A Payments Approach to Checking Revenue Compliant Fees Consumers Willingly Pay

1. A Payments Approach to Checking RevenueCompliant Fees Consumers Willingly Pay 2013

2. Contents Introduction A Payments Approach to DDA Revenues Your Revenue Opportunities Engagement

3. Introduction • 2012 – Present, President and CEO – R.C. Giltner Services, Inc.

4. A Payments Approach to DDA Revenues While service charges on deposits are falling, “payments” providers like PayPal are growing revenues over 20% annually. Service Charges on Deposits Banks < $10 Billion, 2009 - 2012 PayPal Revenues 2009 - 2012 Source: FDIC, PayPal, in millions

5. Scan & Pay A Payments Approach to DDA Revenues The “payments” revenue strategy is exploding.

6. A Payments Approach to DDA Revenues A “payments” approach to segmenting and pricing transaction services is winning relationships and earning fees consumers willingly pay. • Financial institutions focus on “accounts,” which still provide settlement, but their value is at the bottom of the pack in the hierarchy of consumer payment methods, venues and management. • Payment providers create value by focusing on the use, context and experienceof specific payments, such as where the payment occurs or the context of before or after the payment. • Use, context and experience segmentation of individual payments drives new revenue and value that can be added to any account.

7. A Payments Approach to DDA Revenues Large $1.69 69% more Grande $2.10 110% More Consumers pay more for products and services according to use, context and experience.

8. A Payments Approach to DDA Revenues FI Service Charges $44 Billion Non Credit Score Small Dollar Loan Revenues $32 Billion Interchange (net) $10 B With Bank Account $31 Billion 3 2 1 Bank NSF/OD Fee Revenues Segmentation of “payment” revenues within or across all accounts as a add-on services can be focused on 1) NSF revenue, 2) interchange and debit payments and 3) small dollar loans. Source: 2012 FDIC, Fair Issacs, CFSI, Our Analysis

9. Your Revenue Opportunities Your near-term revenue opportunities in applying the payments segmentation paradigm can grow revenues 39%. A. Tiered NSF Fees – 10%, 90 days B. Prepaid Check Card/Fresh Start – 8% C. Salutary Small Dollar Loan – 21%

10. Your Revenue Opportunities We focus first on segmenting the key existing revenue sources, overdraft and liquidity services. Bank Service Key Segments Sample FI 10+ overdrafts fee users pay $1,100 a year in fees; 7% of accounts; want items paid; low per item price sensitivity. Heavy NSFer Good Service 1-5 items a year pay $105 a year in fees,15% of accounts; 6-10 items 6% of accounts. Poor Service No Service Rare NSFer Non NSF Liquidity Borrower 22% of accounts <650 credit score 15% of accounts>650 and convenience loan oriented 35 % No Liquidity Use

11. Your Revenue Opportunities – Tiered NSF Fees Tiered NSF fees according to the context of total NSFs presented by the consumer annually maximizes customer service, revenue and regulatory management. Sample Competitive Market Fifth Third $37 Chase $35 BBVA Compass $38 Wells Fargo $35 Fulton Bancshares $39 Your Tiered Pricing Estimate 29.50 11

12. Your Revenue Opportunities – Tiered NSF Fees Sample Client – 5,000 Accounts We recommend monitoring accounts with 10 or more NSFs, but with monthly deposits averaging less than $20k or where annual NSF/OD fees are more than 3% of annual deposits a year for removal or limitation of use of from overdraft programs. Consumer accounts reflect rising deposit amounts and frequency with increased NSF/OD usage, and overdraft fees consistently below 1% of annual deposits.

13. Your Revenue Opportunities – Checking Companion Card Prepaid is now promoted as an alternative to checking accounts. • Big retailer promotion is driving consumer interest. • 87% of prepaid card users have a checking account. You can create a checking account to serve as a prepaid companion account.

14. Your Revenue Opportunities – Segment Expansion $13.95/mo. 87% of prepaid card users have a checking account. Providing a companion card and services by segment drives better service and revenues.

15. Your Revenue Opportunities – Small Dollar Loans Small dollar loans can be delivered with automated underwriting and online automation with SEO marketing with no outward facing customer data. You serve and win customers who can repay with no credit score required. Proprietary Checking Based Small Dollar Loan Program

16. Your Revenue Opportunities – Small Dollar Loans Using deposits and net account balances is an alternative way for underwriting loans, similar to Guidance by the OCC (OCC-2013-0005), FDIC (6714-01-P) and CFPB, FIs can define customer ability to repay without credit scores.

17. Your Revenue Opportunities – Small Dollar Loans Nearly Half of Small Dollar Loan Users Have Credit Scores >650 • <650 credit score 54% • >650 credit score 46% Source: FI Client Underwriting Justifies Loans for 67% of FI Accounts <650 Credit Score Source: Our Client Analysis

18. Your Revenue Opportunities – Small Dollar Loans Third Party Management We provide the keys to provide a better service for the marketplace: • Alternative underwriting documenting ability to repay. • Automated, online delivery. • Low APR pricing 15% (no payday loan rates). • Repayment over many months. • Process, usage and risk management controls. • Pricing and revenue business model assuring profitability with performance reporting. • Superior fairness and transparency. • Detailed compliance, regulatory and legal analysis and documentation. • Financial empowerment education and support for consumers with website, blog, and outreach kit.

19. Your Revenue Opportunities – Small Dollar Loans Without your response, “payments” competitors using aggregation will steal your revenue and customers with their disruptive strategies. $69B

20. Your Revenue Opportunities We integrate simply with any product set with our sales script and “payments” services. Empower Debit Empower Checking Empower Loan Program

21. Next Steps A Payments Approach to Checking RevenueCompliant Fees Consumers Willingly Pay Let us share the detailed pro forma of the revenue benefits we can bring to you.