EX-99.1 6 dex991.htm CONVERSION APPRAISAL REPORT Conversion Appraisal Report

Exhibit 99.1

 

CONVERSION APPRAISAL REPORT

 

ROYAL FINANCIAL, INC.

 

PROPOSED HOLDING COMPANY FOR

ROYAL SAVINGS BANK

Chicago, Illinois

 

Dated As Of:

September 3, 2004

 

Prepared By:

 

RP Financial, LC.

1700 North Moore Street

Suite 2210

Arlington, Virginia 22209

 

RP® FINANCIAL, LC.

Financial Services Industry Consultants

 

September 3, 2004

 

Board of Directors

Royal Savings Bank

9226 South Commercial Avenue

Chicago, Illinois 60617

 

Members of the Board of Directors:

 

At your request, we have completed and hereby provide an independent appraisal (“Appraisal”) of the estimated pro forma market value of the common stock which is to be issued in connection with the mutual-to-stock conversion of Royal Savings Bank, Chicago, Illinois (“Royal Savings” or the “Bank”). The common stock issued in connection with the Bank’s conversion will simultaneously be acquired by a holding company, Royal Financial, Inc. (“Royal Financial” or the “Company”). Pursuant to the plan of conversion, Royal Financial will offer its stock in a subscription offering to Eligible Account Holders, the Employee Stock Ownership Plan (the “ESOP”), supplemental eligible account holders and Other Members. Royal Financial will also issue stock to the newly formed Royal Charitable Foundation (the “Foundation”). To the extent that shares remain available for purchase after satisfaction of all subscriptions received in the subscription offering, the shares may be offered for sale in a community offering.

 

This Appraisal is furnished pursuant to the requirements of the Code of Federal Regulations 563b.7 and has been prepared in accordance with the “Guidelines for Appraisal Reports for the Valuation of Savings and Loan Associations Converting from Mutual to Stock Form of Organization” of the Office of Thrift Supervision (“OTS”), which have been adopted in practice by the Federal Deposit Insurance Corporation (“FDIC”).

 

Description of Plan of Conversion

 

The Board of Directors of the Bank has adopted a plan of conversion pursuant to which the Bank will convert from an Illinois chartered mutual savings bank to an Illinois chartered stock savings bank to be known as Royal Savings Bank and issue all of its outstanding shares to the Company. Royal Financial will sell in the subscription and community offerings, Royal Financial common stock in the amount equal to the appraised value of the Bank. Immediately following the conversion, the only significant assets of the Company will be the capital stock of the Bank and the net conversion proceeds remaining after purchase of the Bank’s common stock by the Company. Royal Financial will use an estimated 50% of the net conversion proceeds to purchase the Company’s common stock. In addition, as part of the reorganization the Bank will establish the Foundation to further enhance the Bank’s commitment to the local community. The Foundation will be funded with $500,000 of Royal Financial stock and $100,000 in cash.

 

Washington Headquarters     

Rosslyn Center

    Telephone:  (703) 528-1700

1700 North Moore Street, Suite 2210

    Fax No.:  (703) 528-1788

Arlington, VA 22209

    Toll-Free No.:  (866) 723-0594

 

Board of Directors

September 3, 2004

Page 2

 

A portion of the net conversion proceeds retained by the Company will be loaned to the ESOP to fund the ESOP’s stock purchases in the offering, fund the contribution to the Foundation, and the remainder will initially be invested into short-term investment securities.

 

RP Financial, LC.

 

RP Financial, LC. (“RP Financial”) is a financial consulting firm serving the financial services industry nationwide that, among other things, specializes in financial valuations and analyses of business enterprises and securities, including the pro forma valuation for savings institutions converting from mutual-to-stock form. The background and experience of RP Financial is detailed in Exhibit V-l. We believe that, except for the fee we will receive for our appraisal and assisting in the preparation of the Bank’s regulatory business plan, we are independent of the Bank and the other parties engaged by Royal Savings to assist in the corporate reorganization and stock issuance process.

 

Valuation Methodology

 

In preparing our appraisal, we have reviewed the regulatory applications of Royal Savings, including the prospectus as filed with the State of Illinois Division of Banks and Real Estate (“DBRE”) and the Securities and Exchange Commission (“SEC”). We have conducted a financial analysis of the Bank that has included due diligence related discussions with Royal Savings’ management; Crowe Chizek and Company LLC, the Bank’s independent auditor; Vedder, Price, Kaufman & Kammholz, P.C., Royal Savings’ conversion counsel; and Hovde Financial, Inc., which has been retained as the financial and marketing advisor in connection with the Company’s stock offering. All conclusions set forth in the Appraisal were reached independently from such discussions. In addition, where appropriate, we have considered information based on other available published sources that we believe are reliable. While we believe the information and data gathered from all these sources are reliable, we cannot guarantee the accuracy and completeness of such information.

 

We have investigated the competitive environment within which Royal Savings operates and have assessed the Bank’s relative strengths and weaknesses. We have kept abreast of the changing regulatory and legislative environment and analyzed the potential impact on Royal Savings and the industry as a whole. We have analyzed the potential effects of conversion on the Bank’s operating characteristics and financial performance as they relate to the pro forma market value of Royal Financial. We have reviewed the economy in the Bank’s primary market area and have compared Royal Savings’ financial performance and condition with selected publicly-traded thrift institutions with similar characteristics as the Bank, as well as all publicly-traded thrifts. We have reviewed conditions in the securities markets in general and conditions in the market for thrift stocks in particular, including the market for existing thrift issues and the market for initial public offerings by thrifts.

 

Board of Directors

September 3, 2004

Page 3

 

Our Appraisal is based on Royal Savings’ representation that the information contained in the regulatory applications and additional information furnished to us by the Bank and its independent auditors are truthful, accurate and complete. We did not independently verify the financial statements and other information provided by the Bank and its independent auditors, nor did we independently value the assets or liabilities of the Bank. The valuation considers Royal Savings only as a going concern and should not be considered as an indication of the liquidation value of the Bank.

 

Our appraised value is predicated on a continuation of the current operating environment for Royal Savings and for all thrifts. Changes in the local, state and national economy, the legislative and regulatory environment, the stock market, interest rates, and other external forces (such as natural disasters or significant world events) may occur from time to time, often with great unpredictability and may materially impact the value of thrift stocks as a whole or the Bank’s value alone. It is our understanding that Royal Savings intends to remain an independent institution and there are no current plans for selling control of the Bank as a converted institution. To the extent that such factors can be foreseen, they have been factored into our analysis.

 

Pro forma market value is defined as the price at which Royal Financial’s stock, immediately upon completion of the conversion offering, would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.

 

Valuation Conclusion

 

It is our opinion that, as of September 3, 2004, the pro forma market value of the Company’s common stock immediately following the offering is $20,000,000 at the midpoint, equal to 2,000,000 shares offered at a per share value of $10.00. Pursuant to conversion guidelines, the 15% offering range provides for a minimum value of $17,000,000 and a maximum value of $23,000,000. Based on the $10.00 per share offering price, this valuation range equates to total shares outstanding of 1,700,000 at the minimum and 2,300,000 at the maximum. In the event the appraised value is subject to an increase, up to 2,645,000 shares may be issued at an issue price of $10.00 per share for an aggregate market value of $26,450,000 without requiring a resolicitation.

 

Limiting Factors and Considerations

 

Our valuation is not intended, and must not be construed, as a recommendation of any kind as to the advisability of purchasing shares of the common stock. Moreover, because such valuation is necessarily based upon estimates and projections of a number of matters, all of which are subject to change from time to time, no assurance can be given that persons who purchase shares of common stock in the conversion will thereafter be able to buy or sell such shares at prices related to the foregoing valuation of the pro forma market value thereof.

 

Board of Directors

September 3, 2004

Page 4

 

RP Financial’s valuation was determined based on the financial condition and operations of Royal Savings as of June 30, 2004, the date of the financial data included in the regulatory applications and prospectus.

 

RP Financial is not a seller of securities within the meaning of any federal and state securities laws and any report prepared by RP Financial shall not be used as an offer or solicitation with respect to the purchase or sale of any securities. RP Financial maintains a policy which prohibits the company, its principals or employees from purchasing stock of its client institutions.

 

The valuation will be updated as provided for in the conversion regulations and guidelines. These updates will consider, among other things, any developments or changes in the Bank’s financial performance and condition, management policies, and current conditions in the equity markets for thrift shares. These updates may also consider changes in other external factors which impact value including, but not limited to: various changes in the legislative and regulatory environment, the stock market and the market for thrift stocks, and interest rates. Should any such new developments or changes be material, in our opinion, to the valuation of the shares, appropriate adjustments to the estimated pro forma market value will be made. The reasons for any such adjustments will be explained in the update at the date of the release of the update.

 

Respectfully submitted,

RP FINANCIAL, LC.

/s/    WILLIAM E. POMMERENING        
William E. Pommerening
Managing Director
/s/    JAMES J. OREN        
James J. Oren
Senior Vice President

 

RP Financial, LC.

 

TABLE OF CONTENTS

ROYAL SAVINGS BANK

Chicago, Illinois

 

DESCRIPTION

   

PAGE

NUMBER

CHAPTER ONE                 OVERVIEW AND FINANCIAL ANALYSIS

     

Introduction

    1.1  

Plan of Reorganization

    1.1  

Strategic Overview

    1.2  

Balance Sheet Trends

    1.5  

Income and Expense Trends

    1.9  

Interest Rate Risk Management

    1.12

Lending Activities and Strategy

    1.12

Asset Quality

    1.15

Funding Composition and Strategy

    1.16

Subsidiaries and Other Activities

    1.17

Legal Proceedings

    1.17

CHAPTER TWO                MARKET AREA

     

Introduction

    2.1  

National Economic Factors

    2.2  

Economic and Interest Rate Environment

    2.2  

Market Area Demographics

    2.3  

Local Economy

    2.5  

Competition

    2.7  

Summary

    2.13

CHAPTER THREE            PEER GROUP ANALYSIS

     

Peer Group Selection

    3.1  

Financial Condition

    3.4  

Income and Expense Components

    3.7  

Loan Composition

    3.11

Credit Risk

    3.13

Interest Rate Risk

    3.13

Summary

    3.16

RP Financial, LC.

 

TABLE OF CONTENTS

ROYAL SAVINGS BANK

Chicago, Illinois

(continued)

 

DESCRIPTION

   

PAGE

NUMBER

CHAPTER FOUR              VALUATION ANALYSIS

     

Introduction

    4.1  

Appraisal Guidelines

    4.1  

RP Financial Approach to the Valuation

    4.1  

Valuation Analysis

    4.2  

1. Financial Condition

    4.3  

2. Profitability, Growth and Viability of Earnings

    4.4  

3. Asset Growth

    4.7  

4. Primary Market Area

    4.7  

5. Dividends

    4.9  

6. Liquidity of the Shares

    4.9  

7. Marketing of the Issue

    4.10

A. The Public Market

    4.10

B. The New Issue Market

    4.14

C. The Acquisition Market

    4.18

8. Management

    4.18

9. Effect of Government Regulation and Regulatory Reform

    4.19

Summary of Adjustments

    4.19

Valuation Approaches

    4.19

1. Price-to-Earnings (“P/E”)

    4.21

2. Price-to-Book (“P/B”)

    4.23

3. Price-to-Assets (“P/A”)

    4.23

Comparison to Recent Conversions

    4.23

Valuation Conclusion

    4.24

RP Financial, LC.

 

LIST OF TABLES

ROYAL SAVINGS BANK

Chicago, Illinois

 

TABLE

NUMBER

   

DESCRIPTION

    PAGE
1.1   

Historical Balance Sheets

    1.6  
1.2   

Historical Income Statements

    1.10
2.1   

Summary Demographic Data

    2.4  
2.2   

Primary Market Area Employment Sectors

    2.6  
2.3   

Market Area Unemployment Trends

    2.6  
2.4   

Deposit Share – Cook County

    2.8  
2.5   

Deposit Summary

    2.12
3.1   

Peer Group of Publicly-Traded Thrifts

    3.3  
3.2   

Balance Sheet Composition and Growth Rates

    3.5  
3.3   

Income as a Percent of Average Assets and Yields, Costs, Spreads

    3.8  
3.4   

Loan Portfolio Composition and Related Information

    3.12
3.5   

Interest Rate Risk Measures and Net Interest Income Volatility

    3.14
3.6   

Credit Risk Measures and Related Information

    3.15
4.1   

Market Area Unemployment Rates

    4.8  
4.2   

Pricing Char/After-Market Trends Recent Conversions

    4.16
4.3   

Market Pricing Comparatives

    4.17
4.4   

Valuation Adjustments

    4.19
4.5   

Public Market Pricing

    4.22

RP Financial, LC.

Page 1.1

 

I. OVERVIEW AND FINANCIAL ANALYSIS

 

Introduction

 

Royal Savings is a state chartered mutual savings bank operating from a headquarters office and two branch office locations in the city of Chicago, Cook County, Illinois. A map of the Bank’s office locations is provided in Exhibit I-1. The Bank’s primary regulators are the State of Illinois Division of Banks and Real Estate and the Federal Deposit Insurance Corporation (“FDIC”). Royal Savings is a member of the Federal Home Loan Bank (“FHLB”) system, and its deposits are insured up to the regulatory maximums by the Bank Insurance Fund (“BIF”) of the FDIC. At June 30, 2004, Royal Savings had $92.5 million in assets, $77.2 million in deposits and total equity of $12.7 million or 13.72% of total assets.

 

Plan of Reorganization

 

The Board of Directors of the Bank has adopted a plan of conversion pursuant to which the Bank will convert from an Illinois chartered mutual savings bank to an Illinois chartered stock savings bank to be known as Royal Savings Bank and issue all of its outstanding shares to the Company. Royal Financial will sell in the subscription and community offerings, Royal Financial common stock in the amount equal to the appraised value of the Bank. Immediately following the conversion, the only significant assets of the Company will be the capital stock of the Bank and the net conversion proceeds remaining after purchase of the Bank’s common stock by the Company. Royal Financial will use an estimated 50% of the net conversion proceeds to purchase the Company’s common stock. In addition, as part of the reorganization the Bank will establish a charitable foundation (the “Foundation”) to further enhance the Bank’s commitment to the local community. The Foundation will be funded with $500,000 of Royal Financial stock and $100,000 in cash.

 

A portion of the net conversion proceeds retained by the Company will be loaned to the ESOP to fund the ESOP’s stock purchases in the offering, fund the cash contribution to the Foundation, and the remainder will initially be invested into short-term investment securities.

 

RP Financial, LC.

Page 1.2

 

Strategic Overview

 

Royal Savings maintains a local community banking emphasis, with a primary strategic objective of meeting the borrowing and savings needs of its local customer base. Historically, Royal Savings’ operating strategy was fairly reflective of a traditional thrift operating strategy, in which 1-4 family residential mortgage loans were the primary source of loan originations and assets were primarily funded with retail deposits. The Bank also historically maintained a sizeable investment portfolio, as the loans/assets ratio was well below industry averages. In the past year, through a reorganization of the senior management team, the Bank has begun a strategy of diversifying the loan portfolio into other loan types, such as commercial real estate, construction, commercial business and home equity loans. Pursuant to the Bank’s business plan, Royal Savings will continue to emphasize 1-4 family lending, but will also pursue greater diversification into these other types of lending. Overall, it is the Bank’s objective to continue to grow the Bank’s asset base, with investment of available funds to be concentrated in whole loans, which will facilitate a higher yielding interest-earning asset composition.

 

As stated above, in the past two years, the Bank has pursued certain strategic initiatives that have prepared the Bank for the proposed mutual-to-stock conversion and for post-conversion operations. First, the Board of Directors hired the current President and CEO, Donald Moll in March 2003 to lead the day-to-day operations of the Bank. Mr. Moll has since established a senior management team (chief financial officer, loan officer and vice president/operations), consisting of individuals with strong experience in commercial and community banking in the Chicago area. This four-person management team has the necessary experience to lead the Bank following the conversion, particularly as the Bank intends to emphasize commercial real estate/commercial business lending and business relationship banking.

 

The Bank’s intention to transition the Bank’s operations from a traditional thrift to a more diversified financial institution is being achieved by increasing its emphasis on community-based lending, such as lending to small and medium-sized businesses in the local market areas in which the Bank operates. This type of lending includes both commercial real estate lending and commercial business lending, which also represents the strength and backgrounds of the new management team. However, one-to-four family residential lending will remain an important

 

RP Financial, LC.

Page 1.3

 

part of the Bank’s operations. Royal Savings will continue to focus on serving the local customer base in terms of retail deposit offerings, and will focus more attention on the servicing needs of the local business community. By doing so, Royal Savings intends to remain an important part of the local financial services industry into the future.

 

The Board of Directors has also pursued other strategies in order to prepare Royal Savings for the future. The Bank recently completed construction of, and now occupies a new main office building, and has recently opened a second branch office. The new main office, located on an adjacent lot to the prior main office, provides the Bank with the local “presence” of a modern, full-service community bank, including additions such as drive-through lanes, areas for community group meetings and other community based involvement activities. The new branch office, a leased facility located in Lansing, Illinois, provides access to an additional market area within Cook County, Illinois for new deposit customers and loan customers.

 

Royal Savings has also enhanced other areas of operations in order to achieve its strategic initiatives. Royal Savings recently converted to a new data processing system, provided by Bisys, Inc. which provides the necessary systems to handle the anticipated expansion of the commercial lending operations (commercial real estate/commercial business lending). The Bank has also invested in additional back-office structures by employing an outside human resources consultant to upgrade the human resources function systems, policies and procedures. These investments will provide the necessary framework for the Bank to expand operations following completion of the conversion.

 

All of the above strategic actions have been pursued in order to allow Royal Savings to transition from a traditional thrift operation to that of a more diversified financial institution that is able to provide a wider array of products and services to its local customers. This diversification is essential for the long-term survival of the Bank, in light of the current competition within the banking and financial services industries. These strategic actions, in concert with the proposed conversion, will provide for improved service to the local market areas in which the Bank operates.

 

The post-conversion business plan of the Bank is expected to continue to focus on products and services which have facilitated the recent growth of the Bank, with the immediate

 

RP Financial, LC.

Page 1.4

 

leverage of the additional capital used to purchase certain investment securities such as MBS, pending re-deployment into whole loans receivable. Royal Savings will continue to be an independent community-oriented financial institution with a commitment to local real estate mortgage financing and commercial real estate and commercial business financing with operations funded by retail deposits, borrowings, equity capital and internal cash flows.

 

The Bank’s Board of Directors has elected to pursue the stock offering in order to improve the competitive position of Royal Savings. The additional capital realized from the stock offering will increase the operating flexibility and overall financial strength of Royal Savings as well as support the expansion of the Bank’s strategic focus of providing competitive community banking services in its local market area. Royal Savings’ higher equity-to-assets ratio will also better position the Bank to take advantage of expansion opportunities as they arise. Such expansion would most likely occur through establishing one or more additional branches in the market area served. In addition, the Bank or the Company will consider branch acquisitions, acquisitions of other regional thrifts or commercial banks. Royal Savings’ higher capital position resulting from the infusion of conversion proceeds will also serve to reduce interest rate risk, through enhancing the Bank’s interest-earning-assets-to-interest-bearing-liabilities (“IEA/IBL”) ratio. The additional funds realized from the stock offering will provide an alternative funding source to deposits and borrowings in meeting the Bank’s future funding needs, which may facilitate a reduction in Royal Savings’ funding costs. The Bank’s projected internal use of proceeds is highlighted below.

 

  • Royal Financial. The Company is expected to retain 50% of net conversion proceeds. At present, funds at the Company level are expected to be utilized to fund the ESOP, with the remaining funds used for Company operating expenses and for reinvestment into earning assets. Royal Financial does not intend to begin paying cash dividends immediately after completing the conversion. The remaining funds held at the Company will be used to fund the loan to the ESOP established as part of this conversion. Any remaining funds are expected to be primarily invested initially into short-term investment grade securities. Over time, the funds may be utilized for various corporate purposes.

 

  •

Royal Savings. The remaining net conversion proceeds will be infused into the Bank in exchange for all of the Bank’s newly issued stock. The increase in capital will be less, as the amount to be borrowed by the ESOP to fund the ESOP stock purchase will be deducted from capital. Cash proceeds (i.e., net proceeds less deposits withdrawn to fund stock purchases) infused into the Bank are anticipated

 

RP Financial, LC.

Page 1.5

 

 

to become part of general operating funds, and are expected to be primarily utilized to fund loan growth.

 

Overall, it is the Bank’s objective to pursue growth that will serve to increase returns and operating efficiencies, while, at the same time, growth will not be pursued that could potentially compromise the overall risk associated with Royal Savings’ operations. Initial growth, intended to be achieved through the use of additional borrowed funds, will be reinvested into investment securities, such as MBS, pending eventual reinvestment into whole loans receivable.

 

Balance Sheet Trends

 

From June 30, 2000 through June 30, 2004, Royal Savings exhibited annual asset growth of 3.1% (see Table 1.1). From fiscal year 2000 to 2003, the Bank’s interest-earning asset composition remained relatively stable, with loans receivable comprising approximately 25% to 30% of total assets. During fiscal 2004, the Bank recorded an increase in the proportion of loans receivable from 27.5% of assets at fiscal year end 2003 to 37.5% of assets at June 30, 2004. Since fiscal 2001, asset growth has been funded with increases in both deposits and borrowings, with deposits providing most of the new funds for reinvestment. The Bank’s audited financial statements are incorporated by reference in Exhibit I-2, and a summary of Royal Savings’ key operating ratios for the past five fiscal years are presented in Exhibit I-3.

 

Royal Savings’ loans receivable portfolio increased at an 11.1% annual rate from fiscal year end 2000 through June 30, 2004, although most of this growth occurred during fiscal 2004, as loans receivable increased by 45.4% during that fiscal year. From fiscal 2000 to fiscal 2003, loans receivable increased by only $1.1 million, or 4.6%. Recent loan growth has been sustained by the Bank’s efforts to increase the levels of commercial real estate and commercial business loans through additional internal lending activities as directed by the newly formed senior management team.

 

Royal Savings’ historical emphasis on 1-4 family lending, and the more recent emphasis on commercial real estate and commercial business lending is reflected in its loan portfolio composition, as 57.6% of total loans receivable consisted of 1-4 family mortgage loans at June 30, 2004, while commercial real estate loans (including multi-family loans) comprised 32.9% of

 

RP Financial, LC.

 

Table 1.1

Royal Savings Bank

Historical Balance Sheets

 

     As of June 30,
    

6/30/00-
6/30/04
Annualized

Growth Rate

  
     2000
     2001
     2002
     2003
     2004
    
     Amount
     Pct(1)
     Amount
    Pct(1)
     Amount
    Pct(1)
     Amount
    Pct(1)
     Amount
     Pct(1)
     Pct
  
     ($000)     (%)     ($000)    (%)     ($000)    (%)     ($000)    (%)     ($000)     (%)     (%)  

Total Amount of:

                                                                          

Assets

    $ 81,797     100.00 %   $ 80,189    100.00 %   $ 86,491    100.00 %   $ 86,797    100.00 %   $ 92,539     100.00 %   3.13 %

Loans Receivable (net)

      22,812     27.89 %     24,708    30.81 %     25,652    29.66 %     23,862    27.49 %     34,697     37.49 %   11.05 %

Cash and Equivalents

      4,884     5.97 %     7,593    9.47 %     9,187    10.62 %     9,864    11.36 %     7,943     8.58 %   12.93 %

Investment Securities

      52,656     64.37 %     46,731    58.28 %     50,009    57.82 %     51,164    58.95 %     44,876     48.49 %   -3.92 %

Fixed Assets

      654     0.80 %     553    0.69 %     957    1.11 %     1,152    1.33 %     4,314     4.66 %   60.27 %

Other Assets

      791     0.97 %     603    0.75 %     687    0.79 %     754    0.87 %     710     0.77 %   -2.69 %

Deposits

      70,645     86.37 %     66,827    83.34 %     70,388    81.38 %     70,455    81.17 %     77,168     83.39 %   2.23 %

FHLB Advances

      0     0.00 %     0    0.00 %     2,000    2.31 %     2,000    2.30 %     2,000     2.16 %   NM  

Other Liabilities

      1,146     1.40 %     1,079    1.35 %     801    0.93 %     867    1.00 %     672     0.73 %   -12.49 %

Stockholders Equity

      10,006     12.23 %     12,283    15.32 %     13,302    15.38 %     13,474    15.52 %     12,699     13.72 %   6.14 %

AFS Adjustment

      (1,006 )   -1.23 %     615    0.77 %     953    1.10 %     646    0.74 %     (214 )   -0.23 %   NA  

Offices Open

      2             2            2            2            3           —    

 

(1) Ratios are as a percent of ending assets.

 

Source:  Royal Savings Bank’s draft prospectus and audited financial reports.

 

RP Financial, LC.

Page 1.7

 

loans receivable as of the same date. Recent growth trends in the Bank’s loan portfolio show increased concentration by the Bank into commercial real estate loans. Specifically, commercial real estate loans increased from 11.0% of total loans receivable at June 30, 2003 to the current 32.9% of total loans receivable at June 30, 2004. As the result of this increase, the Bank’s 1-4 family loans, including home equity loans, decreased from 88.3% to 57.6% of total loans outstanding at June 30, 2003 and June 30, 2004, respectively. Commercial business lending, while small in balance, has also been a recent emphasis by Royal Savings, increasing from a zero balance as of June 30, 2003 to $3.0 million as of June 30, 2004. Over the same time period, Royal Savings has engaged in minimal construction and consumer lending.

 

The intent of the Bank’s investment policy is to provide adequate liquidity within the context of supporting Royal Savings’ overall profitability, credit, reinvestment, liquidity and interest rate risk objectives. As such, the Bank’s cash and investment securities portfolio has historically included a variety of investment securities, such as mortgage backed securities or collateralized mortgage obligations (“MBS/CMOs”), U.S. Government and agency securities, corporate bonds, Federal Home Loan Bank stock, and cash and cash equivalents. Over the past five years, the Bank’s level of cash and investment securities (inclusive of FHLB stock) ranged from a low of 57.1% of assets at fiscal year end 2004 to a high of 70.3% of assets at June 30, 2000. The general decline in cash and investments in fiscal 2004 reflects the effects of the overall increase in the loan portfolio as a percent of the asset base. As of June 30, 2004, the investment portfolio was comprised primarily of cash and cash equivalents ($7.9 million), FHLB stock ($0.3 million), U.S. government and agency securities ($17.7 million), MBS/CMOs ($18.8 million), corporate bonds ($7.6 million), and municipal bonds ($0.7 million). Exhibit I-4 provides detail of the Bank’s investment portfolio. It is anticipated that conversion proceeds retained at the Company level will primarily be invested into investments with short-term adjustment periods or maturities.

 

Table 1.1 also presents trends in the level of fixed assets since June 30, 2000, and illustrates that during fiscal 2004 the Bank increased the level of investment in fixed assets to a total of $4.3 million, or 4.7% of assets. The level of such assets increased due to the construction of the new main office building, and opening of a second branch office. The relative investment

 

RP Financial, LC.

Page 1.8

 

in fixed assets negatively impacts the Bank’s reported income, as the Bank experiences higher depreciation expense, and maintains more assets in interest earning asset form.

 

Over the past five years, Royal Savings’ funding needs have been substantially met through retail deposits, borrowings, internal cash flows and retained earnings. From fiscal year end 2000 through June 30, 2004, the Bank’s deposits increased at an annual rate of 2.2%, as Royal Savings gained deposits through continued marketing efforts to build the deposit base. Most of this growth occurred during fiscal 2004, as the deposit total as of June 30, 2003, $70.5 million, was lower than the level as of June 30, 2000 ($70.6 million). The opening of the second branch office has also resulted in additional deposits for the Bank. The recent emphasis on commercial lending has assisted in building the deposit base as business loan customers also deposit business related funds with the Bank. As of June 30, 2004, CDs and savings accounts represented 44.1% and 41.8% of the Bank’s total deposits, respectively. During fiscal 2004, Royal Savings’ demand accounts increased by $4.6 million, or 74%, to a total of $10.9 million, while CDs declined slightly. During this time, savings accounts also increased in balance. As of June 30, 2004, the Bank had no brokered CDs in the deposit base.

 

Borrowings serve as a minor alternative funding source for the Bank to enable the Bank to more fully leverage the capital base, support control of deposit costs and to aid in interest rate risk management. The Bank has used borrowings only in the most recent three fiscal years, and as of June 30, 2004, borrowings held by Royal Savings totaled $2.0 million, or 2.5% of total deposits and borrowings. These borrowings consist of one FHLB advance which matures in September 2006. Additional deposit growth, the offering proceeds, and internal cash flows are expected to adequately address most of the Bank’s funding needs in the foreseeable future. To the extent additional borrowings may be utilized by the Bank, such borrowings would likely consist of FHLB advances.

 

Since fiscal year end 2000, positive earnings translated into an annual capital growth rate of 6.1% for the Bank. Capital growth exceeded the Bank’s asset growth rate, as Royal Savings’ equity-to-assets ratio increased from 12.2% at fiscal year end 2000 to 13.7% at June 30, 2004. All of the Bank’s capital consists of tangible capital, and the Bank maintained capital surpluses relative to all of its regulatory capital requirements at June 30, 2004. The addition of conversion proceeds will serve to strengthen Royal Savings’ capital position and competitive posture within

 

RP Financial, LC.

Page 1.9

 

its primary market area, as well as support expansion of the asset base. At the same time, as the result of the Bank’s increased pro forma capital position, Royal Savings’ ROE can be expected to be below industry averages following its conversion.

 

Income and Expense Trends

 

Table 1.2 shows the Bank’s historical income statements from fiscal year 2000 through fiscal year 2004. The Bank reported positive earnings over the past five years, ranging from a low of 0.09% of average assets during fiscal 2004 to a high of 0.82% of average assets during fiscal 2002. For fiscal 2004, Royal Savings reported net income of $84,000. Consistent with the Bank’s thrift operating strategy, net interest income, non-interest income and operating expenses have been the dominant factors in Royal Savings’ income statement. Loan loss provisions have not been a significant factor. Royal Savings has reported various types of non-operating items (gains or losses) in the past three years, with most of the recent and largest item consisting of gains on the sale of investment securities.

 

Royal Savings maintained a net interest margin between 3.11% and 2.56% of average assets throughout the period shown in Table 1.2. During the most recent fiscal year, the net interest margin has narrowed due to the Bank’s maintenance of a relatively high concentration of short term or adjustable investment securities in portfolio, along with balances of adjustable rate commercial real estate/commercial business loans that are generally tied to the prime rate of interest. All of these types of assets carry relatively lower yields in the current low interest rate environment. Interest expense totals are favorably affected by the balance of core deposits held in portfolio which currently carry relatively low rates. The Bank’s historical net interest rate spreads and yields and costs are set forth in Exhibits I-3 and I-5.

 

Sources of non-interest operating income have been a moderate contributor to the Bank’s earnings in recent years, as Royal Savings has historically generated a level of income from the customer base. During the last five fiscal years, non-interest operating income has ranged from 0.48% of average assets to 0.19% of average assets, and consisted of fees and charges on the deposit base, lending operations, and other miscellaneous income sources. At this time the Bank has no plans to further diversify into activities that would generate substantial additional

 

RP Financial, LC.

 

Table 1.2

Royal Savings Bank

Historical Income Statements

 

     For the Fiscal Year Ended June 30,
  
     2000
     2001
     2002
     2003
     2004
  
     Amount
     Pct(1)
     Amount
     Pct(1)
     Amount
     Pct(1)
     Amount
     Pct(1)
     Amount
     Pct(1)
  
     ($000)     (%)     ($000)     (%)     ($000)     (%)     ($000)     (%)     ($000)     (%)  

Interest Income

    $ 5,243     6.41 %   $ 5,082     6.28 %   $ 4,701     5.64 %   $ 4,241     4.89 %   $ 3,492     3.89 %

Interest Expense

      (2,713 )   -3.32 %     (2,585 )   -3.19 %     (2,112 )   -2.53 %     (1,595 )   -1.84 %     (1,199 )   -1.34 %
    
 
 
 
 
 
 
 
 
 

Net Interest Income

    $ 2,530     3.09 %   $ 2,497     3.08 %   $ 2,589     3.11 %   $ 2,646     3.05 %   $ 2,293     2.56 %

Provision for Loan Losses

      (24 )   -0.03 %     (36 )   -0.04 %     (24 )   -0.03 %     (36 )   -0.04 %     (3 )   0.00 %
    
 
 
 
 
 
 
 
 
 

Net Interest Income after Provisions

    $ 2,506     3.06 %   $ 2,461     3.04 %   $ 2,565     3.08 %   $ 2,610     3.01 %   $ 2,290     2.55 %

Gain on Sale of Loans

    $ 0     0.00 %   $ 0     0.00 %   $ 0     0.00 %   $ 0     0.00 %   $ 0     0.00 %

Other Income

    $ 155     0.19 %   $ 160     0.20 %   $ 165     0.20 %   $ 187     0.22 %   $ 431     0.48 %

Operating Expense

      (1,829 )   -2.24 %     (1,817 )   -2.24 %     (1,863 )   -2.24 %     (2,172 )   -2.51 %     (2,799 )   -3.12 %
    
 
 
 
 
 
 
 
 
 

Net Operating Income

    $ 832     1.02 %   $ 805     0.99 %   $ 867     1.04 %   $ 626     0.72 %     ($77 )   -0.09 %

Gain (Loss) on Sale of Investments

      ($5 )   -0.01 %   $ 18     0.02 %   $ 11     0.01 %   $ 65     0.08 %   $ 176     0.20 %

Gain (Loss) on Sale of Assets

      0     0.00 %     0     0.00 %     0     0.00 %     0     0.00 %     0     0.00 %

Other REO Inc./Expense

      0     0.00 %     0     0.00 %     (20 )   -0.02 %     0     0.00 %     0     0.00 %
    
 
 
 
 
 
 
 
 
 

Net Non-Operating lncome/(Expense)

      ($5 )   -0.01 %   $ 18     0.02 %     ($9 )   -0.01 %   $ 65     0.08 %   $ 176     0.20 %

Net Income Before Tax

    $ 827     1.01 %   $ 823     1.02 %   $ 858     1.03 %   $ 691     0.80 %   $ 99     0.11 %

Income Taxes

      (162 )   -0.20 %     (167 )   -0.21 %     (177 )   -0.21 %     (211 )   -0.24 %     (15 )   -0.02 %
    
 
 
 
 
 
 
 
 
 

Net Income (Loss)

    $ 665     0.81 %   $ 656     0.81 %   $ 681     0.82 %   $ 479     0.55 %   $ 84     0.09 %

Adjusted Earnings:

                                                                       

Net Income

    $ 665     0.81 %   $ 656     0.81 %   $ 681     0.82 %   $ 479     0.55 %   $ 84     0.09 %

Add (Deduct): Non-Operating (Inc)/Exp

      5     0.01 %     (18 )   -0.02 %     9     0.01 %     (65 )   -0.08 %     (176 )   -0.20 %

Tax Effect

      (1 )   0.00 %     4     0.00 %     (2 )   0.00 %     20     0.02 %     27     0.03 %
    
 
 
 
 
 
 
 
 
 

Adjusted Earnings:

    $ 669     0.82 %   $ 641     0.79 %   $ 688     0.83 %   $ 434     0.50 %   ($ 65 )   -0.07 %

 

(1) Ratios are as a percent of average assets.

 

Source:  Royal Savings Bank’s draft prospectus and audited financial statements.

 

RP Financial, LC.

Page 1.11

 

interest operating income and, thus, Royal Savings’ earnings can be expected to be similarly affected by the level of non-interest

non-income.

 

Operating expenses represent the other major component of the Bank’s earnings, ranging from a low of 2.24% of average assets in fiscal 2000 through 2002 to a high of 3.12% of average assets in fiscal 2004. Such expenses as a percent of average assets have increased over the time period shown in Table 1.2. The operating expense ratio for the Bank reflects the overall small asset size of Royal Savings, which limits operating efficiencies. Higher operating expenses recorded during fiscal 2004 were largely attributable to additional fixed asset and depreciation expense related to the newly constructed main office building, and additional compensation expenses that were incurred in connection with the hiring of additional personnel in anticipation of the post-conversion growth, including the new senior management team. Upward pressure will be placed on the Bank’s operating expense ratio following the stock offering, due to expenses associated with operating as a publicly-traded company, including expenses related to the stock benefit plans. At the same time, the increase in capital realized from the stock offering will increase the Bank capacity to leverage operating expenses through pursuing a more aggressive growth strategy.

 

Overall, the general trends in the Bank’s net interest margin and operating expense ratio since 2000 reflect currently a low level of core earnings, as indicated by the Bank’s expense coverage ratio (net interest income divided by operating expenses). Royal Savings’ expense coverage ratio equaled 1.38 times in fiscal 2000, versus a comparable ratio of 0.82 times during the twelve months ended June 30, 2004. Similarly, Royal Savings’ efficiency ratio (operating expenses, net of amortization of intangibles, as a percent of the sum of net interest income and other operating income) of 102.6% for twelve months ended June 30, 2004 was less favorable to the 68.3% efficiency ratio maintained in fiscal 2000.

 

Due to adequate asset quality in the past several years, and lack of appreciable levels of loan chargeoffs, Royal Savings has relatively low levels of loan loss provisions in recent fiscal years, totaling $3,000 in fiscal 2004. The level of allowances for loan losses required at present also reflect the Bank’s assessment of the loan portfolio quality and other factors related to the collectibility of the loan portfolio. As of June 30, 2004, the Bank maintained an allowance for loan losses of $236,000, equal to 212.61% of non-performing assets and accruing loans more

 

RP Financial, LC.

Page 1.12

 

than 90 days past due and 0.68% of net loans receivable. Exhibit I-6 sets forth the Bank’s allowance for loan loss activity during the past two years.

 

As stated previously, the primary non-operating income or expense item in the most recent three fiscal years consisted of gains on the sale of investment securities, which totaled $176,000 for fiscal 2004. The Bank’s effective tax rate has been affected by the overall low levels of income. On a go forward basis, assuming moderately profitable operation, the Bank’s effective tax rate is expected to approximate 34%.

 

Interest Rate Risk Management

 

Interest rate risk calculations indicate that Royal Savings is subject to a level of interest rate risk. As of June 30, 2004, the Net Portfolio Value (“NPV”) analysis as shown in the prospectus indicates that a 2% instantaneous and sustained increase in interest rates would result in a 20% decline in the Bank’s NPV (see Exhibit I-7).

 

The Bank manages interest rate risk from both the asset and liability sides of the balance sheet. On the asset side of the balance sheet, Royal Savings maintains a loan portfolio with adjustable rate features, including adjustable rate residential loans, and adjustable commercial real estate and commercial business loans. The Bank also maintains a balance of short-term liquid funds and an adjustable rate MBS portfolio. Royal Savings has also recently followed a strategy of selling longer term fixed rate loans into the secondary market. On the liability and equity side of the balance sheet, management of interest rate risk has been pursued through emphasizing less interest rate sensitive and lower costing transaction and savings accounts. Exhibit I-8 reveals the characteristics of the Bank’s loan portfolio.

 

The infusion of stock proceeds will serve to further limit the Bank’s interest rate risk exposure, as most of the net proceeds will be redeployed into interest-earning assets and the increase to capital will lessen the proportion of interest rate sensitive liabilities funding assets.

 

Lending Activities and Strategy

 

Royal Savings’ lending activities have recently emphasized commercial real estate/commercial business loans and 1-4 family permanent mortgage loans and these loan types continue to comprise the largest concentration of the loan portfolio. Additional lending

 

RP Financial, LC.

Page 1.13

 

diversification by the Bank includes a balance of home equity loans and a small balance of consumer loans. Exhibit I-9 provides historical detail of Royal Savings’ loan portfolio composition over the past two years and Exhibit I-10 provides the contractual maturity of the Bank’s loan portfolio by loan type as of June 30, 2004.

 

At June 30, 2004, the Bank’s loan portfolio was concentrated in 1-4 family residential mortgage loans (inclusive of home equity loans), totaling $20.2 million, or 57.9% of loans receivable. In the near term future, Royal Savings intends to continue active originations of residential loans in the local market areas served. The Bank originates permanent first mortgage loans (both adjustable rate and fixed rate) both for portfolio and for sale. Due to interest rate risk concerns, the Royal Savings in recent periods has been an active originator and seller of long term fixed rate residential loans to private sector servicing firms, such as ABN Amro Mortgage of Chicago, IL. Lending volumes of adjustable rate residential mortgage loans has been minimal in recent periods due to a lack of customer demand, although the Bank does continue to offer such loans. Residential ARM loans generally have up to 30 year terms and an interest rate that adjusts every one, three, or five years in accordance with an index tied to the U.S. treasury securities of a constant comparable maturity. The Bank generally offers discounted initial rates, and the loan terms include caps on the allowable changes in the interest rate over the life of the loans. First mortgage fixed rate residential loans originated by Royal Savings for the purpose of purchasing an owner-occupied home include terms of 10 to 30-years, with loan-to-value (“LTV”) ratios of 80% or more requiring private mortgage insurance. The Bank will originate loans up to a 95% LTV ratio. Non-owner occupied 1-4 family residential loans carry a slightly higher interest rate.

 

In recent periods Royal Savings has been an active lender on commercial real estate property, consisting of loans secured by certain non-residential real estate property and on multi-family property. Such loans are tied to the prime rate of interest, and are thus short-term adjustable loans, which assist in interest rate risk management. This strategy has been pursued within the past two years subsequent to the hiring of new senior management, including a dedicated commercial real estate loan officer. To date, these loans have consisted of participations with other local financial institutions, as the Bank’s size and lending limits restrict the ability of the Bank to originate whole loans. The loans are generally secured by property

 

RP Financial, LC.

Page 1.14

 

such as strip shopping centers, small industrial buildings, medical office building and smaller multi-family buildings. The Bank’s senior management team, including the lending function, contains personnel with strong experience to operate a commercial loan department. This type of lending is attractive due to the higher yields and adjustable rate nature of these loans, and permits the Bank to operate as a more complete community bank and full service institution, offering a wider array of loan products to the communities served. The generally larger balances of such loans is also attractive to Royal Savings as this allows the Bank to operate the lending function more efficiently with fewer personnel required. Such loans totaled $11.5 million as of June 30, 2004. In order to take advantage of local lending opportunities, provide for higher asset yields and to position the Bank as a more full-service financial institution, Royal Savings intends to continue to offer such non-residential mortgage loans, and this will continue to be an area of emphasis for the Bank. The Bank has in place sufficient experienced personnel in this area of lending in order to facilitate expansion of this area going forward.

 

Royal Savings, to a minor extent, also originates construction loans on local residential property as a business strategy to enhance the yield of the loan portfolio, shorten the term to maturity of the loan portfolio, and increase the Bank’s presence in the local market area in connection with builders and real estate agents. Construction loans are made on sites that are either pre-sold or, to a lesser extent, speculative homes. Construction loan terms include a maximum LTV of 80% and terms of no more than one year.

 

As of June 30, 2004, non-mortgage loans totaled $3.2 million, or 9.2% of the loan portfolio. In parallel with the commercial real estate lending activities, the Bank originates commercial business loans to businesses located in the local market area, with such loans secured by various business assets such as inventory or property, plant and equipment. These loans are primarily prime-based loans and thus are short-term adjustable loans that assist in interest rate risk management. Royal Savings does originate a few fixed rate commercial business loans, with terms generally limited to approximately 3-5 years. This area of lending is expected to be increased and the Bank has in place the required personnel expertise needed to adequately manage and expand this business activity. Consumer lending has not been an area of emphasis for Royal Savings, due to the need for additional personnel to originate and service

 

RP Financial, LC.

Page 1.15

 

such loans. Consumer loans totaled $183,000 as of June 30, 2004, and consisted mostly of secured personal loans. These loans are offered in order to provide a broader product line for customers, however such loans are not actively marketed. Such loans are higher yielding and short-term loans, thus assisting in reaching income and interest rate risk goals.

 

Exhibit I-11 provides a summary of the Bank’s lending activities over the past two years, which shows that originations of 1-4 family permanent mortgage loans accounted for $7.84 million, or 52.3% of the Bank’s total lending volume during fiscal 2004. Loan originations increased noticeably from fiscal 2003 to 2004, reflecting the new management team and focus on building the loan portfolio. Commercial real estate and commercial business lending constituted the Bank’s other most active area of lending during the past two years, with such originations totaling $6.96 million during fiscal 2004, or 46.6% of all loan originations. In addition to the more active origination levels during fiscal 2004, the Bank also was involved in purchasing loan participations from other parties in the regional market area. Such purchases, which consisted of participations in loans secured by commercial real estate or multi-family properties, totaled $9.2 million. This represents an intended strategy of building the loan portfolio through selected loan purchases.

 

Asset Quality

 

The Bank’s balance of non-performing assets and accruing loans that are more than 90 days past due has been moderate over the past two fiscal years, equaling 0.64% and 0.14% of assets as of June 30, 2003 and June 30, 2004, respectively. The consistently strong credit quality has been realized through aggressive oversight of the loan portfolio and selective underwriting. As shown in Exhibit I-12, the Bank’s balance of problem assets at June 30, 2004 consisted of $111,000 of non-accruing loans and $17,000 of loans greater than 90 days past due and still accruing. The non-accruing loan balance consisted of loans secured by multi-family property.

 

The Bank reviews and classifies assets on a quarterly basis and establishes loan loss provisions based on the overall quality, size and composition of the loan portfolio, as well other factors such as historical loss experience, industry trends and local real estate market and economic conditions. The Bank maintained valuation allowances of $236,000 at June 30, 2004, equal to 0.68% of net loans receivable and 184.38% of non-performing assets and accruing loans more than 90 days past due.

 

RP Financial, LC.

Page 1.16

 

Funding Composition and Strategy

 

Deposits have consistently accounted for the Bank’s primary source of funds and at June 30, 2004 deposits equaled 97.5% of Royal Savings’ interest-bearing funding composition. Exhibits I-13 and I-14 provide the interest rate and maturity composition of the CD portfolio at June 30, 2004. Lower costing demand accounts, along with savings accounts, comprise the largest component of the Bank’s deposit composition, with such deposits amounting to $43.2 million or 55.9% of total deposits at June 30, 2004. Over the past year, the Bank’s concentration of demand and savings accounts comprising total deposits has increased, as demand and savings account deposits equaled 51.6% of Royal Savings’ total deposits at fiscal year end 2003. The increase in core deposits as a percent of total deposits was realized through growth of all account types.

 

CDs represent the second largest component of the Bank’s deposit composition, with Royal Savings’ current CD composition reflecting a higher concentration of short-term CDs (maturities of one year or less). As of June 30, 2004, the CD portfolio totaled $34.0 million or 44.1% of total deposits and 77% of the CDs were scheduled to mature in one year or less. Royal Savings does not hold any brokered CDs in portfolio. Deposit rates offered by the Bank are generally in the middle of the range of rates offered by local competitors.

 

A minor amount of borrowings, consisting of one FHLB advance, has been utilized by the Royal Savings in the most recent fiscal year, primarily to assist in interest rate risk management and to support expansion of operations, as such funds were used to purchase investment securities and fund certain lending operations. The Bank maintained $2.0 million of borrowings at June 30, 2004, versus a zero balance as of June 30, 2000. Exhibit I-15 provides further detail of Royal Savings’ borrowing activities during the past two fiscal years. The advance is a medium term advance maturing in September 2006. As stated in the Bank’s business plan, Royal Savings is not expecting to utilize additional borrowings to fund the desired growth of the Bank following completion of the conversion, as deposit growth, internal funding and stock proceeds are expected to provide sufficient funds for operations. To the extent additional borrowings are utilized by the Bank, such borrowings would most likely consist of FHLB advances.

 

RP Financial, LC.

Page 1.17

 

Subsidiary Operations

 

As of June 30, 2004, Royal Savings did not have any operating subsidiaries.

 

Legal Proceedings

 

Royal Savings is involved in routine legal proceedings occurring in the ordinary course of business which, in the aggregate, are believed by management to be immaterial to the financial condition of the Bank.

 

RP Financial, LC.

Page 2.1

 

II- MARKET AREA

 

Introduction

 

The Bank conducts operations in the southeastern portion of the Chicago metropolitan area, primarily in Cook County, through a network of a headquarters office and 2 branch offices (see Exhibit II-1 for details of the Bank’s office facilities). Minor levels of business activities occur in Will County to the south of Cook County and in northwestern section of Indiana, primarily in Lake County. The population of the Chicago MSA was 9.4 million as of 2004, representing an increase from the 2000 census, and thus the Chicago MSA represents one of the largest metropolitan statistical areas in the United States, with a largely diversified economy, employment base, and population base. The Bank’s branch office network, which is dispersed across the southeastern portion of the region, is characterized by a cross-section of the region’s population base, businesses and property characteristics.

 

The Bank holds only a minor market share of deposits in Cook County (approximately 0.05%), and thus has potential for additional growth if given the financial strength and ability to establish a wider branch office network with greater access to customers. Royal Savings competes with a large number of national, regional and locally-based financial institutions. The primary financial institution competitors include Charter One Bank, N.A., MB Financial Bank, N.A., First National Bank of IL and Pullman Bank and Trust. Other larger competitors include Bank One N.A., LaSalle Bank N.A., Harris Trust and Savings Bank and Citibank, FSB. In addition, the Bank faces competition from mortgage banking companies, consumer finance companies, investment houses, mutual funds, insurance companies and other financial intermediaries. Over the past couple of years, the competitive factors have intensified with the growth of electronic delivery systems (particularly the Internet).

 

Future growth opportunities for the Bank depend on future growth and stability of the regional economy (in particular the Chicago metropolitan statistical area), demographic growth trends and the nature and intensity of the competitive environment. These factors have been briefly examined in the following pages to help determine the growth potential that exists for the

 

RP Financial, LC.

Page 2.2

 

Bank and the relative economic health of the Bank’s market area, and the relative impact on value.

 

National Economic Factors

 

The business potential of a financial institution is partially dependent on the future operating environment and growth opportunities for the banking industry and the economy as a whole. The major stock exchange indices increased during calendar year 2003 and through mid-2004, due to the completion of major military action in Iraq, a somewhat improved economic performance by the nation’s economy, a continued expectation that interest rates would remain at current historical low levels, low inflation rates and more positive recent corporate earnings reports. However, during April and May 2004, increasing signs of a strongly growing economy led to fears of inflation, higher interest rates and a potential slowdown of the national economy, which resulted in a moderate pullback in the stock market during mid-2004. The price of oil reached all time highs approaching $50 per barrel, which also led to fears of adverse economic impacts. The national unemployment rate has remained relatively low in comparison to recent historical levels, and was 5.5% as of July 2004, representing a decline from 6.2% one year earlier. The size of the projected federal budget deficit in the future has also led to a level of uncertainty about future economic performance. As an indication of the changes in the nation’s stock markets over the last twelve months, as of September 3, 2004, the Dow Jones Industrial Average closed at 10260.2, an increase of 8.0% from September 3, 2003, while the NASDAQ Composite Index stood at 1844.5, a decrease of 0.7% over the same time period. The Standard & Poors 500 Index totaled 1113.6 as of September 3, 2004, an increase of 9.0%.

