January 13, 2011

1. January 13, 2011 The call will begin at 10am Central

2. Disclaimer Although this presentation is based on information obtained from sources we believe to be reliable, we do not guarantee its accuracy. Many assumptions underlie the assessments contained herein Check with your auditors Draw your own conclusions Interpretations may change as time passes Although the information included in this report has been obtained from sources we believe to be reliable, we do not guarantee its accuracy. All opinions expressed in this report constitute the judgments as of the dates indicated and are subject to change without notice. This report is for informative purposes only and is not intended as an offer or solicitation with respect to the purchase or sale of any product. The accuracy of the financial projections is dependent on the occurrence of future events which cannot be assured; therefore, the actual results achieved during the projection period may vary from the projections. Member NASD/SIPC.

3. Agenda Update from Washington Brief review of Small Business Lending Fund Application process Approval process Closing process Ongoing maintenance Tools and resources Q&A

4. Paul Merski Senior Vice President and Chief Economist, Independent Community Bankers of America

5. Why a $30 BillionSmall Business Lending Fund ? Voluntary Capital Program for Interested COMMUNITY BANKS Support Small Business Lending Frozen Private Capital Markets Regulator Pressure to Increase Capital Levels Uncertain Economic Outlook and Ongoing Bank Asset Quality Concerns Not TARP! Chance to Refinance TARP Under Better Terms and Conditions.

6. Genesis of SBLF • 2009 ICBA Engaged with Administration and Treasury to help create Capital Program . Develop Key Criteria w/ Treasury: • For Community Banks Only - $10 Billion < , No TBTF or Credit Unions • Not TARP! No TARP-like Restrictions. CAN REFINANCE TARP • Easily Return the $ if Rules Change • Broadest Bank Eligibility CAMELS 1, 2, 3, (4)… Subchapter S , Mutual, Holding Companies. • Must be Tier 1 Capital • Treasury Program w/ Treasury Final Application Decision • Easy Way to Report Small Business Lending • Broad Small Business Lending Eligible - including Ag Lending.

7. Genesis of SBLF President Obama Launches ICBA-Inspired SBLF in his January,2010 State of the Union Address: “Financing remains difficult for small business owners across the country, even those that are making a profit. So tonight, I'm proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat." (Applause.)

8. SBLF Legislative Outcome Protracted 9 Month Battle in Congress to Pass SBLF…several failed Senate votes. ICBA Community Bankers lobby hard to protect and advance core SBLF. House Passed on June 17th, 2010 (241-182) Senate narrowly Passed on September 16th, 2010 (61-38) President Signs “Small Business Jobs Act” with SBLF program on September 27, 2010 (exactly 9 month after launch in SOTU.)

9. Important Treasury Links SBLF Treasury Resources: www.treasury.gov/SBLF For communications pertaining to a specific institution, please email: SBLFInstitutions@do.treas.gov , a confidential email address. Application Process If your institution wants to apply to participate in the Small Business Lending Fund, it must submit an application to Treasury at: SBLFApps@do.treas.gov . The application form is available on the Small Business Lending Fund website at: www.treasury.gov/SBLF . Given application processing times, applications for banks eligible to apply under the available term sheets should be submitted by March 31, 2011. Terms Sheets for Subchapter S banks and Mutuals are forthcoming from Treasury and these institutions will have a later application deadline.

10. Hunter Smith, CPA Senior Vice President, Investment Strategies – Vining Sparks

11. Quick Points of Note • Currently these guidelines are designed specifically for COMMUNITY BANKS (i.e., banks, thrifts, and bank and thrift holding companies with assets < $10 billion) • Does NOT apply to mutuals, Sub-S banks, or community development loan funds (Treasury currently developing terms and guidance for these) • Submitting an application does NOT obligate your institution to participate in the SBLF if approved • Participation is entirely voluntary! • After receiving capital, your institution CAN exit the SBLF at any time (pending regulatory approval, and the observance of several other criterion)

12. The 30,000 Foot View… • The SBLF is a $30 billion fund for interested community banks with $10 billion or less in assets to help increase small business lending while targeting women, minorities, or veterans • SBLF capital carries a base dividend rate of 5%, and can go as low as 1% for participants that increase their small business lending • Treasury provides Tier 1 capital to participants in the form of senior perpetual noncumulative preferred stock (or equivalents), with liquidation preference of $1,000/share • Senior preferred will rank senior to common stock and paripassuwith all existing preferred stock (excluding junior preferred shares) • The more a bank increases its small business lending, the lower the rate it will pay for SBLF capital

