-Interest Bearing NOW & Other Savings MMDA CDs

FDIC data shows the Banking Industry has experienced a surge in Deposits since 2008. Deposit Mix has changed as well with all non maturity segments (Non-Interest Bearing, Now/Savings, and MMDA) expanding while Time Deposits have declined over the same period.

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Weekly Musings | 2-21-17

TOTAL THE LAST WORD: MMDA & Ticker DEPOSITS Savings % of Do All Core Deposits React The Same As Rates Rise? ($000) Total Dep

Taking our work on Deposits one step further, we took a deeper dive on CFR Cullen/Frost Bankers Inc. 25,881,842 87.9% Core Deposits. In particular, we broke out Core Deposits by segment RBCAA Republic Bancorp Inc. 3,256,447 87.1% given the industry’s belief that all Core Deposits may not react the same BPFH Boston Private Financial 6,152,028 86.5% in a Rising Rate Environment. Specifically, we broke out Money Market CUNB CU Bancorp 2,617,104 85.6% Deposits from Total Core Deposits as many industry experts believe STI SunTrust Banks Inc. 162,368,587 85.3%

these deposits could be more sensitive to rate increases than other Core Source: FIG Partners Research, SNL Financial Financial SNL Research, FIG Partners Source: KEY KeyCorp 107,452,468 85.1% Deposits. OPB Opus Bank 6,687,435 85.0%

A bank with 80% Core Deposits where all of the Core Deposits are Mon- HBAN Inc. 77,582,768 84.3% ey Market would likely have a higher Deposit Beta than a Bank with 80% WABC Westamerica Bancorp. 4,708,199 84.2% Core Deposits all of which were Noninterest Bearing, Interest Bearing WBS Webster Financial Corp. 19,460,175 83.3% Checking or Savings. Our summary tables below show which size Banks SBNY 31,863,527 83.2% have the greatest concentration of Money Market Deposit balances. Fur- COLB Columbia Banking System Inc. 8,067,346 82.5% ther, we highlight the 20 Banks with the largest percentage of Money GCBC Greene County Bncp Inc. (MHC) 777,259 82.3% Market Balances. Time will tell if these Deposits carry a higher Beta than other Core Deposit categories in a rising rate cycle. WAL Western Alliance Bancorp 14,563,903 82.1% SYBT Stock Yards Bancorp Inc. 2,527,656 82.1% GBNK Guaranty Bancorp 2,708,786 82.1% TCBI Texas Capital Bancshares Inc. 17,237,330 82.1% ZION Zions Bancorp. 53,819,075 82.0%

CCNE CNB Financial Corp. 2,019,648 81.9% # of Banks % of Banks CHMG Chemung Financial Corp. 1,460,174 81.7% # of Banks MMDA > 50% MMDA > 50% of Total Dep of Total Dep LARGE 36 18 50% MID 94 41 44% SMALL 141 40 28% MICRO 137 8 6%

Source: FIG Partners Research, SNL Financial LC

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Weekly Musings | 2-21-17

Core Deposits: Banks $20B to $50B in Assets Appendix: Page 1 of 4 D Nonint- Other DEPOSIT TOTAL DNOW % MMDA % CDs as % Core % LOANS-to- Cost of bear Dep/ Savings % BETA Ticker Institution Name DEPOSITS Aof Total of Total of Total of DEPOSITS Int. Deposits of Total Since Fall ($000) sDeposits Deposits Deposits Total (%) Deposits (%) Deposits 2015 % SIVB Silicon 39,521,961 82.3% 0.0% 0.0% 81.1% 0.1% 100% 50% 0.09 6% TCBI 17,237,330 47.7% 0.0% 5.8% 76.2% 2.6% 97% 102% 0.45 29% CFR Frost Bank 25,881,842 40.9% 1.3% 3.8% 84.1% 3.1% 97% 46% 0.05 (2.1%) SBNY Signature Bank 31,863,527 33.2% 0.6% 36.1% 47.0% 4.2% 96% 91% 0.63 4% FHN First Tennessee Bank 22,911,760 27.0% 5.7% 2.3% 65.6% 5.9% 94% 85% 0.30 25% UMBF UMB Bank 16,692,167 40.6% 1.3% 55.3% 19.0% 6.8% 93% 63% 0.21 6% ASB Associated Bank 22,286,041 24.3% 7.0% 38.0% 41.0% 7.2% 93% 90% 0.33 23% BOKF BOKF, National Association 22,325,034 7.0% 7.1% 1.9% 74.2% 9.8% 90% 75% 0.20 (4.2%) FCNCA First-Citizens Bank & Trust 28,183,659 36.0% 13.3% 7.4% 57.5% 10.0% 90% 77% 0.10 (4.2%) CBSH Commerce Bank 21,110,986 35.2% 6.0% 3.7% 66.2% 10.6% 89% 64% 0.19 2%