 

Economic and Interest Rate Environment

 

The future success of Royal Savings’ operations is partially dependent upon various national and local economic trends. Trends in the national economy improved during calendar year 2003 and in the first half of 2004. Inflation remains relatively low compared to historical levels, increasing at an annual rate of 4.1% for the first six months of 2004. The economic slowdown of 2000 to 2002, the results of the reaction to the September 11 attacks, and other actions by the federal government has eliminated the previous Federal budget surplus and caused

 

RP Financial, LC.

Page 2.3

 

a record budget deficit for fiscal 2004. The economic slowdown has also caused a noticeable increase in unemployment, which increased from several decades lows of below 5.0% in 2000 to 6.0% in late 2003. As of July 2004, the unemployment rate had declined to 5.5%, although a large number of potential workers had stopped seeking employment and thus were not counted among the unemployed. The economy has showed signs of recovery, termed a “jobless recovery”, although certain sectors of the economy remain stagnant. The GDP increased by 4.4% in the first quarter of 2004 and a revised 4.1% in the fourth quarter of 2003, indicating gaining strength to the economy.

 

After remaining at historical lows over the past couple of years, market rates have increased in recent months, following the perception of a strongly growing economy, and statements by the Federal Reserve that it would likely raise key interest rates in the near future. On June 30, 2004, the Federal Reserve raised the key interest rates by 0.25%, in recognition of the current stronger economy. At the July 2004 Federal Reserve meeting, interest rates were again raised by 0.25%, although the Federal Reserve was not specific about future rate change intentions. The Federal Reserve had kept key market interest rates at historical lows not seen since the 1950s, having lowered the key interest rates (federal funds and the discount rate) over a dozen times since January 1, 2001. As of the latest Fed rate increase, effective July 2004, the Fed Funds rate was 1.50%, down from 6.50% at the beginning of 2001, while the Discount Rate stood at 1.25%, down from 6.00% at January 1, 2001. The financial markets had previously “priced in” the expectation of rising interest rates, as the treasury yield curve had risen in the past 3 months. As of September 3, 2004, one- and ten-year U.S. government bonds were yielding 2.06% and 4.24%, respectively, compared to 1.27% and 4.61%, respectively, as of one year ago. See Exhibit II-2 for historical recent interest rate trends.

 

Market Area Demographics

 

Table 2.1 presents information regarding the demographic and economic trends for the Bank’s market area county from 2000 to 2004 and projected through 2009, with additional data provided in Exhibit II-3. Data for the State of Illinois is included for comparative purposes. Cook County maintained a population of approximately 5.4 million as of 2004. Reflecting

 

Table 2.1

Royal Savings Bank

Summary Demographic Data

 

    

Base

2000

   

Current

2004

   

Projected

2009

   

% Change

2000-2004

   

% Change

2003-2009

State of Illinois

                         

Total Population:

    12,419,293    12,704,832    13,047,103    2.30    2.69

0-14 Age Group (%):

    22    21    21    -0.07    -0.70

15-34 Age Group (%):

    29    28    28    0.68    1.46

35-54 Age Group (%):

    29    29    29    2.59    1.15

55+ Age Group (%):

    20    21    23    6.67    9.82

Total Households:

    4,591,779    4,693,863    4,816,110    2.22    2.60

$0-24K Households (%):

    25    23    20    -7.29    -9.78

$25-50K Households (%):

    28    26    24    -5.25    -5.40

$50K+ Households (%):

    47    51    56    11.77    12.20

Average Household Income:

    61,557    68,913    78,124    11.97    13.37

Median Household Income:

    47,013    51,444    57,868    9.43    12.49

Per Capita Income:

    23,104    25,772    29,160    11.55    13.15

Cook County

                         

Total Population:

    5,376,741    5,364,329    5,342,232    -0.23    -0.41

0-14 Age Group (%):

    22    22    21    -1.25    -4.03

15-34 Age Group (%):

    30    29    29    -4.16    -1.65

35-54 Age Group (%):

    28    28    28    1.43    -2.12

55+ Age Group (%):

    20    21    22    4.52    7.40

Total Households:

    1,974,181    1,967,430    1,956,540    -0.34    -0.55

$0-24K Households (%):

    26    24    22    -7.76    -10.66

$25-50K Households (%):

    28    26    24    -7.43    -8.08

$50K+ Households (%):

    46    50    54    8.09    8.20

Average Household Income:

    62,495    69,408    78,140    11.07    12.58

Median Household Income:

    46,409    50,093    56,142    7.94    12.08

Per Capita Income:

    23,227    25,692    28,866    10.61    12.35

 

Source:  Claritas

 

RP Financial, LC.

Page 2.5

 

trends across the nation, the more urbanized county of Cook reported a slight population loss from 2000 to 2004 of 0.23%, compared to a 2.3% increase for the state of Illinois. This population trend represents a less than desirable trend for Bank as all of the Bank’s deposits are located in Cook County, and that the most attractive growth trends are located in the outlying counties. The larger population base of Cook County provides an adequate source of business for financial institutions, although the Bank is relatively small institution that faces many smaller and larger competitors in the local market area. As shown in Table 2.1, the number and growth of households performed similarly over the same time period, although there is a national trend towards a lower average household size and an increase in the number of households. In addition, the population and household growth trends described above are forecast to remain relatively constant over the next five years, indicating that the Bank’s business prospects are expected to remain stable in the foreseeable future. Table 2.1 also details the age distribution of the residents of Cook County, and reveals that the market area’s population base is relatively dispersed in terms of age.

 

Examination of another characteristic of the Bank’s market area, median household income and per capita income, revealed that Cook County reported income levels in line with the statewide averages. The moderate income levels in Cook County indicate the potential for reduced levels of financial institution deposits, deposit growth and need for financial institution services. Local household income distribution data also revealed a similar level of income level in Cook County versus the statewide averages.

 

Local Economy

 

Due to the large size of the Chicago metropolitan area population base and economy, the Bank operates in a very diversified economic and demographic area, where all economic sectors are fully represented. As shown in Table 2.2 below, the State of Illinois and Cook County both reported the largest proportion of employment in services, wholesale/retail trade, manufacturing and government, indicative of a relatively diversified employment base. The state of Illinois recorded a higher level of manufacturing employment, while Cook County recorded a higher level of transportation/public utilities employment. However, the employment base of Cook

 

RP Financial, LC.

Page 2.6

 

County was quite similar to the statewide averages, indicative of the large economy in the Chicago metropolitan area. See Exhibit II-4 for additional data and details.

 

Table 2.2

Primary Market Area Employment Sectors

(Percent of Labor Force)

 

Employ. Sectors

    Illinois
     Cook County
  

Services

    32.4 %   36.2 %

Wholesale/Ret. Trade

    20.7     19.0  

Manufacturing

    12.9     11.9  

Government

    12.0     10.8  

Finance, Ins., Real Estate

    9.1     10.8  

Transportation/Public Util.

    5.5     6.7  

Construction

    5.0     4.1  

Agriculture

    1.4     0.0  

Other

    1.0     0.5  
    
 
     100.0 %   100.0 %

 

Source:  REIS DataSource.

 

As shown in Table 2.3, similar to national trends, the unemployment rates in Illinois and Cook County decreased in the last twelve months. Both Illinois and Cook County had unemployment rates above the national average, an unfavorable sign as it reflects a certain weakness to the job market for workforce employers.

 

Table 2.3

Market Area Unemployment Trends

 

Region

   

June 2003

Unemployment

    

June 2004

Unemployment

  

United States

    6.5 %   5.8 %

Illinois

    6.6 %   5.9 %

Cook County

    7.6 %   6.6 %

 

Source:  U.S. Bureau of Labor Statistics.

 

RP Financial, LC.

Page 2.7

 

Competition

 

Due to the size of the market in which the Bank operates, Royal Savings holds a minimal market share of deposits of 0.05% in Cook County (see Table 2.4). With the current market share below 1%, additional deposit growth in the market area is likely achievable, particularly as Royal Savings competes with a number of regional and super-regional competitors, along with a number of locally-based financial institutions.

 

Table 2.5 displays deposit trends for thrifts, savings banks and commercial banks in Illinois and Cook County. Since 1999, deposit growth in Illinois has been positive for commercial banks and savings banks, while thrift institutions have lost deposits. Savings banks have recorded the highest growth rate. Commercial banks continue to maintain the majority of deposit funds in the state of Illinois, approximately 92% of all deposits as of the most recent date.

 

Within Cook County, Royal Savings recorded a decrease in the balance of deposits of 2.5% since 1999. This resulted in a reduction in Royal Savings’ deposit market share from 0.06% in 1999 to 0.05% in 2003. Commercial banks increased deposits in Cook County at an annual rate of 7.8%, while savings institutions recorded a decline in deposits at an annual rate of 8.9%. Commercial banks have approximately 94% of deposit funds in Cook County.

 

With regard to lending competition in the local market area, the Bank anticipates the most significant competition from larger financial institutions such as MB Financial, LaSalle Bank, N.A., Citibank, FSB along with other mid-sized commercial banks. In addition other competitors include other local and regional mortgage companies, independent mortgage brokers and credit unions in originating mortgage and non-mortgage loans. To remain competitive, Royal Savings focuses on providing residential and non-residential mortgage loans, multi-family loans and commercial business loans and retail deposit services to existing customers and the new customers attracted to the Bank. As indicated in the mission statement, the Bank’s mission is to position itself to exceed every expectation for providing high quality personal customer service. This strategy is designed to identify a niche in the market where the Bank can compete against other institutions.

 

Table 2.4

Deposit Share

Cook County

 

                       

# of

Branches

    Deposits as of June 30,
    Market  

Holding Company

    Institution
   City
    State
            2001
    2002
    2003
    Share
  
                             ($000)    ($000)    ($000)    (%)  

J.P. Morgan Chase & Co.

    Bank One
National
Association		   Chicago    IL    B    137    $ 29,046,949    $ 31,488,810    $ 36,472,614    23.64 %

LaSalle Bank Corporation

    LaSalle Bank
NA		   Chicago    IL    B    111    $ 23,122,409    $ 23,414,497    $ 23,966,499    15.53 %

BMO Financial Group

    Harris Trust
& Savings
Bank		   Chicago    IL    B    50    $ 8,483,130    $ 9,202,962    $ 9,858,456    6.39 %

Citigroup Inc.

    Citibank FSB   Reston    VA    T    42    $ 6,616,199    $ 7,464,552    $ 7,546,703    4.89 %

Northern Trust Corp.

    Northern
Trust Co.		   Chicago    IL    B    8    $ 7,735,448    $ 6,543,349    $ 7,112,482    4.61 %

Royal Bank of Scotland Group

    Charter One
Bank NA		   Cleveland    OH    B    84    $ 5,370,033    $ 4,918,728    $ 4,782,355    3.10 %

Bank of America Corp.

    Bank of
America NA		   Charlotte    NC    B    8    $ 2,585,777    $ 2,847,708    $ 3,608,341    2.34 %

Fifth Third Bancorp

    Fifth Third
Bank		   Grand Rapids    Ml    B    33    $ 2,971,746    $ 3,171,965    $ 3,322,016    2.15 %

MB Financial Inc.

    MB Financial
Bank N.A.		   Chicago    IL    B    42    $ 3,154,436    $ 3,228,251    $ 3,144,652    2.04 %

MAF Bancorp Inc.

    Mid America
Bank FSB		   Clarendon
Hills		    IL    T    28    $ 3,065,494    $ 3,406,853    $ 3,077,599    1.99 %

Corus Bankshares Inc.

    Corus Bank
NA		   Chicago    IL    B    14    $ 2,242,604    $ 2,081,046    $ 2,252,641    1.46 %

Taylor Capital Group Inc.

    Cole Taylor
Bank		   Rosemont    IL    B    13    $ 1,737,297    $ 1,821,134    $ 1,971,699    1.28 %

First Midwest Bancorp Inc.

    First Midwest
Bank		   Itasca    IL    B    18    $ 1,983,935    $ 2,011,710    $ 1,808,512    1.17 %

TCF Financial Corp.

    TCF National
Bank		   Wayzata    MN    B    30    $ 1,402,407    $ 1,383,574    $ 1,408,476    0.91 %

U.S. Bancorp

    U.S. Bank NA   Cincinnati    OH    B    32    $ 1,384,577    $ 1,328,777    $ 1,304,944    0.85 %

Parkway Bancorp Inc.

    Parkway
Bank & Trust
Company		   Harwood
Heights		    IL    B    16    $ 1,110,173    $ 1,230,262    $ 1,293,476    0.84 %

Popular Inc.

    Banco
Popular North
America		   New York    NY    B    20    $ 1,066,624    $ 1,065,657    $ 1,196,972    0.78 %

Marquette National Corp.

    Marquette
Bank		   Chicago    IL    B    17    $ 944,341    $ 1,010,149    $ 1,113,580    0.72 %

CIB Marine Bancshares Inc.

    CIB Bank   Hillside    IL    B    12    $ 725,194    $ 926,506    $ 1,021,167    0.66 %

PrivateBancorp Inc.

    PrivateBank
& Trust Co.		   Chicago    IL    B    3    $ 550,563    $ 759,768    $ 953,338    0.62 %

FBOP Corp.

    Pullman Bank
& Trust
Company		   Chicago    IL    B    9    $ 860,914    $ 905,090    $ 944,291    0.61 %

Shorebank Corp.

    ShoreBank   Chicago    IL    B    11    $ 818,503    $ 864,466    $ 856,963    0.5_ %

Standard Bancshares Inc.

    Standard
Bank & Trust
Company		   Hickory Hills    IL    B    14    $ 771,529    $ 785,997    $ 841,667    0.55 %

Midwest Banc Holdings Inc.

    Midwest
Bank & Trust
Company		   Elmwood Park    IL    B    8    $ 660,827    $ 767,623    $ 833,700    0.54 %

Cummins-American Corp.

    Glenview
State Bank		   Glenview    IL    B    7    $ 621,406    $ 684,975    $ 765,675    0.50 %

American Chartered Bncp Inc.

    American
Chartered
Bank		   Schaumburg    IL    B    5    $ 470,628    $ 538,477    $ 764,466    0.50 %

First American Bank Corp

    First
American
Bank		   Carpentersville    IL    B    13    $ 593,044    $ 734,843    $ 758,628    0.49 %

Financial Federal MHC

    BankFinancial
FSB (MHC)		   Olympia
Fields		    IL    T    13    $ 836,452    $ 772,143    $ 739,487    0.48 %

Wintrust Financial Corp.

    North Shore
Cmnty
Bk&Tr		   Wilmette    IL    B    7    $ 435,562    $ 529,917    $ 659,210    0.43 %

BMO Financial Group

    Harris Bank
Barrington
NA		   Barrington    IL    B    2    $ 537,277    $ 566,028    $ 635,206    0.41 %

Liberty Bank for Savings

    Liberty Bank
for Savings		   Chicago    IL    S    4    $ 539,218    $ 575,055    $ 624,569    0.40 %

Hershenhorn Bancorp. Inc.

    First B&TC
of Illinois		   Palatine    IL    B    2    $ 1,095,991    $ 762,611    $ 599,716    0.39 %

Bridgeview Bancorp Inc.

    Bridgeview
Bank Group		   Bridgeview    IL    B    13    $ 491,725    $ 496,627    $ 544,136    0.35 %

SBC Incorporated

    State Bank of
Countryside		   Countryside    IL    B    4    $ 456,756    $ 491,828    $ 539,169    0.35 %

BMO Financial Group

    Harris Bank
Palatine NA		   Palatine    IL    B    7    $ 448,544    $ 470,749    $ 536,998    0.35 %

Golden West Financial

    World SB
FSB		   Oakland    CA    T    10    $ 225,775    $ 252,217    $ 505,752    0.33 %

Great Lakes Fncl Resources Inc

    Great Lakes
Bank NA		   Blue Island    IL    B    10    $ 497,460    $ 523,670    $ 493,671    0.32 %

Amalgamated Investments Co.

    Amalgamated
Bank of
Chicago		   Chicago    IL    B    1    $ 435,022    $ 414,059    $ 478,021    0.31 %

National City Corp.

    National City
Bank of MI/
IL		   Bannockburn    IL    B    12    $ 375,977    $ 411,843    $ 466,789    0.30 %

BMO Financial Group

    Harris Bk
Glencoe-
Nbrook NA		   Glencoe    IL    B    3    $ 417,779    $ 431,343    $ 462,235    0.30 %

Associated Banc-Corp

    Associated
Bank Chicago		   Chicago    IL    B    6    $ 463,762    $ 446,123    $ 460,963    0.30 %

Peotone Bancorp Inc.

    Founders
Bank		   Worth    IL    B    6    $ 383,188    $ 416,128    $ 449,362    0.29 %

Wintrust Financial Corp.

    Barrington
Bank & Trust
Co NA		   Barrington    IL    B    2    $ 235,629    $ 332,723    $ 447,150    0.29 %

BMO Financial Group

    Harris Bank
Winnetka NA		   Winnetka    IL    B    2    $ 317,284    $ 351,530    $ 421,707    0.27 %

Lakeside Bancorp Inc.

    Lakeside
Bank		   Chicago    IL    B    6    $ 293,515    $ 346,888    $ 420,878    0.27 %

FBOP Corp.

    Regency
Savings Bank
A FSB		   Naperville    IL    T    6    $ 349,709    $ 350,088    $ 382,894    0.25 %

Broadway Bank

    Broadway
Bank		   Chicago    IL    B    4    $ 185,133    $ 334,043    $ 376,387    0.24 %

Natl Republic Bk of Chicago

    Natl Republic
Bk of Chicago		   Chicago    IL    B    2    $ 245,829    $ 299,087    $ 369,777    0.24 %

Albank Corporation

    Albany Bank
& Trust
Company N		   Chicago    IL    B    4    $ 359,124    $ 383,215    $ 369,531    0.24 %

First Savings Bank Hegewisch

    First Savings
Bank
Hegewisch		   Chicago    IL    S    6    $ 324,088    $ 356,987    $ 363,532    0.24 %

Builders Financial Corporation

    Builders Bank   Chicago    IL    B    2    $ 315,549    $ 487,669    $ 362,234    0.23 %

BMO Financial Group

    Harris Bank
Argo		   Summit    IL    B    6    $ 288,017    $ 330,558    $ 358,409    0.23 %

Metropolitan Bank Group Inc.

    Archer Bank   Chicago    IL    B    9    $ 264,070    $ 300,178    $ 357,586    0.23 %

Community Savings Bank

    Community
Savings Bank		   Chicago    IL    S    2    $ 310,049    $ 329,414    $ 338,336    0.22 %

LDF Incorporated

    Labe Bank   Chicago    IL    T    2    $ 217,029    $ 287,522    $ 327,000    0.21 %

GreatBanc Inc.

    First National
Bank		   Chicago
Heights		    IL    B    4    $ 247,248    $ 299,629    $ 319,344    0.21 %

Metropolitan Bank Group Inc.

    North
Community
Bank		   Chicago    IL    B    17    $ 231,004    $ 258,151    $ 300,598    0.19 %

First Evanston Bancorp Inc

    First Bank &
Trust		   Evanston    IL    B    3    $ 234,499    $ 280,814    $ 297,883    0.19 %

FBOP Corp.

    Cosmopolitan
Bank & Trust		   Chicago    IL    B    1    $ 226,249    $ 241,428    $ 294,489    0.19 %

Palos Bancshares Inc.

    Palos Bank &
Trust
Company		   Palos Heights    IL    B    2    $ 237,702    $ 252,260    $ 289,753    0.19 %

CFS Bancorp Inc.

    Citizens Finl
Services FSB		   Munster    IN    T    7    $ 216,663    $ 207,209    $ 280,795    0.18 %

BMO Financial Group

    Harris Bank
Arlington-
Meadows		   Rolling
Meadows		    IL    B    2    $ 242,456    $ 258,053    $ 271,225    0.18 %

Hoyne Savings Bank

    Hoyne
Savings Bank		   Chicago    IL    S    4    $ 262,326    $ 264,894    $ 267,977    0.17 %

Seaway Bancshares Inc.

    Seaway NB of
Chicago		   Chicago    IL    B    5    $ 238,366    $ 265,058    $ 267,074    0.17 %

Metropolitan Bank Group Inc.

    Plaza Bank
Norridge		   Norridge    IL    B    6    $ 231,050    $ 248,758    $ 265,488    0.17 %

First Oak Brook Bancshares

    Oak Brook
Bank		   Oak Brook    IL    B    6    $ 178,839    $ 231,744    $ 265,424    0.17 %

Foster Bankshares Inc.

    Foster Bank   Chicago    IL    B    4    $ 208,264    $ 231,409    $ 257,476    0.17 %

 

Table 2.4

Deposit Share

Cook County

 

                        # of
Branches
    Deposits as of June 30,
    Market  

Holding Company

    Institution
   City
    State
            2001
    2002
    2003
    Share
  
                             ($000)    ($000)    ($000)    (%)  

NW Suburban Bancorp Inc.

    Mount
Prospect
National Bank		   Mount
Prospect		    IL    B    1    $ 167,956    $ 201,600    $ 254,078    0.16 %

Commerce Bancorp Inc.

    National Bank
of Commerce		   Berkeley    IL    B    1    $ 175,291    $ 231,737    $ 251,246    0.16 %

Chesterfield Financial Corp.

    Chesterfield
FS&LA of
Chicago		   Chicago    IL    T    2    $ 244,557    $ 253,918    $ 248,027    0.16 %

Republic Bancorp Co.

    Republic Bank
of Chicago		   Darien    IL    B    7    $ 210,387    $ 223,749    $ 239,470    0.16 %

GreatBanc Inc.

    Greatbank A
National Assn.		   Evanston    IL    B    4    $ 146,096    $ 184,685    $ 222,400    0.14 %

Prospect FSB

    Prospect FSB   Worth    IL    T    4    $ 171,343    $ 198,652    $ 213,071    0.14 %

Lincolnwood Bancorp Inc.

    Bank of
Lincolnwood		   Lincolnwood    IL    B    3    $ 209,669    $ 210,754    $ 204,104    0.13 %

FBOP Corp.

    First Bank of
Oak Park		   Oak Park    IL    B    4    $ 186,515    $ 172,686    $ 203,177    0.13 %

First Banks Inc.

    First Bank   St. Louis    MO    B    6    $ 282,937    $ 256,021    $ 197,082    0.13 %

Devon Bancorp Inc.

    Devon Bank   Chicago    IL    B    5    $ 192,072    $ 191,578    $ 196,353    0.13 %

Wintrust Financial Corp.

    Northbrook
Bank & Trust
Co		   Northbrook    IL    B    1    $ 51,800    $ 119,221    $ 194,936    0.13 %

Wintrust Financial Corp.

    Northview
Bank & Trust		   Northfield    IL    B    2    $ 171,059    $ 174,007    $ 194,228    0.13 %

Metropolitan Bank Group Inc.

    Chicago
Community
Bank		   Chicago    IL    B    5    $ 187,070    $ 188,452    $ 194,047    0.13 %

HPK Financial Corporation

    Hyde Park
Bank & Trust
Company		   Chicago    IL    B    2    $ 184,034    $ 193,776    $ 193,186    0.13 %

Heritage Community Bancorp

    Heritage
Community
Bank		   Glenwood    IL    B    4    $ 167,445    $ 176,656    $ 192,318    0.12 %

First Lansing Bancorp Inc.

    First National
Bank of IL		   Lansing    IL    B    2    $ 187,449    $ 188,233    $ 191,778    0.12 %

Metropolitan Bank Group Inc.

    Citizens Bank
Illinois NA		   Berwyn    IL    B    4    $ 202,550    $ 207,786    $ 191,193    0.12 %

Suburban Illinois Bncp Inc.

    Suburban
Bank & Trust
Company		   Elmhurst    IL    B    5    $ 164,413    $ 166,247    $ 190,144    0.12 %

Hemlock Federal Financial Corp

    Hemlock
Federal Bk For
Svgs		   Oak Forest    IL    T    5    $ 171,691    $ 182,419    $ 189,198    0.12 %

AJS Bancorp Inc. (MHC)

    A J Smith FSB
(MHC)		   Midlothian    IL    T    3    $ 160,952    $ 168,518    $ 188,384    0.12 %

First Northwest Bancorp Inc.

    First
Northwest
Bank		   Arlington
Heights		    IL    B    2    $ 148,307    $ 171,813    $ 187,860    0.12 %

First Security Bancorp Inc.

    First Security
Trust & Svgs
Bk		   Elmwood
Park		    IL    B    1    $ 189,454    $ 198,231    $ 186,908    0.12 %

BMO Financial Group

    Harris Bank
Bartlett		   Bartlett    IL    B    2    $ 177,839    $ 179,788    $ 186,452    0.12 %

BMO Financial Group

    Harris Bank
Westchester		   Westchester    IL    B    2    $ 159,588    $ 174,709    $ 184,045    0.12 %

FBOP Corp.

    Park NB&TC
of Chicago		   Chicago    IL    B    1    $ 198,583    $ 193,977    $ 183,598    0.12 %

Lincoln Park Savings Bank

    Lincoln Park
Savings Bank		   Chicago    IL    S    4    $ 116,834    $ 143,889    $ 181,424    0.12 %

Royal American Corporation

    Royal
American
Bank		   Inverness    IL    B    1    $ 120,903    $ 143,876    $ 179,812    0.12 %

CBR Holdings Inc.

    Community
Bank of
Ravenswood		   Chicago    IL    B    2    $ 146,066    $ 156,022    $ 178,578    0.12 %

Chicago Shore Corporation

    Delaware
Place Bank		   Chicago    IL    B    1    $ 137,545    $ 185,657    $ 176,573    0.11 %

Second FS&LA of Chicago

    Second
FS&LA of
Chicago		   Chicago    IL    T    4    $ 167,645    $ 183,852    $ 176,503    0.11 %

Umbrella Bancorp Inc.

    UmbrellaBank
FSB		   Chicago    IL    T    1    $ 0    $ 0    $ 172,998    0.11 %

Metropolitan Bank Group Inc.

    Metropolitan
B&TC		   Chicago    IL    B    7    $ 149,392    $ 159,341    $ 171,784    0.11 %

First Mutual Bncp of IL Inc.

    Mutual Bank   Harvey    IL    B    2    $ 65,089    $ 120,304    $ 170,226    0.11 %

F.N.B.C. of La Grange Inc.

    First NB of La
Grange		   La Grange    IL    B    3    $ 130,445    $ 155,641    $ 167,170    0.11 %

BMO Financial Group

    Harris Bank
Roselle		   Roselle    IL    B    2    $ 157,062    $ 159,035    $ 163,791    0.11 %

Prairie Financial Corporation

    Prairie Bank &
Trust
Company		   Bridgeview    IL    B    1    $ 132,519    $ 177,518    $ 162,055    0.11 %

HeritageBanc Inc.

    Heritage Bank   Chicago
Heights		    IL    B    2    $ 136,938    $ 146,090    $ 160,593    0.10 %

Western Springs Bancorp Inc.

    Western
Springs NB &
Trust		   Western
Springs		    IL    B    2    $ 136,044    $ 147,217    $ 158,867    0.10 %

Bank Leumi Le-lsrael

    Bank Leumi
USA		   New York    NY    B    1    $ 167,643    $ 142,753    $ 157,753    0.10 %

Metropolitan Bank Group Inc.

    First
Commercial
Bank		   Chicago    IL    B    4    $ 142,237    $ 127,907    $ 157,702    0.10 %

1st Brookfield Inc.

    First NB of
Brookfield		   Brookfield    IL    B    1    $ 125,230    $ 133,594    $ 157,676    0.10 %

BMO Financial Group

    Harris Bank
Elk Grove
Natlona		   Elk Grove
Village		    IL    B    2    $ 141,068    $ 142,969    $ 157,238    0.10 %

George Washington Bancorp Inc

    George
Washington
Savings Bank		   Oak Lawn    IL    S    1    $ 132,373    $ 152,657    $ 164,866    0.10 %

National Bancorp Inc.

    AmericaUnited
B&TC USA		   Schaumburg    IL    B    2    $ 116,574    $ 144,663    $ 152,257    0.10 %

Central FS&LA

    Central
FS&LA		   Cicero    IL    T    2    $ 150,143    $ 150,308    $ 152,242    0.10 %

BMO Financial Group

    Harris Bank
Hinsdale NA		   Hinsdale    IL    B    1    $ 118,341    $ 131,769    $ 151,164    0.10 %

Wintrust Financial Corp.

    Hinsdale Bank
& Trust
Company		   Hinsdale    IL    B    2    $ 79,612    $ 120,205    $ 149,247    0.10 %

Community Bank Corp.

    Park Ridge
Community
Bank		   Park Ridge    IL    B    1    $ 118,707    $ 135,685    $ 147,696    0.10 %

Oak Park River Forst BshrsInc

    Community
Bank Of Oak
Park		   Oak Park    IL    B    2    $ 89,512    $ 106,386    $ 143,727    0.09 %

Cornerstone Bancorp Inc.

    Cornerstone
National
B&TC		   Palatine    IL    B    1    $ 56,630    $ 100,492    $ 142,877    0.09 %

Greater Chicago Fncl. Corp.

    Austin Bank of
Chicago		   Chicago    IL    B    3    $ 122,638    $ 138,555    $ 139,583    0.09 %

NC Bancorp Inc.

    Edens Bank   Wilmette    IL    B    5    $ 110,566    $ 118,244    $ 139,119    0.09 %

Brickyard Bancorp Inc.

    Brickyard
Bank		   Lincolnwood    IL    B    1    $ 143,113    $ 165,643    $ 136,418    0.09 %

I.S.B. Financial Corp.

    Interstate Bank   Oak Forest    IL    B    2    $ 113,236    $ 118,952    $ 128,526    0.08 %

First Business Bancorp Co.

    South Central
Bank		   Chicago    IL    B    3    $ 110,486    $ 121,700    $ 126,720    0.08 %

Polish National Alliance

    Alliance FSB   Niles    IL    T    2    $ 111,820    $ 115,963    $ 125,716    0.08 %

NCB Holdings Inc.

    New Century
Bank		   Chicago    IL    B    1    $ 73,613    $ 110,179    $ 125,700    0.08 %

First Forest Park Corporation

    Forest Park
NB&TC		   Forest Park    IL    B    2    $ 103,753    $ 116,842    $ 124,368    0.08 %

Midland Capital Holdings Corp.

    Midland
FS&LA		   Bridgeview    IL    T    3    $ 108,023    $ 115,370    $ 121,559    0.08 %

BMO Financial Group

    Harris Bank
Wilmette NA		   Wilmette    IL    B    1    $ 99,913    $ 112,766    $ 119,634    0.08 %

Inland Bancorp Holding Company

    Westbank   Westchester    IL    B    2    $ 66,568    $ 95,985    $ 119,327    0.08 %

New Asia Bancorp Incorporated

    NAB Bank   Chicago    IL    B    3    $ 105,217    $ 118,081    $ 117,969    0.08 %

BMO Financial Group

    NLSB   New Lenox    IL    B    1    $ 85,247    $ 95,513    $ 115,681    0.07 %

Ben Franklin Bank of Illinois

    Ben Franklin
Bank of
Illinois		   Arlington
Heights		    IL    T    5    $ 115,011    $ 117,575    $ 114,219    0.07 %

F.F. Holding Corporation

    Oak Bank   Chicago    IL    B    2    $ 92,500    $ 101,961    $ 110,130    0.07 %

Charter Bancorp

    Charter Bank
& Trust NA		   Hoffman
Estates		    IL    B    3    $ 109,016    $ 108,893    $ 108,932    0.07 %

BMO Financial Group

    Harris Bank
Hoffman-
Schaumburg		   Hoffman
Estates		    IL    B    2    $ 92,725    $ 87,537    $ 108,889    0.07 %

 

Table 2.4

Deposit Share

Cook County

 

                        

# of

Branches

    Deposits as of June 30,
   

Market

Share

  

Holding Company

   

Institution

    City
    State
            2001
    2002
    2003
   
                              ($000)    ($000)    ($000)    (%)  

First Suburban Bancorp Corp.

    First Suburban National Bank    Maywood    IL    B    4    $ 114,769    $ 114,305    $ 102,365    0.07 %

University Bancorp. Inc.

    University National Bank    Chicago    IL    B    2    $ 90,830    $ 95,944    $ 100,180    0.06 %

Illinois-Service FS&LA

    Illinois-Service FS&LA    Chicago    IL    T    2    $ 89,908    $ 94,605    $ 98,850    0.06 %

IBC Bancorp Inc.

    International Bank of Chicago    Chicago    IL    B    3    $ 80,147    $ 83,073    $ 96,528    0.06 %

Burling Bank

    Burling Bank    Chicago    IL    B    1    $ 87,474    $ 90,506    $ 96,253    0.06 %

Platinum Bancshares Inc.

    Platinum Community Bank    Rolling Meadows    IL    T    1    $ 48,099    $ 68,870    $ 95,730    0.06 %

Highland Community Company

    Highland Community Bank    Chicago    IL    B    4    $ 110,699    $ 103,535    $ 94,294    0.06 %

Park Bancorp Inc.

    Park FSB    Chicago    IL    T    2    $ 93,575    $ 91,412    $ 93,381    0.06 %

First Equity Corporation

    1st Equity Bank    Skokie    IL    B    1    $ 55,321    $ 82,530    $ 92,031    0.06 %

Northbrook Investments

    North FSB    Chicago    IL    T    2    $ 85,571    $ 92,753    $ 89,841    0.06 %

Central FS&LA of Chicago

    Central FS&LA of Chicago    Chicago    IL    T    3    $ 76,035    $ 83,077    $ 89,636    0.06 %

BB&T Bancshares Corporation

    Bloomingdale Bank & Trust    Bloomingdale    IL    B    2    $ 62,172    $ 66,071    $ 88,665    0.06 %

North Bank

    North Bank    Chicago    IL    B    2    $ 74,480    $ 79,485    $ 86,072    0.06 %

Bank Calumet Inc.

    Bank Calumet NA    Hammond    IN    B    2    $ 73,431    $ 81,356    $ 85,627    0.06 %

First Personal Financial Corp.

    First Personal Bank    Orland Park    IL    B    3    $ 57,699    $ 69,313    $ 83,072    0.05 %

Schaumburg Bancshares Inc.

    Heritage Bank of Schaumburg    Schaumburg    IL    B    1    $ 87,058    $ 87,344    $ 82,439    0.05 %

State Financial Services Corp.

    State Financial Bank NA    Hales Corners    WI    B    3    $ 81,990    $ 88,029    $ 81,009    0.05 %

BMO Financial Group

    Suburban Bank of Barrington    Barrington    IL    B    1    $ 68,668    $ 74,164    $ 79,887    0.05 %

Loomis FS&LA

    Loomis FS&LA    Chicago    IL    T    1    $ 64,571    $ 74,570    $ 77,643    0.05 %

Illinois State Bancorp Inc.

    First Nations Bank of Wheaton    Chicago    IL    B    1    $ 59,012    $ _5,283    $ 75,113    0.05 %

PGB Holdings Inc.

    Pacific Global Bank    Chicago    IL    B    1    $ 45,173    $ 58,204    $ 73,266    0.05 %

Community Holdings Corporation

    Family Bank & Trust Company    Palos Hills    IL    B    1    $ 77,666    $ 80,247    $ 73,064    0.05 %

Crete Bancorporation Inc.

    First United Bank    Crete    IL    B    1    $ 57,237    $ 62,381    $ 70,736    0.05 %

Royal Savings Bank

    Royal Savings Bank    Chicago    IL    S    2    $ 67,245    $ 70,670    $ 70,706    0.05 %

FBA Bancorp Incorporated

    First Bk of the Americas SSB    Chicago    IL    S    5    $ 49,641    $ 50,782    $ 70,325    0.05 %

Wintrust Financial Corp.

    Village B&T of Arlington Hts    Arlington Heights    IL    B    2    $ 49,426    $ 58,410    $ 67,250    0.04 %

Evergreen Community Bank

    Evergreen Community Bank    Evergreen Park    IL    B    1    $ 35,324    $ 51,248    $ 67,062    0.04 %

East Side Financial Inc.

    First East Side Savings Bank    Chicago    IL    T    2    $ 63,489    $ 64,062    $ 65,138    0.04 %

Peoples Bancorp Inc.

    Peoples’ Bank    Arlington Heights    IL    B    1    $ 37,618    $ 52,555    $ 65,079    0.04 %

Premier Bancorp Inc.

    Premier Bank    Wilmette    IL    B    1    $ 55,177    $ 47,371    $ 62,944    0.04 %

Allegiance Community Bank

    Allegiance Community Bank    Tinley Park    IL    B    1    $ 36,442    $ 45,967    $ 59,390    0.04 %

Bancpal Inc.

    Bank of Palatine    Palatine    IL    B    1    $ 53,145    $ 52,603    $ 58,213    0.04 %

Bellwood Bancorporation Inc.

    Greater Chicago Bank    Bellwood    IL    B    4    $ 57,862    $ 57,830    $ 57,805    0.04 %

Citizens Financial Corporation

    Citizens B&TC of Chicago    Chicago    IL    B    1    $ 33,303    $ 50,670    $ 56,434    0.04 %

Family Fed Svgs of Illinois

    Family Fed Svgs of Illinois    Cicero    IL    T    1    $ 49,609    $ 50,587    $ 55,137    0.04 %

West Town Bancorp Inc.

    West Town Savings Bank    Cicero    IL    S    2    $ 47,555    $ 53,103    $ 53,918    0.03 %

Oak Lawn Bank

    Oak Lawn Bank    Oak Lawn    IL    B    1    $ 32,574    $ 42,740    $ 50,991    0.03 %

Wintrust Financial Corp.

    Advantage National Bank    Elk Grove
Village		    IL    B    1    $ 12,073    $ 45,828    $ 50,772    0.03 %

Mutual Federal Bancorp MHC

    Mutual FS&LA of Chicago (MHC)    Chicago    IL    T    1    $ 43,786    $ 48,230    $ 48,890    0.03 %

American Metro Bank

    American Metro Bank    Chicago    IL    B    2    $ 23,947    $ 35,039    $ 47,665    0.03 %

IBC Bancorp Inc.

    Community Bank of Lawndale    Chicago    IL    B    1    $ 50,736    $ 56,555    $ 47,495    0.03 %

First Eagle Bancshares Inc.

    First Eagle National Bank    Hanover Park    IL    B    1    $ 0    $ 33,545    $ 41,873    0.03 %

EFC Bancorp Inc.

    EFS Bank    Elgin    IL    S    1    $ 33,156    $ 37,269    $ 38,167    0.02 %

Howard Savings Bank

    Howard Savings Bank    Glenview    IL    S    1    $ 40,908    $ 40,632    $ 37,821    0.02 %

State Bank of India

    State Bk of India - Chicago Br    Chicago    IL    B    1    $ 3,116    $ 39,516    $ 37,483    0.02 %

Washington Bancshares Inc.

    Washington Fed Bank for Svgs    Chicago    IL    T    1    $ 25,214    $ 29,108    $ 36,470    0.02 %

Amerimark Financial Corporation

    Amerimark Bank    Villa Park    IL    B    1    $ 39,129    $ 42,854    $ 35,825    0.02 %

United Bancorp Inc

    United Trust Bank    Bridgeview    IL    T    2    $ 28,760    $ 32,838    $ 34,339    0.02 %

Pulaski Savings Bank

    Pulaski Savings Bank    Chicago    IL    S    1    $ 34,932    $ 35,393    $ 34,261    0.02 %

Cambank Inc.

    Cambridge Bank    Lake Zurich    IL    B    1    $ 29,823    $ 27,347    $ 33,985    0.02 %

South End Savings. S. B.

    South End Savings. S. B.    Homewood    IL    S    1    $ 33,493    $ 35,802    $ 32,752    0.02 %

North Side FS&LA Chicago

    North Side FS&LA Chicago    Chicago    IL    T    1    $ 24,764    $ 27,369    $ 30,179    0.02 %

Alikat Investments Inc

    Northside Community Bank    Gurnee    IL    B    1    $ 0    $ 0    $ 27,786    0.02 %

First Busey Corp.

    Community Bank of Lemont    Lemont    IL    B    1    $ 5,456    $ 18,243    $ 27,425    0.02 %

JD Financial Group Inc.

    Pan American Bank    Chicago    IL    B    1    $ 29,925    $ 26,367    $ 26,976    0.02 %

Center Financial Corp.

    Center Bank    Los Angeles    CA    B    1    $ 43,596    $ 35,754    $ 26,435    0.02 %

First Banks Inc.

    Continental Cmnty B&TC    Aurora    IL    B    1    $ 114,736    $ 24,275    $ 23,585    0.02 %

A. E. Bancorp Incorporated

    American Enterprise Bank    Buffalo Grove    IL    B    1    $ 1,699    $ 11,039    $ 19,802    0.01 %

Columbus Savings Bank

    Columbus Savings Bank    Chicago    IL    S    1    $ 15,184    $ 15,157    $ 15,562    0.01 %

AMCORE Financial Inc.

    Amcore Bank NA    Rockford    IL    B    2    $ 0    $ 2,451    $ 8,710    0.01 %

American Union S&LA

    American Union S&LA    Chicago    IL    T    1    $ 7,418    $ 7,883    $ 7,736    0.01 %

Washington Mutual Inc.

    Washington Mutual Bank, FA    Stockton    CA    T    20    $ 0    $ 0    $ 2,717    0.00 %

Wells Fargo & Co.

    Wells Fargo Bank Illinois NA    Galesburg    IL    B    1    $ 0    $ 0    $ 2,514    0.00 %

Guaranty Financial MHC

    Guaranty Bank (MHC)    Milwaukee    Wl    T    3    $ 0    $ 3    $ 1,183    0.00 %

HSBC Holdings Plc

    Household Bank (SB) NA    Las Vegas    NV    B    1    $ 0    $ 0    $ 0    0.00 %

J.P. Morgan Chase & Co.

    J.P. Morgan Tr Co NA    Los Angeles    CA    B    2    $ 0    $ 0    $ 0    0.00 %

Bank Tokyo-Mitsubishi Chicago

    Bank Tokyo-Mitsubishi Chicago    Chicago    IL    B    1    $ 0    $ 0    $ 0    0.00 %

 

Table 2.4

Deposit Share

Cook County

 

                        

# of

Branches

    Deposits as of June 30,
   

Market

Share

  

Holding Company

   

Institution

    City
    State
            2001
    2002
    2003
   
                              ($000)    ($000)    ($000)    (%)  

LaSalle Bank Corporation

    Standard Federal Bank NA    Troy    MI    B    6    $ 0    $ 0    $ 0    0.00 %

Allstate Corp.

    Allstate Bank    Vernon Hills    IL    T    1    $ 0    $ 0    $ 0    0.00 %

HSBC Holdings plc

    Household Bank FSB    Wood Dale    IL    T    1    $ 0    $ 0    $ 0    0.00 %

Marshall & llsley Corp.

    M&I Bank FSB    Las Vegas    NV    T    3    $ 0    $ 0    $ 0    0.00 %

Canadian Imperial Bank of Comm

    Amicus FSB    Maitland    FL    T    1    $ 23,995    $ 22,473    $ 0    0.00 %

Wells Fargo & Co.

    Wells Fargo Bank NA    San Francisco    CA    B    1    $ 0    $ 0    $ 0    0.00 %

Nara Bancorp Inc.

    Nara Bank National Association    Los Angeles    CA    B    1    $ 0    $ 0    $ 0    0.00 %

BMO Financial Group

    Harris Bank Frankfort    Frankfort    IL    B    1    $ 0    $ 0    $ 0    0.00 %

 

Source:  SNL Securities, LC.

 

Table 2.5

Royal Savings Bank

Deposit Summary

 

     As of June 30,
   

% of 2003

Total

    

5 Year

CAGR

  
     1999
    2000
    2001
    2002
    2003
     
     ($000)    ($000)    ($000)    ($000)    ($000)    (%)     (%)  

State of Illinois

                                      

Bank Deposits

    196,020,551    214,413,885    225,848,049    240,254,974    258,030,717    91.57 %   7.11 %

Thrift Deposits

    19,166,105    21,266,540    22,821,514    22,272,754    18,898,527    6.71 %   -0.35 %

Savings Bank Deposits

    3,351,545    3,403,785    3,355,461    3,791,988    4,855,844    1.72 %   9.71 %
    
  
  
  
  
  
 

Total Deposits

    218,538,201    239,084,210    252,025,024    266,319,716    281,785,088    100.00 %   6.56 %

Cook County

                                      

Bank Deposits

    108,109,554    120,285,455    127,057,036    135,016,297    145,980,820    93.77 %   7.80 %

Thrift Deposits

    11,179,379    8,732,991    8,825,496    7,642,108    7,700,853    4.95 %   -8.90 %

Savings Bank Deposits

    1,732,996    1,701,101    1,744,278    1,867,893    2,005,107    1.29 %   3.71 %
    
  
  
  
  
  
 

Total Deposits

    121,021,929    130,719,547    137,626,810    144,526,298    155,686,780    100.00 %   6.50 %

Royal Savings Bank

    72,516    71,078    67,246    70,670    70,706    0.05 %   -0.63 %

 

Source:  SNL Financial

 

RP Financial, LC.

Page 2.13

 

Royal Savings’ approach to reaching the potential customer base is to market to the general public at large through various marketing avenues.

 

Summary

 

The condition of the primary market area can be characterized as stable, with moderate growth potential in the immediate Cook County market area based on regional population and economic projections. The total population base within the Bank’s market area does provide the potential for additional banking customers, particularly in light of the current market share of deposits held by the Bank. Going forward, in view of the local demographic and economic trends and the numbers and types of competitors in the market area, the competition for deposits is expected to remain substantial, which will result in Royal Savings having to pay competitive deposit rates, provide high quality service and consider providing electronic banking capabilities to increase local market share. In addition, the Bank also will have to engage in sufficient levels of marketing activities.

 

RP® Financial, LC.

Page 3.1

 

III. PEER GROUP ANALYSIS

 

This chapter presents an analysis of Royal Savings’ operations versus a group of comparable companies (the “Peer Group”) selected from the universe of all publicly-traded savings institutions. The primary basis of the pro forma market valuation of Royal Savings is provided by these public companies. Factors affecting the Bank’s pro forma market value such as financial condition, credit risk, interest rate risk, and recent operating results can be readily assessed in relation to the Peer Group. Current market pricing of the Peer Group, subject to appropriate adjustments to account for differences between Royal Savings and the Peer Group, will then be used as a basis for the valuation of Royal Financial’s to-be-issued common stock.

 

Peer Group Selection

 

The Peer Group selection process is governed by the general parameters set forth in the regulatory valuation guidelines. Accordingly, the Peer Group is comprised of only those publicly-traded savings institutions whose common stock is either listed on a national exchange (NYSE or AMEX), or is NASDAQ listed, since their stock trading activity is regularly reported and generally more frequent than non-publicly traded and closely-held institutions. Non-listed institutions are inappropriate since the trading activity for thinly-traded or closely-held stocks is typically highly irregular in terms of frequency and price and thus may not be a reliable indicator of market value. We have also excluded from the Peer Group those companies under acquisition or subject to rumored acquisition, mutual holding companies and recent conversions, since their pricing ratios are subject to unusual distortion and/or have limited trading history. A recent listing of the universe of all publicly-traded savings institutions is included as Exhibit III-1.

 

Ideally, the Peer Group must have at least 10 members to comply with the regulatory valuation guidelines, and should be comprised of locally or regionally-based institutions with comparable resources, strategies and financial characteristics. There are approximately 175 fully-converted publicly-traded thrift institutions nationally and, thus, it is typically the case that the Peer Group will be comprised of institutions with relatively comparable characteristics. To the extent that differences exist between the converting institution and the Peer Group, valuation adjustments will be applied to account for the differences. From the universe of publicly-traded

 

RP® Financial, LC.

Page 3.2

 

thrifts, we selected 10 institutions with characteristics similar to those of Royal Savings. In the selection process, we applied two “screens” to the universe of all public companies:

 

  • Screen #1. All publicly traded thrifts in Illinois and Indiana with assets less than $250 million. Eleven companies met the criteria for Screen #1 and eight were included in the Peer Group: AMB Financial Corp. of Munster, IN; FFW Corporation of Wabash, IN; First BancTrust Corp. of Paris, IL; First Bancorp of Evansville, IN; Great American Bancorp of Champaign, IL; Home Financial Bancorp of Spencer, IN; Northeast Indiana Bancorp, Inc. of Huntington, IN; and PFS Bancorp, Inc. of Aurora, IN. Blue River Bancshares, Inc. of Shelbyville, IN was excluded due to its pending sale of control to another financial institution, while Fidelity Federal Bancorp, Inc. of Evansville, IN was excluded due to poor financial results. First Federal Financial Services, Inc. of Edwardsville, IL was excluded from the Peer Group due to the recent date of its conversion, which was completed in June 2004. Exhibit III-2 provides financial and public market pricing characteristics of all publicly-traded Midwest thrifts with assets less than $250 million.

 

  • Screen #2. Ohio institutions with the smallest asset size (assets less than $250 million). Eight institutions met the criteria for Screen #2 and the smallest two companies were included in the Peer Group: Community Investors Bancorp, Inc. of Bucyrus, OH and First Niles Financial, Inc. of Niles, OH (see Exhibit III-2).

 

Table 3.1 shows the general characteristics of each of the 10 Peer Group companies and Exhibit III-3 provides summary demographic and deposit market share data for the primary market areas served by each of the Peer Group companies. While there are expectedly some differences between the Peer Group companies and Royal Savings, we believe that the Peer Group companies, on average, provide a good basis for valuation subject to valuation adjustments. The following sections present a comparison of Royal Savings’ financial condition, income and expense trends, loan composition, interest rate risk and credit risk versus the Peer Group as of the most recent publicly available date.

 

In aggregate, the Peer Group companies maintain a higher level of capitalization relative to the universe of all public thrifts (12.60% of assets versus 10.74% for the all public average), generate lower earnings on a return on average assets basis (0.76% ROAA versus 0.82% for the all public average), and generate a lower return on equity (6.33% ROE versus 8.70% for the all public average). The summary table below underscores the key differences, particularly in the average pricing ratios between the Peer Group and all publicly traded institutions.

 

RP FINANCIAL, LC.

Financial Services Industry Consultants

1700 North Moore Street, Suite 2210

Arlington, Virginia 22209

(703) 528-1700

 

Table 3.1

Peer Group of Publicly-Traded Thrifts

September 5, 2004(1)

 

Ticker

   

Financial Institution

   

Exchg.

