Seven Major Milestones A Progress Report on Our First 16 Months

A message from our CEO In 2010, we began with a great Dear Friends, legacy. Today, I am pleased to report on the outstanding progress we have made since our bank was established in August 2010. we’re becoming a great bank. As you will see, we have maintained our commitment to serving low- to moderate-income urban communities and have taken When we established Urban significant steps to build a new bank that is strong, secure, and Partnership Bank in 2010, we well-positioned for long-term success. And we have accomplished knew that building a new bank all this while continuing to serve the thousands of customers who out of a failed bank would pre- Urban Partnership Bank celebrated the opening of a new Loop location at 55 E. Jackson, where count on us to provide excellent personal service every day. sent uncommon challenges. we teamed up with Investing In Communities to help strengthen our neighborhoods. Needless to say, it has been a challenging task—one that at times But we also knew that it would has seemed like changing the tires on a moving car. But it is one offer incredible opportunities. that everyone at Urban Partnership Bank knows is worth every Making a ounce of effort we are putting into it. In our first 16 months, we have taken a variety of steps to meet difference Indeed, despite the growing evidence that our nation has begun to those challenges and seize recover from the Great Recession, we see every day that the urban those opportunities. And today every day communities we serve continue to struggle. And that is why Urban a great, new bank—one that Partnership Bank is deeply committed to our mission. As a com- goes beyond ShoreBank’s Urban Partnership munity development bank, we understand that our job is to create legacy of community develop- Bank’s mission is to hope and opportunity in places where hope and opportunity are ment—is on the rise. needed most. make a difference This report describes seven every day: My own hope—and my expectation—is that this progress report important milestones we will prove to be just the first chapter in the long story of the crea- have achieved since Urban serving our tion of a great new bank. But I also know that it’s not what we Partnership Bank was formed customers publish that counts. It’s what we do, day in and day out, that makes in 2010. While our journey has a difference. I would like to thank all of our customers for their just begun, we are very proud building vibrant continuing support. I would also like to thank our management, of how far we have come in neighborhoods staff, and board for their hard work and dedication. Let us all such a short time. And we are continue working together to build a bank that is as great as was confident that each step we promoting economic the legacy on which it was founded. have taken is bringing us closer and environmental to a brighter future for our Sincerely, institution and for the commu- sustainability

nities we serve. and creating long-term success

William Farrow for our communities President and CEO and bank Urban Partnership Bank

Seven Major Milestones 1 16 Months, 7 Major Milestones

Developed a new business model to 1make a difference Urban Partnership Bank is proud to build on our legacy as a community development bank.

We serve distressed and underserved urban communi- ties in , , and , providing low-cost, responsible financial services and products to help people build a strong financial foun- dation for the future. We also provide financing to help small businesses grow, to strengthen nonprofits and faith-based organizations, and to renovate and acquire commercial and residential real estate.

Our ability to accomplish this mission depends not just on Members of the Urban Partnership Bank leadership team Back row, left to right: Terrence Young; Brian Jones; Edward Karasek; Levoi Brown; Darrell Hubbard; Daryl Newell; Kirkland Jones our good intentions, but also Front row, left to right: Kim Lynch; Suzanne Griffith; Robert Marjan; Brian Berg; Joel Ramos; Robert Dennis; Terrell Anderson on our financial strength. So Not shown: Gregory Champlain; Dan Hollowed; Jan Hoffenkamp; Michael Morrell; William Morfoot one of our first steps was to develop a new business model we are well-positioned to grow Today, Urban Partnership Bank in Chicago, Cleveland, and designed to ensure our long- stronger in the years to come. is led by a team of proven Detroit, and is playing a vital term success. professionals with extensive role in our efforts to catalyze Urban Partnership Bank’s new experience in financial services sustainable development business model calls for a di- Strengthened our and deep roots in our com- opportunities that will build munities—people such as better lives and vibrant urban versified loan portfolio that is leadership team spread among a wide variety Levoi K. Brown, our Director neighborhoods. of Commercial Banking. of categories—including small- 2We understand that a new Another new hire, Darrell business loans, real estate business model requires new A native and resident of Hubbard, recently joined our loans, and consumer loans— leadership. So, in addition to Chicago’s South Shore neigh- team as Director of Business in communities where financial retaining selected ShoreBank borhood, Brown came to Urban Banking. Darrell has a broad services are too often unavail- executives, we have hired Partnership Bank in January background in business able. And before we make any several experienced managers 2011 from General Electric Real development, most recently loan, we follow a rigorous and from other financial institu- Estate, where he spent nearly a at the National Equity Fund, as disciplined lending process. tions and community develop- decade in the company’s Senior Vice President of ment organizations for critical Today, Urban Partnership Bank Affordable Housing Group and Investment Management. positions within our organiza- Capital Markets Services. He is is a well-capitalized, financially tion. We have also recruited an And Terrence Young, Director secure institution with more responsible for our commercial entirely new Board of Directors. and multi-family real estate of Commercial Real Estate, than $1.3 billion in assets. And came to Urban Partnership with our new-business model, and business banking portfolio