WBS Webster Bank 19,460,175 21.3% 1.4% 43.7% 39.6% 10.9% 89% 87% 0.33 0%

Source: FIG Partners Research, SNL Financial Financial SNL Research, FIG Partners Source: IBKC IBERIABANK 17,852,993 30.1% 2.8% 43.2% 34.9% 11.9% 88% 84% 0.50 13% HBHC Whitney Bank 19,748,306 40.4% 3.9% 53.9% 20.6% 12.7% 87% 85% 0.42 21% CFG Citizens Bank of Pennsylvania 30,186,441 22.6% 2.8% 36.4% 40.2% 13.1% 87% 68% 0.44 4% PACW Pacific Western Bank 16,373,799 43.7% 0.6% 4.3% 73.3% 13.3% 87% 94% 0.32 (31.3%) UMPQ Umpqua Bank 19,120,311 31.2% 0.0% 41.5% 36.3% 13.6% 86% 92% 0.29 8% PB Prosperity Bank 17,318,018 30.0% 1.1% 12.3% 64.3% 13.9% 86% 55% 0.32 4% PVTB PrivateBank and Trust Company 16,118,042 32.3% 1.7% 2.7% 63.7% 14.8% 85% 94% 0.61 25% PBCT People's United Bank 30,179,848 22.8% 5.6% 68.8% 7.8% 15.1% 85% 99% 0.43 (6.3%) FNB First National Bank of Penn. 16,246,212 27.0% 7.4% 12.5% 52.1% 15.9% 84% 91% 0.37 8% SNV Synovus Bank 24,885,745 28.5% 4.1% 3.7% 67.7% 15.9% 84% 96% 0.37 (10.4%) EWBC 29,966,562 34.2% 0.2% 28.8% 26.2% 16.8% 83% 85% 0.49 17% VLY Valley National Bank 17,799,635 29.9% 1.8% 11.2% 39.6% 17.5% 82% 97% 0.66 13%

ISBC 15,591,294 15.9% 3.8% 46.7% 26.8% 18.9% 81% 121% 0.63 (2.1%) TCB TCF National Bank 17,390,402 20.3% 3.9% 55.4% 14.3% 23.5% 76% 103% 0.44 13%

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Core Deposits: Banks $10B to $20B in Assets Appendix: Page 2 of 4 D Nonint- Other DEPOSIT TOTAL DNOW % MMDA % CDs as % Core % LOANS-to- Cost of bear Dep/ Savings % BETA Ticker Institution Name DEPOSITS Aof Total of Total of Total of DEPOSITS Int. Deposits of Total Since Fall ($000) sDeposits Deposits Deposits Total (%) Deposits (%) Deposits 2015 % STL Sterling National Bank 10,134,206 31.1% 0.0% 7.4% 73.0% 5.8% 94% 94% 0.53 31% BOH Bank of Hawaii 14,372,767 33.6% 1.7% 22.7% 50.4% 8.1% 92% 62% 0.15 8% PNFP Pinnacle Bank 8,800,513 27.3% 2.7% 41.2% 39.4% 9.5% 90% 96% 0.46 23% WAL Western Alliance Bank 14,563,903 38.8% 0.0% 40.9% 41.2% 10.0% 90% 90% 0.35 10% FINN First National Bank of Omaha 16,124,833 33.3% 0.6% 21.8% 54.8% 13.1% 87% 86% 0.48 27% FMBI First Midwest Bank 8,970,712 30.9% 4.7% 18.0% 48.2% 13.3% 87% 92% 0.16 0% ONB 10,842,160 6.3% 1.9% 26.2% 52.1% 13.5% 86% 83% 0.19 4% MBFI MB Financial Bank 14,137,496 45.4% 0.1% 48.6% 17.4% 14.5% 86% 90% 0.38 15% GWB Great Western Bank 8,720,283 22.6% 6.1% 33.3% 39.3% 15.1% 85% 101% 0.43 13%