   

Primary Market

   

Operating
Strat.(2)

    Total
Assets
    Offices
    Fiscal
Year
    Conv.
Date
    Stock
Price
    Market
Value
                                             ($)    ($Mil)
FFWC    FFW Corporation of Wabash IN    OTC    Central IN    Thrift    239 M    4    06-30    04/93    22.00    28
FBEI    First Bancorp of Indiana of IN    OTC    Evansville IN    Thrift    237 M    7    06-30    04/99    20.70    34
NEIB    Northeast Indiana Bncrp of IN    OTC    Northeast IN    Thrift    225         3    12-31    06/95    21.28    31
FBTC    First BancTrust Corp of IL    OTC    Eastcentral IL    Thrift    221         3    12-31    04/01    12.50    31
GTPS    Great American Bancorp of IL    OTC    East Central IL    Thrift    157         3    12-31    06/95    25.60    19
AMFC    AMB Fin. Corp. of Munster IN    OTC    Northwest IN    Thrift    154         3    12-31    04/96    15.01    15
PBNC    PFS Bancorp Inc. of Aurora IN    OTC    Southeastern IN    Thrift    125         3    12-31    10/01    21.91    32
CIBI    Community Inv. Bncp, Inc of OH    OTC    NorthCentral OH    Thrift    122 M    3    06-30    02/95    14.27    16
FNFI    First Niles Fin., Inc. of OH    OTC    Central Ohio    Thrift    97         1    12-31    10/98    18.50    25
HWEN    Home Financial Bancorp of IN    OTC    Central IN    Thrift    60 M    2    06-30    07/96    5.75    8

 

NOTES:

  

(1)

    Or most recent date available (M=March, S=September, D=December, J=June, E=Estimated, and P=Pro Forma)
   

(2)

    Operating strategies are: Thrift=Traditional Thrift, M.B.=Mortgage Banker, R.E.=Real Estate Developer, Div.=Diversified, and Ret.=Retail Banking.
   

(3)

    FDIC savings bank institution.

Source:

   Corporate offering circulars, data derived from information published in SNL Securities Quarterly Thrift Report, and financial reports of publicly-traded thrifts.
Date of Last Update: 09/05/04

 

RP® Financial, LC.

Page 3.4

 

     All
Publicly-Traded
     Peer Group
Reported
Basis
  
     ($000)     ^(000)  

Financial Characteristics (Averages)

                 

Assets ($Mil)

    $ 2,935     $ 164  

Equity/Assets (%)

      10.74 %     12.60 %

Return on Assets (%)

      0.82       0.76  

Return on Equity (%)

      8.70       6.33  

Pricing Ratios (Averages)(l)

                 

Price/Earnings (x)

      17.60x       18.94x  

Price/Book (%)

      159.51 %     120.21 %

Price/Assets (%)

      17.02       15.35  

 

(1) Based on market prices as of September 3, 2004.

 

The following sections present a comparison of Royal Savings’ financial condition, income and expense trends, loan composition, interest rate risk and credit risk versus the figures reported by the Peer Group. The conclusions drawn from the comparative analysis are then factored into the valuation analysis discussed in the final chapter.

 

Financial Condition

 

Table 3.2 shows comparative balance sheet measures for Royal Savings and the Peer Group. Royal Savings’ and the Peer Group’s ratios reflect balances as of June 30, 2004, unless otherwise indicated for the Peer Group companies. Royal Savings’ net worth base of 13.7% was above the Peer Group’s average net worth ratio of 12.6%. Accordingly, with the infusion of the net proceeds realized from the public offering, the Bank will maintain a significantly higher equity-to-assets ratio than the Peer Group. The difference between the Bank’s and the Peer Group’s tangible equity-to-assets ratio will be more significant, in light of the level of intangibles held by the Peer Group companies, on average. Tangible equity-to-assets ratios for the Bank and the Peer Group equaled 13.7% and 12.4%, respectively, as goodwill and intangibles maintained by the Bank and the Peer Group equaled 0.0% and 0.2% of assets, respectively. The increase in Royal Savings’ pro forma capital position will be favorable from a risk perspective and in terms of future earnings potential that could be realized through leverage and lower funding costs. At

 

RP FINANCIAL, LC.

Financial Services Industry Consultants

1700 North Moore Street, Suite 2210

Arlington, Virginia 22209

(703) 528-1700

 

Table 3.2

Balance Sheet Composition and Growth Rates

Comparable Institution Analysis

As of June 30, 2004

 

        Balance Sheet as a Percent of Assets
   Balance Sheet Annual Growth Rates
   Regulatory Capital
        Cash &
Equivalents
   MBS &
Invest
   Loans
   Deposits
   Borrowed
Funds
   Subd.
Debt
   Net
Worth
   Goodwill &
Intang
   Tng Net
Worth
   MEMO,
Pref. Stock
   Assets
   MBS, Cash &
Investments
   Loans
   Deposits
   Borrows. &
Subdebt
   Net
Worth
   Tng Net
Worth
   Tangible
   Core
   Reg. Cap.

Royal Savings Bk of Chicago IL

                                                                                

June 30, 2004

   8.6   48.5   37.5   83.3   2.1   0.0   13.7   0.0   13.7   0.0   6.61   -13.45   45.41   9.53   0.00   -5.76   -5.76   13.85   13.85   28.06

All Public Companies

   3.8   23.8   67.6   66.3   21.0   0.7   10.7   0.8   9.9   0.0   10.90   1.66   12.20   7.98   18.93   2.39   2.06   9.46   9.44   16.86

State of IL

   7.2   24.1   64.1   73.7   13.7   0.3   11.4   0.5   10.8   0.0   8.34   5.16   8.04   6.38   11.41   -1.47   5.58   10.12   9.74   18.60

Comparable Group Average

   6.0   21.1   68.0   68.4   17.7   0.3   12.6   0.2   12.4   0.0   2.13   -11.91   6.99   2.79   2.70   0.77   0.83   10.76   10.76   20.35

Mid-West Companies

   6.0   21.1   68.0   68.4   17.7   0.3   12.6   0.2   12.4   0.0   2.13   -11.91   6.99   2.79   2.70   0.77   0.83   10.76   10.76   20.35

Comparable Group

                                                                                

Mid-West Companies

                                                                                

AMFC

  

AMB Fin. Corp. of Munster IN

   7.5   4.4   80.3   73.7   12.7   3.2   8.3   0.0   8.3   0.0   0.09   -28.39   7.42   0.51   23.42   7.29   7.29   8.74   8.74   15.13

CIBI

  

Community Inv. Bncp, Inc of OH(1)

   6.2   11.5   79.4   71.2   17.3   0.0   11.0   0.0   11.0   0.0   -0.75   -12.56   1.03   -1.60   -0.89   5.09   5.09   10.80   10.80   19.07

FFWC

  

FFW Corporation of Wabash IN(1)

   4.0   36.4   54.0   67.1   21.9   0.0   10.1   0.4   9.7   0.0   1.05   -4.27   3.63   -3.16   17.14   3.87   4.13   NM   NM   NM

FBTC

  

First BancTrust Corp of IL

   3.7   40.6   50.5   71.8   16.0   0.0   11.6   0.0   11.6   0.0   1.97   -3.76   5.78   3.74   0.00   -3.52   -3.52   11.71   11.71   23.91

FBEI

  

First Bancorp of Indiana of IN(1)

   2.9   30.8   60.7   67.2   18.3   0.0   12.9   0.9   12.1   0.0   25.48   50.38   16.35   36.92   8.33   2.68   3.16   11.25   11.25   17.11

FNFI

  

First Niles Fin., Inc. of OH

   3.7   51.6   43.0   62.3   21.1   0.0   15.8   0.0   15.8   0.0   -2.74   -9.89   7.95   -2.31   5.13   -10.92   -10.92   14.57   14.57   38.22

GTPS

  

Great American Bancorp of IL

   19.1   3.4   72.0   79.5   8.3   0.0   10.8   0.3   10.5   0.0   -6.77   -32.49   5.10   -7.04   -7.14   -4.61   -4.74   7.87   7.87   15.13

HWEN

  

Home Financial Bancorp of IN(1)

   6.1   5.7   80.1   64.0   23.4   0.0   11.8   0.0   11.8   0.0   -5.22   -26.87   -1.85   -0.78   -20.00   6.05   6.05   9.90   9.90   15.80

NEIB

  

Northeast Indiana Bncrp of IN

   3.0   18.3   73.0   57.8   29.7   0.0   11.8   0.0   11.8   0.0   2.29   -18.27   8.95   6.06   -1.67   -0.95   -0.95   11.20   11.20   18.40

PBNC

  

FFS Bancorp Inc. of Aurora IN

   3.7   8.0   86.9   69.2   8.0   0.0   21.8   0.0   21.8   0.0   5.89   -33.03   15.49   -4.40   NM   2.72   2.72   NM   NM   NM

State of IL

                                                                                

CFSL

  

Chesterfield Financial of IL(2)

   38.8   19.6   40.1   77.3   0.0   0.0   20.6   0.1   20.5   0.0   -1.81   -0.74   -3.11   -0.74   NM   2.00   2.02   NM   NM   NM

CFSB

  

Citizens First Fin Corp. of IL

   11.6   11.6   72.7   71.7   17.6   0.0   10.1   0.0   10.1   0.0   -3.65   21.64   -8.02   -0.18   -16.77   3.04   3.04   9.27   9.27   15.98

EFC

  

EFC Bancorp, Inc of Elgin IL

   3.4   11.4   80.0   67.4   23.2   0.0   8.4   0.0   8.4   0.0   10.70   -12.99   16.39   14.57   4.84   3.75   3.75   8.05   8.05   11.59

FBTC

  

First BancTrust Corp of IL

   3.7   40.6   50.5   71.8   16.0   0.0   11.6   0.0   11.6   0.0   1.97   -3.76   5.78   3.74   0.00   -3.52   -3.52   11.71   11.71   23.91

FFFS

  

First Fed Serv MHC of IL (45.0)(3)

   12.5   10.1   76.4   72.5   0.7   0.0   26.4   0.0   26.4   0.0   23.37   NM   4.15   0.11   NM   NM   NM   19.90   19.90   41.50

FFBI

  

First Federal Bancshares of IL

   3.9   49.9   43.3   88.4   1.9   2.3   7.0   0.5   6.5   0.0   -8.82   -14.61   -2.32   0.47   NM   NM   NM   7.58   7.58   19.04

GTPS

  

Great American Bancorp of IL

   19.1   3.4   72.0   79.5   8.3   0.0   10.8   0.3   10.5   0.0   -6.77   -32.49   5.10   -7.04   -7.14   -4.61   -4.74   7.87   7.87   15.13

JXSB

  

Jckenville Bcp MHC of IL(46.8)

   2.3   43.3   48.3   88.7   2.4   0.0   7.2   1.1   6.1   0.0   1.78   11.14   -6.44   0.67   NM   -7.15   -7.97   NM   6.64   13.35

MAFB

  

MAF Bancorp, Inc. of IL

   3.4   18.0   71.8   60.5   27.9   0.0   9.7   2.9   6.7   0.0   56.99   90.90   45.86   47.87   77.57   NM   48.84   6.71   6.71   10.60

PFED

  

Park Bancorp of Chicago IL

   4.8   28.3   62.0   62.8   24.8   0.0   11.0   0.0   11.0   0.0   -0.47   -18.53   11.89   -2.77   9.96   -0.36   -0.36   9.90   9.90   16.30

 

(1) Financial information is for the quarter ending March 31, 2004.

 

(2) Excluded from averages due to announced or pending acquisition.

 

(3) Growth rates have been annualized from available financial information.

 

Source:  Audited and unaudited financial statements, corporate reports and offering circulars, and RP Financial, LC. calculations. The information provided in this table has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

 

Copyright (c) 2004 by RP Financial, LC.

 

RP® Financial, LC.

Page 3.6

 

the same time, the Bank’s higher pro forma capitalization will also result in a relatively low return on equity. Both Royal Savings’ and the Peer Group’s regulatory capital ratios reflected capital surpluses with respect to the regulatory capital requirements, with the Bank’s ratios currently exceeding the Peer Group’s ratios.

 

The interest-earning asset compositions for the Bank and the Peer Group were somewhat different, as the Bank’s interest-earning asset composition reflected a significantly lower concentration of loans in comparison to the Peer Group. The Bank’s loans-to-assets ratio equaled 37.5%, versus a comparable ratio of 68.0% for the Peer Group. Comparatively, the Bank’s cash and investments-to-assets ratio of 57.1% was well above the comparable Peer Group ratio of 27.1%, as the Bank reported higher ratios of both investment securities and cash and cash equivalents. Overall, Royal Savings’ interest-earning assets amounted to 94.6% of assets, which was less than the comparable Peer Group ratio of 95.1%. The Bank’s lower ratio was attributable to the larger balance of fixed assets on its balance sheet.

 

Royal Savings’ funding liabilities reflected a funding strategy that was somewhat similar to that of the Peer Group’s funding composition. The Bank’s deposits equaled 83.3% of assets, which was above the Peer Group’s ratio of 68.4%. Comparatively, borrowings accounted for a higher portion of the Peer Group’s interest-bearing funding composition, as indicated by borrowings-to-assets ratios of 2.1% and 17.7% for Royal Savings and the Peer Group, respectively. Total interest-bearing liabilities maintained by the Bank and the Peer Group, as a percent of assets, equaled 85.4% and 86.1%, respectively, with the Bank’s lower ratio supported by its maintenance of a higher capital position.

 

A key measure of balance sheet strength for a thrift institution is its IEA/IBL ratio. Presently, the Bank’s IEA/IBL ratio of 110.8% approximates the Peer Group’s IEA/IBL ratio of 110.5%. The additional capital realized from stock proceeds should serve to increase the Bank’s IEA/IBL ratio, as the interest free capital realized in Royal Savings’ stock offering is expected to be mostly deployed into interest-earning assets.

 

The growth rate section of Table 3.2 shows annual growth rates for key balance sheet items. Royal Savings’ and the Peer Group’s growth rates are based on annual growth for the twelve month period ended June 30, 2004, unless otherwise indicated for the Peer Group

 

RP® Financial, LC.

Page 3.7

 

companies. Royal Savings’ assets increased by 6.6% during the twelve month period, versus 2.1% growth posted by the Peer Group. The Bank’s asset growth was concentrated in an increased in loans receivable, offset in part by a decline in cash and investments. Similarly, asset growth for the Peer Group was realized through loan growth, also offset by a decline in cash and investments. Overall, the Peer Group’s asset growth measures, as well as composition of interest-earning assets, would tend to indicate greater earnings growth potential relative to the Bank’s measures.

 

Asset growth and no change in the level of borrowings resulted in a 9.5% increase in the Bank’s deposits. Growth of deposits and borrowings funded the Peer Group’s asset growth, with a higher growth rate indicated for deposits. Deposit growth of 2.8% was recorded by the Peer Group, while the Peer Group’s growth rate for borrowings was 2.7%. Royal Savings recorded a 5.7% annual decline in the capital account, which resulted from a low return on assets and a negative market value adjustment on investments held-for-sale. The capital growth rate posted by the Peer Group equaled 0.8%, with the low growth rate affected by the negative impact that dividend payments and stock repurchases had on the Peer Group’s capital growth, along with negative market value adjustments on securities held-for-sale. The Bank’s tangible capital also declined by 5.8%, while comparatively, the Peer Group posted tangible capital growth of 0.8%. The increase in capital realized from stock proceeds, as well as possible dividend payments and stock repurchases, will likely depress the Bank’s capital growth rate following the stock offering and thereby increase the comparative advantage currently maintained by the Peer Group with respect to its capital growth rate.

 

Income and Expense Components

 

Table 3.3 displays comparable statements of operations for the Bank and the Peer Group, based on earnings for the twelve months ended June 30, 2004, unless otherwise indicated for the Peer Group companies. Royal Savings and the Peer Group reported net income to average assets ratios of 0.09% and 0.76%, respectively. Lower levels of net interest income, other operating income, and higher operating expenses accounted for the Bank’s lower return. The Peer Group’s earnings reflected comparative earnings disadvantages with respect to posting higher levels of loan loss provisions and lower levels of net non-operating gains.

 

RP FINANCIAL, LC.

Financial Services Industry Consultants

1700 North Moore Street, Suite 2210

Arlington, Virginia 22209

(703) 528-1700

 

Table 3.3

Income as a Percent of Average Assets and Yields, Costs, Spreads

Comparable Institution Analysis

For the Twelve Months Ended June 30, 2004

 

     Net
Income
    Net Interest Income
    NII
After
Provis.
    Other Income
    Total
Other
Income
    G&A/Other Exp.
    Non-Op. Items
    Yields, Costs, and Spreads
   

MEMO_

Assets/

FTE
_mp.

   

MEMO_

Effective

Tax
Rate

      Income
    Expense
    NII
    Loss
Provis.
on IEA
       Loan
Fees
   

R.E.

Oper.

    Other
Income
       G&A
Expense
    Goodwill
Amort.
    Net
Gains
    Extrao.
Items
   

Yield

On
Assets

   

Cost

Of
Funds

   

Yid-Cost

Spread

      

Royal Savings Bk of Chicago IL

                                                                                               

June 30, 2004

    0.09    3.89    -1.34    2.56    0.00    2.56    0.00    0.00    0.48    0.48    3.12    0.00    0.20    0.00    4.29    1.60    2.69    2,571    15.18

All Public Companies

    0.83    5.06    2.03    3.03    0.14    2.89    0.06    0.00    0.62    0.68    2.48    0.02    0.15    0.01    5.28    2.30    2.98    5,252    34.07

State of IL

    0.81    5.00    1.96    3.04    0.14    2.90    0.05    -0.02    0.69    0.72    2.53    0.01    0.11    0.00    5.24    2.24    3.00    4,996    37.37

Comparable Group Average

    0.76    5.35    2.16    3.19    0.15    3.04    0.03    -0.03    0.69    0.70    2.83    0.00    0.13    0.00    5.63    2.51    3.13    3,910    30.68

Mid-West Companies

    0.76    5.35    2.16    3.19    0.15    3.04    0.03    -0.03    0.69    0.70    2.83    0.00    0.13    0.00    5.63    2.51    3.13    3,910    30.68

Comparable Group

                                                                                               

Mid-West Companies

                                                                                               

AMFC

  

AMB Fin. Corp. of Munster IN

    0.67    5.27    2.40    2.87    0.13    2.74    0.05    -0.04    0.85    0.86    2.74    0.00    -0.06    0.00    5.73    2.71    3.02    4,824    38.14

CIBI

  

Community Inv. Bncp, Inc of OH(1)

    0.72    5.32    2.24    3.07    0.08    2.99    0.00    -0.01    0.34    0.34    2.34    0.00    0.10    0.00    5.45    2.53    2.93    3,683    33.69

FFWC

  

FFW Corporation of Wabash IN(1)

    1.03    5.25    2.62    2.63    0.40    2.24    0.00    0.00    0.68    0.68    2.09    0.01    0.32    0.00    5.53    2.93    2.59    NM    10.05

FBTC

  

First BancTrust Corp of IL

    0.68    5.24    2.00    3.24    0.29    2.94    0.16    -0.05    1.18    1.30    3.52    0.00    0.29    0.00    5.50    2.28    3.22    2,603    31.82

FBEI

  

First Bancorp of Indiana of IN(1)

    0.70    5.16    2.23    2.93    0.14    2.80    0.00    0.00    0.61    0.61    2.90    0.04    0.54    0.00    5.52    2.66    2.86    3,115    30.76

FNFI

  

First Niles Fin., Inc. of OH

    1.05    5.02    2.03    2.99    0.00    2.99    0.00    0.00    0.04    0.04    1.78    0.00    0.25    0.00    5.08    2.46    2.63    8,106    30.11

GTPS

  

Great American Bancorp of IL

    0.76    4.78    1.47    3.31    0.00    3.31    0.04    0.00    1.77    1.81    3.99    0.00    0.07    0.00    5.05    1.68    3.37    1,966    36.01

HWEN

  

Home Financial Bancorp of IN(1)

    0.53    7.53    2.65    4.88    0.37    4.51    0.00    -0.12    0.65    0.53    4.27    0.00    -0.29    0.00    8.16    3.00    5.16    2,488    NM

NEIB

  

Northeast Indiana Bncrp of IN

    0.74    5.37    2.66    2.71    0.00    2.71    0.08    0.00    0.42    0.50    2.30    0.00    0.08    0.00    5.65    3.06    2.59    4,502    24.99

PBNC

  

PFS Bancorp Inc. of Aurora IN

    0.71    4.58    1.35    3.23    0.04    3.19    0.00    -0.05    0.40    0.35    2.35    0.00    0.00    0.00    4.65    1.76    2.89    3,900    40.52

 

(1) Financial information is for the quarter ending March 31, 2004.

 

Source:  Audited and unaudited financial statements, corporate reports and offering circulars, and RP Financial, LC. calculations. The information provided in this table has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

 

Copyright (c) 2004 by RP Financial, LC.

 

RP® Financial, LC.

Page 3.9

 

The Peer Group’s stronger net interest income ratio was realized through a higher interest income ratio, which was partially offset by the Bank’s lower interest expense ratio. The Peer Group’s higher interest income ratio was realized through earning a higher yield on interest-earning assets (5.63% versus 4.29% for the Bank) and maintenance of a higher concentration of assets in interest-earning assets. The Peer Group’s higher yield was consistent with an interest-earning asset composition that reflected a higher concentration of loans as compared to the Bank’s interest-earning asset composition. Interest expense ratios for the Bank and the Peer Group equaled 1.34% and 2.16% of average assets, respectively. The Bank’s lower interest expense ratio was supported by its higher level of capital and resulting lower level of interest-bearing liabilities funding assets, as well as maintenance of a lower cost of funds (1.60% versus 2.51% for the Peer Group). Overall, Royal Savings and the Peer Group reported net interest income to average assets ratios of 2.56% and 3.19%, respectively.

 

In another key area of core earnings strength, the Bank maintained a higher level of operating expenses than the Peer Group. For the period covered in Table 3.3, the Bank and the Peer Group reported operating expense to average assets ratios of 3.12% and 2.83%, respectively, inclusive of amortization of goodwill and other intangibles. In general, the Bank’s higher operating expense ratio is supported by the level of staffing needs that result from maintaining three office locations, along with the expense level tied to the depreciation of the newly constructed main office. In addition, in the most recent year the Bank has added certain staff in order to anticipation of future growth and lending activities. Consistent with the Bank’s higher operating expense ratio, Royal Savings maintained a comparatively higher number of employees relative to its asset size. Assets per full time equivalent employee equaled $2.6 million for the Bank, versus a comparable measure of $3.9 million for the Peer Group. On a post-offering basis, the Bank’s operating expenses can be expected to increase with the addition of stock benefit plans and expenses related to operating as a publicly-traded company, with such expenses already impacting the Peer Group’s operating expenses. At the same time, Royal Savings’ capacity to leverage operating expenses will be greater than the Peer Group’s leverage capacity following the increase in capital realized from the infusion of net stock proceeds.

 

When viewed together, net interest income and operating expenses provide considerable insight into a thrift’s earnings strength, since those sources of income and expenses are typically

 

RP® Financial, LC.

Page 3.10

 

the most prominent components of earnings and are generally more predictable than losses and gains realized from the sale of assets or other non-recurring activities. In this regard, as measured by their expense coverage ratios (net interest income divided by operating expenses), the Bank’s earnings strength was lower than the Peer Group’s. Expense coverage ratios posted by Royal Savings and the Peer Group equaled 0.82x and 1.13x, respectively. An expense coverage ratio of greater than 1.0x indicates that an institution is able to sustain pre-tax profitability without having to rely on non-interest sources of income.

 

Sources of non-interest operating income provided a larger contribution to the Peer Group’s earnings, with such income amounting to 0.70% and 0.48% of the Peer Group’s and Royal Savings’ average assets, respectively. The Bank’s relatively low earnings contribution realized from non-interest operating income highlights its historical past with a traditional thrift operating strategy, in which diversification into areas that generate revenues from non-interest sources were been very limited. Taking non-interest operating income into account in comparing the Bank’s and the Peer Group’s earnings, Royal Savings’ efficiency ratio (operating expenses, net of amortization of intangibles, as a percent of the sum of non-interest operating income and net interest income) of 102.6% compared unfavorably to the Peer Group’s efficiency ratio of 72.8%.

 

Loan loss provisions had a larger impact on the Peer Group’s earnings, as minimal loss provisions were established by the Bank during the twelve month period. Comparatively, loss provisions established by the Peer Group equaled 0.15% of average assets. The higher level of loss provisions established by the Peer Group was consistent with its lower level of reserves maintained as a percent of non-performing assets (see Table 3.5) and its greater degree of diversification into higher risk types of lending (see Table 3.4).

 

Net gains realized from the sale of assets (investment securities) totaled 0.20% of average assets for the Bank, while the Peer Group recorded net gains equal to 0.13% of average assets. Given the volatile nature of gains resulting from the sale of loans, investments and other assets, the net gains reflected in the Bank’s and Peer Group’s earnings will be discounted in evaluating the relative strengths and weaknesses of the Bank’s and the Peer Group’s respective earnings. Extraordinary items were not a factor in either the Bank’s or the Peer Group’s earnings.

 

RP® Financial, LC.

Page 3.11

 

Taxes had a larger impact on the Peer Group’s earnings, as Royal Savings and the Peer Group posted effective tax rates of 15.2% and 30.7%, respectively.

 

Loan Composition

 

Table 3.4 presents data related to the Bank’s and the Peer Group’s loan portfolio compositions and investment in mortgage-backed securities. The Bank’s loan portfolio composition reflected a lower concentration of 1-4 family permanent mortgage loans and mortgage-backed securities than maintained by the Peer Group (41.9% versus 54.1% for the Peer Group). The Bank’s lower ratio was attributable to maintaining a lower concentration of 1-4 family residential loans, as the Peer Group’s ratio of 1-4 family permanent mortgage loans was higher than the Bank’s ratio. Loans serviced for others represented a more significant off-balance sheet item for the Peer Group, equaling 18% of the Peer Group’s assets, which was a factor that contributed to the Peer Group’s higher level of non-interest operating income. The Peer Group’s balance of loans serviced for others translated into a modest balance of servicing intangibles.

 

Diversification into higher risk types of lending was more significant for the Peer Group companies on average. Commercial real estate/multi-family loans represented the most significant area of lending diversification for the Peer Group (10.2% of assets), followed by commercial business loans (7.5% of assets). The Bank’s lending diversification consisted primarily of commercial real estate/multi-family loans (12.4% of assets), with other areas of lending diversification substantially limited to commercial business loans (3.3% of assets). Overall, lending diversification for the Peer Group was more significant in all loan types except commercial real estate/multi-family loans. The Peer Group’s more significant diversification into higher risk types of loans and higher concentration of assets maintained in loans compared to lower risk-weighted investments translated into a higher risk-weighted assets-to-assets ratio of 58.3%, as compared to the Bank’s ratio of 50.6%.

 

RP FINANCIAL, LC.

Financial Services Industry Consultants

1700 North Moore Street, Suite 2210

Arlington, Virginia 22209

(703) 528-1700

 

Table 3.4

Loan Portfolio Composition and Related Information

Comparable Institution Analysis

As of June 30, 2004

 

     Portfolio Composition as a Percent Assets
               

Institution

    MBS
    1-4
Family
    Constr.
& Land
    5 + Unit
Comm Rs
    Commerc.
Business
    Consumer
    RWA/
Assets
    Serviced For
Others
    Servicing
Assets
     (%)    (%)    (%)    (%)    (%)    (%)    (%)    ($000)    ($000)

Royal Savings Bk of Chicago IL

    20.07    21.84    0.00    12.42    3.29    0.17    50.64    0    0

All Public Companies

    12.57    36.95    4.89    15.35    3.57    3.87    60.13    752,827    9,347

State of IL

    10.63    38.20    4.28    12.25    3.12    3.97    56.85    422,003    3,029

Comparable Group Average

    11.07    42.98    2.83    10.24    7.48    3.16    58.26    30,103    225

Comparable Group

                                             

AMFC

  

AMB Fin. Corp. of Munster IN

    1.92    55.29    3.59    18.25    1.81    3.50    59.52    0    0

CIBI

   Community Inv. Bncp. Inc of OH(1)    1.08    65.94    2.67    3.83    3.68    3.69    58.44    3,579    34

FFWC

   FFW Corporation of Wabash IN(1)    11.00    34.51    1.86    7.97    7.38    3.29    60.64    74,163    626

FBTC

   First BancTrust Corp of IL    31.77    16.28    0.96    12.03    11.46    2.86    52.89    89,947    847

FBEI

   First Bancorp of Indiana of IN(1)    27.99    32.75    1.62    1.66    23.16    2.26    67.16    56,518    329

FNFI

   First Niles Fin., Inc. of OH    24.30    32.09    2.06    7.38    0.43    0.12    41.17    0    0

GTPS

   Great American Bancorp of IL    2.87    34.66    2.45    14.84    5.40    7.09    54.69    45,224    109

HWEN

   Home Financial Bancorp of IN(1)    3.00    51.59    4.08    11.56    12.82    0.61    65.64    0    0

NEIB

   Northeast Indiana Bncrp of IN    6.78    44.95    3.11    13.97    6.50    5.46    64.42    31,602    300

PBNC

   PFS Bancorp Inc. of Aurora IN    0.00    61.79    5.95    10.87    2.12    2.70    58.03    0    0

 

(1) Financial information is for the quarter ending March 31, 2004.

 

Source:  Audited and unaudited financial statements, corporate reports and offering circulars, and RP Financial, LC. calculations. The information provided in this table has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

 

Copyright (c) 2004 by RP Financial, LC.

 

RP® Financial, LC.

Page 3.13

 

Credit Risk

 

Overall, the credit risk associated with the Bank’s loan portfolio was considered to be less than the Peer Group’s, as implied by the Bank’s more favorable credit quality measures for problem loans and less significant diversification into higher risk types of lending. As shown in Table 3.5, Royal Savings’ ratio of non-performing assets and accruing loans that are more than 90 days past due as a percent of assets was less than the comparable Peer Group ratio (0.14% versus 1.04% for the Peer Group). Non-performing loans equaled 0.37% of the Bank’s loans compared to 1.29% for the Peer Group. The Bank maintained a higher level of loss reserves as a percent of non-performing loans (184.38% versus 102.12% for the Peer Group), while the Peer Group maintained a higher level of reserves as a percent of loans (1.10% versus 0.68% for the Bank). The Bank’s credit risk exposure was also considered to be more favorable with respect to the lower net charge-offs that were recorded for the twelve month period, as net loan charge-offs equaled 0.00% and 0.32% of net loans receivable for the Bank and the Peer Group, respectively.

 

Interest Rate Risk

 

Table 3.6 reflects various key ratios highlighting the relative interest rate risk exposure of the Bank versus the Peer Group companies. In terms of balance sheet composition, Royal Savings’ interest rate risk characteristics were considered to be fairly similar to the Peer Group’s. Most notably, Royal Savings’ tangible capital position and IEA/IBL ratio were more favorable that the comparable Peer Group ratios. A lower level of non-interest earning assets represented an advantage for the Peer Group with respect to capacity to generate net interest income and, in turn, limiting the interest rate risk associated with the balance sheet. On a pro forma basis, the infusion of stock proceeds should provide the Bank with more favorable balance sheet interest rate risk characteristics than currently maintained by the Peer Group, particularly with respect to the increases that will be realized in Bank’s equity-to-assets and IEA/IBL ratios.

 

To analyze interest rate risk associated with the net interest margin, we reviewed quarterly changes in net interest income as a percent of average assets for Royal Savings and the Peer Group. In general, the relative fluctuations in the Bank’s and the Peer Group’s net interest income to average assets ratios were considered to be fairly comparable and, thus, based on the

 

RP FINANCIAL, LC.

Financial Services Industry Consultants

1700 North Moore Street, Suite 2210

Arlington, Virginia 22209

(703) 528-1700

 

Table 3.5

Credit Risk Measures and Related Information

Comparable Institution Analysis

As of June 30, 2004 or Most Recent Date Available

 

Institution

    REO/
Assets
   

NPAs &

90+Del/
Assets

   

NPLs/

Loans

   

Rsrves/

Loans

   

Rsrves/

NPLs

   

Rsrves/

NPAs
&

90+Del

   

Net Loan

Chargoffs

   

NLCs/

Loans

     (%)    (%)    (%)    (%)    (%)    (%)    ($000)    (%)

Royal Savings Bk of Chicago IL

    0.00    0.14    0.37    0.68    184.38    184.38    0    0.00

All Public Companies

    0.09    0.55    0.63    0.96    227.07    188.86    297    0.14

State of IL

    0.06    0.55    0.92    0.93    143.96    118.29    91    0.14

Comparable Group Average

    0.26    1.04    1.29    1.10    102.12    70.90    97    0.32

Comparable Group

                                        

AMFC

  

AMB Fin. Corp. of Munster IN

    0.05    1.29    1.54    0.58    37.46    36.13    406    1.30

CIBI

  

Community Inv. Bncp, Inc of OK(1)

    0.03    0.75    0.90    0.63    69.72    66.89    21    0.09

FFWC

  

FFW Corporation of Wabash IN(1)

    0.51    0.94    0.74    1.85    250.73    114.37    56    0.17

FBTC

  

First BancTrust Corp of IL

    0.07    1.25    2.29    1.93    84.26    79.48    123    0.44

FBEI

  

First Bancorp of Indiana of IN(1)

    0.01    0.39    0.62    0.72    115.27    112.89    79    0.22

FNFI

  

First Niles Fin., Inc. of OH

    0.16    1.09    1.83    1.78    97.30    71.51    0    0.00

GTPS

  

Great American Bancorp of IL

    0.00    0.04    NA    1.05    NA    NA    0    -0.04

HWIN

  

Home Financial Bancorp of IN(1)

    1.32    2.57    1.55    0.80    51.67    25.13    54    0.45

NEIB

  

Northeast Indiana Bncrp of IN

    0.49    1.08    0.81    0.89    110.58    60.79    211    0.49

PBNC

  

PFS Bancorp Inc. of Aurora IN

    0.00    NA    NA    0.72    NA    NA    19    0.07

State of IL

                                        

CFSL

  

Chesterfield Financial of IL(2)

    0.00    0.10    0.25    0.89    361.94    361.94    0    0.00

CFSB

  

Citizens First Fin Corp. of IL

    0.21    0.99    1.01    1.27    126.70    94.52    5    0.01

EFC

  

EFC Bancorp, Inc of Elgin IL

    0.00    0.27    0.33    0.53    160.40    160.40    3    0.00

FBTC

  

First BancTrust Corp of IL

    0.07    1.25    2.29    1.93    84.26    79.48    123    0.44

FFFS

  

First Fed Serv MHC of IL (45.0)

    0.01    0.10    0.11    0.41    359.66    312.41    0    0.00

FFBI

  

First Federal Bancshares of IL

    0.03    0.55    NA    0.69    NA    54.59    20    0.06

GTPS

  

Great American Bancorp of IL

    0.00    0.04    NA    1.05    NA    NA    0    -0.04

JXSB

  

Jcksnville Bcp MHC of IL(46.0)

    0.17    1.05    1.73    1.60    92.90    74.67    253    0.78

MAFB

  

MAF Bancorp, Inc. of IL

    0.02    0.33    0.43    0.51    119.96    111.46    418    0.00

PFED

  

Park Bancorp of Chicago IL

    0.03    0.37    0.56    0.35    63.85    58.82    1    0.00

 

(1) Financial information is for the quarter ending March 31, 2004.

 

(2) Excluded from averages due to announced or pending acquisition.

 

Source:  Audited and unaudited financial statements, corporate reports and offering circulars, and RP Financial, LC. calculations. The information provided in this table has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

 

Copyright (c) 2004 by RP Financial, LC.

 

RP FINANCIAL, LC.

Financial Services Industry Consultants

1700 North Moore Street, Suite 2210

Arlington, Virginia 22209

(703) 528-1700

 

Table 3.6

Interest Rate Risk Measures and Net Interest Income Volatility

Comparable Institution Analysis

As of June 30, 2004 or Most Recent Date Available

 

     Balance Sheet Measures
    Quarterly Change in Net Interest Income

Institution

        

Equity/

Assets

    ILA/
IBL
   

Non-Earn.

Assets/
Assets

    06/30/04
    03/31/04
    12/31/03
    09/30/03
    06/30/03
    03/31/03
          (%)    (%)    (%)    (change in net interest income is annualized in basis points)

Royal Savings Bk of Chicago IL

    13.7    110.8    5.4    -8    2    -24    -16    -29    -4

All Public Companies

    9.9    108.7    4.7    -3    1    7    -4    -9    -3

State of IL

    10.8    109.4    4.6    -0    3    4    5    -19    -2

Comparable Group Average

    12.4    110.3    5.0    7    5    1    -9    -6    -13

Comparable Group

                                             

AMFC

   

AMB Fin. Corp. of Munster IN

    8.3    102.8    7.8    5    41    -32    -6    2    NA

CIBI

   

Community Inv. Bncp, Inc of ON(1)

    11.0    109.6    2.9    NA    3    11    -8    10    -24

FFWC

   

FFW Corporation of Wabash IN(1)

    9.7    106.0    5.7    NA    12    -5    5    -23    -9

FBTC

   

First BancTrust Corp of IL

    11.6    107.9    5.2    12    -16    18    -11    -49    -15

FBEI

   

First Bancorp of Indiana of IN(1)

    12.1    110.4    5.6    NA    -22    -17    -23    7    -26

FNFI

   

First Niles Fin., Inc. of ON

    15.8    118.0    1.7    -5    -19    22    -24    -1    -6

GTPS

   

Great American Bancorp of IL

    10.5    107.5    5.6    27    12    0    -22    -11    -25

HWEN

   

Home Financial Bancorp of IN(1)

    11.8    105.0    8.2    NA    19    5    2    18    -19

NEIB

   

Northeast Indiana Bncrp of IN

    11.8    107.9    5.6    4    16    11    -12    -0    0

PBNC

   

PFS Bancorp Inc. of Aurora IN

    21.8    127.8    1.4    -3    6    -3    8    -13    7

State of IL

                                             

CFSL

   

Chesterfield Financial of IL(2)

    20.5    127.4    1.5    -14    6    6    -14    -5    -17

CFSN

   

Citizens First Fin Corp. of IL

    10.1    107.4    4.1    5    9    -7    11    11    -14

EFC

   

EFC Bancorp, Inc of Elgin IL

    8.4    104.6    5.2    -18    -7    1    -26    -3    3

FBTC

   

First BancTrust Corp of IL

    11.6    107.9    5.2    12    -16    18    -11    -49    -15

FFFS

   

First Fed Serv MHC of IL (45.0)

    26.4    135.2    1.0    -1    NA    NA    NA    NA    NA

FFBI

   

First Federal Bancshares of IL

    6.5    104.8    2.9    4    -8    -26    46    -33    59

GTPS

   

Great American Bancorp of IL

    10.5    107.5    5.6    27    12    0    -22    -11    -25

JXSB

   

Jcksnville Bcp MHC of IL (46.0)

    6.1    103.2    6.0    -4    19    19    -17    -29    1

MAFB

   

MAF Bancorp, Inc. of IL

    6.7    105.4    6.8    -2    14    -12    12    -4    -14

PFED

   

Park Bancorp of Chicago IL

    11.0    108.5    4.9    -25    -3    38    47    -36    -13

 

(1) Financial information is for the quarter ending March 31, 2004.

 

(2) Excluded from averages due to announced or pending acquisition.

 

NA-Change is greater than 100 basis points during the quarter.

 

Source:  Audited and unaudited financial statements, corporate reports and offering circulars, and RP Financial, LC. calculations. The information provided in this table has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

 

Copyright (c) 2004 by RP Financial, LC.

 

RP® Financial, LC.

Page 3.16

 

interest rate environment that prevailed during the period analyzed in Table 3.5, Royal Savings and the Peer Group were viewed as maintaining a similar degree of interest rate risk exposure in their respective net interest margins. The stability of the Bank’s net interest margin should be enhanced by the infusion of stock proceeds, as the increase in capital will reduce the level of interest rate sensitive liabilities funding Royal Savings’ assets.

 

Summary

 

Based on the above analysis, RP Financial concluded that the Peer Group forms a reasonable basis for determining the pro forma market value of Royal Savings. Such general characteristics as asset size, capital position, interest-earning asset composition, funding composition, core earnings measures, loan composition, credit quality and exposure to interest rate risk all tend to support the reasonability of the Peer Group from a financial standpoint. Those areas where differences exist will be addressed in the form of valuation adjustments to the extent necessary.

 

RP® Financial, LC.

Page 4.1

 

IV. VALUATION ANALYSIS

 

Introduction

 

This chapter presents the valuation analysis and methodology, prepared pursuant to the regulatory valuation guidelines, and valuation adjustments and assumptions used to determine the estimated pro forma market value of the common stock to be issued in conjunction with the Bank’s conversion transaction.

 

Appraisal Guidelines

 

The OTS written appraisal guidelines specify the market value methodology for estimating the pro forma market value of an institution pursuant to a mutual-to-stock conversion. Pursuant to this methodology: (1) a peer group of comparable publicly-traded institutions is selected; (2) a financial and operational comparison of the subject company to the peer group is conducted to discern key differences; and (3) a valuation analysis in which the pro forma market value of the subject company is determined based on the market pricing of the peer group as of the date of valuation, incorporating valuation adjustments for key differences. In addition, the pricing characteristics of recent conversions, both at conversion and in the aftermarket, must be considered.

 

RP Financial Approach to the Valuation

 

The valuation analysis herein complies with such regulatory approval guidelines. Accordingly, the valuation incorporates a detailed analysis based on the Peer Group, discussed in Chapter III, which constitutes “fundamental analysis” techniques. Additionally, the valuation incorporates a “technical analysis” of recently completed stock conversions, including closing pricing and aftermarket trading of such offerings. It should be noted that these valuation analyses cannot possibly fully account for all the market forces which impact trading activity and pricing characteristics of a particular stock on a given day.

 

The pro forma market value determined herein is a preliminary value for the Bank’s to-be-issued stock. Throughout the conversion process, RP Financial will: (1) review changes in

 

RP® Financial, LC.

Page 4.2

 

the Bank’s operations and financial condition; (2) monitor the Bank’s operations and financial condition relative to the Peer Group to identify any fundamental changes; (3) monitor the external factors affecting value including, but not limited to, local and national economic conditions, interest rates, and the stock market environment, including the market for thrift stocks; and (4) monitor pending conversion offerings (including those in the offering phase) both regionally and nationally. If material changes should occur prior to closing the offering, RP Financial will evaluate if updated valuation reports should be prepared reflecting such changes and their related impact on value, if any. RP Financial will also prepare a final valuation update at the closing of the offering to determine if the prepared valuation analysis and resulting range of value continues to be appropriate.

 

The appraised value determined herein is based on the current market and operating environment for the Bank and for all thrifts. Subsequent changes in the local and national economy, the legislative and regulatory environment, the stock market, interest rates, and other external forces (such as natural disasters or major world events), which may occur from time to time (often with great unpredictability) may materially impact the market value of all thrift stocks, including Royal Financial’s value, or Royal Financial’s value alone. To the extent a change in factors impacting the Bank’s value can be reasonably anticipated and/or quantified, RP Financial has incorporated the estimated impact into its analysis.

 

Valuation Analysis

 

A fundamental analysis discussing similarities and differences relative to the Peer Group was presented in Chapter III. The following sections summarize the key differences between the Bank and the Peer Group and how those differences affect the pro forma valuation. Emphasis is placed on the specific strengths and weaknesses of the Bank relative to the Peer Group in such key areas as financial condition, profitability, growth and viability of earnings, asset growth, primary market area, dividends, liquidity of the shares, marketing of the issue, management, and the effect of government regulations and/or regulatory reform. We have also considered the market for thrift stocks, in particular new issues, to assess the impact on value of Royal Financial coming to market at this time.

 

RP® Financial, LC.

Page 4.3

 

1. Financial Condition

 

The financial condition of an institution is an important determinant in pro forma market value because investors typically look to such factors as liquidity, capital, asset composition and quality, and funding sources in assessing investment attractiveness. The similarities and differences in the Bank’s and the Peer Group’s financial strength are noted as follows:

 

  • Overall A/L Composition. The Bank’s interest-earning asset composition was concentrated in cash and investments, while loans accounted for a larger portion of the Peer Group’s interest-earning asset composition. Loan diversification was more significant for the Peer Group. The smaller size of the Bank’s loan portfolio relative to total assets, and more limited diversification into higher risk types of loans resulted in a lower risk weighted assets-to-assets ratio than that maintained by the Peer Group. Royal Savings’ funding composition reflected a higher concentration of deposits and lower concentration of borrowings relative to the Peer Group’s ratios. Overall, as a percent of assets, the Bank maintained a lower level of interest-earning assets and a lower level of interest-bearing liabilities than indicated for the Peer Group, which resulted in similar IEA/IBL ratios for the Bank in comparison to the Peer Group. After factoring in the impact of the net conversion proceeds, the Bank’s IEA/IBL ratio will be stronger than the Peer Group’s ratio. For valuation purposes, the less favorable potential earnings potential of the Bank’s interest-earning asset composition is offset by the recent success in increasing the loan portfolio balance. Accordingly, RP Financial concluded that a no valuation adjustment was warranted for the Bank’s overall asset/liability composition.

 

  • Credit Quality. The Bank maintained lower ratios of non-performing assets-to-assets and non-performing loans-to-loans, and higher valuation allowances as a percent of non-performing assets. The Peer Group recorded a higher ratio of valuation allowances as a percent of loans. Net loan charge-offs were higher for the Peer Group. The Bank maintained a lower risk weighted assets-to-assets ratio, due to Royal Savings’ lower concentration of loans receivable in the earning asset portfolio. Overall, in comparison to the Peer Group, the Bank’s measures imply a lower degree of credit exposure and, thus, RP Financial concluded that a slight upward valuation adjustment was warranted for the Bank’s credit quality.

 

  • Balance Sheet Liquidity. The Bank operated with a higher level of cash and investment securities relative to the Peer Group (57.1% of assets versus 27.1% for the Peer Group); representing a comparative advantage for the Bank with respect to balance sheet liquidity. Royal Savings’ future borrowing capacity was considered to be higher than the Peer Group’s, in light of the lower level of borrowings maintained by the Bank. Overall, after factoring the increase in liquidity that will initially be provided by the infusion of the net stock proceeds, RP Financial concluded that a slight upward adjustment was warranted for the Bank’s balance sheet liquidity.

 

RP® Financial, LC.

Page 4.4

 

  • Funding Liabilities. Retail deposits served as the primary interest-bearing source of funds for the Bank and the Peer Group, with borrowings being utilized to a greater degree by the Peer Group. The Bank recorded a lower cost of funds than the Peer Group. The Bank currently maintains a lower level of interest-bearing liabilities than the Peer Group. Accordingly, following the stock offering, the increase in Royal Savings’ capital position should serve to lower the Bank’s level of interest-bearing liabilities relative to the Peer Group’s ratio. Accordingly, RP Financial concluded that a slight upward adjustment was warranted for Royal Savings’ funding composition.

 

  • Capital. The Bank’s equity-to-assets and tangible equity-to-assets ratios were higher than the comparable Peer Group ratios. Accordingly, following the stock offering, Royal Financial’s pro forma capital position will be higher than the Peer Group’s capital ratios both on a reported and tangible capital basis. The Bank’s pro forma capital position implies similar a leverage capacity, dependence on interest-bearing liabilities to fund assets and capacity to absorb unanticipated losses. Overall, RP Financial concluded that a slight upward adjustment was warranted for the Bank’s pro forma capital position.

 

On balance, Royal Savings’ balance sheet strength was considered to be more favorable to the Peer Group’s, as implied by the various factors discussed above. Accordingly, we concluded that a slight upward valuation adjustment was warranted for the Bank’s financial strength.

 

2. Profitability, Growth and Viability of Earnings

 

Earnings are a key factor in determining pro forma market value, as the level and risk characteristics of an institution’s earnings stream and the prospects and ability to generate future earnings heavily influence the multiple that the investment community will pay for earnings. The major factors considered in the valuation are described below.

 

  •

Reported Earnings. The Bank recorded lower earnings on a ROAA basis (0.09% of average assets versus 0.76% for the Peer Group). A lower level of net interest income and lower non-interest income, along with higher operating expenses largely accounted for the Bank’s lower return. The lower level of net interest income results from the Bank’s disproportionately large investment in fixed assets (non-earning) and interest earning assets concentrated in lower yielding cash, investments and residential loans. The lower level of non-interest operating income is indicative of the small overall size, three office operation and less diversified operations of the Bank. In addition to the Bank’s current disadvantage in the operating expense ratio, the higher operating expenses associated with implementation of the stock benefit plans following conversion will have a net downward effect on reported net income. The Bank also plans to examine pursuing a branching strategy which would result in

 

RP® Financial, LC.

Page 4.5

 

 

increased investment into branch office facilities in the future which would reduce the level of interest income gained from the proceeds. However, the Bank intends to continue a growth strategy post-conversion, whereby the conversion proceeds will be leveraged, providing for additional income from increases in the earning asset portfolio. Royal Savings also believes that the expense base in place at the Bank will support the expected higher level of assets and operations following the conversion, and thus believes that post-conversion earnings will be improved. Notwithstanding these strategies, any improvements in reported net income will be dependent on addressing the structural weaknesses in the Bank’s earnings (high concentration of fixed assets, low yielding loan portfolio, and high expenses related to personnel and future additions to the branch network). Increasing the Bank’s earnings to levels approaching the Peer Group will necessarily take considerable time and effort, and thus, Royal Savings’ reported earnings warranted a moderate downward adjustment for valuation purposes.

 

  • Core Earnings. The Bank’s and the Peer Group’s earnings were derived largely from recurring sources, including net interest income, operating expenses, and non-interest operating income. In these measures, the Bank operated with a lower net interest margin, a higher operating expense ratio and a lower level of non-interest operating income. The Bank’s lower net interest margin and higher level of operating expenses translated into a lower expense coverage ratio than maintained by the Peer Group (0.82x versus 1.13x for the Peer Group). Likewise, the Bank’s higher operating expense ratio also provided for an efficiency ratio that was less favorable than the Peer Group’s ratio (102.6% versus 72.8% for the Peer Group). Loss provisions had a larger impact on the Peer Group’s earnings, as lower loss provisions were established by the Bank during the twelve month period analyzed. These measures, as well as the expected earnings benefits the Bank should realize from the redeployment of stock proceeds into interest-earning assets, and the intended expansion of the loan portfolio, which will be somewhat negated by expenses associated with the stock benefit plans and operating as a publicly-traded bank, indicate that the Bank’s core earnings are lower than the Peer Group’s. As stated above, the Bank intends to address its weakness in core earnings by continuing to pursue its growth strategy. Royal Savings also believes that the expense base in place at the Bank will support the expected higher level of assets and operations following the conversion, thus partially addressing its earnings weakness. However, also as stated above, the Bank’s weakness in core earnings is structural in nature. Increasing the Bank’s core earnings to levels approaching the Peer Group will require considerable time and effort, and RP Financial thus concluded that a moderate downward adjustment should be applied for the Bank’s core earnings.