13. Is the SBLF = to TARP? • NO!!! • Congress authorized SBLF as part of the Small Business Jobs Act of 2010 – objective is to increase the availability of credit to small businesses • Draws from a separate source of funding • Administered by a separate organization in Treasury • No executive compensation restrictions • No requirement to issue warrants • Specific assurance that participants will NOT be considered TARP recipients

14. “Small Business Lending” • Definition differs from those in call report • Call defines small business lending as “loans to small businesses” and “loans to small farms” • Commercial and industrial loans (RC-C Part I Line 4) • Loans secured by owner-occupied nonfarm, nonresidential real estate (RC-C Part I Line 1.e.) • Loans to finance agricultural production and other loans to farmers (RC-C Part I Line 3) • Loans secured by farmland (RC-C Part I Line 1.b.) • Note that these are bank call report labels; S&Ls use different categorizations on the TFR

15. Small Business Lending per SBLF • Includes loans of up to $10 million to businesses with up to $50 million in annual revenue (will likely capture many of the business loans community banks already make) • $10 million loan cap is based on the ORIGINAL principal/commitment amount, and a group of loans to the same borrower or any of its affiliates will be treated as a single loan • $50 million revenue cap is measured for the most recent fiscal year that had ended when the loan originated • EXCLUDE guaranteed or participated portions of loans • If your institution is a holding company, qualified small business lending is combination of all its insured depository institution subsidiaries

16. Eligibility • Total assets of $10 billion or less as of 12/31/09 (end of Q4 2009) • If your institution is controlled by a holding company, the combined assets of the holding company determine eligibility • If you are a CPP borrower, your institution must be in material compliance with all terms, conditions, and covenants of the CPP agreement; be current on dividend payments to Treasury; and not previously have missed more than one dividend payment (a missed payment is defined as a payment submitted more than 60 days after due date) • ALL outstanding CPP funding must be refinanced or repaid in full at time of refinancing!!

17. NOT ELIGIBLE • If total assets > $10 billion at 12/31/09 • An institution on the FDIC’s problem bank list (or similar list) • An institution that has been removed from that list in the previous 90 days • Generally, this includes banks with a composite CAMELS rating of 4 or 5

18. Funding Limits Total Assets < $1B Total Assets $1B<x<$10B • Minimum investment amount is 1% of RWA • Maximum investment amount is 3% of RWA • Minimum investment amount is 1% of RWA • Maximum investment amount is 5% of RWA

19. Application Process • Submit completed application to Treasury via email at SBLFApps@do.treas.gov • Due by March 31, 2011given processing time • ALSO…submit a small business lending plan (~ 2 pages in length) to primary federal regulator AND state regulator (if applicable) AT THE SAME TIME your application is sent to Treasury • The small business lending plan should NOT be sent directly to Treasury!! • The regulator will forward the plan to Treasury post-review • For holding companies: submit the lending plan to the primary federal regulator (and state regulator, if applicable) of EACH insured depository institution subsidiary

20. Application (cont.) • Submitting an application does not obligate your institution to participate in the SBLF if approved!! • Application may be withdrawn at any time prior to entering into a definitive agreement with Treasury

22. Small Business Lending Plan • ~ 2 pages in length • Do NOT send to Treasury; send to the regulator(s) directly • Submit simultaneously with application, but application goes to Treasury • Should outline how the institution plans to use capital to grow small business lending in a manner consistent with safe and sound operations • Are deemed purely CONFIDENTIAL, and no plans will be disclosed and will be used only in the context of the SBLF

23. Small Business Lending Plan (cont.) • The plan should: • Address the needs of small businesses • Describe how you intend to use funding to address small business needs within your community • Describe basis for lending goals and how you plan to achieve them • Explain why projected increase in small business lending is reasonable • Describe types of loans anticipated and customers served • Specify the projected increase in small business lending • Describe increase expected after 2yrs from investment (projected range is acceptable – no pro forma F/S required at this stage) • Provide for community outreach • Describe plans to provide “linguistically and culturally appropriate” outreach, using print, radio, TV, or electronic media outlets targeting women, minorities, or veterans