FBC Flagstar Bank, FSB 8,926,186 24.7% 0.0% 77.9% 2.8% 15.5% 84% 72% 0.72 4% Source: FIG Partners Research, SNL Financial Financial SNL Research, FIG Partners Source: BXS BancorpSouth Bank 11,699,521 26.5% 0.0% 34.9% 37.1% 15.7% 84% 92% 0.31 0% UCBI 8,686,546 30.4% 3.3% 52.5% 24.4% 15.9% 84% 80% 0.20 4% TRMK Trustmark National Bank 10,072,725 29.5% 3.2% 47.4% 15.6% 16.1% 84% 81% 0.20 4% FULT Fulton Bank 8,313,493 30.1% 4.8% 8.0% 58.2% 17.0% 83% 105% 0.45 8% AF Astoria Bank 9,054,435 13.6% 4.4% 24.0% 50.4% 17.7% 82% 115% 0.34 (18.8%) BNP 16,800,526 35.7% 1.8% 12.2% 53.9% 20.9% 79% 69% 0.26 10% BANC Banc of California 9,300,582 15.5% 0.0% 12.0% 54.1% 21.1% 79% 65% 0.64 10% CHFC Chemical Bank 12,889,401 25.9% 1.3% 12.9% 56.9% 23.4% 77% 101% 0.54 58% OZRK Bank of the Ozarks 15,597,059 16.7% 1.2% 34.6% 30.5% 31.7% 68% 93% 0.50 40% HOPE Bank of Hope 10,655,892 27.4% 0.0% 1.5% 47.6% 39.2% 61% 99% 0.76 (6.3%) WAFD 10,696,221 3.0% 0.0% 29.6% 23.7% 41.1% 59% 96% 0.50 (4.2%) CATY 11,709,839 21.5% 0.2% 5.3% 47.8% 41.9% 58% 96% 0.69 2%

TFSL Third Federal Savings and Loan 8,418,790 2.2% 1.2% 30.0% 0.5% 67.6% 32% 142% 1.07 (2.1%)

ADS Comenity Bank 4,176,879 1.2% 0.0% 0.0% 27.4% 71.4% 29% 258% 1.39 31%

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Core Deposits: Banks $5B to$10B in Assets Appendix: Page 3 of 4