 

  •

Interest Rate Risk. Quarterly changes in the Bank’s and the Peer Group’s net interest income to average assets ratios indicated a similar degree of volatility was associated with their respective net interest margins. However, the interest rate risk associated with the Bank’s overall earnings was considered to be greater, in light of the Bank’s less diversified operations into areas that generate non-interest operating income that

 

RP® Financial, LC.

Page 4.6

 

would support sustainability of earnings during periods when net interest margins come under pressure as the result of higher interest rates. Interest rate risk as measured by tangible capital and IEA/IBL ratios were more favorable for the Bank, while the Peer Group’s interest rate risk was slightly more favorable with respect to maintaining a lower level of non-interest earning assets as a percent of total assets. On a pro forma basis, the Bank’s capital position and IEA/IBL ratio will be enhanced by the infusion of stock proceeds and, thus, provide the Bank with more favorable measures relative to the Peer Group’s balance sheet ratios. Overall, RP Financial concluded that the interest rate risk associated with the Bank’s earnings was comparable to the Peer Group’s earnings interest rate risk exposure and no valuation adjustment was necessary for this factor.

 

  • Credit Risk. Loan loss provisions were a larger factor in the Peer Group’s earnings, as lower loss provisions were established by the Bank for the twelve months ended June 30, 2004. In terms of future exposure to credit quality related losses, lending diversification into higher risk types of loans was greater for the Peer Group. The Bank maintained a higher concentration of assets in cash and investments, however such loans included a larger proportion of residential real estate secured loans. The Bank’s and the Peer Group’s credit quality measures indicated that the Bank maintained a lower level of non-performing assets, a higher level of loss reserves as a percent of non-performing assets and a lower level of loss reserves as a percent of loans. Taking these factors into account, RP Financial concluded that a slight upward adjustment was warranted for this factor.

 

  • Earnings Growth Potential. Several factors were considered in assessing earnings growth potential. First, potential earnings growth that may be realized through balance sheet growth is expected to be more favorable for the Bank based on recent historical growth trends, particularly in the important area of higher yielding loan growth. The Bank currently has in place the necessary infrastructure and cost structure, including personnel, to manage a higher level of business activities. Second, the infusion of stock proceeds will increase the Bank’s earnings growth potential with respect to leverage capacity, as the Bank’s pro forma leverage capacity will be higher than the Peer Group’s. Offsetting these factors, the Bank’s less diversified operations will limit earnings growth in the short term and the Bank’s comparative weaknesses relative to the Peer Group are structural and significant (break-even levels of core earnings versus a return on assets of 0.76 percent of average assets for the Peer Group). Thus, although the Bank’s growth potential is favorable, the Bank is beginning from a position of significant weakness relative to the Peer Group and the market as a whole. We concluded that no adjustment is warranted for this factor.

 

  •

Return on Equity. As the result of the increase in capital that will be realized from the infusion of net stock proceeds, the Bank’s return on equity will be below the comparable averages for the Peer Group and all publicly-traded thrifts. In view of the

 

RP® Financial, LC.

Page 4.7

 

     lower capital growth rate that will be imposed by Royal Savings’ lower ROE, we concluded that a moderate downward adjustment was warranted for the Bank’s ROE.

 

Overall, a moderate downward adjustment was applied for the Bank’s profitability, growth and viability of earnings.

 

3. Asset Growth

 

Recent asset growth trends for the Bank and the Peer Group reflected more favorable growth characteristics for the Bank, as Royal Savings experienced a 6.6% increase in assets and a 45.4% increase in loans for the twelve month period ended June 30, 2004. Comparatively, over the same time period, the Peer Group posted a 2.1% increase in assets and a 7.0% increase in loans. On a pro forma basis, the Bank’s tangible equity-to-assets ratio will be higher than the Peer Group’s tangible equity-to-assets ratio, indicating a higher leverage capacity for the Bank. On average, the demographic characteristics of the Bank’s primary market area were considered to be somewhat more favorable compared to the markets served by the Peer Group companies with respect to supporting growth opportunities, based on the large population base and business market in the Chicago metropolitan statistical area. On balance, we concluded that after taking into account the Bank’s stronger historical growth trends and more favorable market area trends, a slight upward adjustment was warranted for this factor.

 

4. Primary Market Area

 

The general condition of an institution’s market area has an impact on value, as future success is in part dependent upon opportunities for profitable activities in the local market served. The market area served by the Bank consists substantially of the developed Chicago metropolitan statistical area, including portions of northwestern Indiana. The market area has experienced moderate population and household growth since 2000. The primary market area has a diversified economy, with household and per capita income measures in line with above state averages and above national averages. Competition faced by the Bank for deposits and loans is significant, which includes other locally based banks and savings institutions, as well as regional and super regional banks.

 

RP® Financial, LC.

Page 4.8

 

Overall, the markets served by the Peer Group companies were viewed as being less favorable with respect to supporting growth opportunities. The primary market areas served by the Peer Group companies are generally less populous and have generally experienced low levels of population growth, similar to the Bank’s market area. In general, the Peer Group companies faced less competition than the Bank, as indicated by the significantly higher deposit market share that was maintained by the Peer Group companies on average (14.3% versus 0.1% for the Bank). Summary demographic and deposit market share data for the Bank and the Peer Group companies is provided in Exhibit III-3. As shown in Table 4.1, June 2004 unemployment rates for the majority of the markets served by the Peer Group companies were lower than the unemployment rate reflected for Cook County. On balance, we concluded that a slight upward adjustment was appropriate for the Bank’s market area.

 

Table 4.1

Market Area Unemployment Rates

Royal Savings and the Peer Group Companies (1)

 

     County
   

June 2004

Unemployment

  

Royal Savings Bank of Chicago, IL

    Cook    6.6 %

Peer Group Average

         5.5 %

AMB Financial Corp. of IN

    Lake    6.1 %

FFW Corporation of Wabash, IN

    Wabash    5.7  

First BancTrust Corp. of Paris, IL

    Edgar    4.2  

First Bancorp of Evansville, IN

    Vanderburgh    4.2  

Great American Bncp of Champaign, IN

    Champaign    3.5  

Home Financial Bancorp of Spencer, IN

    Owen    4.6  

Northeast Indiana Bncp of Huntington, IN

    Huntington    5.2  

PFS Bancorp, Inc. of Aurora, IN

    Ohio    4.4  

Community Invest Bncrp of Bucyrus, OH

    Crawford    9.7  

First Niles Financial, Inc. of Niles, OH

    Trumbull    7.1  

 

(1) Unemployment rates are not seasonally adjusted.

 

Source:  U.S. Bureau of Labor Statistics.

 

RP® Financial, LC.

Page 4.9

 

5. Dividends

 

At this time the Bank has not established a dividend policy. Future declarations of dividends by the Board of Directors will depend upon a number of factors, including investment opportunities, growth objectives, financial condition, profitability, tax considerations, minimum capital requirements, regulatory limitations, stock market characteristics and general economic conditions.

 

All ten of the Peer Group companies pay regular cash dividends, with implied dividend yields ranging from 1.37% to 3.24%. The average dividend yield on the stocks of the Peer Group institutions equaled 2.30% as of September 3, 2004. As of September 3, 2004, approximately 92% of all publicly-traded thrifts had adopted cash dividend policies (see Exhibit IV-1), exhibiting an average yield of 2.35%. The dividend paying thrifts generally maintain higher than average profitability ratios, thereby facilitating their ability to pay cash dividends.

 

While the Bank has not established a definitive dividend policy prior to the stock offering, the Bank will have the capacity to pay a dividend comparable or in excess to the Peer Group’s average dividend yield based on pro forma capitalization, but a lower capacity to pay a dividend based on pro forma earnings. On balance, we concluded that no adjustment was warranted for purposes of the Bank’s dividend policy.

 

6. Liquidity of the Shares

 

The Peer Group is by definition composed of companies that are traded in the public markets. All ten of the Peer Group members trade on the NASDAQ system. Typically, the number of shares outstanding and market capitalization provides an indication of how much liquidity there will be in a particular stock. The market capitalization of the Peer Group companies, based on the shares issued and outstanding to shareholders ranged from $7.8 million to $33.6 million as of September 3, 2004, with average and median market values of $23.9 million and $22.1 million, respectively. The shares issued and outstanding to the shareholders of the Peer Group members ranged from 735,000 to 2.5 million, with average and median shares outstanding of 1.4 million and 1.4 million, respectively. The Bank’s stock offering is expected to have a pro forma market value and shares outstanding that are at the higher end of the

 

RP® Financial, LC.

Page 4.10

 

comparable Peer Group ranges. While all of the Peer Group companies are quoted on the NASDAQ National Market System, the Bank’s stock is expected to be listed on the OTC Bulletin Board following the stock offering, a less liquid trading exchange. Overall, we anticipate that the Bank’s public stock will have a lower level of liquidity as the Peer Group companies on average and, therefore, concluded a slight downward adjustment was necessary for this factor.

 

7. Marketing of the Issue

 

Three separate markets exist for thrift stocks: (1) the after-market for public companies, in which trading activity is regular and investment decisions are made based upon financial condition, earnings, capital, ROE, dividends and future prospects; (2) the new issue market in which converting thrifts are evaluated on the basis of the same factors, but on a pro forma basis without the benefit of prior operations as a publicly-held company and stock trading history; and (3) the thrift acquisition market for thrift franchises in Illinois. All of these markets were considered in the valuation of the Bank’s to-be-issued stock.

 

  A. The Public Market

 

The value of publicly-traded thrift stocks is easily measurable, and is tracked by most investment houses and related organizations. Exhibit IV-1 provides pricing and financial data on all publicly-traded thrifts. In general, thrift stock values react to market stimuli such as interest rates, inflation, perceived industry health, projected rates of economic growth, regulatory issues and stock market conditions in general. Exhibit IV-2 displays historical stock market trends for various indices and includes historical stock price index values for thrifts and commercial banks. Exhibit IV-3 displays historical stock price indices for thrifts only.

 

In terms of assessing general stock market conditions, the performance of the overall stock market has been mixed over the past year. Economic data that showed a strengthening economy, particularly in the manufacturing sector, propelled stocks higher through September 2003, as the DJIA and NASDAQ posted respective 14-month and 16-month highs. Stocks retreated following the release of August employment data which showed further job losses, but then recovered in mid-September as the Federal Reserve indicated that it would not

 

RP® Financial, LC.

Page 4.11

 

raise rates in the near term. Weaker than expected numbers for consumer confidence and manufacturing activity pulled the boarder market lower at the close of the third quarter, which ended a streak of six monthly gains in the DJIA.

 

Comparatively, at the start of the fourth quarter stocks showed renewed strength, as optimism about third quarter earnings and employment data for September 2003 provided a boost to stocks. In mid-October, the DJIA and the NASDAQ hit 16- and 19-month highs, respectively, primarily on the basis of some favorable third quarter earnings reports. The broader stock market rally cooled in mid-October, as the result of profit taking and the posting of some less favorable third quarter earnings by some of the bellwether technology and manufacturing stocks. Indications that the economic recovery was gaining momentum, including an annualized GDP growth rate of 8.2% in the third quarter, as well as the Federal Reserve’s statement that it would not raise its target interest rates for a considerable period, supported a stock market rally during late-October and into early-November. Despite upbeat economic news, including employment data that showed the size of the U.S. workforce increased in October, stocks edged lower in mid-November on profit taking and concerns over increased terrorism in the Middle East. In late-November and early-December 2003, positive economic news such as improved third quarter corporate profits and a strong start to the Christmas shopping season provided a boost to stocks. Stocks continued to move higher at the close of 2003, as key sectors of the economy continued to show signs of strengthening.

 

Year end momentum in the stock market was sustained at the beginning of 2004, reflecting generally favorable fourth quarter earnings and an increase in consumer confidence. Profit taking and slower than expected GDP growth in the fourth quarter of 2003 caused stocks to falter in late-January. However, aided by January employment data that showed jobs were added and a decline in the national unemployment rate to 5.6%, the broader stock market moved higher during the first half of February. Stocks generally declined during the balance of February and during the first half of March, reflecting valuation concerns following a year of strong gains and weaker than expected job growth during February. Concerns about terrorism and higher oil prices caused stocks to tumble in late-March, before rebounding at the close of the first quarter on more attractive fundamentals and optimism about first quarter earnings.

 

RP® Financial, LC.

Page 4.12

 

Stocks moved higher in early April 2004, as investors reacted favorably to a strong employment report for March. For the balance of April trading in the broader market produced uneven results, as generally favorable first quarter earnings and strong economic data weighed against the growing threat of inflation and higher interest rates. The DJIA closed below 10000 for the first time in 2004 in the second week of May, as strong job growth during April raised expectations of a rate increase by the Federal Reserve. The downward trend in stocks prevailed through most of May, on concerns about higher oil prices, violence in the Middle East and higher interest rates. Stocks rebounded in late-May, primarily on the basis of higher corporate earnings and lower oil prices. Strong employment data for May combined with lower oil prices and favorable inflation data provided for a positive trend in the broader market through mid-June. Stocks traded in a narrow range through the end of the second quarter, as investors awaited the outcome of the Federal Reserve meeting at the end of June.

 

Rising oil prices and profit warnings from some technology companies caused major stock indices to fall at the start of the third quarter of 2004. Stocks continued to trend lower through most of July, as a slow down in the economic expansion raised concerns about future earnings growth. Strong consumer confidence numbers for July reversed the downward in stocks during the last week of July, with the DJIA closing up for the week for the first time since mid-June. The recovery in the stock market was short-lived, as record high oil prices, weak retail sales for July and weaker than expected job growth for July pulled stocks lower in early-August. A positive economic outlook by the Federal Reserve and bargain hunting supported gains in the stock market during mid-August, as the DJIA moved back above the 10000 barrier. The stock market traded in a narrow range through early September 2004, as concerns about earnings, particularly in the high tech industry, and terrorism fears and the effect on world oil prices, continued to weigh on the U.S. stock market. As an indication of the general trends in the nation’s stock markets over the past year, as of September 3, 2004, the DJIA closed at 10260.2, an increase of 8.0% from one year ago and a decline of 1.9% year-to-date. As of September 3, 2004 the NASDAQ closed at 1844.5, a decrease of 0.7% from one year ago and decline of 7.9% year-to-date. The Standard & Poors 500 Index closed at 1113.6 on September 3, 2004, an increase of 9.3% from a year ago and a decline of 0.1% year-to-date.

 

RP® Financial, LC.

Page 4.13

 

The market for thrift stocks has been mixed as well during the past twelve months, but, in general, thrift issues have paralleled trends in the broader market. Merger activity and acquisition speculation in the thrift sector provided a boost to thrift prices in early-September 2003. After easing lower into mid-September on data that showed a slow down in refinancing activity, thrift stocks strengthened following the Federal Reserve’s decision to leave interest rates unchanged at its mid-September meeting.

 

After following the broader stock market lower as the close of the third quarter approached, thrift issues posted solid gains at the beginning of the fourth quarter of 2003. A rally in the broader stock market and acquisition activity were noteworthy factors that supported the positive trend in thrift stocks. Following a two week run-up, thrift stocks declined in mid-October on profit taking and a pullback in the broader market. Merger activity, most notably Bank America’s announced acquisition of FleetBoston Financial Corp., along with strength in the broader market, provided for gains in the thrift sector during late-October. The positive trend in thrift stocks carried into early-November, reflecting expectations of improving net interest margins and more consolidation of thrifts. Thrifts stocks eased lower in mid-November in conjunction with the decline in the broader market. In late-November and early-December 2003, thrift stocks followed the broader market higher and then stabilized at the close of the fourth quarter.

 

After trading in a narrow range at the beginning of 2004, thrift issues trended higher in late-January and the first half of February. The positive trend was supported by further consolidation in the thrift sector, including GreenPoint Financial’s agreement to sell to North Fork Bancorp, as well as generally favorable fourth quarter earnings. Indications that interest rates would continue to remain low provided further support to thrift prices. Thrift stocks followed the broader market lower in mid-February, before recovering in late-February following a dip in long term Treasury yields. Thrift issues generally experienced some selling pressure during the first half of March, reflecting profit taking and weakness in the broader stock market. Higher interest rates and weakness in the broader market pressured thrift issues lower in late-March, which was followed by an upward move in thrift prices at the close of the first quarter.

 

RP® Financial, LC.

Page 4.14

 

Thrifts stocks generally traded lower at the start of the second quarter of 2004, as a strong employment report for March pushed interest rates higher. Higher interest rates and inflation worries pressured interest rate sensitive issues lower through most of April, with the sell-off sharpening in early-May following another strong employment report for April. Thrift stocks recovered modestly in mid-May as the yield on 10-year Treasury note declined slightly. Acquisition speculation involving the sale of Washington Mutual lifted the thrift sector in late-May. Thrift stocks generally retreated during the first half of June, as the yield on the 10-year Treasury note moved to a two-year high on inflation concerns. Following the sharp sell-off, thrift stocks rebounded as a moderate increase in core consumer prices during may and comments by the Federal Reserve Chairman that inflation did not seem likely to be a serious problem eased fears of a sharp rise in inflation. Acquisition activity helped to boost thrift stocks in late-June, but the upward trend was abruptly reversed at the end of June as a significant decline in Washington Mutual’s 2004 earnings guidance pulled the broader thrift sector lower.

 

Thrift stocks responded favorably to the 25 basis point rate increase implemented by the Federal Reserve at the close of the 2004 second quarter, as the Federal Reserve indicated that it would continue to raise the federal funds rate 25 basis points at a time. June employment data which showed weaker than expected job growth also provided support to thrift stocks in early-July. For most of July there was little movement in thrift stocks, as second quarter earnings were generally in line with expectations. A rally in the broader market in late-July provided a boost to thrift stocks as well. Thrift issues traded down with the rest of the market in early-August, although losses in the thrift sector were mild compared to the sell-off experienced in the boarder market as weaker than expected job growth for July pushed interest rates lower. Improved inflation data, lower interest rates and a rally in the broader stock market combined to push the thrift sector in mid-August. On September 3, 2004, the SNL Index for all publicly-traded thrifts closed at 1,493.5, an increase of 12.4% from one year ago and an increase of 0.8% year-to-date.

 

  B. The New Issue Market

 

In addition to thrift stock market conditions in general, the new issue market for converting thrifts is also an important consideration in determining the Bank’s pro forma market

 

RP® Financial, LC.

Page 4.15

 

value. The new issue market is separate and distinct from the market for seasoned thrift stocks in that the pricing ratios for converting issues are computed on a pro forma basis, specifically: (1) the numerator and denominator are both impacted by the conversion offering amount, unlike existing stock issues in which price change affects only the numerator; and (2) the pro forma pricing ratio incorporates assumptions regarding source and use of proceeds, effective tax rates, stock plan purchases, etc. which impact pro forma financials, whereas pricing for existing issues are based on reported financials. The distinction between pricing of converting and existing issues is perhaps no clearer than in the case of the price/book (“P/B”) ratio in that the P/B ratio of a converting thrift will typically result in a discount to book value whereas in the current market for existing thrifts the P/B ratio often reflects a premium to book value. Therefore, it is appropriate to also consider the market for new issues, both at the time of the conversion and in the aftermarket.

 

Thrift offerings completed in 2004 have generally been well received, with most offerings being oversubscribed and trading higher in initial trading activity. However, reflecting the general pull back in thrift stocks, four of the five recent offerings shown in Table 4.2 were not oversubscribed and the two second-step conversion offerings traded below their IPO prices in initial trading activity. As shown in Table 4.2, one standard conversion, two second-step conversions and two mutual holding company offerings were completed during the past three months. The standard conversion offerings are considered to be more relevant for purposes of our analysis, however this offering, Third Century Bancorp, trades on the OTC Bulletin Board. As of September 3, 2004, Third Century Bancorp’s stock price was $11.25, representing an increase of 12.5% since the initial public offering date of June 30, 2004.

 

Shown in Table 4.3 are the current pricing ratios of Partner Trust Financial Group, which is the only NASDAQ or Exchange listed fully-converted offering that has been completed within the past three months. Partners Trust’s closing market price of $9.95 on September 3, 2004 represented a 0.5% decrease from its IPO price.

 

RP Financial, LC.

 

Table 4.2

Pricing Characteristics and After-Market Trends

Recent Conversions Completed (Last Three Months)

 

Institutional Information

   Pre-Conversion Data
     Offering Information
    

Contribution to

Charitable Found

   Insider Purchases
    

Initial

Dividend
Yield

  
    Financial Info.
     Asset
Quality
                                              
                                                        Benefit Plans
          
   

Conversion

   Assets
   Equity/
Assets
    

NPAs/

Assets

     Res.
Cov.
    

Gross

Proc.

   %
Offered
    

% of

Mid.

     Exp./
Proc.
     Form
   % of
Offering
   ESOP
     Recog.
Plans
     Mgmt.
&
Dirs.
    

Institution

  

ST

  

Date

  

Ticker

                            
                ($Mil)   (%)     (%)     (%)     ($Mil.)   (%)     (%)     (%)         (%)   (%)     (%)     (%)(2)     (%)  

Standard Conversions

                                                                                            

Third Century Bancorp

   IN   6/30/04   TDCB-OTS BB   $ 107   7.62 %   0.47 %   662 %   $ 16.5   100 %   132 %   3.8 %   NA   NA   8.0 %   4.0 %   9.6 %   0.00 %
Averages - Standard Conversions:   $ 107   7.62 %   0.47 %   662 %   $ 16.5   100 %   132 %   3.8 %   N.A.   N.A.   8.0 %   4.0 %   9.6 %   0.00 %
Medians - Standard Conversions:   $ 107   7.62 %   0.47 %   662 %   $ 16.5   100 %   132 %   3.8 %   N.A.   N.A.   8.0 %   4.0 %   9.6 %   0.00 %

Second Step Conversions

                                                                                            

DSA Financial Corporation

   IN   7/30/04   DSFN-OTS BB   $ 78   12.07 %   0.71 %   59 %   $ 8.5   52 %   108 %   6.1 %   N.A.   N.A.   8.0 %   4.0 %   7.4 %   4.00 %

Partners Trust Financial Group, Inc.*

   NY   7/15/04   PRTR-NASDAQ   $ 3,628   11.01 %   0.59 %   264 %   $ 148.8   54 %   85 %   3.6 %   N.A.   N.A.   8.0 %   4.0 %   0.7 %   2.50 %
Averages - Second Step Conversions:   $ 1,853   11.54 %   0.65 %   162 %   $ 78.6   53 %   97 %   4.9 %   NA   NA   8.0 %   4.0 %   4.0 %   3.25 %
Medians - Second Step Conversions:   $ 1,853   11.54 %   0.65 %   162 %   $ 78.6   53 %   97 %   4.9 %   NA   NA   8.0 %   4.0 %   4.0 %   3.25 %

Mutual Holding Company Conversions

                                                                                            

First Federal Financial Services, Inc.

   IL   6/29/04   FFFS-NASDAQ   $ 123   15.62 %   0.07 %   471 %   $ 17.6   45 %   92 %   3.9 %   N.A.   N.A.   5.0 %   4.0 %   8.6 %   2.40 %

Monadnock Community Bncp, Inc.*(9

   NH   6/29/04   MNCK-OTC BB   $ 45   5.64 %   0.37 %   207 %   $ 3.4   45 %   100 %   14.8 %   N.A.   N.A.   4.0 %   4.0 %   13.5 %   0.00 %
Averages - Mutual Holding Company Conversions:   $ 84   10.63 %   0.22 %   339 %   $ 10.5   45 %   96 %   9.3 %   NA   NA   4.5 %   4.0 %   11.0 %   1.20 %
Medians - Mutual Holding Company Conversions:   $ 84   10.63 %   0.22 %   339 %   $ 10.5   45 %   96 %   9.3 %   NA   NA   4.5 %   4.0 %   11.0 %   1.20 %
Averages - All Conversions:   $ 796   10.39 %   0.44 %   333 %   $ 39.0   59 %   103 %   6.4 %   NA   NA   6.6 %   4.0 %   7.9 %   1.78 %
Medians - All Conversions:   $ 107   11.01 %   0.47 %   264 %   $ 16.5   52 %   100 %   3.9 %   NA   NA   8.0 %   4.0 %   8.6 %   2.40 %

 

Institutional Information

   Pro Forma Data
    

IPO
Price

   Post-IPO Pricing Trends
  
    Pricing Ratios(3)
     Financial Charac.
       Closing Price:
  
                                          First
Trading
Day
   %
Change
     After
First
Week(4)
   %
Change
     After
First
Month(5)
   %
Change
  
   

Conversion

   P/TB
    

Core

P/E

     P/A
    

Core

ROA

     TE/A
    

Core

ROE

                

Institution

  

ST

  

Date

  

Ticker

                          
                (%)     (x)     (%)     (%)     (%)     (%)     ($)   ($)   (%)     ($)   (%)     ($)   (%)  

Standard Conversions

                                                                                          

Third Century Bancorp

   IN   6/30/04   TDCB-OTS BB   74.9 %   39.1 x   13.7 %   0.4 %   18.3 %   1.9 %   $ 10.00   $ 11.32   13.2 %   $ 11.05   10.5 %   $ 11.25   12.5 %
Averages - Standard Conversions:   74.9 %   39.1 x   13.7 %   0.4 %   18.3 %   1.9 %   $ 10.00   $ 11.32   13.2 %   $ 11.05   10.5 %   $ 11.25   12.5 %
Medians - Standard Conversions:   74.9 %   39.1 x   13.7 %   0.4 %   18.3 %   1.9 %   $ 10.00   $ 11.32   13.2 %   $ 11.05   10.5 %   $ 11.25   12.5 %

Second Step Conversions

                                                                                          

DSA Financial Corporation

   IN   7/30/04   DSFN-OTS BB   100.3 %   20.0 x   19.3 %   1.0 %   19.2 %   5.0 %   $ 10.00   $ 9.80   -2.0 %   $ 9.50   -5.0 %   $ 9.30   -7.0 %

Partners Trust Financial Group, Inc.*

   NY   7/15/04   PRTR-NASDAQ   188.9 %   17.2 x   12.7 %   0.7 %   6.7 %   11.0 %   $ 10.00   $ 9.99   -0.1 %   $ 9.98   -0.2 %   $ 9.81   -1.9 %
Averages - Second Step Conversions:   144.6 %   18.6 x   16.0 %   0.9 %   13.0 %   8.0 %   $ 10.00   $ 9.90   -1.1 %   $ 9.74   -2.6 %   $ 9.56   -4.4 %
Medians - Second Step Conversions:   144.6 %   18.6 x   16.0 %   0.9 %   13.0 %   8.0 %   $ 10.00   $ 9.90   -1.1 %   $ 9.74   -2.6 %   $ 9.56   -4.4 %

Mutual Holding Company Conversions

                                                                                          

First Federal Financial Services, Inc. IL

   6/29/04   FFFS-NASDAQ   73.4 %   23.7 x   24.9 %   1.2 %   25.0 %   4.8 %   $ 10.00   $ 11.50   15.0 %   $ 12.25   22.5 %   $ 13.50   35.0 %

Monadnock Community BNCP, Inc.*(9NH

   6/29/04   MNCK-OTC BB   84.1 %   458.9 x   14.7 %   0.0 %   10.7 %   0.0 %   $ 8.00   $ 8.30   3.8 %   $ 8.00   0.0 %   $ 7.70   -3.8 %
Averages - Mutual Holding Company Conversions:   78.7 %   241.3 x   19.8 %   0.6 %   17.9 %   2.4 %   $ 9.00   $ 9.90   9.4 %   $ 10.13   11.3 %   $ 10.60   15.6 %
Medians - Mutual Holding Company Conversions:   78.7 %   241.3 x   19.8 %   0.6 %   17.9 %   2.4 %   $ 9.00   $ 9.90   9.4 %   $ 10.13   11.3 %   $ 10.60   15.6 %
Averages - All Conversions:   104.3 %   111.8 x   17.1 %   0.7 %   16.0 %   4.5 %   $ 9.60   $ 10.18   6.0 %   $ 10.16   5.6 %   $ 10.31   7.0 %
Medians - All Conversions:   84.1 %   23.7 x   14.7 %   0.7 %   18.3 %   4.8 %   $ 10.00   $ 9.99   3.8 %   $ 9.98   0.0 %   $ 9.81   -1.9 %

 

Note:*- Appraisal performed by RP Financial; “NT” - Not Traded; “NA” - Not Applicable, Not Available; C/S-Cash/Stock.

 

(1) Non-OTS regulated thrift.

 

(2) As a percent of MHC offering for MHC transactions.

 

(3) Does not take into account the adoption of SOP 93-6.

 

(4) Latest price if offering is less than one week old.

 

(5) Latest price if offering is more than one week but less than one month old.

 

(6) Mutual holding company pro forma data on full conversion basis.

 

(7) Simultaneously completed acquisition of another financial institution.

 

(8) Simultaneously converted to a commercial bank charter.

 

(9) Former credit union.

 

September 3, 2004

 

RP Financial, LC.                                        

Financial Services Industry Consultants

1700 North Moore Street, Suite 2210

Arlington, Virginia 22209

(703) 528-1700

 

Table 4.3

Market Pricing Comparatives

Prices as of September 3, 2004

 

Financial
Institution

    Market
Capitalization
    Per Share Data
               
      Core
12-Wth
EPS (2)
    Book
Value/
Share
    Pricing Ratios (3)
    Dividends (4)
    Financial Characteristics (6)
   Price/ /
Share(1)
    Market
Value
          P/E
    P/B
    P/A
    P/TS
    P/
CORE
   

Amount/

Share

    Yield
   

Payout

Ratio(3)

   

Total

Assets

   

Equity/

Assets

   

NPAs/

Assets

    Report
    Core
                                                ROA
    ROK
    ROA
    ROK
                                                                                                

All Public Companies

    22.15    466.74    1.02    14.19    17.60    159.51    17.02    173.56    19.55    0.48    2.20    36.08    2,935    10.74    0.55    0.82    0.70    0.71    7.21

Special Selection Grouping (8)

    9.95    276.04    0.58    11.00    16.58    90.45    12.63    188.09    17.16    0.24    2.41    41.38    2,183    13.98    0.24    0.76    5.45    0.74    5.27

Comparable
Group

                                                                                               

Special
Comparative
Group (8)

                                                                                               

PRTR Partners Trust Fin. Grp. of NY

    9.95    276.04    0.58    11.00    16.58    90.45    12.65    188.09    17.16    0.24    2.41    41.38    2,183    13.98    0.24    0.76    5.45    0.74    5.27

 

(1) Average of High/Low or Bid/Ask price per share.

 

(2) EPS (estimate core basis) is based on actual trailing twelve month data, adjusted to omit non-operating items on a tax affected basis.

 

(3) P/E = Price to earnings; P/B = Price to book; P/A = Price to assets; P/TB = Price to tangible book value; and P/CORE = Price to estimated core earnings.

 

(4) Indicated twelve month dividend, based on last quarterly dividend declared.

 

(5) Indicated dividend as a percent of trailing twelve month estimated core earnings.

 

(6) ROA (return on assets) and ROE (return on equity) are indicated ratios based on trailng twelve month earnings and average equity and assets balances.

 

(7) Excludes from averages those companies the subject of actual or rumored acquisition activities or unusual operating characteristics.

 

(8) Includes Converted Last 3 Mths (no MHC).

 

Source: Corporate reports, offering circulars, and RP Financial, LC, calculations. The information provided in this report has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

 

Copyright (c) 2004 by RP Financial, LC.

 

RP® Financial, LC.

Page 4.18

 

  C. The Acquisition Market

 

Also considered in the valuation was the potential impact on Royal Savings’s stock price of recently completed and pending acquisitions of other savings institutions operating in Illinois. As shown in Exhibit IV-4, there were nine Illinois thrift acquisitions announced from 2001 through year-to-date 2004, and there are currently two pending acquisitions of Illinois savings institutions. The recent acquisition activity in the regional market area may imply a certain degree of acquisition speculation for the Bank’s stock. To the extent that acquisition speculation may impact the Bank’s offering, we have largely taken this into account in selecting companies which operate in markets that have experienced a comparable level of acquisition activity as the Bank’s market and, thus, are subject to the same type of acquisition speculation that may influence Royal Savings’ trading price. However, since converting thrifts are subject to a three-year regulatory moratorium from being acquired, acquisition speculation in Royal Savings’ stock would tend to be less compared to the more seasoned stocks of the Peer Group companies.

 

* * * * * * * * * * *

 

In determining our valuation adjustment for marketing of the issue, we considered trends in both the overall thrift market, the new issue market and the local acquisition market for thrift stocks. Taking these factors and trends into account, RP Financial concluded that no adjustment was appropriate in the valuation analysis for purposes of marketing of the issue.

 

8. Management

 

Royal Savings’ management team appears to have experience and expertise in all of the key areas of the Bank’s operations. Exhibit IV-5 provides summary resumes of Royal Savings’ Board of Directors and senior management. The financial characteristics of the Bank suggest that the Board and senior management have been effective in implementing an operating strategy that can be well managed by the Bank’s present organizational structure. The Bank currently does not have any senior management positions that are vacant.

 

Similarly, the returns, capital positions and other operating measures of the Peer Group companies are indicative of well-managed financial institutions, which have Boards and

 

RP® Financial, LC.

Page 4.19

 

management teams that have been effective in implementing competitive operating strategies. Therefore, on balance, we concluded no valuation adjustment relative to the Peer Group was appropriate for this factor.

 

9. Effect of Government Regulation and Regulatory Reform

 

In summary, as a fully-converted institution, Royal Savings will operate in substantially the same regulatory environment as the Peer Group members — all of whom are adequately capitalized institutions and are operating with no apparent restrictions. Exhibit IV-6 reflects the Bank’s pro forma regulatory capital ratios. On balance, no adjustment has been applied for the effect of government regulation and regulatory reform.

 

Summary of Adjustments

 

Overall, based on the factors discussed above, we concluded that the Bank’s pro forma market value should reflect the following valuation adjustments relative to the Peer Group:

 

Table 4.4

Valuation Adjustments

Royal Savings Bank

 

Key Valuation Parameters:

   

Valuation Adjustment

Financial Condition    Slight Upward
Profitability, Growth and Viability of Earnings    Moderate Downward
Asset Growth    Slight Upward
Primary Market Area    Slight Upward
Dividends    No Adjustment
Liquidity of the Shares    Slight Downward
Marketing of the Issue    No Adjustment
Management    No Adjustment
Effect of Government Regulations and Regulatory Reform    No Adjustment

 

Valuation Approaches

 

In applying the accepted valuation methodology promulgated by the OTS and adopted by the FDIC, i.e., the pro forma market value approach, we considered the three key pricing ratios

 

RP® Financial, LC.

Page 4.20

 

in valuing Royal Savings’ to-be-issued stock — price/earnings (“P/E”), price/book (“P/B”), and price/assets (“P/A”) approaches — all performed on a pro forma basis including the effects of the conversion proceeds. In computing the pro forma impact of the conversion and the related pricing ratios, we have incorporated the valuation parameters disclosed in Royal Savings’ prospectus for reinvestment rate, the effective tax rate, offering expenses and stock benefit plan assumptions (summarized in Exhibits IV-7 and IV-8). In our estimate of value, we assessed the relationship of the pro forma pricing ratios relative to the Peer Group and the recent conversions.

 

RP Financial’s valuation placed an emphasis on the following:

 

  • P/E Approach. The P/E approach is generally a good indicator of long-term value for a stock. Given the similarities between the Bank’s and the Peer Group’s earnings composition and overall financial condition, the P/E approach was carefully considered in this valuation. At the same time, since reported earnings for both the Bank and the Peer Group included certain non-recurring items, we also made adjustments to earnings to arrive at core earnings estimates for the Bank and the Peer Group and resulting price/core earnings ratios.

 

  • P/B Approach. P/B ratios have generally served as a useful benchmark in the valuation of thrift stocks, particularly in the context of an initial public offering, as the earnings approach involves assumptions regarding the use of proceeds. RP Financial considered the P/B approach to be a useful indicator of pro forma value taking into account the pricing ratios under the P/E and P/A approaches. We have also modified the P/B approach to exclude the impact of intangible assets (i.e., price/tangible book value or “P/TB”), in that the investment community frequently makes this adjustment in its evaluation of this pricing approach.

 

  • P/A Approach. P/A ratios are generally a less reliable indicator of market value, as investors typically assign less weight to assets and attribute greater weight to book value and earnings - we have also given less weight to the assets approach. Furthermore, this approach as set forth in the regulatory valuation guidelines does not take into account the amount of stock purchases funded by deposit withdrawals, thus understating the pro forma P/A ratio. At the same time, the P/A ratio is an indicator of franchise value, and, in the case of highly capitalized institutions, high P/A ratios may limit the investment community’s willingness to pay market multiples for earnings or book value when ROE is expected to be low.

 

The Bank will adopt Statement of Position (“SOP”) 93-6, which will cause earnings per share computations to be based on shares issued and outstanding excluding unreleased ESOP shares. For purposes of preparing the pro forma pricing analyses, we have reflected all shares issued in the offering, including all ESOP shares, to capture the full dilutive impact, particularly

 

RP® Financial, LC.

Page 4.21

 

since the ESOP shares are economically dilutive, receive dividends and can be voted. However, we did consider the impact of the adoption of SOP 93-6 in the valuation.

 

Based on the application of the three valuation approaches, taking into consideration the valuation adjustments discussed above, RP Financial concluded that, as of September 3, 2004, the pro forma market value of Royal Savings’ conversion stock was $20,000,000 at the midpoint, equal to 2,000,000 shares at $10.00 per share.

 

1. Price-to-Earnings (“P/E”). The application of the P/E valuation method requires calculating the Bank’s pro forma market value by applying a valuation P/E multiple to the pro forma earnings base. In applying this technique, we considered both reported earnings and a recurring earnings base, that is, earnings adjusted to exclude any one-time non-operating items, plus the estimated after-tax earnings benefit of the reinvestment of the net proceeds. The Bank’s reported earnings equaled $84,423 for the twelve months ended June 30, 2004. In examining Royal Savings’ core earnings, the adjustment made to reported earnings was to eliminate gains on the sale of securities equal to $175,985 for the twelve month period. After eliminating the after impact of these gains, the Bank’s core earnings were determined to equal a negative $65,450, or deemed “not meaningful” for valuation purposes. (Note: see Exhibit IV-9 for the adjustments applied to the Peer Group’s earnings in the calculation of core earnings).

 

     Amount
  
     ($000)  

Net income

    $ 84,423  

Less: Gain on sale of Securities

      ($149,434 )
    

Core earnings estimate

      ($65,011 )

 

Based on the Bank’s reported earnings, and incorporating the impact of the pro forma assumptions discussed previously, the Bank’s pro forma reported P/E multiple at the $20.0 million midpoint value equaled 215.97 times which provided for a premium of 1,040.3% relative to the Peer Group’s average reported earning multiple of 18.94 times (see Table 4.5). At the top of the super range, the Bank’s reported P/E multiple of 260.96 times reflected a premium of 1,277.8% relative to the comparable P/E multiple for the Peer Group.

 

RP FINANCIAL, LC.

Financial Services Industry Consultants

1700 North Moore Street, Suite 2210

Arlington, Virginia 22209

(703) 528-1700

 

Table 4.5

Public Market Pricing

Royal Savings Bk of Chicago IL and the Comparables

As of September 3, 2004

 

     Market
Capitalization
    Per Share Data
    Pricing Ratios(3)
    Dividends(4)
    Financial Characteristics(6)
  
     Price/
share(1)
    Market
Value
    Core
12-Mth
EPS(2)
    Book
Value/
Share
    P/E
    P/B
    P/A
    P/TB
    P/CORE
   

Amount/

Share

    Yield
    Payout
Ratio(5)
    Total
Assets
    Equity/
Assets
   

NPAs/

Assets

    Reported
    Core
  
                                                  ROA
    ROE
    ROA
     ROE
  
     ($)    ($Mil)    ($)    ($)    (x)    (%)    (%)    (%)    (x)    ($)    (%)    (%)    ($Mil)    (%)    (%)    (%)    (%)    (%)     (%)  

Royal Savings Bk of Chicago IL

                                                                                                              

Superrange

    $ 10.00    $ 26.45    $ 0.04    $ 13.00    260.96    76.94    23.16    76.94    NM    $ 0.00    0.00    0.00    $ 114    30.10    0.11    0.09    0.29    (0.04 )   (0.14 )

Range Maximum

      10.00      23.00      0.04      13.65    237.91    73.25    20.68    73.25    NM    $ 0.00    0.00    0.00      111    26.23    0.12    0.09    0.31    (0.05 )   (0.17 )

Range Midpoint

      10.00      20.00      0.05      14.40    215.97    69.43    18.41    69.43    NM    $ 0.00    0.00    0.00      109    26.51    0.12    0.09    0.32    (0.05 )   (0.20 )

Range Minimum

      10.00      17.00      0.05      15.42    192.01    64.85    16.03    64.85    NM    $ 0.00    0.00    0.00      106    24.72    0.12    0.08    0.34    (0.06 )   (0.23 )

All Public Companies(7)

                                                                                                              

Averages

      22.15      466.74      1.02      14.19    17.60    159.51    17.02    173.56    19.55      0.48    2.20    36.08      2,935    10.74    0.55    0.82    8.70    0.71     7.21  

Medians

      —        —        —        —      16.31    148.88    14.72    162.87    17.70      —      —      —        —      —      —      —      —      —       —    

All Non-MNC State of IL(7)

                                                                                                              

Averages

          26.08      236.49      1.52      20.46    16.59    126.94    12.34    138.36    19.35      0.53    2.01    38.02      1,660    9.80    0.54    0.79    7.63    0.71     6.81  

Medians

          —        —        —        —      15.33    121.36    12.48    121.36    16.31      —      —      —        —      —      —      —      —      —       —    

Comparable Group Averages

                                                                                                              

Averages

      17.75      23.90      0.84      14.94    18.94    120.21    15.35    121.81    19.90      0.41    2.30    42.66      164    12.60    1.04    0.76    6.33    0.67     5.69  

Medians

      —        —        —        —      18.83    116.73    13.47    117.79    18.49      —      —      —        —      —      —      —      —      —       —    

State of IL

                                                                                                              

CFSL

  

Chasterfield Financial of IL(7)

      31.11      120.58      0.51      19.29    NM    161.28    33.29    162.28    NM      0.32    1.03    62.75      362    20.64    0.10    0.54    2.67    0.54     2.67  

CFS_

  

Citizens First Fin Corp. of IL

      24.50      36.73      0.84      22.45    23.11    109.13    10.99    109.13    29.17      0.40    1.63    47.62      334    10.07    0.99    0.46    4.78    0.36     3.79  

EFC

  

EFC Bancorp, Inc of Elgin IL

      25.50      118.65      1.43      17.13    16.78    148.86    12.48    148.06    17.83      0.61    2.39    42.66      951    8.38    0.27    0.78    9.01    0.74     8.48  

FBTC

  

First BancTrust Corp of IL

      12.50      31.25      0.44      10.30    20.49    121.36    14.13    121.36    28.41      0.24    1.92    54.55      221    11.64    1.25    0.68    5.79    0.49     4.17  

FFBI

  

First Federal Bancshares of IL

      20.40      26.72      1.65      16.43    11.93    124.16    8.68    134.12    12.36      0.44    2.16    26.67      308    6.99    0.55    0.69    5.75    0.67     5.55  

GTPS

  

Great American Bancorp of IL

      25.60      18.82      1.57      23.09    15.33    110.87    11.96    114.13    16.31      0.44    1.72    28.03      157    10.79    0.04    0.76    6.99    0.72     6.57  

MAFB

  

MAF Bancorp, Inc. of IL

      42.46      1387.08      2.65      27.74    14.54    153.06    14.80    219.77    16.02      0.84    1.98    31.70      9,375    9.67    0.33    1.19    12.34    1.08     11.20  

PFED

  

Park Bancorp of Chicago IL

      31.60      36.18      2.06      26.09    13.92    121.12    13.36    121.12    15.34      0.72    2.28    34.95      271    11.03    0.37    0.97    8.73    0.88     7.92  

Comparable Group

                                                                                                              

AMFC

  

AMB Fin. Corp. of Munster IN

      15.01      14.63      1.10      13.16    14.43    114.06    9.48    114.06    13.65      0.24    1.60    21.82      154    8.31    1.29    0.67    8.15    0.71     8.62  

CIBI

  

Community Inv. Bncp, Inc of OH

      14.27      15.65      0.73      12.21    17.84    116.87    12.88    116.87    19.55      0.36    2.52    49.32      122    11.02    0.75    0.72    6.73    0.66     6.14  

FFWC

  

FFW Corporation of Wabash IN

      22.00      28.27      1.52      18.87    11.46    116.59    11.82    121.48    14.47      0.68    3.09    44.74      239    10.14    0.94    1.03    10.53    0.81     8.33  

FBTC

  

First BancTrust Corp of IL

      12.50      31.25      0.44      10.30    20.49    121.36    14.13    121.36    28.41      0.24    1.92    54.55      221    11.64    1.25    0.68    5.79    0.49     4.17  

FBEI

  

First Bancorp of Indiana of IN

      20.70      33.62      0.43      18.83    23.79    109.93    14.20    117.81    NM      0.58    2.80    NM      237    12.92    0.39    0.69    4.71    0.34     2.33  

FNFI

  

First Niles Fin. Inc. of OH

      18.50      25.46      0.64      11.19    24.34    165.33    26.17    165.33    28.91      0.60    3.24    NM      97    15.03    1.09    1.06    6.39    0.89     5.38  

GTPS

  

Great American Bancorp of IL

      25.60      18.82      1.57      23.09    15.33    110.87    11.96    114.13    16.31      0.44    1.72    28.03      157    10.79    0.04    0.76    6.99    0.72     6.57  

HWEN

  

Home Financial Bancorp of IN

      5.75      7.80      0.33      5.21    23.96    110.36    13.06    110.36    17.42      0.12    2.09    36.36      60    11.83    2.57    0.53    4.76    0.73     6.55  

NEIB

  

Northeast Indiana Bncrp of IN

      21.28      31.24      1.04      18.07    18.83    117.76    13.88    117.76    20.46      0.56    2.63    53.85      225    11.78    1.08    0.74    6.15    0.68     5.66  

PBNC

  

PFS Bancorp Inc. of Aurora IN

      21.91      32.30      0.57      18.42    NM    118.95    25.88    118.95    NM      0.30    1.37    52.63      125    21.76    NA    0.70    3.13    0.70     3.13  

 

(1) Average of high/low or bid/ask price per share.

 

(2) EPS (core basis) is based on actual trailing twelve month data, adjusted to omit the impact of non-operating items on a tax effected basis, and is shown on a pro forma basis where appropriate.

 

(3) P/E = Price to Earnings; P/F = Price to Book; P/A = Price to Assets; P/TB = Price to Tangible Book; and P/CORE = Price to Core Earnings.

 

(4) Indicated twelve month dividend, based on last quarterly dividend declared.

 

(5) Indicated twelve month dividend as a percent of trailing twelve month estimated core earnings.

 

(6) ROA (return on assets) and ROE (return on equity) are indicated ratios based on trailing twelve month common earnings and average common equity and total assets balances.

 

(7) Excludes from averages and medians those companies the subject of actual or rumored acquisition activities or unusual operating characteristics.

 

Source:  Corporate reports, offering circulars, and RP Financial, LC. calculations. The information provided in this report has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

 

Copyright (c) 2004 by RP Financial, LC.

 

RP® Financial, LC.

Page 4.23

 

2. Price-to-Book (“P/B”). The application of the P/B valuation method requires calculating the Bank’s pro forma market value by applying a valuation P/B ratio to Royal Savings’ pro forma book value. The pre-conversion reported book value for Royal Savings equaled $12.7 million and consisted entirely of tangible capital. Based on the $20.0 million midpoint valuation, Royal Savings’ pro forma P/B and P/TB ratios both equaled 69.43%. In comparison to the average P/B and P/TB ratios for the Peer Group of 120.21% and 121.81%, respectively, the Bank’s ratios reflected a discount of 42.2% on a P/B basis and a discount of 43.0% on a P/TB basis. At the top of the super range, the Bank’s P/B and P/TB ratios both equaled 76.94% and reflected discounts of 36.0% and 36.8% relative to the comparable P/B and P/TB ratios for the Peer Group. RP Financial considered the discounts under the P/B approach to be reasonable in light of the Bank’s significantly lower pro forma return on equity and the Bank’s resulting P/E multiples.

 

3. Price-to-Assets (“P/A”). The P/A valuation methodology determines market value by applying a valuation P/A ratio to the Bank’s pro forma asset base, conservatively assuming no deposit withdrawals are made to fund stock purchases. In all likelihood there will be deposit withdrawals, which results in understating the pro forma P/A ratio which is computed herein. At the midpoint of the valuation range, Royal Savings’ value equaled 18.41% of pro forma assets. Comparatively, the Peer Group companies exhibited an average P/A ratio of 15.35%, which implies a 19.9% premium has been applied to the Bank’s pro forma P/A ratio.

 

Comparison to Recent Offerings

 

As indicated at the beginning of this chapter, RP Financial’s analysis of recent conversion pricing characteristics at closing and in the aftermarket has been limited to a “technical” analysis and, thus, the pricing characteristics of recent conversion offerings can not be a primary determinate of value. Particular focus was placed on the P/TB approach in this analysis, since the P/E multiples do not reflect the actual impact of reinvestment and the source of the stock proceeds (i.e., external funds vs. deposit withdrawals). The single standard conversion offering completed within the past three months closed at an average P/TB ratio of 74.9% and appreciated

 

RP® Financial, LC.

Page 4.24

 

10.5% during the first week of trading. The two second-step conversion offerings completed within the past three months closed at an average P/TB ratio of 144.6% and on average declined in price by 2.6% during the first week of trading. Excluding the Partners Trust conversion, a very large offering that included a simultaneous acquisition, the remaining second-step conversion closed at a 100.3% P/TB ratio. The two recently completed MHC offerings closed at a price/tangible book ratio of 78.7% (fully-converted basis) and, on average, appreciated 11.3% during the first week of trading. In comparison, the Bank’s P/TB ratio of 69.43% at the midpoint value reflects an implied discount of 7.3% relative to the closing P/TB ratio of the recent standard offering, and an 11.8% discount to the average of the closing P/TB ratios of the recent MHC offerings. At the top of the super range, the Bank’s P/TB ratio of 76.94% reflected an implied premium of 2.7% relative to the closing P/TB ratio of the recent standard offering (Third Century Bancorp).

 

Valuation Conclusion

 

Based on the foregoing, it is our opinion that, as of September 3, 2004, the estimated aggregate pro forma market value of the shares to be issued immediately following the conversion was $20,000,000 at the midpoint. Pursuant to conversion guidelines, the 15% offering range indicates a minimum value of $17,000,000 and a maximum value of $23,000,000. Based on the $10.00 per share offering price, this valuation range equates to an offering of 1,700,000 shares at the minimum and 2,300,000 shares at the maximum. In the event the appraised value is subject to an increase, the offering range may be increased up to a super maximum value of $26,450,000, or 2,645,000 shares without requiring a resolicitation. The comparative pro forma valuation calculations relative to the Peer Group are shown in Table 4.3 and are detailed in Exhibit IV-7 and Exhibit IV-8.