Seven Major Milestones 2 Bank with extensive commu- Managed agreement with the FDIC The result: We have kept nity development experience, stipulating that it would cover borrowers in their homes, having spent more than a thousands of 80 percent of the losses we prevented businesses from dozen years at Fannie Mae problem loans incurred on these loans. closing—and made our organ- and, before that, at First 3 ization stronger, healthier, and National Bank of Chicago. Among the assets Urban Before we could begin lending, more stable in the process. Partnership Bank acquired we had to manage this $800 They join a core of strong from the Federal Deposit Insur- million loan portfolio. Since professionals from ShoreBank ance Corporation in August September 2010, we have Upgraded our —like Terrell Anderson, 2010 were nearly 6,000 loans, reviewed nearly the entire Director of Treasury Manag- 30 percent of which were troubled-loan portfolio. And branch system ement Services & Nonprofit classified as troubled loans. while we were unable to restruc- 4 and technology to and Foundation Banking, and The amount of troubled loans ture many of the loans, we have Daryl Newell, Director of Con- has since increased because of succeeded in modifying approx- expand our reach sumer Banking. Together, our continued economic stress in imately $125 million of our From October 2011 to February new leadership team is focused our neighborhoods. When we troubled-loan portfolio. Thanks 2012, we opened four new on serving our customers, im- acquired these assets, we to these modifications, scores branches in some of Chicago’s proving our communities, and entered into a loss-sharing of problem loans have been most underserved urban succeeding over the long term. returned to performing loans. communities.

Located in Austin, Bellwood, Bronzeville, and the Loop, these new branches are part of

Seven Major Milestones 3 16 Months, 7 Major Milestones continued

our long-term plan to create a an agency of the United States new branch system that is Department of Treasury. more convenient for our custom- ers and expands our services Urban Partnership Bank is one in neighborhoods that lack of fewer than a hundred com- access to low-cost, respon- munity development banks in sible financial services. A new the nation to be certified as a branch in Detroit opened in CDFI. We’re proud to be in such May 2012. The new branches select company. Our certifica- are smaller than the typical tion reflects our deep-seated bank branch, but they provide commitment to serve these a full range of retail services under-banked communities. and are easily accessible to all of our customers. The goal is to offer customers who do not Implemented use banks a responsible a new lending alternative to the payday 6process and lenders and other high-cost financial service providers in resumed their communities. making loans We are also upgrading our One of our major goals has technology to better serve been to implement a new people—especially younger lending process with rigorous people—in our communities, Helping kids—and creating jobs controls. And we have made who prefer to bank using com- solid progress. Tess McKenzie knows firsthand the power of small-business puters, smart phones, and loans to create jobs and improve communities. In 2002, ATMs. Rolling out these virtual Today, a number of different McKenzie launched her All About Kids day care facility and banking capabilities and im- teams are involved in the pro- saw it grow to serve more than 60 children and employ eight proving other infrastructure cess of approving and funding people. In 2010, she added two more classrooms and created are among our key priorities as every loan, giving us a stringent five more jobs. we build a strong bank. When another area day care provider retired in 2011, McKenzie saw an opportunity to expand her business yet CDFIs are financial again. The facility she acquired was old and needed renova- Became a institutions that tions—$102,000 worth to bring it up to her standards. With certified CDFI specialize in a five-year, $43,000 loan from Urban Partnership Bank, 5In July 2011, Urban Partnership serving low- to the newly renovated Lakeshore Learning Academy is on its way to bringing quality care for 43 children and creating Bank was certified as a Com- moderate-income 10 new jobs for her South Side community. Partnering with munity Development Financial nearby CVS High School, the center also will provide child- Institution (CDFI). individuals and care services and parenting classes for teen mothers. CDFIs are financial institu- communities that tions that specialize in serving lack access to low- to moderate-income credit, capital, and individuals and communities that lack access to credit, financial services capital, and financial services from traditional from traditional financial institutions. To qualify as a financial CDFI, an organization must be institutions. certified by the CDFI Fund,