D Nonint- Other DEPOSIT TOTAL DNOW % MMDA % CDs as % Core % LOANS-to- Cost of bear Dep/ Savings % BETA Ticker Institution Name DEPOSITS Aof Total of Total of Total of DEPOSITS Int. Deposits of Total Since Fall ($000) sDeposits Deposits Deposits Total (%) Deposits (%) Deposits 2015 % UNH Optum Bank, Inc. 6,138,935 27.5% 30.2% 66.7% 0.2% 0.0% 100% 8% 0.19 (4.2%) COLB Columbia State Bank 8,067,346 49.0% 0.0% 9.0% 73.5% 5.0% 95% 77% 0.08 0% WABC 4,708,199 44.4% 1.0% 11.7% 72.5% 5.4% 95% 29% 0.08 (2.1%) WTBFB Washington Trust Bank 4,927,938 41.3% 1.2% 4.9% 77.5% 5.9% 94% 76% 0.14 (2.1%) CVBF Citizens Business Bank 6,327,427 58.1% 6.4% 5.4% 24.0% 6.1% 94% 69% 0.21 2% OPB Opus Bank 6,687,435 13.5% 3.6% 45.5% 39.5% 7.7% 92% 85% 0.50 (16.7%) FFIN First Financial Bank, National Association5,573,218 31.1% 6.2% 12.0% 62.2% 9.1% 91% 60% 0.14 6% MCHB Mechanics Bank 4,429,455 45.2% 0.5% 9.5% 57.7% 9.2% 91% 82% 0.21 29% CBU Community Bank, National Association7,253,734 25.1% 5.9% 18.0% 54.4% 9.7% 90% 68% 0.14 (2.1%) SFBS ServisFirst Bank 5,426,371 23.7% 4.4% 0.9% 75.8% 9.7% 90% 91% 0.59 13% BPFH Boston Private Bank & Trust Company6,152,028 28.6% 0.6% 35.4% 51.1% 9.7% 90% 99% 0.39 (2.1%) PFS Provident Bank 6,609,947 21.3% 7.6% 53.7% 24.0% 9.9% 90% 106% 0.35 8% INDB Rockland Trust Company 6,456,128 32.1% 8.4% 13.8% 56.9% 9.9% 90% 93% 0.26 (6.2%) BANF BancFirst 6,317,078 40.3% 3.4% 43.8% 26.9% 10.9% 89% 70% 0.37 17% HE American Savings Bank, F.S.B. 5,594,875 30.1% 1.6% 39.5% 42.8% 11.8% 88% 85% 0.21 10% SSB South State Bank 7,361,637 30.2% 5.0% 10.9% 62.0% 11.9% 88% 91% 0.11 (8.3%) FCF First Commonwealth Bank 4,978,098 26.1% 2.3% 30.1% 50.1% 11.9% 88% 98% 0.22 (2.1%) WSFS Washington State Bank 4,843,804 35.2% 9.7% 10.3% 13.4% 31.3% 88% 93% 0.43 2% NBTB NBT Bank, National Association 7,003,515 7.7% 2.4% 16.2% 61.2% 12.5% 88% 88% 0.22 (4.2%) GBCI Glacier Bank 7,436,049 27.5% 3.4% 49.1% 24.9% 12.8% 87% 76% 0.34 2% BANR 7,983,349 38.9% 0.0% 55.4% 18.6% 12.8% 87% 91% 0.21 (8.3%) EGBN EagleBank 5,807,707 30.7% 3.0% 0.5% 50.9% 12.9% 87% 98% 0.57 29% CSFL CenterState Bank of , National4,155,640 Association34.4% 3.6% 54.7% 21.7% 13.1% 87% 83% 0.28 4% LBAI Lakeland Bank 4,104,514 23.1% 0.0% 12.0% 67.4% 13.3% 87% 94% 0.39 25% FIBK First Interstate Bank 7,376,090 25.8% 5.7% 31.0% 38.7% 13.3% 87% 73% 0.24 (2.1%)

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Core Deposits: Banks $1B to $5B in Assets Appendix: Page 4 of 4

D Nonint- Other DEPOSIT TOTAL DNOW % MMDA % CDs as % Core % LOANS-to- Cost of bear Dep/ Savings % BETA Ticker Institution Name DEPOSITS Aof Total of Total of Total of DEPOSITS Int. Deposits of Total Since Fall ($000) sDeposits Deposits Deposits Total (%) Deposits (%) Deposits 2015 % TBBK Bancorp Bank 4,246,542 77.2% 10.8% 0.3% 22.3% 0.0% 100% 29% 0.46 31% FAF First American Trust, F.S.B. 2,883,131 13.9% 0.0% 22.5% 71.1% 0.1% 100% 0% 0.11 2% MTB Wilmington Trust 3,153,814 99.3% 0.0% 0.0% 0.1% 0.6% 99% 9% 0.32 (10.4%) GDOT Green Dot Bank 871,159 98.1% 3.6% 1.1% 0.4% 0.8% 99% 1% 0.40 (8.3%) CUNB California United Bank 2,617,104 53.9% 0.9% 1.0% 84.6% 1.1% 99% 78% 0.23 0% AMBZ American Business Bank 1,599,428 52.0% 0.4% 53.1% 34.2% 2.7% 97% 50% 0.16 (6.3%) MCBC Macatawa Bank 1,454,267 34.9% 3.8% 52.2% 27.7% 5.1% 95% 88% 0.19 (6.3%) COBZ CoBiz Bank 3,048,369 42.0% 0.0% 0.6% 78.1% 5.2% 95% 96% 0.24 2% FBAK First National Bank Alaska 2,475,675 52.8% 5.1% 22.7% 57.9% 5.5% 94% 68% 0.07 (2.1%) OVLY Oak Valley Community Bank 914,322 34.1% 18.0% 8.2% 31.0% 5.9% 94% 67% 0.14 4% FRBK Republic First Bank 1,739,073 14.1% 21.2% 10.6% 47.7% 6.4% 94% 55% 0.45 6% CCBG Capital City Bank 2,426,082 33.3% 12.3% 60.8% 10.4% 6.6% 93% 64% 0.06 0% GFCJ Guaranty Bank (MHC) 951,032 29.8% 3.9% 13.1% 66.3% 6.7% 93% 77% 0.04 2% BDGE Bridgehampton National Bank 2,954,934 39.9% 3.0% 39.1% 35.0% 7.0% 93% 88% 0.43 10% SGBK Stonegate Bank 2,449,372 20.9% 13.6% 5.1% 53.3% 7.1% 93% 93% 0.59 21% FNRN First Northern Bank of Dixon 1,066,191 34.3% 2.8% 11.6% 67.5% 7.1% 93% 64% 0.18 0% TRCY Tri City National Bank 1,285,346 20.6% 17.7% 17.7% 50.4% 7.4% 93% 62% 0.13 0% WTBA West Bank 1,550,450 31.2% 3.9% 42.5% 37.2% 7.5% 93% 90% 0.38 35% FRAF Farmers and Merchants Trust Co 982,974 17.4% 2.9% 33.8% 42.8% 7.6% 92% 91% 0.28 (2.1%) RBCAA Republic Bank & Trust Company 3,256,447 32.7% 1.1% 6.4% 80.7% 7.7% 92% 117% 0.31 13% CACB Bank of the Cascades 2,663,066 13.7% 0.0% 7.4% 65.7% 8.3% 92% 79% 0.09 (2.1%) PCBK Pacific Continental Bank 2,156,122 16.9% 14.3% 3.4% 57.2% 8.3% 92% 86% 0.25 0% QCRH Quad City Bank and Trust Co 1,125,947 43.8% 11.9% 26.6% 18.8% 8.5% 92% 90% 0.33 23% BMRC Bank of Marin 1,776,290 46.2% 0.5% 47.7% 30.4% 8.5% 91% 84% 0.14 (6.3%) TCBK Tri Counties Bank 3,898,361 32.8% 1.2% 10.0% 47.4% 8.6% 91% 71% 0.13 (2.1%)