 

EXHIBITS

 

RP Financial, LC.

 

LIST OF EXHIBITS

 

Exhibit

Number

   

Description

 I-1      Map of Office Locations
 I-2      Audited Financial Statements
 I-3      Key Operating Ratios
 I-4      Investment Portfolio Composition
 I-5      Yields and Costs
 I-6      Loan Loss Allowance Activity
 I-7      Net Portfolio Value Analysis
 I-8      Fixed Rate and Adjustable Rate Loans
 I-9      Loan Portfolio Composition
 I-10    Contractual Maturity By Loan Type
 I-11    Loan Originations, Sales and Purchases
 I-12    Non-Performing Assets
 I-13    Deposit Composition
 I-14    Maturity of Time Deposits
 I-15    Borrowing Activity
II-1      Description of Office Facilities
II-2      Historical Interest Rates
II-3      Market Area Demographic Data
II-4      Market Area Economic Data

 

RP Financial, LC.

 

LIST OF EXHIBITS (continued)

 

III-l    General Characteristics of Publicly-Traded Institutions
III-2    Public Market Price of Midwest Thrifts
III-3    Peer Group Market Area Comparative Analysis
IV-1    Stock Prices: As of September 3, 2004
IV-2    Historical Stock Price Indices
IV-3    Historical Thrift Stock Indices
IV-4    Market Area Acquisition Activity
IV-5    Director and Senior Management Summary Resumes
IV-6    Pro Forma Regulatory Capital Ratios
IV-7    Pro Forma Analysis Sheet
IV-8    Pro Forma Effect of Conversion Proceeds
IV-9    Peer Group Core Earnings Analysis
 V-l    Firm Qualifications Statement

 

EXHIBIT I-1

Royal Savings Bank

Map of Office Locations

 

[GRAPHIC]

 

EXHIBIT I-2

Royal Savings Bank

Audited Financial Statements

 

[Incorporated by Reference]

 

EXHIBIT I-3

Royal Savings Bank

Key Operating Ratios

 

     Year Ended June 30,
  
     2004
     2003
  

Key Financial Ratios:

             

Performance Ratios:

             

Return on average assets

    0.09 %   0.55 %

Return on average equity

    0.63     3.50  

Interest rate spread(1)

    2.69     3.04  

Net interest margin(2)

    2.83     3.32  

Total noninterest expenses to average total assets

    3.10     2.51  

Efficiency ratio(3)

    102.75     76.67  

Asset Quality Ratios:

             

Nonperforming loans to total loans at end of period

    0.37 %   2.29 %

Nonperforming assets to total assets at end of period

    0.14     0.64  

Allowance for loan losses to total loans at end of period

    0.68     0.97  

Allowance for loan losses to total nonperforming loans at end of period

    184.38     42.29  

Capital Ratios:

             

Total capital (to risk-weighted assets)

    28.07 %   35.07 %

Tier 1 Capital (to risk-weighted assets)

    27.57     34.44  

Tier 1 Capital (to average assets)

    13.85     14.79  

Equity to assets at end of period

    13.72     15.52  
(1) Yield on average interest-earning assets less rate on average interest-bearing liabilities.

 

(2) Net interest income, on a tax-equivalent basis, divided by average interest-earning assets.

 

(3) Non-interest expense divided by the sum of net interest income, plus non-interest income, excluding net gain on sales of securities.

 

Source:  Royal Savings’ prospectus.

 

EXHIBIT I-4

Royal Savings Bank

Investment Portfolio Composition

 

     At June 30,
     2004
    2003
     Amortized Cost
    Fair Value
    Amortized Cost
    Fair Value
     (In Thousands)

U.S. Government and Federal agency

    $ 17,732    $ 17,446    $ 10,811    $ 10,952

State and municipal

      715      734      1,912      1,971

Mortgage-backed

      2,655      2,691      4,315      4,417

Collateralized mortgage obligations

      16,113      15,884      22,071      22,033

Corporate

      7,634      7,771      10,754      11,469
    
  
  
  

Total

    $ 44,849    $ 44,526    $ 49,863    $ 50,842
    
  
  
  

 

Source:  Royal Savings’ prospectus.

 

EXHIBIT I-5

Royal Savings Bank

Yields and Costs

 

     At June 30, 2004
  
     Balance
     Yield/Rate
  
     (Dollars in Thousands)  

Interest-earning assets:

               

Loans receivable, net(1)

    $ 34,697     5.74 %

Securities available for sale:

               

Taxable

      43,793     2.96  

Nontaxable(2)

      733     7.70  

Deposits with financial institutions(3)

      3,048     1.03  

Federal Home Loan Bank stock

      349     6.00  
    
     

Total interest-earning assets

    $ 82,620     4.11  

Non-interest-earning assets

      9,919        
    
     

Total assets

    $ 92,539        
    
     

Interest-bearing liabilities:

               

Deposits:

               

Demand

    $ 10,907     0.72  

Savings

      32,247     0.98  

Certificates of Deposit

      34,014     2.03  
    
     

Total deposits

    $ 77,168     1.41  

Borrowings:

               

Federal Home Loan Bank advances

      2,000     4.78  
    
     

Total interest-bearing liabilities

    $ 79,168     1.49  

Non-interest-bearing liabilities

      672        
    
     

Total liabilities

    $ 79,840        

Total equity capital(4)

      12,699        
    
     

Total liabilities and equity capital

    $ 92,539        
    
     

Net interest-earning assets

    $ 3,432     2.62  

Interest rate spread(5)

            2.68  

Net interest margin(6)

               

Interest-earning assets to interest-bearing liabilities ratio

      104.36 %      
(1) Includes nonaccruing loans.

 

(2) Tax effected yield assuming a 34% rate.

 

(3) Includes interest-bearing demand deposits and federal funds sold.

 

(4) Includes retained earnings and accumulated other comprehensive income (loss).

 

(5) Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate on interest-bearing liabilities.

 

(6) Net interest margin is net interest income divided by year-end interest-earning assets.

 

Source:  Royal Savings’ prospectus.

 

EXHIBIT I-5 (continued)

Royal Savings Bank

Yields and Costs

 

     Year Ended June 30,
  
     2004
     2003
  
     Average
Balance
     Interest
    Average
Yield/
Rate(1)
     Average
Balance
     Interest
    Average
Yield/
Rate(1)
  
     (Dollars in Thousands)  

Interest-Earning Assets:

                                           

Loans receivable, net(2)

    $ 27,787     $ 1,732    6.23 %   $ 24,535     $ 1,778    7.25 %

Securities available for sale:

                                           

Taxable

      48,936       1,635    3.24       50,163       2,274    4.53  

Nontaxable(3)

      1,140       89    7.81               179    6.78  

Deposits with financial institutions(4)

      3,863       39    1.01       2,640       54    1.41  

Federal Home Loan Bank stock

      336       27    8.04       316       16    5.06  
    
 
  
 
 
  

Total interest-earning assets

    $ 82,062     $ 3,522    4.29       81,496       4,301    5.28  

Non-interest-earning assets:

      8,321                    4,903               
    
              
            

Total assets

    $ 90,383                  $ 86,399               
    
              
            

Interest-Bearing Liabilities:

                                           

Deposits:

                                           

Demand

    $ 5,889       39    0.66     $ 4,579       41    0.89  

Savings

      32,348       329    1.02       29,588       400    1.35  

Certificates of Deposit

      34,579       734    2.12       34,988       1,057    3.02  
    
 
  
 
 
  

Total deposits

    $ 72,816       1,102    1.51       69,155       1,498    2.17  

Borrowings:

                                           

Federal Home Loan Bank advances

    $ 2,000       97    4.85       2,000       97    4_85  
    
 
  
 
 
  

Total interest-bearing liabilities

    $ 74,816       1,199    1.60       71,155       1,595    2.24  

Non-interest-bearing liabilities:

      2,191                    1,568               
    
              
            

Total liabilities

    $ 77,007                    72,723               

Total equity capital(5)

      13,376                    13,676               
    
              
            

Total liabilities and equity capital

    $ 90,383                  $ 86,399               
    
              
            

Net average interest-earning assets

    $ 7,246                  $ 10,341               

Net interest income; interest rate spread(6)

            $ 2,323    2.69 %           $ 2,706    3.04 %

Net interest margin(7)

                   2.83 %                  3.32 %

Average interest-earning assets to average interest-bearing liabilities

      109.69 %                  114.53 %             
(1) Yields and rates have been annualized where appropriate.

 

(2) Includes nonaccruing loans.

 

(3) Assuming a 34% rate.

 

(4) Includes interest-bearing demand deposits and federal funds sold.

 

(5) Includes retained earnings and accumulated other comprehensive income (loss).

 

(6) Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate on interest-bearing liabilities.

 

(7) Net interest margin is net interest income divided by average interest-earning assets.

 

Source:  Royal Savings’ prospectus.

 

EXHIBIT I-6

Royal Savings Bank

Loan Loss Allowance Activity

 

     Year Ended June 30,
  
     2004
     2003
  
     (Dollars in Thousands)  

Total loans outstanding

    $ 34,927     $ 24,117  

Average loans outstanding, net

      27,787       24,535  

Balance at beginning of period

      233       198  

Charge-Offs:

                 

Real estate loans:

                 

One- to-four-family loans

      —         —    

Commercial real estate loans

      —         —    

Multi-family loans

      —            

Commercial loans

      —         —    

Consumer loans:

                 

Home Equity loans

      —         —    

Share loans

      —         —    
    
 

Total charge-offs

      —         —    

Recoveries:

                 

Real estate loans:

                 

One- to four-family loans

      —         —    

Commercial real estate loans

      —         —    

Multi-family loans

      —            

Commercial loans

      —         —    

Consumer loans:

                 

Home Equity loans

      —         —    

Share loans

      —         —    
    
 

Total recoveries

      —         —    
    
 

Net charge-offs

      —         —    

Provision for loan losses

      3       36  
    
 

Balance at end of period

    $ 236     $ 233  
    
 

Allowance for loan losses as a percent of total loans outstanding

      0.68 %     0.97 %

Allowance for loan losses as a percent of total non-performing loans

      184.38 %     42.21 %

Ratio of net charge-offs to average loans outstanding

      0.00 %     0.00 %

 

Source:  Royal Savings’ prospectus.

 

EXHIBIT I-7

Royal Savings Bank

Net Portfolio Value Analysis

 

Net Portfolio Value
  

Change in

Interest Rates

(basis points)

   

Estimated

NPV

   

Estimated

NPV as a

Percentage

of Assets

    

Amount

of Change

    

Change as a

Percentage

of Assets

  
(Dollars in Thousands)  
+300    $ 10,400    12.24 %   $ (5,845 )   (6.88 )%
+200      12,204    13.94       (4,041 )   (4.62 )
+100      14,243    15.75       (2,002 )   (2.21 )
—        16,245    17.45       —       —    
-100      15,705    16.64       (540 )   (0.57 )

 

Source:  Royal Savings’ prospectus.

 

EXHIBIT I-8

Royal Savings Bank

Fixed Rate and Adjustable Rate Loans

 

     Fixed-Rates
    Floating or
Adjustable-
Rates
    Total
     (In Thousands)

Real estate loans:

                     

One- to four-family loans

    $ 20,118    $ —      $ 20,118

Commercial real estate loans

      3,954      2,163      6,117

Multi-family loans

      956      —        956

Commercial loans

      341      —        341

Consumer loans:

                     

Home Equity loans

      12      —        12

Share loans

      11      149      160
    
  
  

Total loans

    $ 25,392    $ 2,312    $ 27,704
    
  
  

 

Source:  Royal Savings’ prospectus.

 

EXHIBIT I-9

Royal Savings Bank

Loan Portfolio Composition

 

     June 30,
  
     2004
     2003
  
     Amount
     Percentage
     Amount
    Percentage
  
     (Dollars in Thousands)  

Real estate loans:

                            

One- to four-family loans

    $ 20,120     57.61 %   $ 21,304    88.34 %

Commercial real estate loans

      10,538     30.17       1,863    7.72  

Multi-family loans

      956     2.74       779    3.23  
    
 
 
  

Total real estate loans

      31,614     90.52       23,946    99.29  

Commercial loans

      3,041     8.71       —      —    

Consumer loans:

                            

Home Equity loans

      89     0.25       14    0.06  

Share loans

      183     0.52       157    0.65  
    
 
 
  

Total consumer loans

      272     0.77       171    0.71  
    
 
 
  

Total Loans

    $ 34,927     100.00 %     24,117    100.00 %
            
        

Less:

                            

Deferred loan fees and costs, net

      (6 )           22       

Allowance for loan losses

      236             233       
    
       
      

Loans receivable, net

    $ 34,697           $ 23,862       
    
       
      

 

Source:  Royal Savings’ prospectus.

 

EXHIBIT I-10

Royal Savings Bank

Contractual Maturity By Loan Type

 

     At June 30, 2004
     One- to
Four-Family
    Commercial
Real Estate
    Multi-family
    Commercial
    Consumer
    Total
Loans
     (In Thousands)

Amounts Due In:

                                          

One year or less

    $ 2    $ 4,421    $ —      $ 2,700    $ 100    $ 7,223

More than one year to five years

      671      4,685      162      341      172      6,031

More than five years

      19,447      1,432      794      —        —        21,673
    
  
  
  
  
  

Total amount due

    $ 20,120    $ 10,538    $  956    $ 3,041    $ 272    $ 34,927
    
  
  
  
  
  

 

Source:  Royal Savings’ prospectus.

 

EXHIBIT I-11

Royal Savings Bank

Loan Originations, Purchases and Sales

 

     Year Ended June 30,
  
     2004
     2003
  
     (In Thousands)  

Loan Originations:

                 

Real estate loans:

                 

One- to four-family loans

    $ 7,840     $ 4,289  

Commercial real estate loans

      3,606       469  

Multi-family loans

      232       —    

Commercial loans

      3,147       —    

Consumer loans:

                 

Home Equity loans

      80       —    

Share loans

      98       67  
    
 

Total Loan Originations

    $ 15,003     $ 4,825  

Participations Purchased(2)

    $ 9,234     $ —    

Sales and Loan Principal Reductions:

                 

Loans sold(1)

    $ (3,380 )     —    

Loan principal reductions

      (10,047 )     (6,567 )
    
 

Total loans sold and principal reductions

    $ (13,427 )   $ (6,567 )

Increase (decrease) due to other items net(2)

      25       (48 )
    
 

Net increase (decrease) in loan portfolio

    $ 10,835     $ (1,790 )
    
 
(1) Loans sold consist of one- to four-family real estate loans.

 

(2) Participations purchased consist of commercial real estate loans.

 

(3) Other items consist of loans in process, deferred fees, unearned interest and allowance for loan losses. Although federal laws and regulations permit savings institutions to originate and purchase loans secured by real estate located throughout the United States, Royal Savings Bank concentrates its lending activity to its primary market area in Cook County, Illinois. Subject to its loans-to-one borrower limitation, Royal Savings Bank is permitted to invest without limitation in residential mortgage loans and up to __% of its capital in loans secured by non-residential or commercial real estate. Royal Savings Bank may also invest in secured and unsecured consumer loans in an amount not exceeding __% of total assets. This __% limitation may be exceeded for certain types of consumer loans, such as home equity and property improvement loans secured by residential real property. In addition, Royal Savings Bank may invest up to 15% of its total assets in secured and unsecured loans for commercial, corporate, business or agricultural purposes.

 

Source:  Royal Savings’ prospectus.

 

EXHIBIT I-12

Royal Savings Bank

Non-Performing Assets

 

     At June 30,
  
     2004
     2003
  
     (Dollars in Thousands)  

Nonaccruing Loans:

                 

Real estate loans:

                 

One- to four-family loans

    $ —       $ 551  

Commercial real estate loans

      —         —    

Multi-family loans

      111          

Commercial loans

      —         —    

Consumer loans:

                 

Home Equity loans

      —         —    

Share loans

      —         —    
    
 

Total nonaccruing loans

      111       551  

Loans past due over 90 days still on accrual

      17       1  
    
 

Real estate owned(1)

      —         —    
    
 

Total nonperforming assets(2)

      128       552  

Troubled debt restructurings

      —         —    
    
 

Troubled debt restructurings and total nonperforming assets

    $ 128     $ 552  
    
 

Total nonperforming loans and troubled debt restructurings as a percentage of total loans

      0.37 %     2.29 %
    
 

Total nonperforming assets and troubled debt restructurings as a percentage of total assets

      0.14 %     0.64 %
    
 
(1) Real estate owned typically includes other repossessed assets and the balances are shown net of related loss allowances.

 

(2) Nonperforming assets consist of nonperforming loans, impaired loans, other repossessed assets and real estate owned.

 

Source:  Royal Savings’ prospectus.

 

EXHIBIT I-13

Royal Savings Bank

Deposit Composition

 

     At June 30,
  
     2004
     2003
  
     Amount
    Percent of
Deposits
     Amount
    Percent of
Deposits
  
     (Dollars in Thousands)  

Transaction accounts:

                           

Demand deposits

                           

Interest bearing

    $ 9,411    12.20 %   $ 5,626    7.98 %

Non-interest bearing

      1,496    1.93       632    .90  

Savings deposits

      32,247    41.79       30,105    42.73  
    
  
 
  

Total transaction accounts

      43,154    55.92       36,363    51.61  

Certificate accounts:

                           

0.00% – 0.99%

      114    0.15       —      —    

1.00% – 1.99%

      21,248    27.53       14,637    20.77  

2.00% – 2.99%

      5,606    7.26       13,151    18.67  

3.00% – 3.99%

      5,582    7.24       3,414    4.85  

4.00% – 4.99%

      1,273    1.65       1,845    2.62  

5.00% – 5.99%

      191    0.25       1.045    1.48  
    
  
 
  

Total certificate accounts

      34,014    44.08       34,092    48.39  
    
  
 
  

Total deposits

    $ 77,168    100.00 %   $ 70,455    100.00 %
    
  
 
  

 

Source:  Royal Savings’ prospectus.

 

EXHIBIT I-14

Royal Savings Bank

Maturity of Time Deposits

 

     Maturity Date

Interest Rate

    One
Year or
Less
    1-2 Years
    2-3 Years
    Over 3 Years
    Total
     (In Thousands)

0.00% - 0.99%

    $ 114    $ —      $ —      $ —      $ 114

1.00% - 1.99%

      19,749      1,260      239      —        21,248

2.00% - 2.99%

      4,633      741      232      —        5,606

3.00% - 3.99%

      918      1,326      1,942      1,396      5,582

4.00% - 4.99%

      466      807                    1,273

5.00% - 5.99%

      191      —        —        —        191
    
  
  
  
  

Total

    $ 26,071    $ 4,134    $ 2,413    $ 1,396    $ 34,014
    
  
  
  
  

 

Source:  Royal Savings’ prospectus.

 

Exhibit I-15

Royal Savings Bank

Borrowing Activity

 

     At or for the Year Ended
June 30,
  
     2004
     2003
  
     (Dollars in Thousands)  

Federal Home Loan Bank open line of credit:

                 

Average balance outstanding

    $ 2,000     $ 2,000  

Maximum amount outstanding at any month-end during the period

      2,000       2,000  

Balance outstanding at end of period

      2,000       2,000  

Average interest rate during the period

      4.78 %     4.78 %

Weighted average interest rate at end of period

      4.78 %     4.78 %

 

Source:  Royal Savings’ prospectus.

 

EXHIBIT II-1

Description of Office Facilities

 

Location

    Owned or
Leased
     Lease
Expiration
Date
    Net Book Value of
Property and
Leasehold
Improvements at
June 30, 2004
    Deposits at
June 30, 2004
                (In Thousands)     

9226 Commercial Avenue

Chicago, Illinois 60617

    Owned (1)   —      $ 3,459    $ 41,383

10555 South Ewing Avenue

Chicago, Illinois 60617

    Owned     —        186      34,331

17130 S. Torrence Avenue

Lansing, Illinois 60438

    Leased     9/22/08      —        1,454
(1) This property represents Royal Savings Bank’s main office and Royal Financial’s headquarters.

 

Source:  Royal Savings’ prospectus.

 

Exhibit II-2

Historical Interest Rates(1)

 

Year/Qtr. Ended

    Prime
Rate
     90 Day
T-Bill
     One Year
T-Bill
     10 Year
T-Bond
  

1995:

    Quarter 1    9.00 %   5.88 %   6.49 %   7.20 %
     Quarter 2    9.00 %   5.60 %   5.65 %   6.21 %
     Quarter 3    8.75 %   5.40 %   5.65 %   6.17 %
     Quarter 4    8.50 %   5.10 %   5.18 %   5.58 %

1996:

    Quarter 1    8.25 %   5.13 %   5.41 %   6.34 %
     Quarter 2    8.25 %   5.18 %   5.70 %   6.73 %
     Quarter 3    8.25 %   5.14 %   5.71 %   6.72 %
     Quarter 4    8.25 %   5.21 %   5.51 %   6.43 %

1997:

    Quarter 1    8.50 %   5.35 %   6.02 %   6.92 %
     Quarter 2    8.50 %   5.25 %   5.67 %   6.51 %
     Quarter 3    8.50 %   5.06 %   5.47 %   6.12 %
     Quarter 4    8.50 %   5.36 %   5.51 %   5.75 %

1998:

    Quarter 1    8.50 %   5.16 %   5.41 %   5.67 %
     Quarter 2    8.50 %   5.10 %   5.38 %   5.44 %
     Quarter 3    8.25 %   4.37 %   4.41 %   4.44 %
     Quarter 4    7.75 %   4.48 %   4.53 %   4.65 %

1999:

    Quarter 1    7.75 %   4.49 %   4.72 %   5.25 %
     Quarter 2    7.75 %   4.78 %   5.07 %   5.81 %
     Quarter 3    8.25 %   4.88 %   5.22 %   5.90 %
     Quarter 4    8.50 %   5.33 %   5.98 %   6.45 %

2000:

    Quarter 1    9.00 %   5.88 %   6.28 %   6.03 %
     Quarter 2    9.50 %   5.88 %   6.08 %   6.03 %
     Quarter 3    9.50 %   6.23 %   6.07 %   5.80 %
     Quarter 4    9.50 %   5.89 %   5.32 %   5.12 %

2001:

    Quarter 1    8.00 %   4.30 %   4.09 %   4.93 %
     Quarter 2    6.75 %   3.65 %   3.72 %   5.42 %
     Quarter 3    6.00 %   2.40 %   2.49 %   4.60 %
     Quarter 4    4.75 %   1.74 %   2.17 %   5.07 %

2002:

    Quarter 1    4.75 %   1.79 %   2.70 %   5.42 %
     Quarter 2    4.75 %   1.70 %   2.06 %   4.86 %
     Quarter 3    4.75 %   1.57 %   1.53 %   3.63 %
     Quarter 4    4.25 %   1.22 %   1.32 %   3.83 %

2003:

    Quarter 1    4.25 %   1.14 %   1.19 %   3.83 %
     Quarter 2    4.00 %   0.90 %   1.09 %   3.54 %
     Quarter 3    4.00 %   0.95 %   1.15 %   3.96 %
     Quarter 4    4.00 %   0.95 %   1.26 %   4.27 %

2004:

    Quarter 1    4.00 %   0.95 %   1.20 %   3.86 %
     Quarter 2    4.00 %   1.33 %   2.09 %   4.62 %

As of September 3, 2004

    4.50 %   1.62 %   2.06 %   4.24 %

 

(1) End of period data.

 

Sources:  Federal Reserve.

 

EXHIBIT II-3

Market Area Demographic Data

 

Demographic Totals by State: United States

Source: Claritas

 

     Base
2000
    Current
2004
    Projected
2009
    % Change
2000-2004
    % Change
2004-2009

Total Population:

    281,421,906    290,647,163    305,918,071    3.28    5.25

0-14 Age Group (%):

    21    21    20    1.12    1.21

15-34 Age Group (%):

    28    27    27    0.48    2.84

35-54 Age Group (%):

    29    29    29    3.05    2.70

55+ Age Group (%):

    21    22    24    9.52    15.37

Total Households:

    105,480,101    109,440,059    116,034,472    3.75    6.03

$0-24K Households (%):

    29    26    22    -7.27    -7.58

$25-50K Households (%):

    29    28    27    -2.09    2.26

$50K+ Households (%):

    42    47    52    15.23    19.20

Average Household Income:

    56,675    63,207    72,210    11.53    14.24

Median Household Income:

    42,729    46,868    53,230    9.69    13.57

Per Capita Income:

    21,587    24,078    27,656    11.54    14.86

 

Source: SNL Financial, Charlottesville, VA

    Page 1    08/05/20

Demographic Totals by State: Illinois

Source: Claritas

 

    

Base

2000

    Current
2004
    Projected
2009
    % Change
2000-2004
    % Change
2004-2009

Total Population:

    12,419,293    12,659,502    13,056,619    1.93    3.14

0-14 Age Group (%):

    22    22    21    0.43    -0.08

15-34 Age Group (%):

    29    28    27    -1.01    0.53

35-54 Age Group (%):

    29    29    29    2.07    1.05

55+ Age Group (%):

    20    22    24    7.48    12.53

Total Households:

    4,591,779    4,691,677    4,858,034    2.18    3.55

$0-24K Households (%):

    25    22    19    -9.25    -10.29

$25-50K Households (%):

    28    26    30    -5.51    18.85

$50K+ Households (%):

    47    52    58    12.89    15.34

Average Household Income:

    61,557    69,161    79,421    12.35    14.83

Median Household Income:

    47,013    52,104    59,837    10.83    14.84

Per Capita Income:

    23,104    25,898    29,810    12.09    15.11

 

Source: SNL Financial, Charlottesville, VA

    Page 1    08/05/20

FULL-TIME AND PART-TIME EMPLOYMENT BY SIC INDUSTRY 1/

(number of jobs)

 

Illinois state total [17000]

 

Item

    1996
    1997
    1998
    1999
    2000

Employment by place of work

                         

Total full-time and part-time employment

    6,925,239    7,028,691    7,185,401    7,281,872    7,416,309

By type

                         

Wage and salary employment

    5,921,096    6,007,563    6,133,960    6,215,756    6,304,065

Proprietors employment

    1,004,143    1,021,128    1,051,441    1,066,116    1,112,244

Farm proprietors employment

    80,981    81,068    82,360    81,892    81,079

Nonfarm proprietors employment 2/

    923,162    940,060    969,081    984,224    1,031,165

By industry

                         

Farm employment

    98,923    100,692    99,640    100,909    101,167

Nonfarm employment

    6,826,316    6,927,999    7,085,761    7,180,963    7,315,142

Private employment

    5,964,916    6,063,335    6,214,636    6,298,581    6,420,243

Agricultural services, forestry, fishing & other 3/

    57,178    59,923    61,808    65,123    66,490

Mining

    21,443    21,242    19,291    19,165    17,878

Construction

    321,686    330,155    336,765    353,948    367,873

Manufacturing

    991,322    994,897    994,574    975,449    962,497

Transportation and public utilities

    374,161    381,234    394,156    399,196    407,960

Wholesale trade

    360,043    365,942    372,751    377,562    385,409

Retail trade

    1,113,007    1,122,247    1,117,321    1,129,711    1,143,247

Finance, insurance, and real estate

    594,939    610,418    642,826    648,181    674,530

Services

    2,131,137    2,177,277    2,275,144    2,330,246    2,394,359

Government and government enterprises

    861,400    864,664    871,125    882,382    894,899

Federal, civilian

    99,678    96,721    95,581    95,279    99,808

Military

    59,528    58,465    58,434    58,127    57,616

State and local

    702,194    709,478    717,110    728,976    737,475

State government

    161,634    160,264    161,791    165,141    164,536

Local government

    540,560    549,214    555,319    563,835    572,939

 

See footnotes at end of table.

         REGIONAL ECONOMIC INFORMATION SYSTEM

Table CA25

    May 2004    BUREAU OF ECONOMIC ANALYSIS

 

FULL-TIME AND PART-TIME EMPLOYMENT BY NAICS INDUSTRY 1/

(number of jobs)

 

Illinois state total [17000]

 

Item

    2001
    2002

Employment by place of work

          

Total employment

    7,372,717    7,316,528

By type

          

Wage and salary employment

    6,242,188    6,126,018

Proprietors employment

    1,130,529    1,190,510

Farm proprietors employment

    78,391    78,410

Nonfarm proprietors employment 2/

    1,052,138    1,112,100

By industry

          

Farm employment

    98,322    94,461

Nonfarm employment

    7,274,395    7,222,067

Private employment

    6,378,312    6,321,463

Forestry, fishing, related activities, and other 3/

    14,483    14,117

Mining

    18,555    18,164

Utilities

    30,405    29,059

Construction

    385,998    386,365

Manufacturing

    834,746    774,116

Wholesale trade

    334,227    322,983

Retail Trade

    766,745    754,501

Transportation and warehousing

    295,981    288,521

Information

    170,836    163,094

Finance and insurance

    445,385    449,178

Real estate and rental and leasing

    226,561    261,554

Professional and technical services

    516,165    499,557

Management of companies and enterprises

    77, 457    79,901

Administrative and waste services

    450,321    440,599

Educational services

    140,473    144,625

Health care and social assistance

    706,549    720,439

Arts, entertainment, and recreation

    133,785    137,371

Accommodation and food services

    435,446    434,962

Other services, except public administration

    394,194    402,357

Government and government enterprises

    896,083    900,604

Federal, civilian

    91,202    89,765

Military

    56,360    51,640

State and local

    748,521    759,199

State government

    163,558    163,076

Local government

    584,963    596,123

 

See footnotes at end of table.         REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA25N    May 2004    BUREAU OF ECONOMIC ANALYSIS

 

Footnotes for Table CA25 (NAICS)

Full-time and Part-time Employment by Industry

 

1/ The estimates of employment for 2001-2002 are based on the 2002 North American Industry Classification System (NAICS).

 

2/ Excludes limited partners.

 

3/ “Other” consists of the number of jobs held by U.S. residents employed by International organizations and foreign embassies and consulates in the United States.

 

4/ Broomfield County, CO, was created from parts of Adams, Boulder, Jefferson, and Weld counties effective November 15, 2001. Estimates for Broomfield county begin with 2002.

 

 E The estimate shown here constitutes the major portion of the true estimate.

 

(D) Hot shown to avoid disclosure of confidential information, but the estimates for this item are included in the totals.

 

(L) Less than 10 jobs, but the estimates for this item are included in the totals.

 

(N) Data not available for this year.

 

REGIONAL ECONOMIC PROFILE

 

Illinois state total [17000]

 

Item

    1998
    1999
    2000
    2001

Place of residence profile

                    

Personal income (thousands of dollars)

    360,094,542    373,384,640    400,373,280    410,338,426

Derivation of personal income

                    

Net earnings 1/

    247,264,948    261,445,076    278,642,365    285,638,740

Personal current transfer receipts

    41,304,704    42,080,991    44,817,784    48,188,461

Income maintenance 2/

    4,542,218    4,369,566    4,362,527    4,515,942

Unemployment insurance benefit payments

    1,100,504    1,175,897    1,211,667    1,915,599

Retirement and other

    35,661,982    36,535,528    39,243,590    41,756,920

Dividends, interest, and rent

    71,524,890    69,858,573    76,913,131    76,511,225

Population (persons) 3/

    12,271,847    12,359,020    12,438,824    12,517,168

Per capita incomes (dollars) 4/

                    

Per capita personal income

    29,343    30,212    32,187    32,782

Per capita net earnings

    20,149    21,154    22,401    22,820

Per capita personal current transfer receipts

    3,366    3,405    3,603    3,850

Per capita income maintenance

    370    354    351    361

Per capita unemployment insurance benefits

    90    95    97    153

Per capita retirement and other

    2,906    2,956    3,155    3,336

Per capita dividends, interest, and rent

    5,828    5,652    6,183    6,113

Place of work profile

                    

Earnings by place of work ($000)

    278,207,021    294,029,382    313,023,692    321,053,298

Wage and salary disbursements

    209,672,178    222,143,189    236,025,503    240,339,221

Supplements to wages and salaries

    40,151,074    42,611,074    45,398,966    47,091,522

Employer contrib. for employee pens.& insur. funds

    25,340,607    27,137,714    29,170,033    30,474,227

Employer contrib. for government social insurance

    14,810,467    15,473,360    16,228,933    16,617,295

Proprietors’ income

    28,383,769    29,275,119    31,599,223    33,622,555

Nonfarm proprietors’ income

    27,287,450    28,719,004    30,635,874    32,459,943

Farm proprietors’ income

    1,096,319    556,115    963,349    1,162,612

Total full-time and part-time employment

    7,185,401    7,281,872    7,416,309    7,372,717

Wage and salary jobs

    6,133,960    .6,215,756    6,304,065    6,242,188

Number of proprietors

    1,051,441    1,066,116    1,112,244    1,130,529

Number of nonfarm proprietors 5/

    969,081    984,224    1,031,165    1,052,138

Number of farm proprietors

    82,360    81,892    81,079    78,391

Average earnings per job (dollars)

    38,718    40,378    42,207    43,546

Average wage and salary disbursements

    34,182    35,739    37,440    38,502

Average nonfarm proprietors’ Income

    28,158    29,179    29,710    30,851

 

See footnotes at end of table.         REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA30    May 2004    BUREAU OF ECONOMIC ANALYSIS

 

REGIONAL ECONOMIC PROFILE

 

Illinois state total [17000]

 

Item

    2002

Place of residence profile

     

Personal Income (thousands of dollars)

    416,018,465

Derivation of personal Income

     

Net earnings 1/

    286,807,201

Personal current transfer receipts

    52,526,592

Income maintenance 2/

    4,943,808

Unemployment Insurance benefit payments

    3,051,102

Retirement and other

    44,531,682

Dividends, interest, and rent

    76,684,672

Population (persons) 3/

    12,586,447

Per capita incomes (dollars) 4/

     

Per capita personal income

    33,053

Per capita net earnings

    22,787

Per capita personal current transfer receipts

    4,173

Per capita Income maintenance

    393

Per capita unemployment Insurance benefits

    242

Per capita retirement and other

    3,538

Per capita dividends, interest, and rent

    6,093

Place of work profile

     

Earnings by place of work ($000)

    322,805,249

Wage and salary disbursements

    239,690,575

Supplements to wages and salaries

    48,874,761

Employer contrib. for employee pens. _ insur. funds

    31,964,801

Employer contrib. for government social Insurance

    16,909,960

Proprietors’ income

    34,239,913

Nonfarm proprietors’ income

    33,907,794

farm proprietors’ income

    332,119

Total full-time and part-time employment

    7,316,528

Wage and salary jobs

    6,126,018

Number of proprietors

    1,190,510

Number of nonfarm proprietors 5/

    1,112,100

Number of farm proprietors

    78,410

Average earnings per job (dollars)

    44,120

Average wage and salary disbursements

    39,127

Average nonfarm proprietors’ income

    30,490

 

See footnotes at end of table.         REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA30    May 2004    BUREAU OF ECONOMIC ANALYSIS

 

Footnotes for Table CA30

Regional Economic Profiles

 

1/ Total earnings less contributions for government social insurance adjusted to place of residence.

 

2/ Consists largely of supplemental security income payments, family assistance, general assistance payments, food stamp payments, and other assistance payments, including emergency assistance.

 

3/ Census Bureau midyear population estimates. Estimates for 2000-2002 reflect county population estimates available as of April 2004.

 

4/ Type of income divided by population yields a per capita measure for that type of income.

 

5/ Excludes limited partners.

 

6/ Cibola, NM was separated from Valencia in June 1981, but in these estimates Valencia includes Cibola through the end of 1981.

 

7/ La paz County, AZ was separated from Yuma County on January 1, 1983. The Yuma, AZ MSA contains the area that became La Paz County, AZ through 1982 and excludes it beginning with 1983.

 

8/ Estimates for 1979 forward reflect Alaska Census Areas as defined by the Census Bureau; those for prior years reflect Alaska Census Divisions as defined in the 1970 Decennial Census. Estimates from 1988 forward separate Aleutian Islands Census Area into Aleutians East Borough and Aleutians West Census Area. Estimates for 1991 forward separate Denali Borough from Yukon-Koyukuk Census Area and Lake and Peninsula Borough from Dillinghan Census Area. Estimates from 1993 forward separate Skagway-Yakutat-Angoon Census Area into Skagway-Hoonah-Angoon Census Area and Yakutat Borough.

 

9/ Shawano, WI and Menominee, WI are combined as Shawano (incl. Menominee), WI for the years prior to 1989.

 

10/ Broomfield County, CO, was created from parts of Adams, Boulder, Jefferson, and Held counties effective November 15, 2001. Estimates for Broomfield county begin with 2002.

 

o All state and local area dollar estimates are in current dollars (not adjusted for inflation).

 

(L) Less than $50,000 or less than 10 jobs, as appropriate, but the estimates for this item are included in the totals.

 

(N) Data not available for this year.

 

PERSONAL INCOME BY MAJOR SOURCE AND EARNINGS BY NAICS INDUSTRY 1/

(thousands of dollars)

 

Cook, Illinois [17031]

 

Item

    2001
     2002
  

Income by place of residence ($000)

             

Personal income

    187,091,937     189,054,081  

Population (persons) 2/

    5,378,722     5,367,180  

Per capita personal income (dollars)

    34,784     35,224  

Derivation of personal income ($000)

             

Earnings by place of work

    169,775,997     168,880,862  

less: Contributions for government social insurance 3/

    17,758,678     17,818,834  

plus: Adjustment for residence 4/

    -21,861,938     -21,001,498  

equals: Net earnings by place of residence

    130,155,381     130,060,530  

plus: Dividends, interest, and rent 5/

    34,012,073     34,114,864  

plus: Personal current transfer receipts

    22,924,483     24,878,687  

Earnings by place of work ($000)

             

Components of earnings

             

Wage and salary disbursements

    125,673,941     123,368,309  

Supplements to wages and salaries

    23,751,821     24,270,742  

Proprietors’ income 6/

    20,350,235     21,241,811  

Farm proprietors’ income

    588     328  

Nonfarm proprietors’ income

    20,349,647     21,241,483  

Earnings by industry

             

Farm earnings

    6,902     6,010  

Nonfarm earnings

    169,769,095     168,874,852  

Private earnings

    150,675,166     149,045,993  

Forestry, fishing, related activities, and other 7/

    54,052     55,082  

Forestry and logging

    1,138     (D )

Fishing, hunting, and trapping

    174     (D )

Agriculture and forestry support activities

    15,762     15,496  

Other 8/

    36,978     37,795  

Mining

    1,612,811     1,485,554  

Oil and gas extraction

    (D )   (D )

Mining (except oil and gas)

    81,462     78,830  

Support activities for mining

    (D )   (D )

Utilities

    752,023     611,989  

Construction

    8,222,343     8,333,060  

Construction of buildings

    2,445,817     2,540,727  

Heavy and civil engineering construction

    680,412     755,684  

Specialty trade contractors

    5,096,114     5,036,649  

Manufacturing

    19,194,606     18,127,299  

Durable goods manufacturing

    11,776,677     10,740,103  

Wood product manufacturing

    106,234     99,467  

Nonmetallic mineral product manufacturing

    455,917     382,864  

Primary metal manufacturing

    827,834     634,243  

Fabricated metal product manufacturing

    2,985,579     2,875,786  

Machinery manufacturing

    1,825,899     1,642,709  

Computer and electronic product manufacturing

    1,529,051     1,278,577  

Electrical equipment and appliance manufacturing

    1,083,264     1,002,993  

Motor vehicle manufacturing

    (D )   (D )

Transportation equipment mfg. excl. motor vehicles

    (D )   (D )

Furniture and related product manufacturing

    407,127     395,723  

Miscellaneous manufacturing

    1,521,205     1,394,881  

Nondurable goods manufacturing

    7,417,929     7,387,196  

Food manufacturing

    2,126,756     2,216,136  

Beverage and tobacco product manufacturing

    305,305     287,607  

Textile mills

    53,053     46,150  

Textile product mills

    93,521     94,260  

Apparel manufacturing

    195,665     182,287  

Leather and allied product manufacturing

    66,111     63,751  

Paper manufacturing

    844,954     832,627  

Printing and related support activities

    1,397,768     1,298,398  

Petroleum and coal products manufacturing

    214,167     275,268  

Chemical manufacturing

    1,290,216     1,238,870  

Plastics and rubber products manufacturing

    830,413     851,842  

Wholesale trade

    9,661,066     9,127,798  

Retail Trade

    7,794,093     7,835,759  

Motor vehicle and parts dealers

    1,384,294     1,397,159  

Furniture and home furnishings stores

    408,561     410,613  

Electronics and appliance stores

    536,788     503,925  

Building material and garden supply stores

    559,494     572,039  

 

See footnotes at end of table.         REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA05N    May 2004    BUREAU OF ECONOMIC ANALYSIS

 

PERSONAL INCOME BY MAJOR SOURCE AND EARNINGS BY NAICS INDUSTRY 1/

(thousands of dollars)

Cook, Illinois [17031]

 

Item

    2001
     2002
  

Food and beverage stores

    1,317,063     1,381,763  

Health and personal care stores

    726,792     776,282  

Gasoline stations

    121,062     125,999  

Clothing and clothing accessories stores

    842,083     836,068  

Sporting goods, hobby, book and music stores

    271,762     272,930  

General merchandise, stores

    819,404     780,961  

Miscellaneous store retailers

    486,930     482,518  

Nonstore retailers

    319,860     295,502  

Transportation and warehousing

    8,059,588     7,972,221  

Air transportation

    3,207,650     3,124,673  

Rail transportation

    (D )   (D )

Water transportation

    43,040     43,904  

Truck transportation

    1,846,701     1,849,213  

Transit and ground passenger transportation

    369,359     372,052  

Pipeline transportation

    12,247     7,124  

Scenic and sightseeing transportation

    23,698     21,485  

Support activities for transportation

    774,230     787,272  

Couriers and messengers

    (D )   (D )

Warehousing and storage

    696,452     701,530  

Information

    6,223,213     6,167,053  

Publishing industries, except Internet

    1,751,449     1,718,832  

Motion picture and sound recording industries

    325,505     291,335  

Broadcasting, except Internet

    1,182,203     1,371,187  

Internet publishing and broadcasts

    87,624     45,722  

Telecommunications

    2,140,984     2,081,421  

ISPs, search portals, and data processing

    608,370     543,776  

Other information services

    127,078     114,780  

Finance and insurance

    20,031,539     20,142,160  

Monetary authorities - central bank

    (D )   (D )

Credit intermediation and related activities

    6,123,090     6,398,254  

Securities, commodity contracts, investments

    8,200,380     7,932,304  

Insurance carriers and related activities

    4,274,062     4,410,741  

Funds, trusts, and other financial vehicles

    (D )   (D )

Real estate and rental and leasing

    4,974,430     5,410,855  

Real estate

    4,160,044     4,592,233  

Rental and leasing services

    740,601     751,587  

Lessors of nonfinancial Intangible assets

    53,785     67,035  

Professional and technical services

    26,354,958     25,462,191  

Management of companies and enterprises

    5,086,714     4,840,953  

Administrative and waste services

    6,582,352     6,204,256  

Administrative and support services

    6,246,978     5,857,308  

Waste management and remediation services

    335,374     346,948  

Educational services

    2,891,065     3,075,301  

Health care and social assistance

    12,722,658     13,378,196  

Amubulatory health care services

    4,898,980     5,189,599  

Hospitals

    5,273,350     5,538,137  

Nursing and residential care facilities

    1,199,566     1,265,347  

Social assistance

    1,350,762     1,385,113  

Arts, entertainment, and recreation

    1,475,940     1,537,499  

Performing arts and spectator sports

    688,206     728,393  

Museums, historical sites, zoos, and parks

    215,194     215,699  

Amusement, gambling, and recreation

    572,540     593,407  

Accommodation and food services

    3,945,183     3,877,997  

Accommodation

    985,155     967,663  

Food services and drinking places

    2,960,028     2,910,334  

Other services, except public administration

    5,036,532     5,400,770  

Repair and maintenance

    1,059,921     1,063,850  

Personal and laundry services

    1,011,755     1,045,759  

Membership associations and organizations

    2,577,039     2,880,398  

Private households

    387,817     410,763  

Government and government enterprises

    19,093,929     19,828,859  

Federal, civilian

    3,536,265     3,625,184  

Military

    202,776     186,129  

State and local

    15,354,888     16,017,546  

State government

    2,639,635     2,771,872  

Local government

    12,715,253     13,245,674  

 

See footnotes at end of table.

         REGIONAL ECONOMIC INFORMATION SYSTEM

Table CA05N

    May 2004    BUREAU OF ECONOMIC ANALYSIS

 

Footnotes for Table CA05 (NAICS)

Personal Income by Major Source and Earnings by Industry

 

1/ The estimates of earnings for 2001-2002 are based on the 2002 North American Industry Classification System (NAICS).

 

2/ Census Bureau midyear population estimates. Estimates for 2001-2002 reflect county population estimates available as of April 2004.

 

3/ Contributions for government social insurance are included in earnings by type and Industry but they are excluded from personal income.

 

4/ The adjustment for residence is the net inflow of the earnings of interarea commuters. For the United States, it consists of adjustments for border workers: Wage and salary disbursements to U.S. residents commuting to Canada less wage and salary disbursements to Canadian and Mexican residents commuting into the United States.

 

5/ Rental income of persons includes the capital consumption adjustment.

 

6/ Proprietors’ income includes the inventory valuation adjustment and capital consumption adjustment.

 

7/ “Other” consists of wage and salary disbursements to U.S. residents employed by international organizations and foreign embassies and consulates in the United States.

 

8/ Broomfield County, CO, was created from parts of Adams, Boulder, Jefferson, and Held counties effective November 15, 2001. Estimates for Broomfield county begin with 2002.

 

o All state and local area dollar estimates are in current dollars (not adjusted for Inflation).

 

 E The estimate shown here constitutes the major portion of the true estimate.

 

(D) Not shown to avoid disclosure of confidential information, but the estimates for this item are included in the totals.

 

(L) Less than $50,000, but the estimates for this item are included in the totals.

 

(N) Data not available for this year.

 

FULL-TIME AND PART-TIME EMPLOYMENT BY SIC INDUSTRY 1/

(number of jobs)

 

Cook, Illinois [17031]

 

Item

    1996
    1997
    1998
    1999
    2000

Employment by place of work

                         

Total full-time and part-time employment

    3,188,788    3,228,275    3,292,016    3,301,058    3,351,990

By type

                         

Wage and salary employment

    2,821,532    2,854,480    2,902,906    2,892,685    2,921,941

Proprietors employment

    367,256    373,795    389,110    408,373    430,049

Farm proprietors employment

    237    236    240    239    236

Nonfarm proprietors employment 2/

    367,019    373,559    388,870    408,134    429,813

By Industry

                         

Farm employment

    566    598    559    590    607

Nonfarm employment

    3,188,222    3,227,677    3,291,457    3,300,468    3,351,383

Private employment

    2,831,242    2,871,807    2,937,359    2,944,034    2,991,180

Agricultural services, forestry, fishing & other 3/

    13,488    14,260    14,688    15,925    16,189

Mining

    2,283    2,298    2,115    2,346    2,288

Construction

    119,728    123,643    124,687    131,416    137,324

Manufacturing

    439,444    439,794    431,043    412,282    401,249

Transportation and public utilities

    202,759    206,464    212,492    218,001    223,632

Wholesale trade

    173,332    176,450    177,124    175,300    175,075

Retail trade

    462,020    465,960    462,608    456,955    460,972

Finance, insurance, and real estate

    330,522    337,493    351,584    350,403    360,263

Services

    1,087,666    1,105,445    1,161,018    1,181,406    1,214,189

Government and government enterprises

    356,980    355,870    354,098    356,434    360,203

Federal, civilian

    52,476    50,329    49,509    49,037    51,230

Military

    13,264    12,633    12,237    12,028    12,144

State and local

    291,240    292,908    292,352    295,369    296,629

State government

    49,418    48,847    49,360    50,165    49,339

Local government

    241,822    244,061    242,992    245,204    247,490

 

See footnotes at the end of table.

         REGIONAL ECONOMIC INFORMATION SYSTEM

Table CA25

    May 2004    BUREAU OF ECONOMIC ANALYSIS

 

Footnotes for Table CA25 (SIC)

Full-time and Part-time Employment by Industry

 

1/ The estimates of employment for 1969-74 based on 1967 Standard Industrial Classification (SIC). The estimates for 1975-87 are based on the 1972 SIC. The estimates for 1988-2000 are based on the 1987 SIC.

 

2/ Excludes limited partners.

 

3/ “Other” consists of the number of jobs held by U.S. residents employed by international organizations and foreign embassies and consulates in the United States.

 

4/ Cibola, NM was separated from Valencia in June 1981, but in these estimates Valencia includes Cibola through the end of 1981.

 

5/ La Paz County, AZ was separated from Yuma County on January 1, 1983. The Yuma, AZ MSA contains the area that became La Paz County, AZ through 1982 and excludes it beginning with 1983.

 

6/ Estimates for 1979 forward reflect Alaska Census Areas as defined by the Census Bureau; those for prior years reflect Alaska Census Divisions as defined in the 1970 Decennial Census. Estimates from 1988 forward separate Aleutian Islands Census Area into Aleutians East Borough and Aleutians West Census Area. Estimates for 1991 forward separate Denali Borough from Yukon-Koyukuk Census Area and Lake and Peninsula Borough from Dillingham Census Area. Estimates from 1993 forward separate Skagway-Yakutat-Angoon Census Area into Skagway-Hoonah-Angoon Census Area and Yakutat Borough.

 

7/ Shawano, HI and Menominee, WI are combined as, Shawano (incl. Menominee), WI for the years prior to 1989.

 

 E The estimate shown here constitutes the major portion of the true estimate.

 

(D) Not shown to avoid disclosure of confidential information, but the estimates for this item are included in the totals.

 

(L) Less than 10 jobs, but the estimates for this item are included

 

(N) Data not available for this year.