26. Treasury Evaluation • Treasury will coordinate with federal and state regulators (as applicable) to review your application and determine if your institution is qualified to receive capital from the SBLF • Treasury will notify you of one of the following 3 conclusions: • Preliminary approval • If you elect to participate, inform Treasury and Treasury will assign a law firm as its representative to work with you on closing and funding • Preliminary approval contingent on matched funding • You will be eligible for funding, provided you raise separate matched funding from private, nongovernmental sources • If you elect to participate, inform Treasury and Treasury will assign a law firm as its representative to work with you on closing and funding • Considered Withdrawn • Treasury determines you are not eligible and your application is considered withdrawn

27. Requirements for Raising Separate Matched Funds • Needs to be received either prior to or concurrent with Treasury’s SBLF funding • Treasury will notify your institution of the amount of private funds it must raise to qualify for SBLF funding – required private investment will be AT LEAST EQUAL TO the amount of proposed SBLF funding • MAXIMUM SBLF funding provided will be 3% of RWA • Source of private investment must not be any institution that has received or applied to receive SBLF capital • Private investment must be subordinate to SBLF capital (although Treasury may approve a dividend rate for the private investment that is higher than SBLF rate) • Treasury will consider as matching funds any capital raised after September 27, 2010

28. Requirements for Refinancing Outstanding CPP Securities • If institution has CPP/CDCI stock with aggregate liquidation preference greater than maximum amount of permissible SBLF funding, institution must redeem additional CPP/CDCI stock on or before date it receives SBLF funding • ALL outstanding CPP/CDCI securities must be refinanced or repaid in full at time of refinancing • SBLF funding must be AT LEAST 1% of RWA • Any CPP-related warrants previously issued to Treasury will remain outstanding after CPP refinancing (unless you repurchase them) • Only economically beneficial to refinance if the institution increases small business lending! If the institution’s small business lending has not increased after 9 quarters, then at the beginning of the 5th anniversary of the CPP investment a repayment incentive fee of 2% per annum on the total SBLF funding amount outstanding will be due • This repayment incentive fee will extend to the date 4 ½ yrs following receipt of SBLF funding

29. Closing Process • Includes working with a Treasury-appointed law firm representing Treasury to enter into a Letter Agreement and a Securities Purchase Agreement with Treasury • The Initial Supplemental Report is due before closing • Calculates your institution’s baseline, as well as its initial dividend rate • If the closing date occurs after the call report is due, the first regular Quarterly Supplemental Report is ALSO due at or before closing • Due in the calendar quarter in which closing occurs and in each of the next 9 quarters • Calculates your dividend rate for the quarter following submission of the report (the 10th QSR determines the rate that continues until 4 ½ yrs after closing)

30. Baseline • Quarterly average of qualified small business lending for the four quarters ending June 30, 2010 • Established at time of receipt of funding, and adjusted for mergers, acquisitions, and loan purchases during the baseline quarters • After receipt of funding, baseline will be increased for mergers, acquisitions, and loan purchases that increase small business lending to ensure any rate reductions on funding received correspond to additional lending to small businesses rather than acquisitions of existing loans

31. Initial Dividend Rate • Applies for the first 9 quarters, and will be 5% or less (can be as low as 1%) • Whether it is less will depend upon whether institution achieved a sufficient increase from the baseline as determined in the Initial Supplemental Report, and there are varying rate reductions for varying levels of qualified small business lending increases • For the first 9 quarters after the closing date, the dividend rate each quarter will be similarly determined

32. Dividend Rate After the First 9 Qtrs • The rate that applies in the 10th calendar quarter after the closing date will be in effect until 4 ½ yrs after closing date • If qualified small business lending as of the end of the 8th quarter after the closing date (per the Quarterly Supplemental Report submitted in the 9th quarter) reflects no increase over the baseline, the dividend rate becomes 7% in the 10th quarter and stays at 7% until the end of the 4 ½ yr period after the closing date • After 4 ½ yrs, if the capital is not repaid to Treasury the rate will increase to 9% • Remember…lending/repayment incentive fee may also apply

35. Dividend Rates and Lending Amounts • The lower dividend rate (assuming qualified small business lending has increased over the baseline) will apply ONLY up to the amount by which qualified small business lending has increased! • Example: • $5 million in SBLF funding received • $4 million increase in qualified small business lending in the 2 yrs after capital receipt, which represents a 10% increase over the baseline, equating to a 1% dividend rate • 1% rate applies to $4 million of the SBLF funding and a 5% rate applies to the remaining $1 million of SBLF funding • If qualified small business lending had increased by at least $5 million (the amount of SBLF funding received), then the 1% rate would have applied to the entire amount • DIVIDENDS PAYABLE QUARTERLY ON JAN 1, APR 1, JUL 1, and OCT 1

