Leona Gleason FBOP CORPORATION

1. Leona Gleason • FBOP CORPORATION

2. for the Underserved and Working Poor

3. COMMUNITY SAVINGS CENTER Creation of Community Savings Center Doors Opened January 9, 2006

4. Smart • Savers • I & II OVERVIEW OF COMMUNITY SERVICE CENTER CONCEPT • Integrated offer combining 3 essential elements… • …serving people in the community… • Job training/ placement • Credit • Checking Financial Products • Computer skills Referral Services • Savings • Benefits eligibility • Basic transactions • Tax/EITC • Coun-selling • Additional modules (e.g., home ownership) • Intro to • financial education; credit repair • …enabling progression up the credit path… • …with dignity and sustainability Financial Education

5. PARK NATIONAL BANK • FBOP Corporation is a well-capitalized $15.5 billion multi-bank holding company based in Oak Park, Illinois. Park National Bank (PNB) has $4.0 billion in assets and is a well-performing, financially strong community bank with 30 branches in Chicago. While the bank has a growing presence in the Chicagoland market and all the expertise of the largest area banks, it retains the atmosphere and exceptional service of a community bank. Because of our commitment to the communities in which we serve, we have been a partner with Bethel New Life for over 20 years in a number of community endeavors including Smart Savers 1.

6. BETHEL NEW LIFE • Bethel New Life is a 26 year old faith based community development corporation focused on the west side Chicago community. Bethel brought in over $110 million into a credit starved community with housing, economic development, and social services; initiatives empowering individuals, strengthening and supporting families and building the community. Currently they operate a $13.5 million budget with 348 employees serving 12,000 families. • In 1998 Bethel recognized a need to offer financial education and began an Individual Savings Account (IDA) Program, partnering with Good City and used Faith and Finances curriculum. Park National Bank participated in matching funds from a small government grant for this initial program which has come to be known as Smart Savers I. The Bank pledged $6,000 in support of this program. Additionally the bank opened free accounts for participants. Over 200 individuals completed a 12 week course and opened new accounts from the beginning of the program until the Spring 2005. • Because of this initial program Bethel learned much about the community and the need to continue their efforts.

7. Bethel New Life Smart Savers Graduation 42 graduated (Cycle III) 38 new savings accounts established (Note, three cycles a year) Bethel New Life, Inc. 4950 W. Thomas, Chicago, IL 60651 (773) 473-7870 www.bethelnewlife.org

8. SMART SAVERS APRIL, 2005 34 graduates Bethel New Life

9. THRIVENT FINANCIAL FOR LUTHERANS • Thrivent exists to help its members achieve financial security and give back to their congregations, institutions and the broader community. The organization and its affiliates offer a broad range of financial products and services including life insurance, annuities, mutual funds, disability income insurance, and more. • As a not-for-profit membership organization, Thrivent Financial also sponsors national outreach programs and activities that enable its members to demonstrate their care for others through support of congregations, schools, charitable organizations and needy individuals. • For more than 100 years, Thrivent Financial has been guided by its members’ shared Lutheran traditions and Christian values. Today, these same traditions and values form the foundation of an organization dedicated to improving the quality of life of those it serves.

10. MODEL FOR COLLABORATION What would each Partner “bring to the table? • PARK NATIONAL • Provide suite of financial products/services for low moderate income segment • Provide funds, expertise and staff resources to start up and build the Center • Deliver banking on-site at storefront space at Bethel’s new community center • Facilitate referrals from bank’s traditional branches • Ensure legal compliance and manages risk • Provide bank staff to assist in financial training as needed • Experience in tracking financial product metrics • THRIVENT • Offer best practices for venture based on field research from McKinsey Partners • Culminate in a sustainable and replicable servicing model • Assist in development of operating funds, including $1,000,000 in matching funds for the IDA program • Thrivent branded financial literacy courses and training expertise to develop financial training programs • Select and monitor performance metrics with partners • BETHEL • Well Known and effective social service agency in West Garfield • Experience with getting grants ($1,000,000 grant for the IDA accounts) • Would offer financial education to customers • Referral source for determination of social service benefits, job training and placement, candidacy for Habitat for Humanity and computer skills • Would manage Community Advisory Board

11. OVERVIEW OF COMMUNITY SERVICE CENTER GOVERNANCE STRUCTURE • Core Elements • Governance and Oversight Thrivent (Program manager and other relevant staff) • Collaboration Committee • 2 representatives from Thrivent, Bethel and Park National Bank (6 members total) • Largely advisory, but does have decision-making authority on a few key items (e.g., build out, director, annual plan andbudget) • Additional roles include • Reviewing performance against metrics • Advising in innovative offerings and codifying learnings • Supporting dispute resolution, although formal operational decision making rests in CSC’s hands • Community Advisory Board Bethel (Including CSC director and staff) • Local leaders, influencers • Act as community voice • Assist with outreach, awareness and contact building Park National Bank (Bank Mgmt and staff)