 

FULL-TIME AND PART-TIME EMPLOYMENT BY NAICS INDUSTRY 1/

(number of jobs)

 

Cook, Illinois [17031]

 

Item

    2001
    2002

Employment by place of work

          

Total employment

    3,316,707    3,267,051

By type

          

Wage and salary, employment

    2,864,142    2,786,548

Proprietors employment

    452,565    480,503

Farm proprietors employment

    228    228

Nonfarm proprietors employment 2/

    452,337    480,275

By industry

          

Farm employment

    596    525

Nonfarm employment

    3,316,111    3,266,526

Private employment

    2,957,924    2,906,593

Forestry, fishing, related activities, and other 3/

    1,258    1,222

Mining

    2,582    2,526

Utilities

    6,880    5,930

Construction

    143,203    141,857

Manufacturing

    328,633    300,080

Wholesale trade

    145,309    136,994

Retail Trade

    293,301    287,401

Transportation and warehousing

    167,015    161,610

Information

    86,775    82,804

Finance and insurance

    236,526    238,496

Real estate and rental and leasing

    117,995    134,274

Professional and technical services

    305,716    290,042

Management of companies and enterprises

    46,777    45,997

Administrative and waste services

    228,971    220,704

Educational services

    86,006    87,756

Health care and social assistance

    332,585    338,_53

Arts, entertainment, and recreation

    60,638    61,769

Accommodation and food services

    193,469    190,246

Other services, except public administration

    174,285    178,032

Government and government enterprises

    358,187    359,933

Federal, civilian

    46,041    45,137

Military

    11,572    10,303

State and local

    300,574    304,493

State government

    49,245    49,337

Local government

    251,329    255,156

 

See footnotes at end of table.         REGIONAL ECONOMIC INFORMATION SYSTEM
Table CA25N    May 2004    BUREAU OF ECONOMIC ANALYSIS

 

Footnotes for Table CA25 (NAICS)

Full-time and Part-time Employment by Industry

 

1/ The estimates of employment for 2001-2002 are based on the 2002 North American Industry Classification System (NAICS).

 

2/ Excludes limited partners.

 

3/ “Other” consists of the number of jobs held by U.S. residents employed by international organizations and foreign embassies and consulates in the United States.

 

4/ Broomfield County, CO, was created from parts of Adams, Boulder, Jefferson; and Weld counties effective November 15, 2001. Estimates for Broomfield county begin with 2002.

 

 E The estimate shown here constitutes the major portion of the true estimate.

 

(D) Not shown to avoid disclosure of confidential information, but the estimates for this item are included in the totals.

 

(L) Less than 10 Jobs, but the estimates for this item are Included in the totals.

 

(N) Data not available for this year.

 

REGIONAL ECONOMIC PROFILE

 

Cook, Illinois [17031]

 

Item

    1998
    1999
    2000
    2001

Place of residence profile

                    

Personal income (thousands of dollars)

    165,072,174    169,932,439    182,393,699    187,091,937

Derivation of personal Income

                    

Net earnings 1/

    112,261,644    118,278,731    126,066,487    130,155,381

Personal current transfer receipts

    20,023,564    20,144,986    21,496,113    22,924,483

Income maintenance 2/

    2,741,910    2,673,424    2,682,748    2,728,441

Unemployment insurance benefit payments

    502,668    524,798    533,748    877,499

Retirement and other

    16,778,986    16,946,764    18,279,617    19,318,543

Dividends, interest, and rent

    32,786,966    31,508,722    34,831,099    34,012,073

Population (persons) 3/

    5,345,537    5,365,344    5,377,152    5,378,722

Per capita Incomes (dollars) 4/

                    

Per capita personal income

    30,880    31,672    33,920    34,784

Per capita net earnings

    21,001    22,045    23,445    24,198

Per capita personal current transfer receipts

    3,746    3,755    3,998    4,262

Per capita Income maintenance

    513    498    499    507

Per capita unemployment Insurance benefits

    94    98    99    163

Per capita retirement and other

    3,139    3,159    3,399    3,592

Per capita dividends, interest, and rent

    6,134    5,873    6,478    6,323

Place of work profile

                    

Earnings by place of work ($000)

    146,353,531    154,012,315    166,112,910    169,775,997

Wage and salary disbursements

    110,535,896    116,388,915    124,694,320    125,673,941

Supplements to wages and salaries

    20,475,063    21,589,779    23,135,830    23,751,821

Employer contrib. for employee pens. _ insur. funds

    12,719,664    13,543,889    14,620,182    15,120,635

Employer contrib. for government social insurance

    7,755,399    8,045,890    8,515,648    8,631,186

Proprietors’ income

    15,342,572    16,033,621    18,282,760    20,350,235

Nonfarm proprietors’ income

    15,343,736    16,034,152    18,282,453    20,349,647

Farm proprietors’ income

    -1,164    -531    307    588

Total full-time and part-time employment

    3,292,016    3,301,058    3/351,990    3,316,707

Wage and salary jobs

    2,902,906    2,892,685    2,921,941    2,864,142

Number of proprietors

    389,110    408,373    4 30,049    452,565

Number of Nonfarm proprietors 5/

    388,870    408,134    429,813    452,337

Number of farm proprietors

    240    239    236    228

Average earnings per job (dollars)

    44,457    46,655    49,557    51,188

Average wage and salary disbursements

    38,078    40,236    42,675    43,878

Average nonfarm proprietors’ Income

    39,457    39,286    42,536    44,988

 

See footnotes at end of table.

         REGIONAL ECONOMIC INFORMATION SYSTEM

Table CA30

    May 2004    BUREAU OF ECONOMIC ANALYSIS

 

REGIONAL ECONOMIC PROFILE

 

Cook, Illinois [17031]

 

Item

    2002

Place of residence profile

     

Personal Income (thousands of dollars)

    189,054,081

Derivation of personal income

     

Net earnings 1/

    130,060,530

Personal current-transfer receipts

    24,878,687

Income maintenance 2/

    2,953,769

Unemployment insurance benefit payments

    1,403,240

Retirement and other

    20,521,678

Dividends, interest, and rent

    34,114,864

Population (persons) 3/

    5,367,180

Per capita incomes (dollars) 4/

     

Per capita personal income

    35,224

Per capita net earnings

    24,233

Per capita personal current transfer receipts

    4,635

Per capita income maintenance

    550

Per capita unemployment insurance benefits

    261

Per capita retirement and other

    3,824

Per capita dividends, interest, and rent

    6,356

Place of work profile

     

Earnings by place of work ($000)

    168,880,862

Wage and salary disbursements

    123,368,309

Supplements to wages and salaries

    24,270,742

Employer contrib. for employee pens. & insur. funds

    15,629,606

Employer contrib. for government social insurance

    8,641,136

Proprietors’ income

    21,241,811

Nonfarm proprietors’ income

    21,241,483

Farm proprietors’ income

    328

Total full-time and part-time employment

    3,267,051

Wage and salary jobs

    2,786,548

Number of proprietors

    480,503

Number of nonfarm proprietors 5/

    480,275

Number of farm proprietors

    228

Average earnings per job (dollars)

    51,692

Average wage and salary disbursements

    44,273

Average nonfarm proprietors’ income

    44,228

 

See footnotes at end of table.

         REGIONAL ECONOMIC INFORMATION SYSTEM

Table CA30

    May 2004    BUREAU OF ECONOMIC ANALYSIS

 

Footnotes for Table CA30

Regional Economic Profiles

 

1/ Total earnings less contributions for government social insurance adjusted to place of residence.

 

2/ Consists largely of supplemental security income payments, family assistance, general assistance payments, food stamp payments, and other assistance payments, including emergency assistance.

 

3/ Census Bureau midyear population estimates. Estimates for 2000-2002 reflect county population estimates available as of April 2004.

 

4/ Type of income divided by population yields a per capita measure for that type of income.

 

5/ Excludes limited partners.

 

6/ Cibola, NM was separated from Valencia in June 1981, but in these estimates Valencia includes Cibola through the end of 1981.

 

7/ La Paz County, AZ was separated from Yuma County on January 1, 1983. The Yuma, AZ MSA contains the area that became La Paz County, AZ through 1982 and excludes it beginning with 1983.

 

8/ Estimates for 1979 forward reflect Alaska Census Areas as defined by the Census Bureau; those for prior years reflect Alaska Census Divisions as defined in the 1970 Decennial Census. Estimates from 1988 forward separate Aleutian Islands Census Area into Aleutians East Borough and Aleutians West Census Area. Estimates for 1991 forward separate Denali Borough from Yukon-Koyukuk Census Area and Lake and Peninsula Borough from Dillingham Census Area. Estimates from 1993 forward separate Skagway-Yakutat-Angoon Census Area into Skagway-Hoonah-Angoon Census Area and Yakutat Borough.

 

9/ Shawano, WI and Menominee, WI are combined as Shawano (incl. Menominee), WI for the years prior to 1989.

 

10/ Broomfield County, CO, was created from parts of Adams, Boulder, Jefferson, and Weld counties effective November 15, 2001. Estimates for Broomfield county begin with 2002.

 

o All state and local area dollar estimates are in current dollars (not adjusted for inflation).

 

(L) Less than $50,000 or less than 10 jobs, as appropriate, but the estimates for this item are included in the totals.

 

(N) Data not available for this year.

 

EXHIBIT III-1

General Characteristics of Publicly-Traded Institutions

 

RP FINANCIAL, LC.

Financial Services Industry Consultants

1700 North Moore Street, Suite 2210

Arlington, Virginia 22209

(703) 528-1700

 

Exhibit III-1

Characteristics of Publicly-Traded Thrifts

September 5, 2004 (1)

 

Ticker

  

Financial Institution

    Exchg.
    Primary
Market
  

Operating

Strat. (2)

   

Total

Assets

     Offices
    Fiscal
Year
    Conv.
Date
    Stock
Price
    Market
Value
                       ($Mil)                    ($)    ($Mil)

California Companies

                                             

GDW

  

Golden West Fin. Corp. of CA

    NYSE    Nationwide   Thrift    93,159     271    12-31    05/59    108.41    16,560

WES

  

Westcorp of Irvine CA

    NYSE    California   Thrift    14,999     18    12-31    05/86    41.50    2,151

NDE

  

IndyHac Bancorp, Inc. of CA

    NYSE    Southern CA   Thrift    14,496 H   10    12-31        /        34.75    2,123

DSL

  

Downey Financial Corp. of CA

    NYSE    Southern
CA, AZ		   Thrift    14,222     170    12-31    01/71    54.46    1,523

FED

  

FirstFed Financial Corp. of CA

    NYSE    Los Angeles
CA		   Thrift    5,525     29    12-31    12/83    46.43    762

CCBI

  

Commercial Capital Bcrp of CA

    OTC    Southern CA   Thrift    4,744     3    12-31    12/02    22.38    1,189

PFB

  

PFF Bancorp, Inc. of Pomona CA

    NYSE    Southern CA   Thrift    3,644     26    03-31    03/96    37.35    627

UPFCE

  

United PanAm Fin. Corp of CA

    OTC    San
Francisco
CA		   Thrift    1,684     4    12-31    04/98    17.00    275

PROV

  

Provident Fin. Holdings of CA

    OTC    Southern CA   M.B.    1,319     12    06-30    06/96    25.02    177

KWFG

  

Harrington West Fncl Grp of CA

    OTC    South CA,
KS, AZ		   Thrift    1,050     11    12-31    11/02    16.30    86

KFKD

  

K-Fed Bancorp of CA MNC (39.1)

    OTC    Southern CA   Thrift    923 P   4    12-31    03/04    13.45    196

FFTB

  

First PacTrust Bancorp of CA

    OTC    Southern CA   Thrift    665     9    12-31    08/02    23.83    112

PPBI

  

Pacific Premier Bncrp of CA

    OTC    Southern CA   Thrift    424     3    13-31    06/97    11.05    58

BYFC

  

Broadway Financial Corp. of CA

    OTC    Los Angeles
CA		   Thrift    254     4    12-31    01/96    12.46    19

Florida Companies

                                             

BKUNA

  

BankUnited Fin. Corp. of FL

    OTC    Miami FL   Thrift    8,262     41    09-30    12/85    28.35    851

BBX

  

BankAtlantic Bancorp of FL

    NYSE    Southern FL   M.B.    5,429     73    12-31    11/03    18.17    1,086

FFFL

  

Fidelity Bankshares, Inc of FL

    OTC    Southern FL   Thrift    3,403     42    12-31    05/01    37.69    570

HARB

  

Harbor Florida Bancshrs of FL

    OTC    Eastcentral
FL		   Thrift    2,592     33    09-30    03/98    31.02    738

FFLC

  

FFLC Bancorp of Leesburg FL

    OTC    Central FL   Thrift    1,011     14    12-31    01/94    27.01    146

FDT

  

Federal Trust Corp of FL

    AMEX    Northcentral
FL		   Thrift    515     5    12-31    12/97    8.17    54

FCFL

  

First Community Bk Corp of FL

    OTC    West Central
PL		   Thrift    215     3    12-31        /        21.99    47

Mid-Atlantic Companies

                                             

SOV

  

Sovereign Bancorp, Inc. of PA

    NYSE    KA, PA, NJ,
CT, RI		   M.B.    48,687     522    12-31    08/86    22.21    6,893

GPT

  

GreenPoint Fin. Corp. of NY (3)

    NYSE    New York
City NY		   Thrift    25,955     85    12-31    01/94    44.74    5,901

NYB

 

New York Community Bcrp of NY (3)

    NYSE    NY, NJ   Thrift    24,087     151    12-31    11/93    22.00    5,819

AF

  

Astoria Financial Corp. of NY

    NYSE    New York
City NY		   Thrift    22,334     86    12-31    11/93    36.38    2,795

HCBK

 

Hudson Cty Bcp MNC of NJ (34.5) (3)

    OTC    New Jersy   Thrift    18,671     82    12-31    07/99    35.04    6,558

ICBC

  

Independence Comm Bnk Cp of NY

    OTC    NY, NJ   Thrift    18,018     81    12-31    03/98    40.13    3,347

NWSB

  

Northwest Bcrp MNC of PA(41.4)

    OTC    PA, NY, OH,
KD		   Thrift    5,779     146    06-30    11/94    21.91    1,051

WYPT

  

Waypoint Financial Corp of PA

    OTC    PA, MD   Thrift    5,443     61    12-31    10/00    27.97    934

PFS

  

Provident Fin. Serv. Inc of NJ (3)

    NYSE    Northern NJ   Thrift    4,296     55    12-31    01/03    17.82    1,070

FNFG

  

First Niagara Fin. Group of NY (3)

    OTC    North/
Central NY		   Thrift    3,589 D   47    12-31    01/03    13.06    1,093

DCON

  

Dime Community Bancshare of NY (3)

    OTC    New York
City NY		   Thrift    3,470     20    12-31    06/96    17.06    636

TRST

  

TrustCo Bank Corp NY of NY

    OTC    NY, FL,VT   Thrift    2,849     61    12-31        /        12.90    957

HRBT

  

Hudson River Bancorp Inc of NY

    OTC    Southeast
KY		   Thrift    2,610     51    03-31    07/98    18.52    564

WSFS

  

WSFS Financial Corp. of DE (3)

    OTC    Wilmington
DE, PA		   Div.    2,400     21    12-31    11/86    50.34    353

PRTR

  

Partners Trust Fin. Grp. of NY

    OTC    Central NY   Thrift    2,183 P   17    12-31    07/04    9.95    276

KNBT

  

KNBT Bancorp, Inc. of PA

    OTC    Eastern PA   Thrift    2,057 N   40    12-31    11/03    16.76    484

FFIC

  

Flushing Fin. Corp. of NY (3)

    OTC    New York
City NY		   Thrift    2,028     11    12-31    11/95    18.32    352

PPSB

  

PennFed Fin. Services of NJ

    OTC    Northern NJ   Thrift    1,902     22    06-30    07/94    30.42    206

OCFC

  

OceanFirst Fin. Corp of NJ

    OTC    Eastern NJ   Thrift    1,857     17    12-31    07/96    22.81    302

PBCP

  

Provident Bancorp, Inc. of NY

    OTC    Southeastern
NY		   Thrift    1,783     20    09-30    01/04    11.21    444

PVSA

  

Parkval_ Financial Corp of PA

    OTC    Southwestern
PA		   Thrift    1,612     39    06-30    07/87    25.75    144

KSBF

  

KSB Financial Corp. of PA

    OTC    Western PA   Thrift    1,362     17    12-31    06/90    13.06    140

FMCO

  

FKS Fin Corp. of Burlington NJ

    OTC    Southern NJ   Thrift    1,240     40    12-31    12/88    16.34    106

WGBC

  

Willow Grove Bancorp Inc of PA

    OTC    Philadelphia
PA		   Thrift    922     14    06-30    04/02    17.00    168

SFFS

  

Sound Fed Bancorp, Inc. of NY

    OTC    NY, CT   Thrift    915     10    03-31    01/03    14.00    176

NEPF

  

Northeast PA Fin. Corp of PA

    OTC    Northeast PA   Thrift    881     16    09-30    04/98    17.17    72

SYNP

  

Synergy Financial Group of NJ

    OTC    Central NJ   Thrift    800     18    12-31    01/04    10.39    129

CSBK

  

Clifton Svg Bp MNC of NJ(45.0)

    OTC    Northeast NJ   Thrift    761     10    03-31    03/04    11.84    361

BCSB

  

BCSB Bankcorp MNC of KB (36.4)

    OTC    Northeast
MS		   Thrift    750     16    09-30    07/98    15.64    92

WSBI

  

Warwick Community Bncrp of NY (3)

    OTC    Southeast
NY, NJ		   Thrift    718     10    12-31    12/97    32.45    146

HARL

  

Harleysville Svgs Fin Cp of PA

    OTC    Southeastern
PA		   Thrift    708     5    09-30    08/87    28.64    66

PBCI

  

Pamrapo Bancorp, Inc. of NJ

    OTC    Northern NJ   Thrift    644     9    12-31    11/89    22.89    114

 

RP FINANCIAL, LC.

Financial Services Industry Consultants

1700 North Moore Street, Suite 2210

Arlington, Virginia 22209

(703) 528-1700

 

Exhibit III-1

Characteristics of Publicly-Traded Thrifts

September 5, 2004(1)

 

Ticker

  

Financial Institution

    Exchg.
   

Primary
Market

    Operating
Strat. (2)
    Total
Assets
     Offices
    Fiscal
Year
    Conv.
Date
    Stock
Price
    Market
Value
                        ($Mil)                    ($)    ($Mil)

Mid-Atlantic Companies (continued)

                                              

FSBI

  

Fidelity Bancorp, Inc. of PA

    OTC    Southwestern PA    Thrift    636     13    09-30    06/88    21.99    59

THRD

  

TF Fin. Corp. of Newtown PA

    OTC    PA, NJ    Thrift    625     14    12-31    07/94    27.45    79

SVBI

  

Severn Bancorp, Inc. of __

    OTC    Central Maryland    Thrift    621     2    12-31    /    36.59    152

FKFS

  

First Keystone Fin., Inc of PA

    OTC    Southeastern PA    Thrift    565     7    09-30    01/95    22.30    43

CNY

  

Carver Bancorp, Inc. of NY

    AMEX    New York, NY    Thrift    553     5    03-31    10/94    18.30    42

GAFC

  

Greater Atlant. Fin Corp of VA

    OTC    North. VA, DC, MD    Thrift    504     9    09-30    06/99    6.01    18

WSB

  

Washington SB, F_B of Bowie MD

    AMEX    Southeastern MD    Thrift    471 M   5    07-31    08/88    10.98    80

ONFC

  

Oneida Fincl MHC of NY (42.4)

    OTC    Central NY    Thrift    431     9    12-31    12/98    12.00    90

WVFC

  

WVS Financial Corp. of PA

    OTC    Pittsburgh PA    Thrift    400 M   6    06-30    11/93    17.70    44

ALLB

  

Alliance Bank MHC of PA (20.0)

    OTC    Southeastern PA    Thrift    383     8    12-31    03/95    29.96    103

PHSB

  

PHSB Financial Corp. of PA

    OTC    Western PA    Thrift    323     10    12-31    12/01    26.67    77

AFBC

  

Advance Fin. Bancorp of WV

    OTC    Northwest WV, OK    Thrift    319 M   8    06-30    01/97    25.70    36

ESBK

  

Elmira Svgs Bank, FSB of NY (3)

    OTC    NY, PA    Thrift    314     6    12-31    03/85    29.84    32

LARL

  

Laurel Capital Group Inc of PA

    OTC    Southwestern PA    Thrift    301 M   8    06-30    02/87    22.00    42

PBMC

  

Pathfinder BC MHC of NY (35.3) (3)

    OTC    Central NY    Thrift    300     6    12-31    11/95    16.08    39

GCBC

  

Green Co Bcrp MHC of NY (43.9)

    OTC    Southeast NY    Thrift    285     6    06-30    12/98    31.60    65

ROME

  

Rome Bncp Inc _HC of NY (38.5) (3)

    OTC    Central NY    Thrift    265     4    12-31    10/99    28.70    121

IFSB

  

Independence FSB of DC

    OTC    Washington DC, MD    Thrift    201 M   4    12-31    06/85    20.56    32

ALFC

  

Atlantic Liberty Fincl of NY

    OTC    Brooklyn, NY    Thrift    183     2    03-31    10/02    18.5_    31

GOV

  

Gouverneur Bcp MHC of NY (42.5)

    AMEX    Northern NY    Thrift    98     2    09-30    03/99    13.18    30

Mid-West Companies

                                              

FBC

  

Flagetar Bancorp, Inc. of WI

    NYSE    WI, IN    Thrift    11,966     95    12-31    04/97    21.71    1,327

CFB

  

Commercial Federal Corp. of NE

    NYSE    CO, NE, IA, KS, OK    M.B.    11,714     191    12-31    12/84    27.75    1,106

MAFB

  

MAF Bancorp, Inc. of IL

    OTC    Chicago IL    Thrift    9,375     41    12-31    01/90    42.46    1,387

CFFN

  

Capitol Fd Fn MHC of KS (29.2)

    OTC    Kansas    Thrift    8,447     35    09-30    04/99    34.77    2,572

ABCW

  

Anchor BanCorp Wisconsin of WI

    OTC    Wisconsin    M.B.    3,840     54    03-31    07/92    25.74    592

FTFC

  

First Fed. Capital Corp. of _I

    OTC    S. WI, MN, IL    Thrift    3,685     87    12-31    11/89    29.67    668

BKMU

  

Bank Mutual Corp of WI

    OTC    WI, KN    Thrift    3,107     69    12-31    10/03    11.60    907

TONE

  

TierOne Corp. of Lincoln NE

    OTC    NE, IA, KS    Thrift    2,255     58    12-31    10/02    21.13    386

FPFC

  

First Place Fin. Corp. of OH

    OTC    Northeast OH    Thrift    2,247     24    06-30    01/99    18.57    281

UCFC

  

United Community Fin. of OH

    OTC    Toungstown ON, PA    Thrift    2,184     34    12-31    07/98    11.43    356

CITZ

  

CFS Bancorp, Inc of Munster IN

    OTC    IN, IL    Thrift    1,472     19    12-31    07/98    13.53    166

NASB

  

NASB Fin, Inc. of Grandview MO

    OTC    Western MO    Thrift    1,346     9    09-30    09/85    36.21    306

CTZN

  

Citizens First Bancorp of MI

    OTC    Southeast MI    Thrift    1,294     15    12-31    03/01    21.23    176

FDEF

  

First Defiance Fin. Corp of OH

    OTC    Northwest OH    Thrift    1,073     17    12-31    10/95    26.10    165

CAFI

  

Ca_co Fin Corp of Cambridge OH

    OTC    Eastern OH, KY    Thrift    1,069     23    12-31    /    15.28    112

EFC

  

EFC Bancorp, Inc of Elgin IL

    AMEX    Southeast IL    Thrift    951     _    12-31    04/98    25.50    119

NMNF

  

NMN Financial, Inc. of MN

    OTC    Southeast MN, IA    Thrift    914     13    12-31    06/94    26.80    119

PCBI

  

Peoples Community Bcrp. of OH

    OTC    Sothwest OH    Thrift    852     15    09-30    03/00    23.52    92

NFFC

  

NF Financial Corp. of SD

    OTC    SD, MN    Thrift    823 M   34    06-30    04/92    16.07    57

KPSP

  

MutualFirst Fin. Inc. of IN

    OTC    Eastcentral IN    Thrift    818     17    12-31    12/99    23.00    114

CASH

  

First Midwest Fin., Inc. of IA

    OTC    IA, SD    Thrift    758     16    09-30    09/93    21.00    52

PVFC

  

PVF Capital Corp. of Solon OH

    OTC    Cleveland OH    R._.    742 M   15    06-30    12/92    14.80    104

PFSL

  

Pocabontas Bancorp, Inc. of AR

    OTC    Northeast AR    Thrift    713     21    09-10    04/98    17.24    79

PFSX

  

First Federal Bankshares of IA

    OTC    IA, NE    Thrift    633 M   15    06-30    04/99    22.87    86

HFBC

  

HopFed Bancorp, Inc. of KY

    OTC    Southwest KY    Thrift    582     8    12-31    02/98    16.49    60

LNCB

  

Lincoln Bancorp of IN

    OTC    Central IN    Thrift    581     9    12-31    12/98    18.44    82

PULB

  

Pulaski Fin Cp of St. Louis MO

    OTC    St. Louis MO    Thrift    567     7    09-30    12/98    18.02    99

WFI

  

Winton Financial Corp. of OH

    AMEX    Cincinnati OH    R._.    554     6    09-30    08/88    20.60    95

FFHM

  

FSF Financial Corp. of MN

    OTC    Southern MN    Thrift    511     13    09-30    10/94    34.80    83

PFDC

  

Peoples Bancorp of Auburn IN

    OTC    Northeast IN, MI    Thrift    493     15    09-30    07/87    22.52    76

FFFD

  

North Central Bancshares of IA

    OTC    Central IA    Thrift    450     9    12-31    03/96    37.99    59

ASBI

  

Ameriana Bancorp of IN

    OTC    Eastern IN    Thrift    429     9    12-31    03/87    16.97    53

MFBC

  

MFB Corp. of Nishawaka IN

    OTC    Northern IN    Thrift    428     7    09-30    03/94    28.56    38

FCAP

  

First Capital, Inc. of IN

    OTC    Southern IN    Thrift    418     12    12-31    01/99    20.56    58

WAYN

  

Wayne Savings Bancshares of OH

    OTC    Central OH    Thrift    386     11    03-31    01/03    15.95    60

CFSL

  

Chesterfield Financial of IL

    OTC    Chicago, IL    Thrift    362     3    06-30    05/01    31.11    121

LSBI

  

LSB Fin. Corp. of Lafayette IN

    OTC    Central IN    Thrift    343     5    12-31    02/95    23.55    32

CFSB

  

Citisene First Fin Corp. of IL

    OTC    Central IL    Thrift    334     5    12-31    05/96    24.50    37

SKBC

  

Southern Missouri Bncrp of MO

    OTC    Southeast MO    Thrift    312     8    06-30    04/94    15.21    34

 

RP FINANCIAL, LC.

Financial Services Industry Consultants

1700 North Moore Street, Suite 2210

Arlington, Virginia 22209

(703) 528-1700

 

Exhibit III-1

Chracteristics of Publicly-Traded Thrifts

September 5, 2004(1)

 

Ticker

  

Financial Institution

    Exchg.
   

Primary
Market

    Operating
Strat.(2)
    Total
Assets
     Offices
    Fiscal
Year
    Conv.
Date
    Stock
Price
    Market
Value
                        ($Mil)                    ($)    ($Mil)

Mid-West Companies (continued)

                                              

FFBI

  

First Federal Bancshares of IL

    OTC    Westcentrl IL, MO    Thrift    308     8    12-31    09/00    20.40    27

STBI

  

Sturgia Bancorp, Inc. of _I

    OTC    Southcentral MI    Thrift    294 M   11    12-31    11/88    14.00    38

MCBF

  

Monarch Community Bncrp of NI

    OTC    Southcentral MI    Thrift    292     5    12-31    08/02    14.25    39

CHEV

  

Cheviot Fin Cp MHC of OH (45.0)

    OTC    Cincinnati, OH    Thrift    279     4    12-31    01/04    10.95    109

FFHS

  

First Franklin Corp. of OH

    OTC    Cincinnati OH    Thrift    273     7    12-31    01/88    20.35    33

PF_D

  

Park Bancorp of Chicago IL

    OTC    Chicago IL    Thrift    271     3    12-31    08/96    31.60    36

FBSI

  

First Bancshares, Inc. of _O

    OTC    Southcentral MO    Thrift    268 M   10    06-30    12/93    20.24    34

JXSB

  

Jcksnville Bcp MHC of IL(46.8)

    OTC    Central IL    Thrift    266     8    12-31    04/95    15.25    30

UCBC

  

Union Community Bancorp of I_

    OTC    W. Central IN    Thrift    262     6    12-31    12/97    17.96    36

RIVR

  

River Valley Bancorp of I_

    OTC    Southeast IN    Thrift    258     5    12-31    12/96    21.85    35

FFBZ

  

First Federal Bncrp, Inc of OH

    OTC    Eastern OH    Thrift    258     6    09-30    07/92    13.10    43

FFWC

  

FFW Corporation of Wabash IN

    OTC    Central IN    Thrift    239 M   4    06-30    04/93    22.00    28

FB_I

  

First Bancorp of Indiana of IN

    OTC    Evansville IN    Thrift    237 M   7    06-30    04/99    20.70    34

N_IB

  

Northeast Indiana Bncrp of IN

    OTC    Northeast IN    Thrift    225     3    12-31    06/95    21.28    31

W_FC

  

Wells Fin. Corp. of Wells MN

    OTC    Southcentral IN    Thrift    223     8    12-31    04/95    27.15    32

FBTC

  

First BancTrust Corp of IL

    OTC    Eastcentral IL    Thrift    221     3    12-31    04/01    12.50    31

BRBI

  

Blue River Bancshares of IN

    OTC    Central IN    Thrift    204     4    12-31    06/98    5.68    19

FF_D

  

Fidelity Fed. Bancorp of IN

    OTC    Southwestern IN    Thrift    193     5    12-31    08/87    1.54    17

ASBP

  

ASB Financial Corp. of OH

    OTC    Southern OH    Thrift    163 M   2    06-30    05/95    22.50    38

HLFC

  

Home Loan Financial Corp of OH

    OTC    Central OH    Thrift    l58 M   3    06-30    03/98    19.51    33

GTPS

  

Great American Bancorp of IL

    OTC    East Central IL    Thrift    157     3    12-31    06/95    25.60    19

AMFC

  

AMB Fin. Corp. of Munster IN

    OTC    Northwest IN    Thrift    154     3    12-31    04/96    15.01    15

HCFC

  

Home City Fin. Corp. of OH

    OTC    Southwest OH    Thrift    153     2    12-31    12/96    15.31    13

CKPB

  

CKP Bancorp of Danville KY

    OTC    Central RT    Thrift    152     3    12-31    01/95    17.00    25

F__Y

  

Frankfort First Bancorp of KY

    OTC    Frankfort KY    Thrift    13_ M   3    06-30    07/95    23.86    30

PSFC

  

Peoples Sidney Fin. Corp of OH

    OTC    WestCentral OH    Thrift    137 M   4    06-30    04/97    15.80    23

FFDF

  

FFD Financial Corp of Dover OH

    OTC    Northeast OH    Thrift    137 M   3    06-30    04/96    14.00    17

FFFS

  

First Fed Serv MHC of IL(45.0)

    OTC    West Central IL    Thrift    135     1    12-31    06/04    13.00    51

_CFC

  

Central Federal Corp. of OH

    OTC    Northeast OH    Thrift    129     3    12-31    12/98    12.90    26

PBNC

  

PFS Bancorp Inc. of Aurora IN

    OTC    Southeastern IN    Thrift    125     3    12-31    10/01    21.91    32

CIBI

  

Community Inv. Bncp, Inc of OH

    OTC    NorthCentral OH    Thrift    122 M   3    06-30    02/95    14.27    16

WCF_

  

Wbstr Cty Fed MHC of IA (39.0)

    OTC    Central IA    Thrift    105     1    12-31    08/94    13.50    51

FNFI

  

First Niles Fin., Inc. of OH

    OTC    Central Ohio    Thrift    97     1    12-31    10/98    18.50    25

H___

  

Home Financial Bancorp of IN

    OTC    Central IN    Thrift    60 M   2    06-30    07/96    5.75    8

New England Companies

                                              

PBCT

  

Peoples Bank MHC of CT (41.7) (3)

    OTC    CT    Div.    10,659     155    12-31    07/88    34.27    3,211

NABC

  

NewAlliance Bancshares of CT

    OTC    Connecticut    Thrift    6,391     74    12-31    04/04    13.76    1,571

BFD

  

BostonFed Bancorp, Inc. of MA

    A__X    Eastern MA    M.B.    1,699     18    12-31    10/95    41.66    189

BRXL

  

Brookline Bancorp, Inc. of MA (3)

    OTC    Eastern MA    Thrift    1,610     6    12-31    07/02    15.85    936

BHL

  

Berkshire Hills Bancorp of MA (3)

    A___    Western MA    Thrift    1,296     14    12-31    06/00    38.35    225

_ASB

  

_aseBank Corp. of Reading MA (3)

    OTC    Eastern MA    Thrift    980     15    12-31    05/86    36.57    161

WRO

  

Woronoco Bancorp. Inc. of MA

    AH_X    Southwest MA    Thrift    882     9    12-31    03/99    39.55    145

WFD

  

Westfield Finl MHC of MA (46.5) (3)

    A__X    Southwestern MA    Thrift    789     10    12-31    12/01    22.49    226

NMIL

  

Newmil Bancorp, Inc. of CT (3)

    OTC    Western CT    Thrift    731     20    12-31    02/86    28.64    121

NHTB

  

NN Thrift Bancshares of NH

    OTC    Central NH    Thrift    605     14    12-31    05/86    29.32    61

HIFS

  

Hingham Inst. for Sav, of _A (3)

    OTC    Eastern _A    Thrift    526     7    12-31    12/88    42.00    87

NBN

  

Northeast Bancorp of Auburn __ (3)

    AMEX    Eastern __    Thrift    518 M   12    06-30    08/87    19.20    48

CRBK

  

Central Bncrp of So_erville _A (3)

    OTC    Eastern _A    Thrift    508     10    03-31    10/86    32.45    54

LSBX

  

LSB Corp of No. Andover _A (3)

    OTC    Northeastern _A    Thrift    476     6    12-31    05/86    19.69    85

MYST

  

Mystic Financial, Inc. of _A (3)

    OTC    Eastern _A    Thrift    428 M   6    06-30    01/98    40.10    63

MFLR

  

Mayflower Co-Op. Bank of _A (3)

    OTC    Southeastern _A    Thrift    209 D   5    04-30    12/87    18.11    37

North-West Companies

                                              

WFSL

  

Washington Fedaral, Inc. of WA

    OTC    WA, OR, AZ, ID, UT    Thrift    7,284     118    09-30    11/82    25.77    2,022

STSA

  

Sterling Financial Corp of WA

    OTC    WA, ID, MT, OR    M.B.    6,259     83    12-31    06/83    33.85    766

FMSB

  

First Mutual Bncshrs Inc of WA (3)

    OTC    Western WA    Thrift    964     10    12-31    12/85    24.35    128

HFZB

  

Horison Financial Corp. of WA (3)

    OTC    Northwest WA    Thrift    878     16    03-31    08/86    19.58    202

EVRT

  

Evertrust Fin. Grp, Inc. of WA (3)

    OTC    Northwest WA    Thrift    769     15    03-31    10/99    25.43    175

 

RP FINANCIAL, LC.

Financial Services Industry Consultants

1700 North Moore Street, Suite 2210

Arlington, Virginia 22209

(703) 528-1700

 

Exhibit III-1

Characteristics of Publicly-Traded Thrifts

September 5, 2004(1)

 

Ticker

  

Financial Institution

   

Exchg.

   

Primary Market

   

Operating
Strat. (2)

    Total
Assets
         Offices
    Fiscal
Year
    Conv.
Date
    Stock
Price
    Market
Value
                        ($Mil)                        ($)    ($Mil)

North-West Companies (continued)

                                                  

RPFG

   Ranier Pacific Fin Group of WA    OTC    Western WA    Thrift    761         12    12-31    10/03    18.00    152

FBNW

   FirstBank NW Corp. of WA    OTC    West _A, ID, OR    Thrift    733         20    03-31    07/97    2_.25    84

RVSB

   Riverview Bancorp, Inc. of WA    OTC    Southwest WA    Thrift    515         13    03-31    10/97    20.59    99

TSBX

   Timberland Bancorp, Inc. of WA    OTC    Westcentral WA    Thrift    438         15    09-30    01/98    22.94    89

South-East Companies

                                                  

NTBK

   NetBank, Inc. of Alpharatta GA    OTC         Thrift    5,176         0         /    10.89    508

FFCH

   First Fin. Holdings Inc. of SC    OTC    Charleston SC, NC    Thrift    2,452         44    09-30    11/83    30.60    379

CFCP

   Coastal Fin. Corp. of SC    OTC    SC, NC    Thrift    1,280         1_    09-30    09/90    13.75    218

CHFN

   Charter Fincl MHC of GA (18.4)    OTC    SW GA, East. AL    Thrift    1,068         8    09-30    10/01    34.85    682

FFBW

   First Fed. Bancshares of A_    OTC    Northern AR    Thrift    713         15    12-31    05/96    20.71    108

TSW

   T_che Nlding Cp of N Iberia LA    A_BX    Southern LA    Thrift    580         14    09-30    04/95    37.00    84

CSBC

   Citizens South Banking of NC    OTC    Southwest NC    Thrift    495    M    9    12-31    10/02    13.25    100

CFFC

   Community Fin. Corp. of VA    OTC    Central VA    Thrift    355         _    03-31    03/88    18.80    39

JFBI

   Jefferson Bancshares Inc of TM    OTC    Eastern TN    Thrift    308    M    1    06-30    07/03    13.09    110

SSFC

   South Street Fin. Corp. of NC (3)    OTC    South Central NC    Thrift    212         2    12-31    10/96    10.24    31

GSLA

   GS Financial Corp. of LA    OTC    New Orleans LA    Thrift    209         4    12-31    04/97    18.72    24

DFBS

   Dutchfork Bancshares Inc of SC    OTC    Central SC    Thrift    203         3    09-30    07/00    40.72    46

FIFG

   lst Independence Fin Grp of KY    OTC         Thrift    180         0         /    19.24    24

PFDF

   Great Pee Dee Bancorp of SC    OTC    Northeast SC    Thrift    157    M    2    06-30    12/97    15.50    28

SZB

   SouthFirst Bancshares of AL    A_BX    Central AL    Thrift    139         3    09-30    02/95    16.05    12

UTBI

   United Te_n. Ban_shares of TN    OTC    Eastern TM    Thrift    123         3    12-31    01/98    17.90    22

South-West Companies

                                                  

FBTX

   Franklin Bank Corp of TX    OTC    Austen    Thrift    3,070         0    12-31    /    16.19    344

AABC

   Access Anytime Bancorp of NM    OTC    Eastern NM    Thrift    285         7    12-31    08/86    14.05    17

GUPB

   GPSB Bancorp, Inc of Gallup NM    OTC    Northwest NM    Thrift    239    M    2    06-30    06/95    19.85    23

Western Companies (Excl CA)

                                                  

NTXC

   Matrix Bancorp, Inc. of CO    OTC    NM, CO, AZ    Thrift    1,737         4    12-31    10/96    11.97    78

Other Areas

                                                      

 

NOTES:  

(1)      Or most recent date available (M=March, S=September, D=December, J=June, E=Estimated, and P=Pro Forma)

   

(2)      Operating strategies are: Thrift=Traditional Thrift, M.B. =Mortgage Banker, R.E. =Real Estate Developer, Div. =Diversified, and Ret. =Retail Banking.

   

(3)      FDIC savings bank.

Source:   Corporate offering circulars, SNL Securities Quarterly Thrift Report, and financial reports of publicly Traded Thrifts.

 

Date of Last Update: 09/05/04

 

RP FINANCIAL, LC.

Financial Services Industry Consultants

1700 North Moore Street, Suite 2210

Arlington, Virginia 22209

(703) 528-1700

 

Exhibit III-2

Market Pricing Comparatives

Prices As of September 3, 2004

 

         Market
Capitalisation
    Per Share Data
    Pricing Ratios (3)
    Dividends (4)
    Financial Characteristics (6)
         Price/
Share (1)
    Market
Value
   

Core

12-Mth

EPS (2)

   

Book

Value/

Share

    P/E
    P/B
    P/A
    P/TB
    P/CORE
   

Amount/

Share

    Yield
    Payout
Ratio (5)
    Total
Assets
   

Equity/

Assets

   

NPAs/

Assets

    Reported
    Core

Financial Institution

                                                 ROA
    ROE
    ROA
    ROE
         ($)    ($Mil)    ($)    ($)    (X)    (%)    (%)    (%)    (X)    ($)    (%)    (%)    ($Mil)    (%)    (%)    (%)    (%)    (%)    (%)
                                                                                                    

All Public Companies

    22.15    466.74    1.02    14.19    17.60    159.51    17.02    173.56    19.55    0.48    2.20    36.08    2,935    10.74    0.55    0.82    8.70    0.71    7.21

Special Selection Grouping (8)

    17.17    24.40    0.70    13.30    19.61    134.76    18.33    137.76    20.91    0.48    2.65    40.72    158    13.21    0.95    0.73    5.9_    0.64    5.26

Comparable Group

                                                                                               

Special Comparative Group (8)

                                                                                               

AMFC

  

AMS Fin. Corp. of _unster IN

    15.01    14.63    1.10    13.16    14.43    114.06    9.4_    114.06    13.65    0.24    1.60    21.82    154    8.31    1.29    0.67    8.15    0.71    8.62

ASBP

  

ASB Financial Corp. of OH

    22.50    37.53    1.19    10.39    18.60    216.55    23.07    216.55    18.91    0.60    2.67    50.42    163    10.65    0.66    1.29    12.19    1.27    11.98

BRBI

  

Blue River Bancshares of IN

    5.68    19.35    0.05    4.71    NM    120.59    9.46    155.19    NM    0.00    0.00    0.00    204    7.84    1.76    0.21    2.33    0.10    1.17

C_FB

  

C_F Bancorp of Danville KY

    17.00    24.99    1.14    10.73    14.91    158.43    16.46    170.17    14.91    0.60    3.53    52.63    152    10.39    1.01    1.15    11.20    1.15    11.20

GCFC

  

Central Federal Corp. of OH

    12.90    26.30    -0.96    9.15    NM    140.98    20.40    140.98    NM    0.36    2.79    NM    129    14.47    0.58    -1.63    -9.25    -1.72    -9.76

CIBI

  

Community Inv. _ncp, Inc of OH

    14.27    15.65    0.73    12.21    17.84    116.87    12.88    116.87    19.55    0.36    2.52    49.32    122    11.02    0.75    0.72    6.73    0.66    6.14

FFDF

  

FFD Financial Corp of Dover OH

    14.00    16.90    0.35    14.18    20.00    98.73    12.37    98.73    NM    0.42    3.00    NM    137    12.53    0.49    0.62    4.97    0.31    2.49

FFWC

  

FFW Corporation of wabash IN

    22.00    28.27    1.52    18.87    11.46    116.59    11.82    121.48    14.47    0.68    3.09    44.74    239    10.14    0.94    1.03    10.53    0.81    8.33

FFED

  

Fidelity Fed. Bancorp of IN (7)

    1.54    16.94    -0.01    1.42    NM    10_.45    8.79    108.45    NM    0.00    0.00    NM    193    8.11    0.53    0.13    1.54    -0.06    -0.77

FBTC

  

First BancTrust Corp of IL

    12.50    31.25    0.44    10.30    20.49    121.36    14.13    121.36    28.41    0.24    1.92    54.55    221    11.64    1.25    0.68    5.79    0.49    4.17

FB_I

  

First Bancorp of Indiana of IN

    20.70    33.62    0.43    18.83    23.79    109.93    14.20    117.81    NM    0.58    2.80    NM    237    12.92    0.39    0.69    4.71    0.34    2.33

FFFS

  

First Fed Serv KHC of IL(45.0)

    13.00    22.93    0.4_    9.08    27.08    143.17    37.71    143.17    27.08    0.00    0.00    0.00    135    26.34    0.10    1.46    6.86    1.46    6.86

FNFI

  

First Niles Fin., Inc. of OH

    1_.50    25.46    0.64    11.19    24.34    165.33    26.17    165.33    28.91    0.60    3.24    NM    97    15.83    1.09    1.06    6.39    0.89    5.38

FKKY

  

Frankfort First Bancorp of KY

    23.86    30.23    0.80    13.95    29.83    171.04    21.91    171.04    29.83    1.12    4.69    NM    138    12.81    NA    0.73    5.67    0.73    5.67

GTPS

  

Great American Bancorp of IL

    25.60    18.82    1.57    13.09    15.33    110._7    11.96    114.13    16.31    0.44    1.72    28.03    157    10.79    0.04    0.76    6.99    0.72    6.57

HCFC

  

Home City Fin. Corp. of OH

    15.31    12.62    0.78    15.03    19.38    101._6    8.23    104.36    19.63    0.44    2.87    56.41    153    8.08    NA    0.43    _.43    0.42    5.36

HWEN

  

Home Financial Bancorp of IN

    5.75    7._0    0.33    5.21    23.96    110.36    13.06    110.36    17.42    0.12    2.09    36.36    60    11.83    2.57    0.53    4.76    0.73    6.55

HLFC

  

Home Loan Financial Corp of OH

    19.51    32.99    1.11    13.46    17.42    144.95    20.94    144.95    17.58    0.77    3.95    69.37    158    14.45    1.48    1.26    8.64    1.25    8.56

NEI_

  

Northeast Indiana Bncrp of IN

    21.2_    31.24    1.04    1_.07    18.83    117.76    13.88    117.76    20.46    0.56    2.63    53.85    225    11.78    1.08    0.74    6.15    0.68    5.66

PBNC

  

PFS Bancorp Inc. of Aurora IN

    21.91    32.30    0.57    18.42    NM    118.95    25.88    118.95    NM    0.30    1.37    52.63    125    21.76    NA    0.70    3.13    0.70    3.13

PSFC

  

Peoples Sidney Fin. Corp of OH

    15.80    22.64    0.67    12.18    23.58    129.72    16.55    129.72    23.58    0.56    3.54    NM    137    12.76    1.43    0.69    5._3    0.69    5.53

WCF_

  

Wb_tr Cty Fed __C of IA (39.0)

    13.50    19.87    0.30    5.99    NM    225.3_    48.60    226.51    NM    0.68    _.04    NN    105    21.56    NA    1.07    5.00    1.07    5.00

W_FC

  

Wells Fin. Corp. of Wells __

    27.15    31.52    1.14    24.40    11.70    111.27    14.11    111.27    23.82    0.88    3.24    NM    223    12.68    0.10    1.20    9.72    0.59    4.78

 

(1) Average of High/Low or Bid/Ask price per share.

 

(2) _PS (estimate core basis) is based on actual trailing twelve month data, adjusted to omit non-operating items on a tax effected basis.

 

(3) P/E = Price to earnings; P/B = Price to book; P/A = Price to assets; P/TB = Price to tangible book value; and P/CORE = Price to estimated core earnings.

 

(4) Indicated twelve month dividend, based on last quarterly dividend declared.

 

(5) Indicated dividend as a percent of trailing twelve month estimated core earnings.

 

(6) ROA (return on assets) and ROE (return on equity) are indicated ratios based on trailing twelve month earnings and average equity and assets balances.

 

(7) Excludes from averages those companies the subject of actual or rumored acquisition activities or unusual operating characteristics.

 

(8) Includes Mid-West Companies, Assets less than $250 Million;

 

Source:  Corporate reports, offering circulars, and RP Financial, LC. calculations. The information provided in this report has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

 

Copyright (c) 2004 by RP Financial, LC.

 

Exhibit III-3

Peer Group Market Area Comparative Analysis

 

                                     Per Capita Income
    

Deposit

Market

Share(1)

  
          Population
   

Proj.

Pop.

2009

   

2000-2004

% Change

    

2004-2009

% Change

    

Amount

   

% State

Average

    

Institution

   

County

    2000
    2004
               
          (000)    (000)                                   

AMB Financial Corp. of Munster, IN

    Lake    485    490    496    1.1 %   1.3 %   $ 21,765    96.5 %   1.8 %

FFW Corporation of Wabash, IN

    Wabash    35    35    34    -1.2 %   -1.5 %     19,919    88.4 %   29.2 %

First BancTrust Corp. of Paris, IL

    Edgar    20    19    18    -4.0 %   -5.2 %     19,979    77.5 %   25.1 %

First Bancorp of Evansville, IN

    Vanderburgh    172    172    172    0.1 %   0.2 %     22,568    100.1 %   3.63 %

Great American Bncp, Inc. of Champaign, IL

    Champaign    180    185    192    3.2 %   3.8 %     22,562    87.5 %   4.3 %

Home Financial Bancorp of Spencer, IN

    Owen    22    23    25    6.4 %   7.4 %     19,155    85.0 %   21.4 %

Northeast Indiana Bancorp, Inc. of Huntington, IN

    Huntington    38    39    39    1.4 %   1.6 %     20,736    92.0 %   27.2 %

PFS Bancorp, Inc. of Aurora, IN

    Ohio    6    6    6    6.1 %   7.1 %     21,361    94.8 %   16.30 %

Community Investors Bancorp, Inc. of Bucyrus, OH

    Crawford    47    46    45    -2.0 %   -2.6 %     19,239    83.0 %   12.33 %

First Niles Financial, Inc. of Niles, OH

    Trumbull    225    222    218    -1.3 %   -1.7 %     20,097    86.7 %   2.3 %
     Averages:    123    124    125    1.0 %   1.0 %     20,738    89.1 %   14.3 %
     Medians:    43    42    42    0.6 %   0.7 %     20,417    88.0 %   14.3 %

Royal Savings Bank of Chicago, IL

    Cook    5,377    5,364    5,342    -0.2 %   -0.4 %     25,692    99.7 %   0.1 %

 

(1) Total institution deposits in headquarters county as percent of total county deposits.

 

Sources:  ESRI Business Information Solutions and the FDIC.

 

EXHIBIT IV-1

Stock Prices:

As of September 3, 2004

 

RP FINANCIAL, LC.