Seven Major Milestones 4 Our first loans

For more than 40 years, the Jewish Council on Urban Affairs has worked to pro- mote social and economic justice for disadvantaged communities throughout Chicago. But, like many nonprofits, the organization has seen its funding from foundations, corporations, and individuals decline during the Great Recession. In 2010, with its cash-flow challenges mounting, JCUA set of checks and balances Continued to ers, commercial banking turned to Urban Partnership at every stage of the process. clients, and nonprofits and serve our existing Bank for help. The bank re- In addition, we work closely foundations. We have also sponded with two loans that with our borrowers to educate customers and continued to make a differ- allowed JCUA to maintain them about the potential risks 7 ence in our communities with communities its full menu of programs, involved in getting a loan. In annual programs such as including the Jewish-Muslim that way, we can help eliminate At Urban Partnership Bank, Money Smart Week, our Community-Building Initia- some problems before they we haven’t had the luxury of “Winter Clothing Drive for Kids” tive launched after the have a chance to take root. putting our day-to-day busi- and “Back to School Supply” September 11 terrorist ness on hold while we charted collection. With our new lending process attacks. a new course for the future. in place, we began making This commitment to deliver “We wanted to bank with loans from the outset of the Since August 2010, we have outstanding service to all of our Urban Partnership Bank new year. Among our new loan kept our focus on our custom- customers—regardless of the because of its commitment customers are the Jewish ers and communities while circumstances—reflects the to community and its Council on Urban Affairs, a doing everything you have read quality of our people and the sensitivity to working with nonprofit that serves disadvan- about in this progress report to strength of our mission at nonprofits,” said JCUA taged communities throughout build our new bank. We now Urban Partnership Bank. President Jane Ramsey. “It Chicago, and All About Kids, a operate 11 branches in Chicago, made sense to us.” growing day care center on Cleveland, and Detroit, and Chicago’s South Side. provide a full range of services to our retail banking custom-

Seven Major Milestones 5 Leadership

Board of Directors

David J. Vitale William Farrow Eileen Kennedy Chairman President and CEO Chief Financial One-time Vice Chairman and Farrow is an established leader Officer Director of Bank One Corpo- in global business and finance With experience at the high- ration, Vitale is widely sought technology. His broad back- est levels of global finance, for his financial acumen. He ground gives him an under- Kennedy has keen analytical also has put his shoulder to standing of diverse industries skills and a proven record of the wheel for civic causes and business operations. operational success. including the Chicago Board of Education.