12. LEVEL SETTING ON CSC GOALS • Banking the Unbanked • To help individuals and families move to the economic mainstream through sustainable asset building, by: • Enhancing knowledgeable financial behavior through financial literacy • Providing access to affordable financial products that enable asset accumulation • Ensuring CSC participants have access to social services that support financial well-being • Delivering these services in the most efficient and effective manner possible • Thrivent • Bethel • Park National Bank • Societal impact: Helping users move to the economic and financial mainstream • Cost: Services provided while maintaining effective cost/stewardship • Learning: Learning from the experience (to successfully replicate later) • Risk management: Accomplish CSC goals while managing potential risk/liability • Enable West Garfield/Austin residents to build assets through savings and home ownership and rise out of poverty • Improve economic viability and vitality of the community • Enhance the holistic effectiveness of Bethel New Life in strengthening families and building community • Create new ways to engage the community by focusing on residents’ financial health • Transition customers over time into PNB’s financial mainstream; reducing usage of currency exchanges or pay day lenders • Learn how to create a sustainable product set for the LMI segment, including low cost, basic alternatives such as • Check cashing • Payday loan alternatives • Strengthen focus on community banking • Learn to serve this segment in a safe and secure banking environment • Aim to break even

13. TIMELINE FOR CHICAGO CSC PILOT • April • May • Jun • Jul • Aug • Sep • Oct • Nov • Dec • Q1 2006 Finalize governance / legal Governance functioning, programs designed Programs ready for release • Social services & financial literacy Partner identified, preliminary agreement Finalize governance/ legal Products identified, designed and developed • Financial services D O O R S O P E N IDA grant application, other sources contacted Secure third party funding IDA grant application approved • Funding Replicable playbook for use in other CSC’s Develop cohesive CSC offer, delivery model, playbook and performance metrics - for Chicago pilot • Operating model/ offer/metrics Site selected and contracted Develop CSC look and feel/blueprint. Engage contractor Remodel and finalize CSC space • Remodeling Develop staffing model and hire CSC Director Staff CSC • Staffing • Marketing/ communications/ market research Initial market research/naming/ branding Complete research. Develop marketing strategy/creative Produce marketing and communications material Release Launch local awareness momentum building efforts with community leaders, politicians, large congregations. Target and recruit participants • Local awareness building

14. OVERALL INSIGHTS MARKET RESEARCH SESSIONS Overall Insights 1 • Community residents lack trusted and reliable sources of financial advice; the CSC should position itself to fill this gap 2 • Financial products are important but aren’t enough; advice and education will ultimately drive behavioral changes 3 • Mainstream language, products, and delivery won’t work. We must tailor our language and image to the community, and keep everything simple • We must reach the young and old; not just the middle-aged • Touch youth before bad habits are formed • Seniors are financially vulnerable in the current climate 4 5 • Asset ownership is a recognized goal, but is getting harder to realize. Credit repair will often be the firststep to reaching longer-term asset goals Products & Services 6 • Check cashing and bill pay, offered at a discount to the market, will be a strong draw, as suspected 7 • People are open to one-on-one counseling, but will likely have a “show me first” attitude to courses 8 • Small business offering could eventually help workforce development issues Marketing & Outreach 9 • We will need a mix of marketing and outreach methods with special consideration for the youth segment

15. APPROACH TO MARKET RESEARCH EFFORT PERFORMED BY MCKINSEY CONSULTING • Objectives • Additional sessions, e.g., • Community beat meetings • “Person on the street” interviews • Community leader interviews • 12 local leaders and influencers • Small group sessions • 25-30 potential users • Strengthen team’s insights on overall community needs • Understand community usage and attitudes towards financial services institutions and specific products and services • Spark creative ideas for building the “ideal” center • Test current thinking on concept, offering, look/feel and name • Understand how to best reach the community • Gather early insights on community and high-level reactions to concept • Gauge reactions to potential product and service offering • Identify participants who are willing to stay in touch (e.g., as advisors) during the development of the Community Service Center (CSC) • Test refined concept, and specific product and service offering • Understand what will truly make residents use and trust the CSC • Generate early awareness among potential users • Test offering with specific segments • Seniors • Youth • Small business owners • Gather additional reactions to specific portions of offerings • Generate early awareness among potential users