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Price Change Forward

Market Market P/E Forward Cheapest Institution Name Ticker One One Three Institution Name Ticker Cap Cap P/E Week Month Month Indpndnt Alliance IALB 269 69.2% 73.7% 79.0% Frst NBC Bk Hldg FNBC 91 3.8x Frst NBC Bk Hldg FNBC 91 18.8% -20.2% -41.0% Banc of Cal Inc BANC 990 10.3x Charter Finl CHFN 293 12.0% 16.9% 37.8% Capital One Finl COF 44,089 11.6x

Flagstar Bancorp FBC 1,616 10.5% 9.1% 2.1% Citigroup Inc C 166,815 11.7x WeekPerformance - 1st Source Corp SRCE 1,212 7.6% 9.0% 18.5% HomeStreet Inc HMST 717 11.7x Heartland Finl USA HTLF 1,282 7.3% 7.3% 15.4% Popular Inc BPOP 4,709 12.5x

Sun Bancorp SNBC 501 6.4% 6.9% 9.8% OFG Bancorp OFG 591 12.6x

Best OneBest Veritex Hldgs Inc VBTX 443 6.2% 11.7% 43.8% EverBank Finl EVER 2,482 12.8x

Cheapest Fwd. Tangible Book Tangible Fwd. Cheapest Price Change Forward Estimates Market Market Institution Name Ticker Institution Name Ticker Cap One One Three Cap P/E P/TB Week Month Month Indpndnt Alliance IALB 269 69.2% 73.7% 79.0% Frst NBC Bk Hldg FNBC 91 2.2x 26% Cmnty Bk CYHT 519 -0.3% 39.5% 39.5% First BanCorp FBP 1,424 16.1x 82% Green Bncp Inc GNBC 627 3.4% 26.0% 35.1% CA Frst Natl Bncp CFNB 163 NA 85%

Banc of Cal Inc BANC 990 -0.3% 23.3% 39.8% Bancorp Inc TBBK 293 NA 87% MonthPerformance - Frst Fndtn Inc FFWM 542 2.6% 19.7% 22.1% OFG Bancorp OFG 591 13.3x 87% First Cmnty Finl FCFP 229 3.9% 19.3% 27.3% Citigroup Inc C 166,815 12.9x 92% ABCB 1,709 5.0% 16.9% 16.5% Popular Inc BPOP 4,709 13.9x 100% Charter Finl CHFN 293 12.0% 16.9% 37.8%