Martin Eakes Lori T. Healey Terry Peterson Jerome Szott As Chief Executive Officer of Currently the President and Peterson is the Vice President Szott is former Senior Vice the Center for Responsible CEO of Tur Partners, Healey of Corporate and External President and division head Lending and as a member of served as Executive Director Affairs at Rush University Medi- of proprietary fixed-income the board, of the Chicago NATO Host cal Center and has served as investments at JPMorgan Eakes has taken a leadership Committee. Earlier, she served the Chairman of the Chicago Chase. Drawing on more than role in fighting abusive finan- as former Chicago Mayor Transit Board since 2009. His three decades of experience in cial practices aimed at poor Richard M. Daley’s Chief of extensive background in public financial services, he chairs families, including predatory Staff and Commissioner of the service includes six years as Urban Partnership Bank’s home loans, payday lending, Department of Planning and the Chief Executive Officer of Finance Committee and serves and abusive checking and Development. She also demon- the Chicago Housing Authority. on its Audit Committee. credit card fees. strates commitment to public service as a board member of LISC/Chicago. Stanley C. Rakestraw Andrea Zopp Diana S. Ferguson Rakestraw is co-founder and Attorney Zopp, President of the Ferguson is an experienced Daniel Lupiani Chief Operating Officer of Chicago Urban League, was the financial executive with a SCR Medical Transportation, first woman and first African successful track record in A former Senior Vice President where his passion for customer American appointed as a Cook corporate financial manage- for First Chicago and successor service has fueled 25 years County First Assistant State’s ment, strategic planning, and companies, Lupiani is President of success. Minority-owned Attorney. She has served as public-company audit commit- of Lupiani & Associates, a real and one of Chicago’s largest counsel for Sara Lee Corpora- tees. She recently acted as estate consulting firm, and employers of minorities, SCR tion and Sears Roebuck Co. as Chief Financial Officer of the Adjunct Professor of Finance at was named 2011 Outstanding well as leading the HR division Chicago Board of Education. the ’s Business of the Year by the of Exelon. She was most re- Mendoza College of Business. Black Chamber of cently named by Mayor Rahm Commerce. Rakestraw also Emanuel to the Chicago Board serves on the Metra Board of Education Board of Trustees. of Directors.

Seven Major Milestones 6 Financials

We have kept borrowers in their homes, prevented businesses from closing— and made our organization stronger, healthier, and more stable in the process.

Financial Statement Balances ($ in thousands)

As of December 31, 2011

Total Assets $1,261,457 Loans, net of allowance for loan losses ($79,287) 696,736 Cash and Securities available for sale 231,672 Deposits 1,117,716 Shareholders’ Equity 133,613

Key Ratios

Tier 1 Capital to Average Assets1 10.17% Loans to Deposits 69.43% Net Interest Margin2 5.5%

1Required regulatory capital ratio is 8.00%. 2Net interest income divided by average interest-earning assets

Seven Major Milestones 7 Branch Locations Officers

Chicago Terrell Anderson Director, Treasury Management Services & Austin 5253 West Madison Street, 60644 Nonprofit and Foundation Banking Bronzeville 101 East 35th Street, 60653 Chatham 7936 South Cottage Grove Avenue, 60619 Brian Berg Director, Corporate Communications Kenwood 4659 South Cottage Grove Avenue, 60653 Levoi Brown Director, Commercial Banking Loop 55 East Jackson Boulevard, 60604 South Shore 7054 South Jeffery Boulevard, 60649 Robert Dennis Chief Credit Officer West Ridge 7555 North California Avenue, 60645 William Farrow President and CEO Bellwood, IL 4310 St. Charles Road, 60104 Stone Park, IL 1759 North Mannheim Road, 60165 Suzanne Griffith Director, Corporate Responsibility and Engagement Cleveland 540 East 105th Street, 44108 Jan Hoffenkamp Chief Administrative Officer

Detroit Daniel Hollowed Director, Finance 4830 Cass Avenue, 48201 Brian Jones Director, Strategy and Marketing

Kirkland Jones Director, Human Resources

Contact Us Edward Karasek Chief Operations Officer Eileen Kennedy Chief Financial Officer upbnk.com Kim Lynch General Counsel Customer Service 773.420.5050 Robert Marjan Director, Resolution Portfolio

Toll Free William Morfoot Chief Accounting Officer 800.905.7725 Daryl Newell Director, Consumer Banking

Joel Ramos Director, Compliance

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