Financial Services Industry Consultants

1700 North Moore Street, Suite 2210

Arlington, Virginia 22209

(703) 528-1700

 

Exhibit IV-1A

Weekly Thrift Market Line - Part One

Prices As Of September 3, 2004

 

    Market Capitalization
   Price Change Data
   Current Per Share Financials
    Price/
Share(1)
  

Shares

Out-

standing

  

Market

Capital-

ization(9)

   52 Week(1)
   Last
Week
   % Change From
  

Trailing

12 No.
EPS(3)

  

12 No.

Core
EPS(3)

  

Book

Value/
Share

  

Tangible

Book

Value/
Share(4)

  

Assets/

Share

Financial Institution

         High
   Low
     Last
Week
   52 Wks
Ago(2)
   Dec 31,
2000 (2)
          
    ($)   (000)   ($Mil)   ($)   ($)   ($)   (%)   (%)   (%)   ($)   ($)   ($)   ($)   ($)

Market Averages, SAIF-Insured Thrifts (no MHC)

                                                        

SAIF-Insured Thrifts(149)

   22.06   16,088   471.2   25.26   18.60   21.87   0.86   11.22   -1.42   1.28   1.06   14.95   13.74   166.58

NYSE Traded Companies(11)

   40.83   79,529   3,359.4   44.61   32.10   40.43   0.89   19.99   4.33   3.12   2.52   21.06   19.74   293.34

AMEX Traded Companies(9)

   22.22   3,941   76.6   25.01   18.05   21.91   1.83   16.98   0.49   1.21   0.99   15.28   15.10   182.20

NASDAQ Listed OTC Companies(129)

   20.27   10,805   221.1   23.44   17.36   20.11   0.80   10.04   -2.08   1.12   0.93   14.35   13.09   153.62

California Companies(13)

   36.66   34,557   2,133.6   39.49   28.04   36.12   1.56   28.02   10.05   2.59   1.99   19.29   18.54   257.37

Florida Companies(7)

   24.63   20,412   498.8   26.53   18.66   24.21   1.54   25.14   9.96   1.25   1.21   10.91   10.49   152.30

Mid-Atlantic Companies(33)

   20.35   27,161   621.8   24.26   17.76   19.98   1.50   7.12   -7.66   1.06   0.88   13.02   11.47   164.27

Mid-West Companies(68)

   20.23   7,436   154.0   23.60   17.57   20.24   0.12   7.07   -2.58   1.25   1.05   15.39   14.37   155.86

New England Companies(4)

   27.54   39,969   592.3   30.63   20.94   27.11   1.25   32.03   11.11   1.43   1.25   17.82   14.26   195.88

North-West Companies(6)

   24.90   20,191   535.1   26.34   21.01   24.64   0.86   20.79   2.13   1.35   1.25   16.79   14.04   154.48

South-East Companies(14)

   18.88   8,202   127.3   21.82   16.61   18.80   0.74   5.71   -5.08   0.83   0.56   14.26   13.74   134.31

South-West Companies(3)

   15.12   11,226   180.4   17.72   13.23   14.68   3.06   13.79   -7.96   0.77   0.35   12.53   8.39   188.60

Western Companies (Excl CA)(1)

   11.97   6,520   78.0   13.90   8.00   10.75   11.35   31.39   29.41   0.64   1.13   11.38   11.38   266.38

Thrift Strategy(140)

   21.96   13,276   412.7   25.25   18.57   21.78   0.82   10.95   -1.58   1.26   1.04   15.03   13.90   165.71

Mortgage Banker Strategy(7)

   25.46   77,120   1,770.1   27.00   20.46   24.98   1.98   17.03   1.45   1.82   1.56   14.24   11.18   195.20

Real Estate Strategy(2)

   14.80   7,026   104.0   16.34   11.65   14.90   -0.67   10.53   1.02   1.07   0.45   8.86   8.86   105.55

Companies Issuing Dividends(135)

   22.21   16,396   483.6   25.48   18.84   22.04   0.77   10.54   -1.94   1.30   1.09   15.14   13.99   164.16

Companies Without Dividends(14)

   20.15   12,270   317.6   22.52   15.70   19.78   1.94   19.62   4.93   1.15   0.76   12.51   10.72   196.59

Equity/Assets <6%(13)

   18.03   11,783   268.5   20.77   14.83   17.69   1.92   10.32   1.57   1.25   0.77   11.22   10.41   216.31

Equity/Assets 6-12%(101)

   24.19   16,623   571.1   27.67   20.36   23.99   0.82   9.99   -2.23   1.50   1.25   15.68   14.41   184.49

Equity/Assets >12%(35)

   17.60   16,196   266.0   20.19   15.07   17.48   0.58   15.03   -0.27   0.69   0.63   14.27   13.12   97.57

Converted Last 3 Mths (no MHC)(1)

   9.95   27,743   276.0   21.27   9.35   10.27   -3.12   -11.00   -42.91   0.60   0.58   11.00   5.29   78.67

Actively Traded Companies(10)

   36.77   73,024   3,253.3   39.79   25.81   36.10   2.04   14.61   1.96   2.47   2.57   18.91   15.89   242.29

Market Value Below $20 Million(12)

   13.11   1,460   15.6   16.19   11.74   13.09   0.74   1.61   -9.08   0.59   0.11   11.79   11.00   149.86

Holding Company Structure(147)

   22.14   16,154   474.1   25.37   18.68   21.96   0.83   11.21   -1.57   1.29   1.06   15.01   13.00   167.35

Assets Over $1 Billion(52)

   26.11   39,303   1,210.7   29.25   21.40   25.83   1.08   14.16   0.77   1.65   1.37   14.94   13.07   185.21

Assets $500 Million-$1 Billion(35)

   21.57   4,755   93.3   24.53   18.28   21.28   1.14   12.35   -3.14   1.21   0.95   14.96   13.81   179.65

Assets $250-$500 Million(31)

   19.68   2,778   48.7   23.26   17.42   19.57   0.87   4.71   -3.23   1.25   1.13   15.62   14.65   162.78

Assets less than $250 Million(31)

   17.75   1,485   25.2   21.00   15.17   17.77   0.11   10.88   -1.48   0.75   0.59   14.28   14.00   121.14

Goodwill Companies(99)

   22.25   19,598   465.6   25.42   18.68   22.03   0.87   12.51   -1.76   1.26   1.02   14.90   13.13   168.96

Non-Goodwill Companies(50)

   21.65   8,660   482.9   24.93   18.43   21.53   0.83   8.49   -0.72   1.33   1.15   15.05   15.05   161.55

Acquirors of FSLIC Cases(6)

   46.67   60,436   4,252.8   49.06   37.18   45.77   2.48   16.41   7.27   3.11   3.24   24.39   23.28   328.23

 

(1) Average of high/low or bid/ask price per share.

 

(2) Or since offering price if converted or first listed in 2001 or within the past 52 weeks. Percent change figures are actual year-to-date and are not annualized.

 

(3) EPS (earnings per share) is based on actual trailing twelve month data and is not shown on a pro forma basis.

 

(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).

 

(5) ROA (return on assets) and ROE (return on equity) are indicated ratios based on trailing twelve month common earnings and average common equity and assets balances.

 

(6) Annualized, based on last regular quarterly cash dividend announcement.

 

(7) Indicated dividend as a percent of trailing twelve month earnings.

 

(8) Excluded from averages due to actual or rumored acquisition activities or unusual operating characteristics.

 

(9) For MHC institutions, market value reflects share price multiplied by public (non-MHC) shares.

 

* All thrifts area SAIF insured unless otherwise noted with an asterisk. Parentheses following market averages indicate the number of institutions included in the respective averages. All figures have been adjusted for stock splits, stock dividends, and secondary offerings.

 

Source:  Corporate reports and offering circulars for publicly traded companies, and RP Financial, LC. calculations. The information provided in this report has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

 

Copyright (c) 2004 by RP Financial, LC.

 

RP FINANCIAL, LC.

Financial Services Industry Consultants

1700 North Moore Street, Suite 2210

Arlington, Virginia 22209

(703) 528-1700

 

Exhibit IV-1A (continued)

Weekly Thrift Market Line - Part One

Prices As Of September 3, 2004

 

    Market Capitalization
   Price Change Data
   Current Per Share Financials
                52 Week(1)
       % Change From
                    

Financial Institution

   Price/
Share(1)
  

Shares

Outstanding

   Market
Capital-
ization(9)
   High
   Low
   Last
Week
   Last
Week
  

52 Wks

Ago(2)

   Dec 31,
2000(2)
  

Trailing

12 No.

EPS(3)

  

12 No.

Core

EPS(3)

   Book
Value/
Share
   Tangible
Book Value/
Sbare(4)
   Assets /
Share
    ($)   (000)   ($Mil)   ($)   ($)   ($)   (%)   (%)   (%)   ($)   ($)   ($)   ($)   ($)

Market Averages, BIF-Insured Thrifts (no MHC)

                                                        

BIF-Insured Thrifts(23)

   23.51   31,705   617.7   26.73   19.40   22.97   2.28   9.02   -0.94   1.33   1.26   13.74   12.81   147.24

NYSE Traded Companies(3)

   19.91   162,279   3,444.6   28.56   16.77   19.43   2.28   -9.62   -14.31   0.97   1.19   12.54   8.49   81.30

AMEX Traded Companies(2)

   28.78   4,198   136.8   29.85   23.94   28.16   1.43   16.21   2.71   1.63   1.41   17.85   17.20   212.96

NASDAQ Listed OTC Companies(18)

   23.27   16,981   282.6   26.02   19.13   22.73   2.40   10.66   0.45   1.34   1.25   13.32   12.80   147.28

Mid-Atlantic Companies(9)

   19.68   77,643   1,500.5   24.56   16.55   19.12   3.00   0.86   -8.83   1.20   1.17   11.24   9.30   115.54

New England Companies(10)

   27.87   9,575   194.9   30.41   23.05   27.16   2.91   11.79   1.86   1.51   1.42   16.75   16.20   180.04

North-West Companies(3)

   21.97   7,790   165.1   24.51   16.72   21.76   1.01   25.29   10.58   1.45   1.27   10.41   10.39   133.90

South-East Companies(1)

   10.24   3,068   31.4   10.95   9.13   10.80   -5.19   0.49   -1.92   0.29   0.29   8.29   8.29   68.99

Thrift Strategy(22)

   23.51   31,705   617.7   26.73   19.40   22.97   2.28   9.02   -0.94   1.33   1.26   13.74   12.81   147.24

Companies Issuing Dividends(23)

   23.51   31,705   617.7   26.73   19.40   22.97   2.28   9.02   -0.94   1.33   1.26   13.74   12.81   147.24

Equity/Assets < 6%(1)

   24.35   5,277   128.5   26.45   17.29   24.21   0.58   36.41   9.34   1.66   1.47   10.38   10.38   182.62

Equity/Assets 6-12%(16)

   27.29   7,702   167.2   30.17   22.54   26.61   2.69   13.04   0.17   1.65   1.52   15.84   15.19   189.17

Equity/Assets > 12%(6)

   16.43   80,115   1,525.3   20.46   14.01   16.08   1.81   -2.92   - 4.69   0.70   0.73   10.43   8.85   64.49

Actively Traded Companies(5)

   30.06   4,550   117.7   33.90   25.00   29.24   3.56   6.89   0.12   1.69   1.68   18.81   18.48   195.41

Holding Company Structure(20)

   22.21   37,698   730.8   25.45   18.36   21.62   2.59   7.47   -2.92   1.19   1.17   13.31   12.24   133.78

Assets over $1 Billion(9)

   20.35   75,674   1,447.5   24.21   16.98   19.67   3.43   2.10   -6.96   0.99   1.02   11.38   9.65   93.14

Assets $500 Million - $1 Billion(9)

   20.97   4,350   114.5   32.37   24.02   28.55   1.34   11.26   -0.82   1.73   1.55   16.96   16.39   203.98

Assets $250-$500 Million(3)

   24.77   2,696   58.6   26.52   20.23   23.35   7.07   17.64   9.39   1.86   1.90   15.93   15.70   199.92

Assets less than $250 Million(2)

   14.18   2,560   34.3   15.98   10.90   14.58   -3.25   16.78   9.37   0.62   0.42   8.49   8.47   85.32

Goodwil Companies(16)

   23.92   38,221   757.8   27.90   19.87   23.37   2.21   7.32   -3.27   1.35   1.22   14.23   12.95   154.47

Non-Goodwill Companies(7)

   22.43   14,761   253.7   23.66   18.20   21.91   2.45   13.45   5.12   1.29   1.36   12.45   12.45   128.45

 

(1) Average of high/low or bid/ask price per share.

 

(2) Or since offering price if converted or first listed in 2001 or within the past 52 weeks. Percent change figures are actual year-to-date and are not annualized.

 

(3) EPS (earnings per share) is based on actual trailing twelve month data and is not shown on a pro forma basis.

 

(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).

 

(5) ROA (return on assets) and ROE (return on equity) are indicated ratios based on trailing twelve month common earnings and average common equity and assets balances.

 

(6) Annualized, based on last regular quarterly cash dividend announcement.

 

(7) Indicated dividend as a percent of trailing twelve month earnings.

 

(8) Excluded from averages due to actual or rumored acqiuistion activities or unusual characteristics.

 

(9) For MHC institutions, market value reflects share price multiplied by public (non-MHC) shares.

 

* All thrifts are SAIF insured unless otherwise noted with an asterisk. Parentheses following market averages indicate the number of institutions included in the respective averages. All figures have been adjusted for stock splits, stock dividends, and secondary offerings.

 

Source:  Corporate reports and offering circulars for publicly traded companies, and RP Financial, LC. calculations. The information provided in this report has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

 

Copyright (c) 2004 by RP Financial, LC.

 

RP FINANCIAL, LC.

Financial Services Industry Consultants

1700 North Moore Street, Suite 2210

Arlington, Virginia 22209

(703) 528-1700

 

Exhibit IV-1A (continued)

Weekly Thrift Market Line - Part One

Prices As Of September 3, 2004

 

    Market Capitalization
   Price Change Data
   Current Per Share Financials
                52 Week(1)
       % Change From
                    

Financial Institution

   Price/
Share(1)
  

Shares

Outstanding

   Market
Capital-
ization(9)
   High
   Low
   Last
Week
   Last
Week
  

52 Wks

Ago(2)

   Dec 31,
2000(2)
  

Trailing

12 No.

EPS(3)

  

12 No.

Core

EPS(3)

   Book
Value/
Share
   Tangible
Book
Value/
Share(4)
   Assets /
Share
    ($)   (000)   ($Mil)   ($)   ($)   ($)   (%)   (%)   (%)   ($)   ($)   ($)   ($)   ($)

Market Averages, MHC Institutions

                                                        

SAIF-Insured Thrifts(14)

   19.42   16,236   127.5   23.63   16.03   19.18   1.01   13.85   3.62   0.44   0.43   9.12   8.62   77.25

BIF-Insured Thrifts(5)

   27.32   59,519   754.1   31.45   20.86   26.71   2.05   19.85   4.77   0.92   0.62   9.56   8.95   95.44

AMEX Traded Companies(2)

   17.84   6,170   61.2   19.75   13.73   17.34   2.75   12.83   3.65   0.47   0.43   9.71   9.71   60.72

NASDAQ Listed OTC Companies(17)

   21.93   30,151   319.6   26.39   17.73   21.61   1.11   15.73   3.95   0.58   0.49   9.19   8.59   84.54

California Companies(1)

   13.45   14,549   76.5   14.00   10.47   13.34   0.82   34.50   34.50   0.16   0.17   5.86   5.86   63.42

Mid-Atlantic Companies(10)

   21.60   29,349   305.5   26.91   17.74   21.52   0.52   10.24   -2.71   0.63   0.60   8.68   7.97   90.77

Mid-West Companies(5)

   17.49   18,707   170.6   20.82   14.95   17.31   0.59   14.31   4.56   0.29   0.31   9.14   8.82   68.14

New England Companies(2)

   28.38   51,879   723.5   29.93   18.32   26.98   4.86   35.76   26.29   1.23   0.58   11.97   11.37   96.13

South-East Companies(1)

   34.85   19,571   124.4   41.00   29.56   33.00   5.61   13.15   -8.29   0.39   0.27   13.34   13.03   54.56

Thrift Strategy(18)

   20.79   23,956   234.4   25.21   17.17   20.55   0.99   12.57   0.92   0.49   0.47   9.07   8.57   80.27

Diversified Strategy(1)

   34.27   93,700   1,337.4   34.36   19.82   32.16   6.56   66.76   57.93   1.88   0.65   12.34   11.15   113.76

Companies Issuing Dividends(17)

   22.47   29,790   321.0   27.09   18.08   22.10   1.38   13.45   0.59   0.60   0.50   9.45   8.85   85.93

Companies Without Dividends(2)

   13.23   9,235   49.7   13.75   10.74   13.17   0.41   32.25   32.25   0.32   0.33   7.47   7.47   48.95

Equity/Assets < 6%(1)

   15.64   5,899   33.5   22.68   13.15   15.59   0.32   -4.87   -15.69   0.11   0.10   6.84   6.38   127.13

Equity/Assets 6-12%(10)

   24.43   43,472   497.4   29.01   19.14   24.06   1.33   17.52   4.44   0.81   0.64   9.82   8.89   107.76

Equity/Assets > 12%(8)

   18.56   10,536   68.5   21.91   15.53   18.24   1.34   15.34   5.72   0.32   0.33   8.81   8.77   44.24

Holding Company Structure(16)

   21.81   24,133   248.7   26.59   18.00   21.55   1.05   10.84   -2.27   0.54   0.51   9.43   8.86   84.79

Assets over $1 Billion(5)

   32.17   84,472   981.4   36.40   24.74   31.05   3.46   29.94   8.10   0.97   0.67   11.20   10.31   100.55

Assets $500 Million-$1 Billion(4)

   15.86   15,259   95.6   19.11   12.73   15.64   1.12   13.20   7.97   0.24   0.23   7.71   7.60   73.49

Assets $250-$500 Million(7)

   20.65   4,505   30.1   26.41   17.29   20.70   0.03   3.75   -5.28   0.55   0.53   9.40   8.66   93.83

Assets less than $250 Million(3)

   13.23   3,325   18.5   14.92   11.05   13.13   0.78   21.45   13.03   0.38   0.38   7.63   7.62   35.06

Goodwill Companies(8)

   20.44   22,849   252.0   25.08   15.91   19.89   1.84   11.34   -1.00   0.64   0.41   9.24   7.97   94.99

Non-Goodwill Companies(11)

   22.27   31,101   321.8   26.13   18.32   22.09   0.87   18.40   7.50   0.52   0.53   9.24   9.24   72.61

MHC Institutions(19)

   21.50   27,626   292.4   25.69   17.30   21.16   1.28   15.43   3.92   0.57   0.48   9.24   8.71   82.04

MHC Converted Last 3 Months(1)

   13.00   3,920   22.9   13.50   11.00   13.00   0.00   30.00   30.00   0.48   0.48   9.08   9.08   34.47

 

(1) Average of high/low or bid/ask price per share.

 

(2) Or since offering price if converted or first listed in 2001 or within the past 52 weeks. Percent change figures are actual year-to-date and are not annualized.

 

(3) EPS (earnings per share) is based on actual trailing twelve month data and is not shown on a pro forma basis.

 

(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).

 

(5) ROA (return on assets) and ROE (return on equity) are indicated ratios based on trailing twelve month common earnings and average common equity and assets balances.

 

(6) Annualized, based on last regular quarterly cash dividend announcement.

 

(7) Indicated dividend as a percent of trailing twelve month earnings.

 

(8) Excluded from averages due to actual or rumored acquisition activities or unusual operating characteristics.

 

(9) For MHC institutions, market value reflects share price multiplied by public (non-MHC) shares.

 

* All thrifts are SAIF insured unless otherwise noted with an asterisk. Parentheses following market averages indicate the number of institutions included in the respective averages. All figures have been adjusted for stock splits, stock dividends, and secondary offerings.

 

Source:  Corporate reports and offering circulars for publicily traded companies, and RP Financial, LC. calculations. The information provided in this report has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

 

Copyright (c) 2004 by RP Financial, LC.

 

RP FINANCIAL, LC.

Financial Services Industry Consultants

1700 North Moore Street, Suite 2210

Arlington, Virginia 22209

(703) 528-1700

 

Exhibit IV-1A (continued)

Weekly Thrift Market Line - Part One

Prices As Of September 3, 2004

 

                        Price Change Data
     
         Market Capitalization
    52 Week(1)
    Last
Week
    % Change From
    Current Per Share Financials

Financial Institution

    Price/
Share(1)
    Shares
Outstanding
    Market
Capitalization(9)
    High
    Low
      

Last

Week

   

52 Wks

Ago(2)

    Dec 31,
2000(2)
    Trailing
12 No.
EPS(3)
    12
No.
Core
EPS(3)
    Book
Value/
Share
   

Tangible

Book
Value/
Share(4)

    Assets/
Share
         ($)    (000)    ($Mil)    ($)    ($)    ($)    (%)    (%)    (%)    ($)    ($)    ( $)    ($)    ($)

NYSE Traded Companies

                                                                      

AF

  

Astoria Financial Corp. of NY

    36.38    76,824    2,794.9    42.55    30.77    36.48    -0.27    10.41    -2.20    2.59    2.52    17.86    15.45    290.72

BBX

  

BankAtlantic Bancorp of FL

    18.17    59,779    1,086.2    19.75    13.70    17. 95    1.23    18.29    -4.37    1.25    1.45    7.37    5.90    90.81

CFB

  

Commercial Federal Corp. of NE

    27.75    39,871    1,106.4    28.48    23.79    27.57    0.65    10.51    3.89    2.03    2.69    18.84    14.40    293.79

DSL

  

Downey Financial Corp. of CA

    54.46    27,968    1,523.1    55.49    42.81    54.01    0.83    26.65    10.47    3.21    2.34    33.70    33.58    508.52

FXD

  

FirstFed Financial Corp. of CA

    46.43    16,406    761.7    49.05    38.16    45.95    1.04    12.50    6.74    3.96    3.88    26.79    26.40    336.76

FBC

  

Flagstar Bancorp, Inc. of NI

    21.71    61,141    1,327.4    28.11    18.00    21.06    3.09    9.10    1.35    3.36    1.69    11.61    11.61    195.71

GDW

  

Golden West Fin. Corp. of CA

    108.41    152,749    16,559.5    116.91    83.10    105.99    2.28    24.41    5.06    7.79    7.75    42.98    42.98    609.88

GPT

  

GreenPoint Fin. Corp. of NY(8)*

    44.74    131,886    5,900.6    47.30    28.85    43.57    2.69    34.76    26.67    3.42    1.09    14.88    11.89    196.80

NDX

  

IndyNac Bancorp, Inc. of CA

    34.75    61,099    2,123.2    37.44    22.43    34.93    -0.52    47.81    16.65    2.89    -1.46    17.27    16.72    237.35

NYB

  

New York Community Bcrp of NY*

    22.00    264,493    5,818.8    35.57    17.62    20.95    5.01    -5.66    -22.92    1.35    1.83    11.49    3.76    91.07

PFB

  

PFF Bancorp, Inc. of Pomona CA

    37.35    16,785    626.9    40.95    28.96    37.22    0.35    28.75    2.95    2.53    2.38    19.25    19.17    217.11

PFS

  

Provident Fin. Serv. Inc of NJ*

    17.82    60,065    1,070.4    21.55    15.91    17.90    -0.45    -13.58    -5.71    0.59    0.54    13.59    13.22    71.53

SOV

  

Sovereign Bancorp, Inc. of PA

    22.21    310,365    6,893.2    25.20    17.78    21.88    1.51    15.86    -6.48    1.47    1.31    12.29    7.34    156.87

WES

  

Westcorp of Irvine CA

    41.50    51,833    2,151.1    46.80    33.62    41.65    -0.36    15.57    13.54    3.21    3.21    23.65    23.64    289.17

AMEX Traded Companies

                                                                      

BHL

  

Berkshire Hills Bancorp of NA*

    38.35    5,871    225.2    39.20    31.30    36.93    3.85    19.47    5.94    1.76    1.66    20.79    19.81    220.76

BFD

  

BostonFed Bancorp, Inc. of NA(8)

    41. 66    4,540    189.1    43.00    29.20    42.10    -1.05    29.14    19.37    0.99    -0.29    20.59    16.89    374.20

CNY

  

Carver Bancorp, Inc. of NY

    18.30    2,291    41.9    26.50    17.15    18.35    -0.27    6.03    -27.95    2.02    1.95    18.30    18.30    241.31

EFC

  

EFC Bancorp, Inc. of Elgin IL

    25.50    4,653    118.7    28.49    20.25    25.10    1.59    25.93    6.69    1.52    1.43    17.13    17.13    204.35

FDT

  

Federal Trust Corp of FL

    8.17    6,662    54.4    8.25    6.90    8.06    1.36    11.92    2.12    0.46    0.41    4.11    4.11    77.36

GOV

  

Gouverneur Bcp MHC of NY(42.5)

    13.18    2,283    12.8    14.00    10.65    12.88    2.33    20.92    12.65    0.36    0.35    7.82    7.82    42.94

NBN

  

Northeast Bancorp of Auburn NE*

    19.20    2,525    48.5    20.50    16.57    19.39    -0.98    12.94    -0.52    1.50    1.15    14.90    14.59    205.16

SZB

  

SouthFirst Bancshares of AL

    16.05    719    11.5    18.75    14.60    15.45    3.88    9.93    -7.23    -0.90    -1.76    14.16    13.40    193.02

TSN

  

Teche Hiding Cp of N Theria LA

    37.00    2,279    84.3    41.50    33.24    37.50    -1.33    11.28    1.98    2.60    2.55    25.44    25.44    254.70

WSB

  

Washington SB, FSB of Bowie MD

    10.98    7,308    80.2    11.09    8.75    10.50    4.57    12.50    18.70    1.20    0.93    6.41    6.41    64.50

WFD

  

Westfield Finl MHC of MA(46.5)*

    22.49    10,057    109.7    25.50    16.81    21.80    3.17    4.75    -5.35    0.57    0.50    11.59    11.59    78.50

WFI

  

Winton Financial Corp. of OH(8)

    20.60    4,606    94.9    20.90    12.70    20.25    1.73    57.25    56.53    1.05    0.82    9.98    9.96    120.22

WRO

  

Woronoco Bancorp, Inc. of NA

    39.55    3,673    145.3    40.50    25.45    38.40    2.99    41.25    9.10    1.55    1.42    21.43    20.94    240.15

NASDAQ Listed OTC Companies

                                                                      

FIFG

  

1st Independence Fin Grp of KY

    19.24    1,223    23.5    25.00    17.32    18.60    3.44    -1.38    -15.50    -0.89    -0.99    16.77    16.30    147.54

AMFC

  

AMB Fin. Corp. of Munster IN

    15.01    975    14.6    19.36    13.12    15.01    0.00    0.07    4.60    1.04    1.10    13.16    13.16    158.32

ASBF

  

ASB Financial Corp. of ON

    22.50    1,668    37.5    29.24    19.25    23.14    -2.77    14.21    -0.27    1.21    1.19    10.39    10.39    97.53

AABC

  

Access Anytime Bancorp of NM

    14.05    1,227    17.2    14.74    12.12    13.59    3.38    15.92    -1.13    0.95    0.19    13.07    7.62    232.55

AFBC

  

Advance Fin. Bancorp of WV(8)

    25.70    1,390    35.9    26.56    16.54    18.08    42.15    49.42    40.98    1.88    1.51    15.31    10.82    228.39

ALLB

  

Alliance Bank MHC of PA (20.0)

    29.96    3,441    20.6    40.50    22.35    29.00    3.31    27.71    7.00    0.70    0.69    10.18    10.18    111.23

ASBI

  

Ameriana BanCorp of IN

    16.97    3,149    53.4    18.00    14.07    15.75    7.75    13.13    17.03    0.79    1.71    12.43    12.20    136.09

ABCW

  

Anchor Bancorp Wisconsin of WI

    25.74    22,998    592.0    27.13    22.70    25.88    -0.54    5.10    3.37    1.91    1.29    13.38    12.47    166.96

ALFC

  

Atlantic Liberty Fincl of NY

    18.52    1,681    31.1    20.90    16.48    18.41    0.60    0.38    -5.27    0.84    0.84    15.72    15.72    108.69

BCSB

  

BCSB Bankcorp MHC of MD (36.4)

    15.64    5,899    33.5    22.68    13.15    15.59    0.32    -4.87    -15.69    0.11    0.10    6.84    6.38    127.13

BKMU

  

Bank Mutual Corp of WI

    11.60    78,232    907.5    12.60    9.65    11.45    1.31    11.97    1.84    0.33    0.29    9.07    8.33    39.72

BKUNA

  

BankUnited Fin. Corp. of FL

    28.35    30,006    850.7    30.25    20.75    28.40    -0.18    24.29    9.93    1.58    1.46    15.18    14.24    275.35

BRBI

  

Blue River Bancshares of IN

    5.68    3,406    19.3    7.00    4.75    5.97    -4.86    9.65    -8.97    0.10    0.05    4.71    3.66    60.04

BYFC

  

Broadway Financial Corp. of CA

    12.46    1,500    18.7    15.00    11.01    12.45    0.08    1.71    -4.15    1.10    1.02    8.48    8.48    169.12

BRKL

  

Brookline Bancorp, Inc. of MA*

    15.05    59,074    936.3    16.25    13.75    15.09    5.04    2.26    3.32    0.29    0.26    10.09    10.09    27.26

CITZ

  

CFS Bancorp, Inc. of Munster IN

    13.53    12,291    166.3    15.20    12.44    13.59    -0.44    -2.73    -8.58    0.25    0.19    12.57    12.45    119.74

CKFB

  

CXF Bancorp of Danville KY

    17.00    1,470    25.0    20.00    12.00    19.00    -10.53    40.15    1.49    1.14    1.14    10.73    9.99    103.31

CAFI

  

Camco Fin Corp of Cambridge ON

    15.28    7,359    112.4    18.51    12.63    15.18    0.66    -11.16    -11.83    0.64    0.45    12.46    12.06    145.23

CFFN

  

Capitol Fd Fn MHC of KS (29.1)

    34.77    73,970    747.5    39.58    28.88    33.92    2.51    18.63    -3.60    0.36    0.36    13.03    13.03    114.20

CEBK

  

Central Bncrp of Somerville MA*

    32.45    1,665    54.0    38.00    26.00    32.50    -0.15    -6.40    -11.12    1.26    1.09    25.61    24.27    305.31

CCFC

  

Central Federal Corp. of OH

    12.90    2,039    26.3    18.00    11.25    13.24    -2.57    5.74    -19.83    -0.91    -0.96    9.15    9.15    63.24

CHFN

  

Charter Fincl MHC of GA (18.4)

    34.85    19,571    124.4    41.00    29.56    33.00    5.61    13.15    -8.29    0.39    0.27    13.34    13.03    54.56

CFSL

  

Chesterfield Financial of IL(8)

    31.11    3,876    120.6    31.25    22.36    31.09    0.06    36.45    30.99    0.51    0.51    19.29    19.17    93.46

CHEV

  

Cheviot Fin Cp MXC of 0N(45.0)

    10.95    9,919    48.9    13.75    10.17    10.90    0.46    9.50    9.50    -0.02    0.17    7.72    7.72    28.10

CTZN

  

Citizens First Bancorp of MI

    21.23    8,290    176.0    24.47    20.53    21.26    -0.14    1.10    -6.89    1.17    1.11    19.15    17.52    156.09

CFSB

  

Citizens First Fin Corp. of IL

    24.50    1,499    36.7    28.50    20.00    24.00    2.08    0.41    -3.92    1.06    0.84    22.45    22.45    222.97

CSBC

  

Citizens South Banking of NC

    13.25    7,522    99.7    15.25    12.40    12.98    2.08    -9.31    -5.02    0.36    0.20    11.36    10.34    65.76

CSBK

  

Clifton Svg Bp MHC of NJ (45.0)

    11.14    30,530    162.7    14.25    10.50    11.82    0.17    18.40    18.40    0.12    0.13    6.56    6.56    24.91

CFCP

  

Coastal Fin. Corp. of SC

    13.75    15,856    218.0    15.82    10.89    14.54    -5.43    19.57    -5.82    0.87    0.83    4.93    4.93    80.72

CCBI

  

Commercial Capital Bcrp of CA

    22.38    53,126    1,189.0    24.25    10.70    21.50    4.09    104.01    39.35    0.56    0.52    10.97    4.13    89.29

 

RP FINANCIAL, LC.

Financial Services Industry Consultants

1700 North Moore Street, Suite 2210

Arlington, Virginia 22209

(703) 528-1700

 

Exhibit IV-1A (continued)

Weekly Thrift Market Line - Part One

Prices As Of September 3, 2004

 

     Market Capitalization
    Price Change Data
    Current Per Share Financials
   Price/
Share(1)
   

Shares

Outst-
anding

   

Market

Capitali-
zation(9)

    52 Week (1)
    Last
Week
    % Change From
   

Trailing

12 No.

EPS(3)

   

12 No.
Core

EPS(3)

   

Book

Value/
Share

   

Tangible
Book

Value/
Share(4)

    Assets/
Share

Financial Institution

             High
    Low
       Last
Week
    52 Wks
Ago(2)
    Dec 31,
2000(2)
               
     ($)    (000)    ($Mil)    ($)    ($)    ($)    (%)    (%)    (%)    ($)    ($)    ($)    ($)    ($)

NASDAQ Listed OTC Companies (continued)

                                                                      

CFFC

  

Community Fin. Corp. of VA

    18.80    2,079    39.1    24.70    17.31    19.63    -4.23    9.62    -4.81    1.62    1.62    14.03    14.02    170.87

CIBI

  

Community Inv. Bncp, Inc of OH

    14.27    1,097    15.7    17.00    13.00    14.27    0.00    6.41    -4.68    0.80    0.73    12.21    12.21    110.80

DCOM

  

Dime Community Bancshare of NY*

    17.06    37,304    636.4    21.51    15.33    16.78    1.67    5.24    -16.82    1.33    1.27    7.22    5.72    93.01

DFBS

  

Dutchfork Bancshares Inc of SC(8)

    40.72    1,126    45.9    43.25    33.20    40.72    0.00    20.47    5.77    1.24    1.81    27.48    27.48    180.19

ESBF

  

ESB Financial Corp. of PA

    13.06    10,717    140.0    16.89    10.63    12.97    0.69    -13.22    -18.88    0.87    0.76    8.31    7.61    127.07

ESBX

  

Elmira Svgs Bank, FSB of NY*

    29.84    1,084    32.3    33.35    25.45    29.00    2.90    12.22    5.03    2.30    1.79    18.63    18.16    289.26

EVRT

  

Evertrust Fin. Grp, Inc. of WA(8)*

    25.43    6,893    175.3    30.44    15.95    25.43    0.00    34.76    20.81    1.23    1.17    13.23    13.23    111.57

FFDF

  

FFD Financial Corp of Dover OH

    14.00    1,207    16.9    16.50    13.00    14.91    -6.10    -3.05    -5.08    0.70    0.35    14.18    14.18    113.18

FFLC

  

FFLC Bancorp of Lessburg FL

    27.01    5,405    146.0    30.95    24.26    26.83    0.67    -7.37    -6.05    1.68    1.58    14.89    14.89    187.05

FFWC

  

FFW Corporation of Wabash IN

    22.00    1,285    28.3    26.12    20.14    22.00    0.00    5.62    0.00    1.92    1.52    18.87    18.11    186.09

FMCO

  

FMS Fin Corp. of Burlington NJ

    16.34    6,501    106.2    20.50    15.06    16.01    2.06    -11.44    -9.22    1.11    1.11    10.05    9.60    190.77

FFHN

  

FSF Financial Corp. of MN(8)

    34.80    2,386    83.0    35.00    28.01    34.73    0.20    12.26    14.10    1.82    0.77    21.64    19.63    214.09

FSBI

  

Fidelity Bancorp, Inc. of PA

    21.99    2,668    58.7    24.35    19.75    21.85    0.64    6.39    -6.39    1.68    1.45    14.94    13.86    238.29

FFFL

  

Fidelity Bankshares, Inc of FL

    37.69    15,130    570.2    38.45    25.70    35.90    4.99    37.10    20.03    1.27    1.32    12.50    12.36    224.89

FFED

  

Fidelity Fed. Bancorp of IN(8)

    1.54    11,000    16.9    2.55    1.32    1.63    -5.52    -6.10    -2.53    0.02    -0.01    1.42    1.42    17.52

FBTC

  

First BancTrust Corp of IL

    12.50    2,500    31.3    13.75    11.05    12.50    0.00    11.41    3.05    0.61    0.44    10.30    10.30    88.49

FBEI

  

First Bancorp of Indiana of IN

    20.70    1,624    33.6    23.40    19.05    20.01    3.45    4.76    3.14    0.87    0.43    18.83    17.57    145.78

FBSI

  

First Bancshares, Inc. of NO

    20.24    1,658    33.6    22.15    16.82    19.28    4.98    20.76    -3.62    1.35    1.27    16.71    16.41    161.76

FCAP

  

First Capital, Inc. of IN

    20.56    2,817    57.9    25.00    19.00    20.50    0.29    2.80    -2.10    1.24    1.25    15.57    13.45    148.33

FCFL

  

First Community Bk Corp of FL

    21.99    2,115    46.5    26.19    14.00    21.60    1.81    77.34    43.73    0.82    0.76    10.65    10.45    101.69

FDEF

  

First Defiance Fin. Corp of OH

    26.10    6,318    164.9    30.65    22.01    25.47    2.47    0.42    0.77    1.92    1.37    19.70    16.64    169.86

FFFS

  

First Fed serv MHC of IL(45.0)

    13.00    3,920    22.9    13.50    11.00    13.00    0.00    30.00    30.00    0.48    0.48    9.08    9.08    34.47

FFBN

  

First Fed. Bankshares of AR

    20.71    5,195    107.6    21.50    17.36    30.50    1.02    18.68    1.02    1.40    1.26    14.35    14.35    137.18

FTFC

  

First Fed. Capital Corp. of WI(8)

    29.67    22,517    668.1    30.40    19.76    29.51    0.54    42.03    31.52    1.62    0.70    12.63    8.62    163.64

FFBI

  

First Federal Bancshares of IL

    20.40    1,310    26.7    36.00    20.35    22.00    -7.27    -35.79    -42.05    1.71    1.65    16.43    15.21    234.90

FFSX

  

First Federal Bankshares of IA

    22.87    3,740    85.5    25.24    20.00    22.95    -0.35    2.19    -7.26    1.49    1.26    19.34    14.32    169.32

FFBZ

  

First Federal Bncrp, Inc of OH(8)

    13.10    3,286    43.0    15.00    7.67    13.09    0.08    66.03    44.43    0.56    0.48    6.97    6.97    78.57

FFCH

  

First Fin. Holdings Inc. of SC

    30.60    12,382    378.9    33.14    25.75    30.45    0.49    8.32    -2.14    2.03    1.81    13.18    11.36    198.02

FFHS

  

First Franklin Corp. of OH

    20.35    1,646    33.5    21.48    15.26    20.50    -0.73    10.00    13.24    0.69    0.41    14.32    14.32    165.72

FKFS

  

First Keystone Fin., Inc of PA

    22.30    1,926    42.9    29.00    22.25    22.50    -0.89    -8.98    -18.32    1.35    0.70    14.63    14.63    293.33

CASH

  

First Midwest Fin., Inc. of IA

    21.00    2,497    52.4    24.75    20.26    21.10    -0.47    -3.40    -2.78    1.70    1.92    17.95    16.59    303.38

FMSB

  

First Mutual Bncshrs Inc of WA*

    24.35    5,277    128.5    26.45    17.29    24.21    0.58    36.41    9.34    1.66    1.47    10.38    10.38    182.62

FNFG

  

First Niagara Fin. Group of NY*

    13.06    83,686    1,092.9    15.90    11.49    12.44    4.98    -15.19    -12.76    0.43    0.42    8.70    7.33    42.89

FNFI

  

First Niles Fin., Inc. of OH

    18.50    1,376    25.5    19.50    15.60    18.00    2.78    15.26    4.23    0.76    0.64    11.19    11.19    70.69

FPTB

  

First PacTrust Bancorp of CA

    23.83    4,696    111.9    24.33    19.53    23.60    0.97    16.59    6.77    1.01    1.00    16.66    16.66    141.61

FPFC

  

First Place Fin. Corp. of OH

    18.57    15,141    281.2    20.00    16.44    18.92    -1.85    8.60    -4.92    0.93    0.64    14.74    9.83    148.41

FBNW

  

FirstBank NW Corp. of WA

    28.25    2,965    83.8    31.05    24.50    27.47    2.84    0.89    -6.92    1.73    1.30    23.50    16.48    247.10

FFIC

  

Flushing Fin. Corp. of NY*

    18.32    19,228    352.3    19.50    13.49    17.63    3.91    22.13    0.22    1.18    1.17    7.80    7.59    105.47

FKKY

  

Frankfort First Bancorp of KY

    23.86    1,267    30.2    26.36    19.79    23.98    -0.50    16.90    14.71    0.80    0.80    13.95    13.95    108.90

FBTX

  

Franklin Bank Corp of TX

    16.19    21,225    343.6    20.70    14.33    15.76    2.73    11.66    -14.79    0.59    0.50    11.98    9.15    144.65

GUPB

  

GFSB Bancorp, Inc of Gallup NM(8)

    19.85    1,146    22.7    25.98    17.00    22.00    -9.77    15.41    -9.32    1.42    1.39    16.18    16.18    208.47

GSLA

  

GS Financial Corp. of LA

    18.72    1,299    24.3    20.00    17.73    18.52    1.08    -0.16    -3.70    0.40    0.19    21.86    21.86    161.27

GTPS

  

Great American Bancorp of IL

    25.60    735    18.8    36.75    23.00    25.10    1.99    -22.78    -26.88    1.67    1.57    23.09    22.43    213.96

PEDE

  

Great Pee Dee Bancorp of SC

    15.50    1,812    28.1    18.10    15.05    15.50    0.00    -3.06    -11.93    0.68    0.62    14.60    14.00    86.60

GAFC

  

Greater Atlant. Fin Corp of VA

    6.01    3,012    18.1    8.31    5.78    6.08    -1.15    -17.67    -26.26    -0.04    -3.12    6.38    5.96    167.48

GCBC

  

Green Co Bcrp MHC of NY(43.9)

    31.60    2,054    28.5    36.00    27.75    32.81    -3.69    5.69    -4.82    1.42    1.42    14.52    14.52    138.55

HFFC

  

HF Financial Corp. of SD

    16.07    3,533    56.0    18.25    14.05    15.55    3.34    -0.99    -1.71    1.13    0.85    14.37    12.97    233.01

HMNF

  

HMN Financial, Inc. of MN

    26.80    4,457    119.4    28.19    20.00    26.28    1.98    29.72    10.33    2.20    1.66    18.20    17.26    205.09

HARB

  

Harbor Florida Bancshrs of FL

    31.02    23,788    737. 9    31.84    25.29    30.75    0.88    14.42    4.30    1.66    1.52    11.68    11.51    108.97

HARL

  

Harleysville Svgs Fin Cp of PA

    28.64    2,292    65.6    34.50    25.51    27.54    3.99    14.56    -4.21    2.06    1.91    18.88    18.88    308.86

HWFG

  

Harrington West Fncl Grp of CA

    16.30    5,269    85.9    18.00    12.08    16.40    -0.61    33.94    17.86    1.53    1.46    9.29    8.35    199.36

HIFS

  

Hingham Inst. for Sav. of MA*

    42.00    2,081    87.4    44.97    35.82    41.75    0.60    5.00    1.11    2.80    2.77    20.26    20.26    252.79

HCFC

  

Home City Fin. Corp. of OH

    15.31    824    12. 6    18.25    13.99    16.16    -5.26    8.97    -11.25    0.79    0.78    15.03    14.67    185.99

HWEN

  

Home Financial Bancorp of IN

    5.75    1,356    7.8    6.40    4.79    4.95    16.16    8.49    -8.87    0.24    0.33    5.21    5.21    44.04

HLFC

  

Home Loan Financial Corp of OH

    19.51    1,691    33.0    21.25    16.35    19.50    0.05    19.33    1.35    1.12    1.11    13.46    13.46    93.15

HFBC

  

NopFed Bancorp, Inc. of XY

    16.49    3,637    60.0    18.50    16.00    16.54    -0.30    0.86    -4.35    1.09    0.98    12.75    11.20    160.10

HRZB

  

Horizon Financial Corp. of WA*

    19.58    10,303    201.7    22.56    16.14    19.30    1.45    14.17    11.82    1.24    1.06    10.44    10.39    85.17

HCBK

  

Hudson Cty Bcp MHC of NJ(34.5)*

    35.04    187,157    2,262.9    40.38    28.86    34.50    1.57    19.71    -8.22    1.16    1.10    6.88    6.88    99.76

HRBT

  

Hudson River Bancorp Inc of NY (8)

    18.52    30,430    563.6    21.44    15.55    17.75    4.34    11.10    -5.12    1.08    1.08    9.36    7.06    85.76

ICBC

  

Independence Comm Bnk Cp of NY

    40.13    83,392    3,346.5    41.58    33.41    38.94    3.06    18.41    11.57    1.99    1.98    25.78    11.28    216.06

IFSB

  

Independence FSB of DC(8)

    20.56    1,552    31.9    25.49    17.50    20.45    0.54    17.49    -11.61    -0.15    -1.58    12.88    12.88    129.78

JXSB

  

Jcksnville Bcp MNC of IL(46.8)

    15.25    1,952    13.9    20.00    13.20    15.25    0.00    0.00    -9.55    0.35    0.25    9.86    8.30    136.17

JFBI

  

Jefferson Bancshares Inc of TN

    13.09    8,386    109.8    15.09    11.30    12.73    2.83    -2.24    -5.14    0.15    0.46    11.26    11.26    36.76

KFED

  

K-Fed Bancorp of CA MHC (39.1)

    13.45    14,549    76.5    14.00    10.47    13.34    0.82    34.50    34.50    0.16    0.17    5.86    5.86    63.42

KNBT

  

KNBT Bancorp. Inc. of PA

    16.76    28,854    483. 6    17.99    14.17    16.79    -0.18    67.60    -4.66    -0.33    0.34    13.79    12.21    71.29

 

RP FINANCIAL, LC.