16. GROUP FEEDBACK ON SPECIFIC PRODUCTS AND SERVICES • Participant feedback • Product • Comments • Very important • Check cashing • Will need to be cheaper than currency exchanges to act as draw; fee structure should also be kept simple • Bill pay – specifically utilities, phone, cable, and cell phone • Will need to have little or no service fee to act as a draw; may phase in cell phone bill payment over time • ATM with deposit feature • Should be fee-free and as physically accessible as possible (i.e., 24 hours or beyond CSC hours of operation) • Small business offerings • Will need to assess whether any financial products beyond Small Business Administration-backed micro loans are required • May want to offer business-specific counseling, particularly at startup – potentially in conjunction with Chamber of Commerce or local micro-enterprise organizations • Important • Payday loan alternatives • May need incentives beyond pricing to transition people away from predatory lenders; need to stay far away from “payday” language to avoid negative connotations • Mortgages • Need to tie to education to ensure readiness to take on prospect of home ownership • Checking/savings accounts • Need to be accessible to people with poor credit histories

17. GROUP FEEDBACK ON SPECIFIC PROJECTS AND SERVICES(Continued) • Participant feedback • Product • Comments • Other potential innovations • Special accounts for youth (e.g., lower minimum balance) • Could be linked to in-school programs or for children who attend education workshops with their parents • Interviewees repeatedly stressed the importance of credit repair and debt consolidation products and support – this will be crucial to our offering • Credit repair loans to help payoff credit card debt, etc. • Lack of employment opportunities frequently cited as a concern – can we do anything creative to support local business? • Small business products with incentives linked to investing in the community • Less important • Money orders (inexpensive elsewhere already) • Auto loans (too confusing, prices would need to be highly competitive) • Wire transfers/Western Union (not used often) • Products are “nice to have” but shouldn’t be priority offerings

18. FINANCIAL PRODUCTS WITH SUPPORTING EDUCATION MOVE INDIVIDUALS ALONG THE CREDIT PATH • Behavioural Segment • Needs • Likely product/service offering • Check cashing • Money orders • Bill pay • Financial counselling • Access to Checking class offering • EITC tax preparation • Flex Loan Transactors • Access to liquidity • Understanding of personal finances • Need to cash checks, obtain money orders, and wire money to others Savers • Build initial asset accumulation • Enter the financial mainstream • Basic checking and savings accounts • IDA program • EITC tax preparation Responsible borrowers • Learn to use credit responsibly • Improve/build credit score • Basic checking and savings accounts • More advanced financial literacy classes • Micro-loans and short term credit (e.g., overdraft) Owners • Accelerated asset accumulation; promoting financial stability/security • Need mortgage loans or small business loans • Basic checking and savings accounts • Consumer credit • SBA micro-loans • Mortgage • Auto loan • Transition to mainstream banking

19. CSC PRODUCT OFFERING • Financial Products • ReferralServices • Financial Education • Check Cashing • Money Orders (reduced fee) • Bill payment through • Western Union • New Start Checking • Statement Savings Account • IDA Accounts • Credit Products - Mortgage - Auto Finance - Small Business Loans • Flex Loan (Emergency Loan) • ATM Availability • All Other Traditional Banking • Products • Smart Savers 1 • Smart Savers 2 • Financial Counselling • Credit Repair Workshop • Asset-Specific Modules - Investment - Retirement - College Savings - Small Business • Access to Checking • Home Ownership • Job Training and Placement • Computer Training • Tax Preparation (EITC) • Benefits Availability • Home Buyers Programs • Other Bethel Counseling • Services

20. PARK NATIONAL BANK CURRENT PRODUCT OFFERING AT CSC • Check Cashing Services: We have brought affordable check cashing services to the • community! Customers can cash their payroll and/or government check, conveniently and more affordably. • Money Orders: Sold to Community Savings Center customers at • a reduced rate. Goal is to keep customers away from • currency exchanges and have them move into checking • accounts. • Bill Payment: Processing gas, electric, cable, and several phone carriers. • New Start Checking: Available to individuals that have completed the Financial • Education Course offered by Bethel. The account has no • monthly charges and the owner is entitled to free on-line • banking including bill pay, an ATM card, free checks and • encouraged to sign up for direct deposit. Individuals whose • accounts were closed out at other banks and are on check • systems can now open a checking account upon completion • of the financial education classes. • Statement Savings Account: Available to individuals that have completed a Financial • Education Course offered by Bethel. It can be opened with • $25 and there is no minimum balance requirement to avoid fees!

21. PARK NATIONAL BANK PRODUCT OFFERING AT CSC (continued) • Individual Development Account:Traditional IDA programs are implemented by community- • (IDA) based organizations in partnership with a financial institution that holds the deposits, and funded by public and private sources. The Community Savings Center follows this ideal with Bethel facilitating the program, Park National Bank maintaining the accounts and Thrivent offering an additional match to enhance the program. IDAs make it easier for low income • families to build the financial assets they need to achieve the • American Dream. • Individuals participate in IDA programs to save for 3 specific needs: • - First time Home Purchase - Start of up a Small Business - Educational Purposes • Individuals in the program open a Park National Bank IDA Account saving up to $2,000 over 3 years with a match of $2,000 from the Bethel Grant and $2,000 from Thrivent totaling $6,000 to be used towards one of the above listed needs.