36. Initial Supplemental Report • Due before closing • Sets an initial baseline of qualified small business lending • Reports the initial increases in qualified small business lending • Determines the dividend rate to apply initially after closing

37. Quarterly Supplemental Report • Goal: measure your institution’s increase in qualified small business lending, by comparing outstanding loan amounts to the baseline • Due each quarter when the call report is due (30 days after quarter-end) • Determines if the dividend rate will change for the next quarter based upon new small business lending activity as compared with the baseline (adjusted, if necessary, for acquisitions, mergers, and purchases) • DO NOT FILE WITH THE CALL REPORT; EMAIL SEPARATELY TO TREASURY!!

38. Quarterly Supplemental Report (cont.) • Starts with information already presented in the call report: • Commercial and industrial loans (RC-C Part I Line 4) • Owner-occupied nonfarm, nonresidential real estate loans (RC-C Part I Line 1.e.) • Loans to finance agricultural production and other loans to farmers (RC-C Part I Line 3) • Loans secured by farmland (RC-C Part I Line 1.b.) • From these amounts, the following are SUBTRACTED: • Any loan or group of loans > $10 million • Loans to businesses with annual revenues > $50 million • Portion of loans guaranteed or participated • To these amounts, the following is ADDED: • Cumulative net charge-offs with respect to such loans since July 1, 2010 (so as not to penalize banks for appropriately charging off loans) • Resulting sum = qualified small business lending

39. Supplemental Reporting • Different types of institutions use different forms • 4 different versions of each supplemental report: • Supplemental Report for Banks – for state or nationally-chartered banks • Supplemental Report for Savings Associations • Supplemental Report for Bank Holding Companies • Supplemental Report for Savings and Loan Holding Companies • Each form will be available soon from Treasury; visit www.treasury.gov/SBLF

40. After Funding is Received… • Continuation of dividend payments and share repurchases • You can still make dividend payments or share repurchases subject to some minor restrictions • Failure to pay dividends on SBLF funding carries consequences • CEO and CFO must provide written notice to Treasury why the BOD did not declare dividends • Institution may not repurchase shares or pay dividends on shares that are paripassuor junior to the SBLF shares during the quarter of nonpayment and for the following 3 quarters • Failure to pay for 4 quarters (not consecutive): BOD must certify to Treasury in writing that the institution used best efforts to declare and pay such quarterly dividends according to fiduciary obligation • Failure to pay for 5 quarters (not consecutive): Treasury has right, but not obligation, to appoint an observer to BOD (right expires when full dividends paid for 4 consecutive dividend periods) • Failure to pay for 6 quarters (not consecutive): if total SBLF funding is > $25 million, Treasury has right, but not obligation, to elect 2 directors to BOD (same expiration clause)

41. After Funding is Received… • Downstreaming of SBLF funding • When funding is provided to a holding company, holding company must contribute at least 90% of the amount to its insured depository institution subsidiaries that originate small business loans • If there are multiple subsidiaries, no one may receive more than 5% of its RWA (if the holding company has total assets of $1 billion or less), or 3% of its RWA (if the holding company has total assets more than $1 billion and less than $10 billion)

42. After Funding is Received… • Reporting and certification requirements • CEO, CFO, and directors that sign the call report will certify to Treasury that Quarterly Supplemental Report is accurate • Within 90 days of fiscal year end, auditors submit certification to Treasury that processes and controls used to generate Supplemental Reports are satisfactory • Annually, until redemption date, certify to Treasury that principals of the businesses that received loans have not been convicted of, or pleaded nolocontendreto, a sex offense against a minor • Annually, until redemption date, certify to Treasury compliance with anti-money laundering requirements • Complete a short annual lending survey

43. After Funding is Received… • Repayment of SBLF funding • Senior Preferred redeemable at any time at issuer’s option, subject to approval of the appropriate federal regulator • All redemptions will be at 100% of liquidation value, plus accrued and unpaid dividends as of date of redemption, and pro rata portion of any lending incentive fee (if applicable) • Repaying in part is allowed, provided the part is at least 25% of the original SBLF funding

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48. For More Information To learn more about the SBLF, visit www.treasury.gov/SBLF . For general inquiries and questions, please call the SBLF information line at 888-832-1147 (Monday-Friday, 9:00 a.m. – 7:00 p.m. ET) For communications pertaining to a specific institution, please email SBLFInstitutions@do.treas.gov , a confidential email address.