Best OneBest Carter Bnk & Trst CARE 410 NA 108%

Price Change Forward Estimates ROTCE Estimated Highest Market Market Institution Name Ticker Institution Name Ticker Cap One One Three Cap P/E ROTCE Week Month Month Indpndnt Alliance IALB 269 69.2% 73.7% 79.0% Home BcShrs Inc HOMB 3,935 22.4x 21.9% Republic Frst Bncp FRBK 451 1.3% 3.2% 63.9% Bk of NY Mellon BK 49,379 14.9x 20.7% Heritage Oaks Bncp HEOP 474 2.5% 10.5% 48.3% W Alliance Bncp WAL 5,507 21.0x 19.9%

CU Bncp CUNB 696 1.8% 11.8% 45.2% BofI Holding BOFI 1,883 16.0x 19.3% MonthPerformance - Veritex Hldgs Inc VBTX 443 6.2% 11.7% 43.8% US Bancorp USB 93,127 17.0x 18.6% Banc of Cal Inc BANC 990 -0.3% 23.3% 39.8% Prosperity Bcshs PB 5,202 19.1x 17.8% Pacific Cont Corp PCBK 591 4.9% 0.8% 39.6% State St Corp STT 30,811 15.9x 17.7%

Cmnty Bk CYHT 519 -0.3% 39.5% 39.5% Bank of the Ozarks OZRK 6,683 21.7x 17.5% Best ThreeBest

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Weekly Musings | 2-21-17

The Week In Review Cumulative Weekly Gain Yield Curve 3.5 Index Value 1- Wk. Chg. Bonds Value 1- Wk. Chg. S&P Bank S&P 500 3.0 6.0% Current S&P 500 2,351.16 1.51% Prime Rate 3.75% unch 2.5 4.0% Last Year 5,838.58 1.82% Fed Funds 0.66% unch 2.0 DJIA 20,624.05 1.75% 2 Year Treasury 1.27% +1 bps 2.0% 1.5 S&P Bank Index 300.70 3.74% 5 Year Treasury 2.01% +4 bps 0.0% KBW Bank Index 96.26 3.35% 10 Year Treasury 2.51% +2 bps 1.0 SNL U.S. Bank & Thrift 533.77 3.43% 30 Year Treasury 3.09% +1 bps (2.0%) 0.5 Russell 2000 1,399.86 0.79% 5Yr - 3Mo Swap +73 bps +3 bps (4.0%) 0.0 Russell 3000 1,398.04 1.41% 5Yr - 1Mo Swap +121 bps +3 bps Mon Tue Wed Thu Fri 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 ￭ The research analyst and a member of the analyst’s household has a Buy / Hold / Market- Sell / approved this report prior to publication. financial interest in the common stock of Citigroup and Northwestern ￭ The report has not been approved by the subject company, but may have Outperform Perform Underperform Mutual Life. been reviewed for factual accuracy except for the research summary, % Rated 30.5% 69.5% 0.0% ￭ At the prior month end, neither FIG Partners LLC nor any of its partners research rating and price target. IB Client % in Category 30.8% 16.9% 0.0% or officers owned more than 1% of the outstanding equity securities of ￭ The subject company has not been promised directly or indirectly the subject companies. favorable research, a specific rating or a specific price target nor has the Equity Rating System as of July 1, 2003 ￭ 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. Buy/Outperform FIG expects that total return of the subject inducement for business or compensation. ￭ FIG has been a manager or co-manager of a public offering of certain stock will outperform the industry ￭ Additional information is available by request. benchmark (BIX) over the next 12 months companies in this report within the last three years. ￭ 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 Hold/Market-Perform FIG expects that total return of the subject companies in this report in the last three years. stock will perform inline with the industry accuracy or completeness. The opinions expressed herein are our own ￭ 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 Sell/Underperform 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 under perform 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 For purposes of FINRA rule 2711, outperform is classified as a buy, market- making a market in the subject securities at the time of this report’s for everyone; each investor should assess his or her own particular perform is a hold and underperform is a sell. The industry benchmark that used publication (see www.figpartners.com for our market making list). financial condition and investment objectives before making any is the S&P Bank Index, referred to as the “BIX.” ￭ 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 Banking revenues, but no analyst receives any compensation which is both buyer and seller in connection with the purchase or sale of any based on a specific investment Banking service or transaction. security discussed herein. ￭ 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.

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