22. IDAs DO WORK • Low-income families can save. • Financial Literacy creates savers and savvy consumers. • Assets change lives. • Communities benefit from homeownership, entrepreneurship, and educational attainment. • Economy of scale make IDAs cost effective.

23. PARK NATIONAL BANK PRODUCT OFFERING AT CSC (continued) • Flex Loan:Park National’s FLEX Loan was developed to offer an alternatives to traditional Pay Day Loans and reduce credit card debt. It offers several benefits to applicants: • - Great Way to Build and Repair Credit • - Competitive Fixed Interest Rate at 9.0% • - Loans Available Up To $1,000 • - Flexible Repayment Schedule Over 6 Months • - Funds Immediately Deposited Into Checking Accounts • - Completion of a Financial Course May Be Required • - Quick Decision-Making • - Emergency Loans are Available for Car Repair, etc. • ATM Availability: Availability of ATM services to the community and CSC customers without fees attached.

24. GRASS-ROOTS MARKETING AT THE COMMUNITY LEVEL IS THE MOST IMPORTANT MARKETING TOOL • Word-of-mouth from users • Churches • Schools, such as report-card day when parents are all there • Sponsoring neighborhood events or sports teams • Distributing information outside of grocery stores, in malls, outside currently exchanges, or even at other branches of FBOP • Background on Thrivent Financialand its Fraternal strategy • Other, more traditional media sources were also mentioned, e.g.: - Local papers - Radio (e.g., GCI 1390) - Flyers • Incentives for referrals (e.g., discounts) or first-time visits are also emphasized as keys to trial and loyalty

25. CURRENT “CSC SCORECARD” METRICS • Activity metrics • Outcomes Affordable financial products Improved financial literacy • Total number of customers helped • Financial literacy (course graduates) • Financial products (continuous holders of positive balance checking, savings, and IDA accounts, e.g., for over 1 year) • Impact of social services with a direct link to financial well-being (TBD) • Total dollars saved within CSC • Total transaction fees saved (volume x our discount to competitors)* • Migration along the credit path • Number of responsible checking account users** • Growth in asset-building financial products (metric is an amalgamation of savings accounts, IDA accounts, education loans etc.) • Number of life-affirming investments made, e.g., • Home purchase • Higher education • Small business capitalization • Credit repair • Home repair • Car purchase • Improvement in credit scores • Number of transactions by product, (e.g., check cashing, bill pay) • Number of asset-building financial products, (e.g., savings accounts, education loans) • Average balance • Savings accounts • Checking accounts • IDA accounts • Delinquency (e.g., overdrafts) • Average number of financial products per household • Number of classes held (by class) • Number of participants (by class) • Financial counseling usage • Number of users • Number of hours • Average number of visits per client Operational effectiveness Social services • Financial performance • Deposit size • Administrative cost ratio • Cost/client served in key service areas • IDA • Financial counseling • Marketing and community outreach • Number of referrals from key sources (e.g., other SSAs) • Number of positive media mentions • Number of outreach events • Intake effectiveness ratios • Active outreaches: Active clients • Inquiries: Active clients • Number of organizations in referral network • Number of successful social service referrals made by CSC by type (e.g., job training, computer skills, EITC prep) – both internal and external • High-level demographic profile of CSC users (“Are we reaching/serving the people we are targeting?”) • e.g., employment status, assets

26. Where are We Today?

27. Where are We Today?

28. What Worked: Partnership with Bethel and Thrivent Initial market research provided solid product offering guidelines Strategic planning and ongoing evaluation of program – Collaboration Community Minimal Over The Counter losses (primarily Flex Loan Losses) Positive community reaction and participation Customized education and training for CSC bank staff Ongoing community outreach through grass roots, word of mouth, etc What Didn’t Work: Wrong location – housed in same bldg as Bethel Non-profit management – took over 2 years to push towards replacement Bank staff turned over to find “best fit” for growth within CSC Be prepared to take loan losses Non-profit metrics difficult to obtain Monitoring financial education classes to actual new account growth Advisory Board took too long to establish Ran out of Grant Money Branch Profitability – 5 years + Where are We Today?

29. Where are We going? • Continue to Bank Unbanked • More IDA Grant Funds • New Location • Change FLEX Loan Product = Less Losses • Create Branch Profitability

30. Sample Marketing Materials

31. QUESTIONS AND ANSWERS