Financial Services Industry Consultants

1700 North Moore Street, Suite 2210

Arlington, Virginia 22209

(703) 528-1700

 

Exhibit IV-1A (continued)

Weekly Thrift Market Line - Part One

Prices As Of September 3, 2004

 

        Market Capitalization
   Price Change Data
   Current Per Share Financials
       

Price/
Share(1)

  

Shares

Outst-
anding

  

Market

Capitalization(9)

   52 Week (1)
       % Change From
  

Trailing

12 No.
KPS(3)

  

12 No.

Core
KPS(3)

  

Book

Value/
Share

  

Tangible

Book

Value/
Share(4)

  

Assets/

Share

Financial Institution

         High
   Low
   Last
Week
   Last
Week
   52 Wks
Ago(2)
   Dec 31,
2000(2)
          
        ($)   (000)   ($Mil)   ($)   ($)   ($)   (%)   (%)   (%)   ($)   ($)   ($)   ($)   ($)

NASDAQ Listed OTC Companies (continued)

                                                        

LSBX

  

LSB Corp of No. Andover MA*

   19.69   4,307   84.8   19.69   15.00   17.70   11.24   23.06   13.75   1.41   2.01   13.23   13.23   110.58

LSBI

  

LSB Fin. Corp. of Lafayette IN

   23.55   1,363   32.1   28.00   22.00   23.58   -0.13   -0.17   -14.36   2.21   1.72   21.21   21.21   251.44

LARL

  

Laurel Capital Group Inc of PA

   22.00   1,929   42.4   25.98   19.13   21.05   4.51   8.59   -11.11   0.94   0.92   14.27   12.32   156.17

LNCB

  

Lincoln Bancorp of IN

   18.44   4,430   81.7   21.52   16.12   18.25   1.04   -4.01   -7.57   0.77   0.74   18.18   17.70   131.19

MAFB

  

MAF Bancorp, Inc. of IL

   42.46   32,668   1,387.1   44.95   37.29   42.09   0.88   8.62   1.34   2.92   2.65   27.74   19.32   286.97

MFBC

  

MFB Corp. of Mishawaka IN

   28.56   1,329   38.0   35.00   26.75   30.50   -6.36   1.89   -6.24   2.02   1.30   26.87   26.87   322.00

MASB

  

MassBank Corp. of Reading MA*

   36.57   4,393   160.7   44.27   32.05   34.94   4.67   -1.38   -14.97   1.73   1.48   24.51   24.26   223.18

MTXC

  

Matrix Bancorp, Inc. of CO

   11.97   6,520   78.0   13.90   8.00   10.75   11.35   31.39   29.41   0.64   1.13   11.38   11.38   266.38

MFLR

  

Mayflower Co-Op. Bank of MA*

   18.11   2,052   37.2   21.00   12.67   18.35   -1.31   33.06   20.65   0.94   0.54   8.70   8.65   101.66

MCBF

  

Monarch Community Bncrp of MI

   14.25   2,710   38.6   17.21   12.57   13.90   2.52   -5.19   -11.55   0.19   -0.07   15.50   11.59   107.72

MFSF

  

MutualFirst Fin. Inc. of IN

   23.00   4,949   113.8   29.21   20.94   23.05   -0.22   -13.04   -8.40   1.49   1.31   18.64   18.45   165.37

MYST

  

Mystic Financial, Inc. of MA(8)*

   40.10   1,570   63.0   40.47   23.31   38.50   4.16   71.66   32.65   1.02   0.51   17.65   17.65   272.88

NASB

  

NASB Fin, Inc. of Grandview NO

   36.21   8,458   306.3   44.50   33.08   38.24   -5.31   -2.11   -13.60   2.97   1.91   15.79   15.41   159.12

NHTB

  

NH Thrift Bancshares of NN

   29.32   2,075   60.8   35.67   24.45   29.25   0.24   17.23   -13.38   2.89   2.09   19.75   13.90   291.52

NTBK

  

NetBank, Inc. of Alpharetta GA

   10.89   46,673   508.3   14.83   9.83   10.65   2.25   -13.57   -18.43   0.73   -1.19   9.22   7.73   110.89

NABC

  

NewAlliance Bancshares of CT

   13.76   114,159   1,570.8   15.72   12.92   13.69   0.51   37.60   37.60   -0.15   0.25   12.29   7.95   55.98

NMIL

  

Nenmil Bancorp, Inc. of CT*

   28.64   4,208   120.5   29.85   24.26   27.75   3.21   18.10   -1.41   1.89   1.83   12.64   10.60   173.66

FFFD

  

North Central Bancshares of IA

   37.99   1,563   59.4   39.25   34.90   36.80   3.23   5.47   3.12   3.53   3.53   26.37   23.19   288.05

NEIB

  

Northeast Indiana Bncrp of IN

   31.28   1,468   31.2   22.93   18.12   21.85   -2.61   2.70   1.14   1.13   1.04   18.07   18.07   153.34

NEPF

  

Northeast PA Fin. Corp of PA

   17.17   4,172   71.6   20.00   15.70   17.10   0.41   9.36   -10.62   -0.07   -0.15   13.77   11.22   211.06

NWSB

  

Northwest Bcrp MHC of PA (41.4)

   21.91   47,960   434.9   26.67   16.56   21.68   1.06   31.43   2.67   1.05   0.97   10.42   7.46   120.49

OCFC

  

OceanFirst Fin. Corp of NJ

   22.81   13,244   302.1   28.00   21.30   23.13   -1.38   -14.34   -15.99   1.37   0.83   10.23   10.12   140.24

ONFC

  

Oneida Fincl MHC of NY (42.4)

   12.00   7,488   38.1   17.65   8.74   11.86   1.18   -24.67   -18.59   0.40   0.34   6.52   4.74   57.53

PBNC

  

PFS Bancorp Inc. of Aurora IN

   21.91   1,474   32.3   22.86   17.55   21.53   1.76   23.79   11.50   0.57   0.57   18.42   18.42   84.66

PHSB

  

PHSB Financial Corp. of PA(8)

   26.67   2,903   77.4   26.95   17.60   26.55   0.45   44.08   24.05   1.02   0.49   15.65   15.65   111.27

PVFC

  

PVF Capital Corp. of Solon OR

   14.80   7,026   104.0   16.34   11.65   14.90   -0.67   10.53   1.02   1.07   0.45   8.86   8.86   105.55

PPBI

  

Pacific Premier Bncrp of CA(8)

   11.05   5,255   58.1   15.25   6.71   11.00   0.45   48.12   -0.36   1.09   1.27   7.88   7.88   80.63

PBCI

  

Pamrapo Bancorp, Inc. of NJ

   22.89   4,975   113.9   29.60   19.45   22.43   2.05   13.65   -9.70   1.60   1.60   10.68   10.68   129.39

PFED

  

Park Bancorp of Chicago IL

   31.60   1,145   36.2   35.05   26.58   31.34   0.83   16.22   8.74   2.27   2.06   26.09   26.09   236.49

PVSA

  

Parkvale Financial Corp of PA

   25.75   5,581   143.7   30.73   24.63   25.36   1.54   -0.89   -4.10   1.79   1.67   18.76   16.76   288.92

PRTR

  

Partners Trust Fin. Grp. of NY

   9.95   27,743   276.0   21.27   9.35   10.27   -3.12   -11.00   -42.91   0.60   0.58   11.00   5.29   78.67

PBhC

  

Pathfinder BC MHC of NY (35.3)*

   16.08   2,448   13.9   21.00   14.77   16.08   0.00   -4.51   -12.89   0.61   0.42   8.61   6.74   122.52

PFSL

  

PennFed Fin. Services of NJ

   30.42   6,788   206.5   36.95   27.80   29.68   2.49   6.03   -9.19   1.78   1.73   17.44   17.24   280.24

PFDC

  

Peoples Bancorp of Auburn IN

   22.52   3,371   75.9   28.00   21.50   22.10   1.90   -1.66   -6.17   1.45   1.38   18.82   17.98   146.39

PBCT

  

Peoples Bank MHC of CT (41.7)*

   34.27   93,700   1,337.4   34.36   19.82   32.16   6.56   66.76   57.93   1.88   0.65   12.34   11.15   113.76

PCBI

  

Peoples Community Bcrp. of OH

   23.52   3,899   91.7   24.50   19.83   23.01   2.22   7.15   4.53   0.73   0.70   19.16   17.80   218.56

PSFC

  

Peoples Sidney Fin. Corp of OH

   15.80   1,433   22.6   18.50   13.25   16.44   -3.89   17.04   -0.50   0.67   0.67   12.18   12.18   95.46

PFSL

  

Pocahontas Bancorp, Inc. of AR

   17.24   4,571   78.8   18.11   12.75   17.35   -0.63   35.11   8.16   1.23   1.23   10.87   7.50   155.97

PBCP

  

Provident Bancorp, Inc. of NY

   11.21   39,638   444.3   12.42   8.04   11.03   1.63   28.26   5.75   0.24   0.29   8.64   6.83   44.97

PROV

  

Provident Fin. Holdings of CA

   25.02   7,092   177.4   26.00   19.92   23.34   7.20   22.77   3.47   2.37   0.79   15.51   15.49   185.99

PULB

  

Pulaski Fin Cp of St. Louis MO

   18.02   5,474   98.6   20.44   14.31   17.97   0.28   23.00   6.75   1.03   0.31   7.05   6.95   103.51

RPFG

  

Ranier Pacific Fin Group of WA

   18.00   8,442   152.0   18.35   15.22   1_.04   -0.22   80.00   13.07   -0.24   -0.31   12.92   12.89   90.10

RIVR

  

River Valley Bancorp of IN

   21.85   1,599   34.9   30.25   19.55   22.25   -1.80   8.60   -25.76   1.58   1.20   13.82   13.80   161.64

RVSB

  

Riverview Bancorp, Inc. of WA

   20.59   4,790   98.6   21.83   18.30   20.80   -1.01   11.24   -3.15   1.51   1.52   13.83   11.76   107.59

ROME

  

Rome Bncp Inc MHC of NY (38.5)*

   28.70   4,233   46.8   36.00   24.05   29.00   -1.03   12.55   -7.60   0.36   0.45   8..40   8.40   62.68

SVBI

  

Severn Bancorp, Inc. of MD

   36.59   4,159   152.2   37.70   26.05   32.76   11.69   35.52   14.52   2.88   2.75   13.08   13.00   149.27

SFFS

  

Sound Fed Bancorp, Inc. of NY

   14.00   12,550   175.7   17.35   12.51   14.05   -0.36   -11.39   -10.20   0.51   0.51   9.96   8.85   72.88

SSFC

  

South Street Fin. Corp. of NC*

   10.24   3,068   31.4   10.95   9.13   10.80   -5.19   0.49   -0.92   0.29   0.29   8.29   8.29   68.99

SMBC

  

Southern Missouri Bncrp of MO

   15.21   2,252   34.3   17.50   12.75   15.25   -0.26   10.62   9.82   1.28   1.29   11.52   10.25   138.50

STSA

  

Sterling Financial Corp of WA

   33.85   22,615   765.5   35.42   24.89   33.23   1.87   29.64   8.81   1.90   1.85   18.05   11.46   276.77

STBI

  

Sturgis Bancorp, Inc. of NI

   14.00   2,730   38.2   15.87   11.50   14.25   -1.75   21.74   -1.34   0.82   0.50   10.74   8.83   107.72

SYNF

  

Synergy Financial Group of NJ

   10.39   12,452   129.4   11.50   6.93   10.17   2.16   48.85   3.38   0.31   0.31   8.39   8.33   64.26

THDD

  

TF Fin. Corp. of Newtown PA

   27.45   2,887   79.2   35.47   26.30   27.47   -0.07   -12.86   -19.74   -1.31   -1.22   19.84   18.24   216.37

TONE

  

TierOne Corp. of Lincoln NE

   21.13   18,286   3_6.4   25.37   19.77   20.73   1.93   -6.09   -7.97   1.29   1.18   14.42   14.42   123.33

TSBK

  

Timberland Bancorp, Inc. of WA

   22.94   3,892   89.3   24.95   21.00   22.76   0.79   -4.38   1.10   1.46   1.40   18.44   18.44   112.46

TRST

  

TrustCo Bank Corp NY of NY

   12.90   74,191   957.1   14.25   11.80   12.89   0.08   -1.53   -1.90   0.74   0.63   2.89   2.89   3_.40

UCBC

  

Union Community Bancorp of IN

   17.96   1,988   35.7   19.60   16.53   17.90   0.34   8.98   2.86   1.00   1.00   17.06   15.67   131.56

UCFC

  

United Community Fin. of OH

   11.43   31,165   356.2   13.99   9.53   11.31   1.06   15.57   0.18   0.69   0.55   7.84   6.65   70.07

UPFCE

  

United PanAm Fin. Corp of CA

   17.00   16,164   274.8   19.64   14.20   16.44   3.41   1.49   1.86   0.97   0.94   6.90   6.90   104.19

UTBI

  

United Tenn. Bankshares of TN

   17.90   1,202   21.5   20.00   13.20   17.30   3.47   26.50   10.63   1.70   1.65   14.21   13.58   102.69

WSFS

  

WSFS Financial Corp. of DE (8)*

   50.34   7,016   353.2   52.42   41.45   49.36   1.99   14.75   12.24   3.47   3.30   25.33   25.17   342.07

WVFC

  

WVS Financial Corp. of PA

   17.70   2,497   44.2   19.98   16.00   17.52   1.03   -1.67   1.14   0.97   0.97   11.83   11.83   160.26

WSBI

  

Warwick Community Bncrp of NY(8)*

   32.45   4,499   146.0   35.30   28.17   32.31   0.43   8.24   -5.67   0.22   0.17   15.11   14.60   159.58

WFSL

  

Washington Federal, Inc. of WA

   25.77   78,444   2,021.5   26.44   22.13   25.54   0.90   7.33   -0.12   1.72   1.72   13.9_   13.23   92.86

WAYN

  

Wayne Savings Bancshares of OH

   15.95   3,770   60.1   21.00   13.71   15.65   1.92   14.01   -11.39   0.65   0.62   11.15   10.76   102.51

 

RP FINANCIAL, LC.

Financial Services Industry Consultants

1700 North Moore Street, Suite 2210

Arlington, Virginia 22209

(703) 528-1700

 

Exhibit IV-1A (continued)

Weekly Thrift Market Line - Part One

Prices As Of September 3, 2004

 

                                                      Current Per Share Financials
         Market Capitalization
    Price Change Data
   

Trailing

12 No.

EPS(3)

   

12 No.

Core

EPS(3)

   

Book

Value/

Share

   

Tangible

Book

Value/

Share(4)

   

Assets/

Share

        

Price/

Share(1)

   

Shares

Outst-

anding

   

Market

Capital-

ization(9)

    52 week (1)
   

Last

Week

    % Change From
               

Financial Institution

             High
    Low
      

Last

Week

   

52 Wks

Ago(2)

   

Dec 31,

2000(2)

               
         ($)    (000)    ($Mil)    ($)    ($)    ($)    (%)    (%)    (%)    ($)    ($)    ($)    ($)    ($)

NASDAQ Listed OTC Companies (continued)

                                                                      

WYPT

  

Waypoint Financial Corp of PA(8)

    27.97    33,402    934.3    28.15    18.55    27.66    1.12    46.90    28.95    1.02    0.78    11.86    11.23    162.95

WCFB

  

Wbstr Cty Fed MHC of IA (39.0)

    13.50    3,772    19.9    17.25    11.50    13.50    0.00    13.45    -3.57    0.30    0.30    5.99    5.96    27.78

WEPC

  

Wells Fin. Corp. of Wells MN

    27.15    1,161    31.5    34.79    22.16    26.75    1.50    -0.37    -9.50    2.32    1.14    24.40    24.40    192.38

WGBC

  

Willow Grove Bancorp Inc of PA

    17.00    9,884    168.0    18.78    14.85    16.21    4.87    1.98    -4.28    0.62    0.52    10.50    10.40    93.24

 

RP FINANCIAL, LC.

Financial Services Industry Consultants

1700 North Moore Street, Suite 2210

Arlington, Virginia 22209

(703) 528-1700

 

Exhibit IV-1B

Weekly Thrift Market Line - Part Two

Prices As Of September 3, 2004

 

    Key Financial Ratios
   Asset Quality Ratios
   Pricing Ratios
   Dividend Data(6)

Financial Institution

   Equity/
Assets
   Tang.
Equity/
Assets
   Reported Earnings
   Core Earnings
  

NPAs

Assets

   Resvs /
NPAs
   Resvs/
Loans
   Price/
Earning
   Price/
Book
   Price/
Assets
   Price/
Tang.
Book
   Price/
Core
Earnings
   Ind.
Div. /
Share
   Dividend
Yield
   Payout
Ratio(7)
      ROA(5)
   ROE(5)
   ROI(5)
   ROA(5)
   ROE(5)
                      
    (%)   (%)   (%)   (%)   (%)   (%)   (%)   (%)   (%)   (%)   (x)   (%)   (%)   (%)   (x)   ($)   (%)   (%)

Market Averages, SAIF-Insured Thrifts (no MHCs)

                                                                        

SAIF-Insured Thrifts(149)

   10.11   9.28   0.81   8.86   5.44   0.68   7.12   0.62   171.95   0.97   17.04   149.35   14.69   163.82   19.20   0.46   2.16   34.20

NYSE Traded Companies(11)

   7.31   6.62   1.20   16.37   7.99   0.92   12.44   0.41   185.62   0.98   13.29   193.01   14.15   217.66   14.49   0.57   1.71   20.41

AMEX Traded Companies(9)

   8.21   8.12   0.80   9.00   5.56   0.64   7.18   0.35   249.21   0.76   15.42   151.75   12.42   153.29   16.89   0.50   2.21   29.77

NASDAQ Listed OTC Companies(129)

   10.49   9.60   0.77   8.14   5.19   0.66   6.61   0.66   166.35   0.98   17.56   145.03   14.88   159.27   19.86   0.45   2.20   36.08

California Companies(13)

   7.89   7.17   1.10   14.42   7.05   0.81   10.69   0.26   344.79   1.22   14.18   186.25   14.64   187.42   17.48   0.42   1.37   20.36

Florida Companies(7)

   7.66   7.33   0.98   11.94   5.25   0.96   11.71   0.34   267.38   0.83   20.21   226.72   17.45   238.87   20.98   0.25   0.96   18.40

Mid-Atlantic Companies(33)

   9.22   8.10   0.77   9.09   4.98   0.67   6.77   0.31   214.77   1.06   17.48   154.00   14.57   178.05   19.58   0.46   2.19   38.93

Mid-West Companies(68)

   10.59   9.94   0.80   8.05   5.77   0.66   6.64   0.85   126.09   0.89   17.24   134.75   14.06   145.48   19.44   0.51   2.51   39.45

New England Companies(4)

   12.55   9.23   0.49   6.87   4.23   0.66   6.93   0.12   437.64   0.91   17.83   148.32   17.04   190.96   20.94   0.62   2.09   41.38

North-West Companies(6)

   12.45   11.12   1.01   8.78   5.13   0.94   8.18   0.31   218.24   1.19   15.70   150.78   18.49   183.45   16.99   0.49   2.09   34.06

South-East Companies(14)

   12.35   11.90   0.66   6.62   3.98   0.49   4.34   0.75   115.85   0.97   14.97   140.90   15.92   147.95   17.54   0.45   2.30   32.10

South-West Companies(3)

   6.95   4.80   0.49   6.27   5.20   0.24   2.86   0.30   109.28   0.44   21.12   121.32   8.62   180.66   32.38   0.00   0.00   0.00

Western Companies (Excl CA)(1)

   4.27   4.27   0.24   5.90   5.35   0.43   10.41   2.55   23.70   0.80   18.70   105.18   4.49   105.18   10.59   0.00   0.00   0.00

Thrift Strategy(140)

   10.24   9.44   0.79   8.59   5.34   0.67   6.89   0.63   166.10   0.96   17.23   147.47   14.72   159.93   19.12   0.47   2.21   35.40

Mortgage Banker Strategy(7)

   7.54   6.00   1.07   13.95   7.22   0.92   12.18   0.36   289.63   1.07   14.19   185.96   14.12   244.43   18.29   0.28   1.12   14.70

Real Estate Strategy(2)

   8.39   8.39   1.06   12.51   7.23   0.44   5.26   1.47   38.75   0.69   13.83   167.04   14.02   167.04   32.89   0.27   1.82   25.23

Companies Issuing Dividends(135)

   10.38   9.56   0.82   8.91   5.51   0.70   7.43   0.62   176.13   0.95   16.89   148.79   14.99   162.09   19.15   0.50   2.33   37.19

Companies Without Dividends(14)

   6.69   5.76   0.61   8.29   4.60   0.38   3.24   0.64   113.39   1.22   19.09   156.31   10.90   184.97   19.95   0.00   0.00   0.00

Equity/Assets <6%(13)

   5.16   4.81   0.64   11.23   6.72   0.37   5.56   0.60   143.08   0.72   15.54   161.28   8.46   172.63   17.22   0.26   1.32   17.91

Equity/Assets 6-12%(101)

   8.82   8.15   0.88   9.95   5.94   0.72   8.17   0.65   172.32   1.02   16.49   156.10   13.80   172.55   18.87   0.50   2.19   32.34

Equity/Assets >12%(35)

   15.57   14.14   0.68   4.91   3.57   0.67   4.76   0.53   180.95   0.90   20.18   126.11   19.52   135.35   21.65   0.43   2.38   49.82

Converted Last 3 Mths (no MHC)(1)

   13.98   6.72   0.76   5.45   6.03   0.74   5.27   0.24   233.62   0.91   16.58   90.45   12.65   188.09   17.16   0.24   2.41   40.00

Actively Traded Companies(10)

   8.51   7.19   1.10   13.30   6.51   1.16   13.98   0.52   138.51   0.89   15.66   187.58   15.75   231.14   14.63   0.57   2.05   26.67

Market Value Below $20 Million(12)

   8.38   7.90   0.43   4.72   4.04   0.15   -0.66   0.83   81.84   0.74   17.13   112.30   9.34   124.15   16.46   0.26   1.74   30.92

Holding Company Structure(147)

   10.11   9.28   0.80   8.78   5.40   0.67   7.06   0.62   171.95   0.97   17.11   149.18   14.67   163.76   19.27   0.46   2.16   34.30

Assets Over $1 Billion(52)

   9.36   7.96   0.96   11.73   5.95   0.81   9.62   0.52   203.57   1.07   16.02   173.30   15.80   198.92   18.65   0.44   1.83   27.73

Assets $500 Million-$1 Billion(35)

   8.91   8.30   0.74   8.37   5.36   0.57   5.68   0.42   210.70   0.92   17.48   148.58   13.10   160.77   20.23   0.48   2.14   37.26

Assets $250-$500 Million(31)

   10.78   10.13   0.79   7.95   6.17   0.74   7.21   0.81   129.29   0.94   16.18   128.80   13.60   138.96   17.56   0.47   2.34   37.62

Assets less than $250 Million(31)

   12.24   12.00   0.63   5.24   3.92   0.53   4.34   0.89   99.20   0.87   19.43   128.38   15.70   131.68   20.75   0.47   2.58   40.38

Goodwill Companies(99)

   9.86   8.64   0.80   8.80   5.27   0.66   6.79   0.54   192.56   1.00   16.99   150.23   14.55   171.70   19.13   0.47   2.13   34.35

Non-Goodwill Companies(50)

   10.63   10.63   0.82   8.99   5.82   0.72   7.81   0.79   128.91   0.89   17.14   147.51   14.97   147.51   19.33   0.46   2.21   33.90

Acquirors of FSLIC Cases(6)

   8.86   8.35   1.04   11.92   6.34   1.18   13.55   0.64   100.43   0.78   16.20   176.40   15.63   188.20   14.50   0.56   2.02   23.26

 

(1) Average of high/low or bid/ask price per share.

 

(2) Or since offering price if converted or first listed in 2001 or in the past 52 weeks. Percent change figures are actual year-to-date and are not annualized

 

(3) EPS (earnings per share) is based on actual trailing twelve month data and is not shown on a pro forma basis.

 

(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).

 

(5) ROA (return on assets) and ROE (return on equity) are indicated ratios based on trailing twelve month common earnings and average common equity and assets balances, ROI (return on investment) is current EPS divided by current price.

 

(6) Annualized, based on last regular quarterly cash dividend announcement.

 

(7) Indicated dividend as a percent of trailing twelve month earnings.

 

(8) Excluded from averages due to actual or rumored acquisition activities or unusual operating characteristics.

 

* All thrifts are SAIF insured unless otherwise noted with an asterisk. Parentheses following market averages indicate the number of institutions included in the respective averages. All figures have been adjusted for stock splits, stock dividends, and secondary offerings.

 

Source:  Corporate reports and offering circulars for publicly traded companies, and RP Financial, LC. calculations. The information provided in this report has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of each information.

 

Copyright (c) 2004 by RP Financial, LC.

 

RP FINANCIAL, LC.

Financial Services Industry Consultants

1700 North Moore Street, Suite 2210

Arlington, Virginia 22209

(703) 528-1700

 

Exhibit IV-1B (continued)

Weekly Thrift Market Line - Part Two

Prices As Of September 3, 2004

 

    Key Financial Ratios
   Asset Quality Ratios
   Pricing Ratios
   Dividend Data (6)

Financial Institution

   Equity/
Assets
   Tang-
Equity/
Assets
   Reported Earnings
   Core Earnings
  

NPAs

Assets

   Resvs /
NPAs
   Resvs/
Loans
   Price/
Earning
   Price/
Book
   Price/
Assets
   Price/
Tang.
Book
   Price/
Core
Earnings
   Ind.
Div./
Share
   Dividend
Yield
   Payout
Ratio(7)
      ROA(5)
   ROE(5)
   ROI(5)
   ROA(5)
   ROE(5)
                      
    (%)   (%)   (%)   (%)   (%)   (%)   (%)   (%)   (%)   (%)   (x)   (%)   (%)   (%)   (x)   ($)   (%)   (%)

Market Averages. BIF-Insured Thrifts (no MHCs)

                                                                        

BIF-Insured Thrifts (23)

   11.80   10.87   1.04   10.38   3.51   1.01   9.95   0.13   372.65   1.01   18.35   177.05   19.85   186.23   20.33   0.53   2.37   40.42

NYSE Traded Companies (3)

   15.81   11.31   1.32   9.61   4.72   1.60   12.09   0.12   376.55   0.77   23.25   161.30   24.53   134.80   22.51   0.62   2.95   57.38

ANEX Traded Companies (2)

   8.34   8.04   0.82   9.37   6.20   0.70   7.93   0.29   274.47   1.11   17.29   156.66   13.37   162.59   19.90   0.42   1.56   25.64

NASDAQ Listed OTC Companies (10)

   11.72   11.22   1.03   10.64   5.52   0.90   9.95   0.11   399.59   1.03   17.70   182.21   20.11   193.28   20.04   0.53   2.40   40.06

Mid-Atlantic Companies (9)

   12.25   9.89   1.21   11.64   5.78   1.26   11.86   0.17   293.08   0.82   19.70   184.01   20.92   203.38   20.31   0.54   2.69   49.14

New England Companies (10)

   12.10   11.83   0.95   9.41   5.38   0.90   8.81   0.12   373.11   1.14   18.11   170.80   20.07   178.04   21.05   0.55   2.05   36.04

North-West Companies(3)

   8.97   8.94   1.26   14.44   6.58   1.09   12.61   0.07   768.20   1.31   15.23   211.07   18.16   211.52   17.52   0.44   2.07   31.81

South-East Companies (1)

   12.02   12.02   0.41   3.50   2.83   0.41   3.50   0.00   0.00   0.39   NM   123.52   14.84   123.52   NM   0.40   3.91   0.00

Thrift Strategy (22)

   11.80   10.87   1.04   10.38   5.51   1.01   9.95   0.13   372.65   1.01   18.35   177.05   19.85   186.23   20.33   0.53   2.37   40.42

Companies Issuing Dividends (23)

   11.80   10.87   1.04   10.38   5.51   1.01   9.95   0.13   372.65   1.01   18.35   177.05   19.85   186.23   20.33   0.53   2.37   40.42

Equity/Assets <6% (1)

   5.68   5.68   1.00   17.06   6.82   0.88   15.11   0.12   768.20   1.11   14.67   234.59   13.33   234.59   16.56   0.36   1.48   21.69

Equity/Assets 6-12% (16)

   8.50   8.10   1.00   11.52   6.23   0.95   10.74   0.15   325.13   0.99   16.93   182.86   15.32   195.39   19.47   0.57   2.19   35.81

Equity/Assets >12% (6)

   18.86   16.82   1.12   7.18   3.96   1.16   7.65   0.11   351.6_   1.03   23.17   156.81   29.25   156.41   23.65   0.47   2.84   57.78

Actively Traded Companies (5)

   10.32   10.20   1.05   9.94   5.75   1.08   10.02   0.04   406.83   1.17   18.33   163.92   16.88   165.81   19.58   0.65   2.24   40.09

Holding Company Structure (20)

   12.62   11.53   1.05   10.01   5.30   1.06   9.99   0.13   358.76   1.01   18.94   174.08   20.84   184.63   20.00   0.51   2.41   41.96

Assets Over $1 Billion (9)

   16.21   14.15   1.20   9.94   4.77   1.24   10.38   0.15   297.88   0.93   21.17   103.63   27.25   200.54   21.39   0.47   2.43   48.18

Assets $500 Million-$1 Billion (9)

   8.55   8.28   0.97   11.47   6.12   0.87   10.27   0.13   470.31   1.02   17.19   180.11   15.11   188.08   19.57   0.59   2.04   35.03

Assets $250-$500 Million (3)

   9.20   9.12   1.09   11.31   7.43   1.28   12.39   0.13   258.21   1.47   13.47   154.50   14.06   156.57   13.23   0.64   2.59   34.96

Assets less than $250 Million (2)

   10.29   10.26   0.66   7.19   4.01   0.47   4.87   0.04   0.00   0.79   19.27   165.84   16.33   166.44   33.54   0.40   3.06   42.55

Goodwill Companies (16)

   10.59   9.31   1.05   10.63   5.68   0.99   9.86   0.16   302.09   0.96   19.22   178.12   18.20   191.21   21.83   0.55   2.36   43.27

Non-Goodwill Companies (7)

   14.94   14.94   1.01   9.74   5.06   1.08   10.20   0.06   690.15   1.13   14.54   174.27   24.15   174.27   13.84   0.47   2.38   28.09

 

(1) Average of high/low or bid/ask price per share.

 

(2) Or since offering price if converted or first listed in 2001 or in the past 52 weeks. Percent change figures are actual year-to-date and are not annualized

 

(3) EPS (earnings per share) is based on actual trailing twelve month data and is not shown on a pro forma basis.

 

(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).

 

(5) ROA (return on assets) and ROE (return on equity) are indicated ratios based on trailing twelve month common earnings and average common equity and assets balances, ROI (return on investment) is current EPS divided by current price.

 

(6) Annualized, based on last regular quarterly cash dividend announcement.

 

(7) Indicated dividend as a percent of trailing twelve month earnings.

 

(8) Excluded from averages due to actual or rumored acquisition activities or unusual operating characteristics.

 

* All thrifts are SAIF insured unless otherwise noted with an asterisk. Parentheses following market averages indicate the number of institutions included in the respective averages. All figures have been adjusted for stock splits, stock dividends, and secondary offerings.

 

Source:  Corporate reports and offering circulars for publicly traded companies, and RP Financial, LC. calculations. The information provided in this report has been obtained (from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

 

Copyright (c) 2004 by RP Financial, LC.

 

RP FINANCIAL, LC.

Financial Services Industry Consultants

1700 North Moore Street, Suite 2210

Arlington, Virginia 22209

(703) 528-1700

 

Exhibit IV-1B (continued)

Weekly Thrift Market Line - Part Two

Prices As Of September 3, 2004

 

    Key Financial Ratios
   Asset Quality Ratios
   Pricing Ratios
   Dividend Data(6)

Financial Institution

   Equity/
Assets
   Tang.
Equity/
Assets
   Reported Earnings
   Core Earnings
  

NPAs

Assets

   Resvs /
NPAs
   Resvs/
Loans
   Price/
Earning
   Price/
Book
   Price/
Assets
   Price/
Tang.
Book
   Price/
Core
Earnings
   Ind.
Div./
Share
   Dividend
Yield
   Payout
Ratio(7)
      ROA(5)
   ROE(5)
   ROI(5)
   ROA(5)
   ROE(5)
                      
    (%)   (%)   (%)   (%)   (%)   (%)   (%)   (%)   (%)   (%)   (x)   (%)   (%)   (%)   (x)   ($)   (%)   (%)

Market Averages. MNC Institutions

                                                                        

SAIF-Insured Thrifts(14)

   15.52   14.97   0.63   4.65   2.20   0.64   4.56   0.48   190.46   0.82   25.05   207.61   30.81   222.29   23.97   0.51   2.35   38.09

BIF-Insured Thrifts(5)

   10.59   10.07   0.93   9.74   3.28   0.69   7.05   0.49   136.16   0.88   24.93   250.05   30.56   270.41   31.85   0.66   2.36   64.88

AMEX Traded Companies(2)

   16.49   16.49   0.80   4.65   2.63   0.74   4.30   0.60   135.11   1.14   NM   181.29   29.67   181.29   NM   0.33   1.88   71.20

NASDAQ Listed OTC Companies(17)

   13.95   13.35   0.70   6.14   2.46   0.65   5.32   0.47   178.98   0.80   25.00   221.51   30.87   239.44   25.94   0.57   2.41   43.21

California Companies(1)

   9.24   9.24   0.25   2.73   1.19   0.27   2.90   0.00   0.00   0.49   NM   229.52   21.21   229.52   NM   0.00   0.00   0.00

Mid-Atlantic Companies(10)

   11.69   10.94   0.71   6.88   2.78   0.69   6.49   0.56   185.96   0.79   25.94   223.60   27.33   248.13   25.57   0.47   2.20   59.36

Mid-West Companies(5)

   18.81   18.55   0.61   3.54   1.81   0.73   3.84   0.36   150.23   0.60   27.08   186.38   33.38   192.42   27.08   0.64   2.92   0.00

New England Companies(2)

   12.81   12.28   1.14   10.68   4.01   0.58   4.93   0.33   196.63   1.16   18.23   235.88   29.39   250.70   NM   0.78   2.58   65.94

South-East Companies(1)

   24.45   23.88   0.74   3.13   1.12   0.52   2.17   0.58   108.08   2.08   NM   261.24   63.87   267.46   NM   1.00   2.87   0.00

Thrift Strategy(18)

   14.41   13.89   0.66   5.39   2.31   0.66   5.18   0.49   171.23   0.82   26.13   213.47   30.78   228.61   25.94   0.51   2.29   47.37

Diversified Strategy(1)

   10.85   9.80   1.56   16.71   5.49   0.54   5.78   0.33   207.39   0.99   18.23   277.71   30.12   307.35   NM   1.16   3.38   61.70

Companies Issuing Dividends(17)

   13.80   13.19   0.69   6.13   2.49   0.63   5.25   0.51   164.23   0.88   24.65   220.88   30.89   238.81   25.57   0.61   2.63   61.01

Companies without Dividends(2)

   17.79   17.79   0.85   4.79   2.44   0.86   4.8_   0.10   312.41   0.45   27.08   186.35   29.46   186.35   27.08   0.00   0.00   0.00

Equity/Assets <6%(1)

   5.38   5.02   0.09   1.47   0.70   0.09   1.33   0.17   191.96   0.65   NM   228.65   12.30   245.14   NM   0.50   3.20   0.00

Equity/Assets 6-12%(10)

   9.23   8.30   0.75   8.22   3.21   0.60   6.56   0.62   114.92   0.84   24.65   224.64   23.00   253.87   25.57   0.66   2.49   49.38

Equity/Assets >12%(8)

   21.57   21.48   0.73   3.76   1.80   0.80   4.01   0.37   237.80   0.85   27.08   207.05   42.73   207.97   27.08   0.41   2.07   47.47

Holding Company Structure(l6)

   13.99   13.41   0.70   5.78   2.47   0.70   5.52   0.53   136.11   0.88   26.13   214.60   30.33   231.76   25.94   0.57   2.52   53.29

Assets Over-$1 Billion(5)

   12.45   11.64   0.95   9.91   3.15   0.68   7.20   0.36   106.68   0.84   23.10   254.02   35.55   283.84   27.22   1.07   3.25   56.50

Assets $500 Million-$1 Billion(4)

   13.93   13.84   0.39   2.67   1.36   0.38   2.58   0.17   346.95   0.70   NM   208.18   27.42   212.30   NM   0.26   1.50   35.09

Assets $250-$500 Million(7)

   12.30   11.48   0.53   5.28   2.47   0.60   5.20   0.74   134.15   0.99   26.20   217.27   25.67   238.70   22.25   0.44   2.20   58.72

Assets less than $250 Million(3)

   22.04   22.00   1.14   5.50   2.88   1.13   5.46   0.48   198.39   0.62   27.08   179.03   39.00   179.41   27.08   0.31   2.34   36.11

Goodwill Companies(8)

   12.06   10.77   0.73   6.67   2.97   0.52   4.57   0.58   148.15   1.09   23.86   216.09   27.28   251.95   22.59   0.61   3.04   57.66

Non-Goodwill Companies(11)

   15.79   15.79   0.69   5.48   2.13   0.75   5.68   0.41   193.21   0.65   26.51   217.81   33.26   217.81   27.06   0.50   1.85   45.01

MHC Institutions(19)

   14.22   13.68   0.71   5.99   2.48   0.66   5.21   0.48   173.49   0.83   25.00   217.04   30.74   232.98   25.94   0.55   2.35   48.80

MHC Converted Last 3 Months(1)

   26.34   26.34   1.46   6.86   3.69   1.46   6.86   0.10   312.41   0.41   27.08   143.17   37.71   143.17   27.08   0.00   0.00   0.00

 

(1) Average of high/low or bid/ask price per share.

 

(2) Or since offering price if converted or first listed in 2001 or in the past 52 weeks. Percent change figures are actual year-to-date and are not annualized

 

(3) EPS (earnings per share) is based on actual trailing twelve month data and is not shown on a pro forma basis.

 

(4) Excludes intangibles (such as goodwill, value of core deposits, etc.).

 

(5) ROA (return on assets) and ROE (return on equity) are indicated ratios based on trailing twelve month common earnings and average common equity and assets balances; ROI (return on investment) is current EPS divided by current price.

 

(6) Annualized, based on last regular quarterly cash dividend announcement.

 

(7) Indicated dividend as a percent of trailing twelve month earnings.

 

(8) Excluded from averages due to actual or rumored acquisition activities or unusual operating characteristics.

 

* All thrifts are SAIF insured unless otherwise noted with an asterisk. Parentheses following market averages indicate the number of institutions included in the respective averages. All figures have been adjusted for stock splits, stock dividends, and secondary offerings.

 

Source:

   Corporate reports and offering circulars for publicly traded companies, and RP Financial, LC. calculations.
    The information provided in this report has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

 

Copyright (c) 2004 by RP Financial, LC.

 

RP FINANCIAL, LC.

Financial Services Industry Consultants

1700 North Moore Street, Suite 2210

Arlington, Virginia 22209

(703) 538-1700

 

Exhibit IV-1B (continued)

Weekly Thrift Market Line - Part Two

Prices As Of September 3, 2004

 

        Key Financial Ratios
   Asset Quality Ratios
   Pricing Ratios
   Dividend Data(6)

Financial Institution

  

Equity/

Assets

  

Tang.
Equity/

Assets

   Reported Earnings
   Core Earnings
  

NPAs

Assets

  

Resvs/

NPAs

  

Resvs/

Loans

  

Price/

Earning

  

Price/

Book

  

Price/

Assets

  

Price/
Tang.

Book

  

Price/
Core

Earnings

  

Ind.
Div. /

Share

  

Dividend

Yield

  

Payout

Ratio (7)

      ROA(5)
   ROE(5)
   ROI(5)
   ROA(5)
   ROE(5)
                      
        (%)   (%)   (%)   (%)   (%)   (%)   (%)   (%)   (%)   (%)   (x)   (%)   (%)   (%)   (x)   ($)   (%)   (%)

NYSE Traded Companies

                                                                        

AF

  

Astoria Financial Corp. of NY

   6.14   5.31   0.89   13.98   7.12   0.87   13.61   0.14   269.48   0.65   14.05   203.70   12.51   235.47   14.44   1.00   2.75   38.61

BBX

  

BankAtlantic Bancorp of FL

   8.12   6.50   1.44   16.30   6.88   1.67   18.90   0.27   319.02   1.18   14.54   346.54   20.01   307.97   12.53   0.13   0.72   10.40

CFB

  

Commercial Federal Corp. of NE

   6.41   4.90   0.66   10.73   7.32   0.87   14.22   0.59   140.18   1.18   13.67   147.29   9.45   192.71   10.32   0.54   1.95   26.60

DSL

  

Downey’ Financial Corp. of CA

   6.63   6.60   0.72   9.87   5.89   0.52   7.20   0.28   83.69   0.26   16.97   161.60   10.71   162.18   23.27   0.40   0.73   12.46

FED

  

FirstPad Financial Corp. of CA

   7.96   7.14   1.33   15.10   8.53   1.30   14.80   0.02   NA   1.52   11.72   173.31   13.79   175.87   11.97   0.00   0.00   0.00

FBC

  

Flagstar Bancorp, Inc. of MI

   5.93   5.93   1.84   32.18   15.48   0.93   16.19   0.82   42.44   0.38   6.46   186.99   11.09   186.99   12.85   1.00   4.61   29.76

GDW

  

Golden West Fin. Corp. of CA

   7.05   7.05   1.45   19.96   7.19   1.44   19.68   0.41   75.87   0.33   13.92   252.23   17.78   252.23   13.99   0.40   0.37   5.13

GPT

  

GreenPoint Fin. Corp. of NY(8)*

   7.56   6.04   1.91   23.72   7.64   0.61   7.56   0.86   34.84   0.46   13.08   300.67   22.73   NM   NM   1.20   2.68   35.09

NDE

  

IndyMac Bancorp. Inc. of CA

   7.28   7.05   1.47   18.29   8.32   -0.74   -9.24   0.73   46.66   0.48   12.02   201.22   14.65   207.83   NM   1.28   3.68   44.29

NYB

  

New York Community Bcrp of NY*

   12.62   4.13   1.80   14.97   6.14   2.44   20.29   0.14   232.44   0.66   16.30   191.47   24.16   NM   12.02   1.00   4.55   74.07

PFB

  

PFF Bancorp, Inc. of Pomona CA

   8.87   8.83   1.24   13.83   6.77   1.17   13.01   NA   NA   0.97   14.76   194.03   17.20   194.84   15.69   0.80   2.14   31.62

PFS

  

Provident Fin. Serv. Inc of NJ*

   19.00   18.48   0.84   4.26   3.31   0.77   3.90   0.09   520.66   0.88   30.20   131.13   24.91   134.80   33.00   0.24   1.35   40.68

SOV

  

Sovereign Bancorp, Inc. of PA

   7.83   4.68   1.03   13.20   6.62   0.92   11.76   0.43   169.15   1.21   15.11   180.72   14.16   302.59   16.95   0.12   0.54   8.16

WES

  

Westcorp of Irvine CA

   8.17   8.17   1.15   16.59   7.73   1.15   16.59   0.39   524.09   2.66   12.93   173.48   14.34   173.33   12.93   0.56   1.35   17.45

AMEX Traded Companies

                                                                        

BHL

  

Berkshire Hills Bancorp of MA*

   9.42   8. 97   0.85   8.45   4.59   0.80   7.97   0.25   282.21   1.16   21.79   184.46   17.37   193.59   23.10   0.48   1.25   27.27

BFD

  

BostonFad Bancorp, Inc. of MA(8)

   5.50   4.51   0.27   4.80   2.38   -0.08   -1.41   NA   NA   1.14   NA   202.33   11.13   246.65   NM   0.64   1.54   64.65

CNY

  

Carver Bancorp, Inc. of NY

   7.58   7.58   0.87   11.35   11.04   0.84   10.96   0.34   216.05   1.09   9.06   100.00   7.58   100.00   9.38   0.28   1.53   13.86

EFC

  

EFC Bancorp, Inc of Elgin IL

   8.38   8.38   0.78   9.01   5.96   0.74   8.48   0.27   160.40   0.53   16.78   148.86   12.48   148.86   17.83   0.61   2.39   40.13

FDT

  

Federal Trust Corp of FL

   5.31   5.31   0.65   11.44   5.63   0.58   10.20   0.70   93.79   0.77   17.76   198.78   10.56   198.78   19.93   0.08   0.98   17.39

GOV

  

Governor Bcp NHC of NY(42.5)

   10.21   18.21   0.88   4.64   2.73   0.85   4.51   0.86   84.36   0.95   NM   168.54   30.69   168.54   NM   0.26   1.97   72.22

NBN

  

Northeast Bancorp of Auburn NK*

   7.26   7.11   0.78   10.28   7.81   0.60   7.88   0.32   266.72   1.06   12.80   128.86   9.36   131.60   16.70   0.36   1.88   24.00

SZB

  

SouthFirst Bancshares of AL

   7.34   6.94   -0.47   -5.66   -5.61   -0.93   -11.08   NA   NA   0.92   NM   113.35   8.32   119.78   NM   0.60   3.74   NM

TSH

  

Techa Hiding Cp of N Iberia LA

   9.99   9.99   1.07   10.24   7.03   1.05   10.04   0.35   165.31   0.83   14.23   145.44   14.53   145.44   14.51   0.84   2.27   32.31

WSB

  

Washington SB, FSB of Bowi_ ND

   9.94   9.94   1.99   19.42   10.93   1.54   15.05   NA   NA   0.55   9.15   171.29   17.02   171.29   11.81   0.28   2.55   23.33

WFD

  

Westfield Fin1 KHC of NA(46.5)*

   14.76   14.76   0.72   4.65   2.53   0.63   4.08   0.33   185.86   1.33   NM   194.05   28.65   194.05   NM   0.40   1.78   70.18

WFI

  

Winton Financial Corp. of ON(_)

   8.30   8.28   0.87   10.52   5.10   0.68   8.22   1.01   42.60   0.47   19.62   206.41   17.14   206.83   25.12   0.45   2.18   42.86

WRO

  

Woronoco Bancorp, Inc. of NA

   8.92   8.72   0.69   7.23   3.92   0.64   6.62   0.07   610.61   0.60   25.52   184.55   16.47   188.87   27.85   0.80   2.02   51.61

NASDAQ Listed OTC Companies

                                                                        

FIFG

  

1st Independence Fin Grp of KY

   11.37   11.05   -0.60   -5.21   -4.63   -0.67   -5.79   1.36   39.95   0.79   NM   114.73   13.04   118.04   NM   0.60   3.12   NM

AMFC

  

AMB Fin. Corp. of Nunstar IN

   8.31   8.31   0.67   8.15   6.93   0.71   8.62   1.29   36.13   0.58   14.43   114.06   9.48   114.06   13.65   0.24   1.60   23.08

ASBP

  

ASB Financial Corp. of NK

   10.65   10.65   1.29   12.19   5.38   1.27   11.98   0.66   93.11   0.78   18.60   216.55   23.07   216.55   18.91   0.60   2.67   49.59

AABC

  

Access Anytime Bancorp of NK

   5.62   3.78   0.53   7.58   6.76   0.11   1.52   0.29   157.72   0.65   14.79   107.50   6.04   184.38   NM   0.00   0.00   0.00

APBC

  

Advance Fin. Bancorp of WV(8)

   6.70   4.74   0.81   12.84   7.32   0.65   10.31   0.61   82.35   0.60   13.67   167.86   11.25   237.52   17.02   0.40   1.56   21.28

ALLS

  

Alliance Bank MHC of PA (20.0)

   9.15   9.15   0.63   6.84   2.34   0.63   6.74   1.42   47.09   1.22   NM   294.30   26.94   294.30   NM   0.36   1.20   51.43

ASBI

  

Ameriana Bancorp of IN

   9.13   8.96   0.58   6.36   4.66   1.26   13.77   1.69   43.87   1.63   21.48   136.52   12.47   139.10   9.92   0.64   3.77   NM

ABCW

  

Anchor BanCorp Wisconsin of WI

   8.01   7.47   1.18   14.64   7.42   0.80   9.89   0.50   149.02   0.89   13.48   192.38   15.42   206.42   19.95   0.50   1.94   26.18

ALFC

  

Atlantic Liberty Fincl of NY

   14.46   14.46   0.88   5.42   4.54   0.88   5.42   0.09   355.23   0.52   22.05   117.81   17.04   117.81   22.05   0.28   1.51   33.33

BCSB

  

BCSB Bankcorp NHC of ND (36.4)

   5.38   5.02   0.09   1.47   0.70   0.09   1.33   0.17   191.96   0.65   NM   228.65   12.30   245.14   NM   0.50   3.20   NM

BKMU

  

Bank Mutual Corp of WI

   22.83   20.97   0.86   4.56   2.84   0.76   4.01   0.29   151.36   0.77   NM   127.89   29.20   139.26   NM   0.20   1.72   60.61

BKUNA

  

BankUnited Fin. Corp. of FL

   5.51   5.17   0.64   10.50   5.57   0.59   9.70   0.25   115.06   0.44   17.94   186.76   10.30   199.09   19.42   0.00   0.00   0.00

BRBI

  

Blue River Bancshares of IN

   7.84   6.10   0.21   2.33   1.76   0.10   1.17   1.76   44.04   1.05   NM   120.59   9.46   155.19   NM   0.00   0.00   0.00

BYFC

  

Broadway Financial Corp. of CA

   5.01   5.01   0.71   11.26   8.83   0.66   10.44   0.03   NA   0.57   11.33   146.93   7.37   146.93   12.22   0.20   1.61   18.18

BRKL

  

Brookline Bancorp, Inc. of NA*

   37.01   37.01   1.13   2.84   1.83   1.01   2.54   0.02   NA   1.43   NM   157.09   58.14   157.09   NM   0.34   2.15   NM

CITZ

  

CFS Bancorp, Inc of Munstar IN

   10.50   10.40   0.20   1.90   1.85   0.15   1.50   1.66   46.23   1.12   NM   107.64   11.30   108.67   NM   0.44   3.25   NM

CXFB

  

CKF Bancorp of Danville NY

   10.39   9.67   1.15   11.20   6.71   1.15   11.20   1.01   41.20   0.47   14.91   158.43   16.46   170.17   14.91   0.60   3.53   52.63

CAFI

  

Camco Fin Corp of Cambridge OH

   8.58   8.30   0.45   5.04   4.19   0.31   3.54   1.31   39.39   0.66   23.88   122.63   10.52   126.70   33.96   0.58   3.80   NM

CFFN

  

Capitol Fd Fn MHC of KS (39.2)

   11.41   11.41   0.31   2.74   1.04   0.31   2.74   0.15   34.83   0.10   NM   266.85   30.45   266.85   NM   2.00   5.75   NM

CKBK

  

Central Bncrp of Somerville MA*

   8.39   7.95   0.43   4.91   3.88   0.37   4.25   NA   NA   1.01   25.73   126.71   10.63   133.70   29.77   0.48   1.48   38.10

GCFC

  

Central Federal Corp. of OH

   14.47   14.47   -1.63   -9.25   -7.05   -1.72   -9.76   0.58   61.92   0.59   NM   140.98   20.40   140.98   NM   0.36   2.79   NM

CHFN

  

Central Fincl NHC of GA (18.4)

   24.45   23.88   0.74   3.13   1.12   0.52   2.17   0.58   108.08   2.08   NM   261.24   63.87   267.46   NM   1.00   2.87   NM

CFSL

  

Chesterfield Financial of IL(8)

   20.64   20.51   0.54   2.67   1.64   0.54   2.67   0.10   361.94   0.89   NM   161.28   33.29   162.28   NM   0.32   1.03   62.75

CHEV

  

Cheviot Fin Cp NHC of OH(45.0)

   27.47   27.47   -0.07   -0.26   -0.18   0.61   2.21   0.15   179.02   0.38   NM   141.84   38.97   141.84   NM   0.20   1.83   NM

CTZN

  

Citizens First Bancorp of MI

   12.27   11.22   0.84   6.18   5.51   0.79   5.87   0.63   158.17   1.18   18.15   110.86   13.60   121.18   19.13   0.36   1.70   30.77

CFSB

  

Citizens First Fin Corp. of IL

   10.07   10.07   0.46   4.78   4.33   0.36   3.79   0.99   94.52   1.27   23.11   109.13   10.99   109.13   29.17   0.40   1.63   37.74

CSBC

  

Citizens South Banking of NC

   17.27   15.72   0.55   3.13   2.72   0.30   1.74   0.20   288.18   0.97   NM   116.64   20.15   128.14   NM   0.26   1.96   72.22

CSBK

  

Clifton Svg Bp KHC of NJ(45.0)

   26.33   26.33   0.49   1.83   1.01   0.53   1.98   0.02   663.04   0.32   NM   180.49   47.53   180.49   NM   0.12   1.01   NM

CFCP

  

Coastal Fin. Corp. of SC

   6.11   6.11   1.13   18.09   6.33   1.08   17.26   NA   NA   1.36   15.80   278.90   17.03   278.90   16.57   0.18   1.31   20.69

CCBI

  

Commercial Capital Bcrp of CA

   12.29   4.63   1.32   15.09   2.50   1.22   14.02   0.12   646.27   1.00   NM   204.01   25.06   NM   NM   0.16   0.71   28.57

CFFC

  

Community Fin. Corp. of VA

   8.21   8.21   1.03   11.91   8.62   1.03   11.91   0.74   106.41   0.94   11.60   134.00   11.00   134.09   11.60   0.40   2.13   24.69

 

RP FINANCIAL, LC.

Financial Services Industry Consultants

1700 North Moore Street, Suite 3210

Arlington, Virginia 22209

(703) 528-1700

 

Exhibit IV-1B (continued)

Weekly Thrift Market Line - Part Two

Prices As Of September 3, 2004

 

        Key Financial Ratios
   Asset Quality Ratios
   Pricing Ratios
   Dividend Data(6)
       

Equity/

Assets

  

Tang.
Equity/

Assets

   Reported Earnings
   Core Earnings
  

NPAs

Assets

  

Resvs/

NPAs

  

Resvs/

Loans

  

Price/

Earning

  

Price/

Book

  

Price/

Assets

  

Price/
Tang.

Book

  

Price/
Core

Earnings

  

Ind.
Div. /

Shares

  

Divi-

dend

Yield

  

Payout

Ratio(7)

Financial Institution

       ROA(5)
   ROE(5)
   ROI(5)
   ROA(5)
   ROE(5)
                      
        (%)   (%)   (%)   (%)   (%)   (%)   (%)   (%)   (%)   (%)   (X)   (%)   (%)   (%)   (x)   ($)   (%)   (%)

NASDAQ Listed OTC Companies (continued)

                                                                        

CIBI

  

Community Inv. Bncp. Inc of OH

   11.02   11.02   0.72   6.73   5.61   0.66   6.14   0.75   66.89   0.63   17.84   116.87   12.88   116.87   19.55   0.36   2.52   45.00

DCOM

  

Dime Community Bancshares of NY*

   7.76   6.15   1.54   17.90   7.80   1.47   17.09   0.04   NA   0.60   12.83   236.29   18.34   298.25   13.43   0.56   3.28   42.11

DFBS

  

Dutchfork Bancshares Inc of SC(8)

   15.25   15.25   0.64   4.41   3.05   0.94   6.44   0.25   94.64   0.92   32.84   148.18   22.60   148.18   22.50   0.00   0.00   0.00

ESBF

  

ESB Financial Corp. of PA

   6.54   5.99   0.69   9.60   6.66   0.60   8.39   0.21   139.07   1.20   15.01   157.16   10.28   171.62   17.18   0.40   3.06   45.98

ESBK

  

Elmira, Svgs Bank, FSB of NY*

   6.44   6.28   0.85   11.53   7.71   0.66   8.97   0.24   258.21   0.98   12.97   160.17   10.32   164.32   16.67   0.76   2.55   33.04

EVRT

  

Evertrust Fin. Grp, Inc. of WA(8)*

   11.86   11.86   1.10   9.33   4.84   1.05   8.88   NA   NA   1.37   20.67   192.21   22.79   192.21   21.74   0.44   1.73   35.77

FFDF

  

FFD Financial Corp of Dover OH

   12.53   12.53   0.62   4.97   5.00   0.31   2.49   0.49   118.80   0.69   20.00   98.73   12.37   98.73   NM   0.42   3.00   60.00

FFLC

  

FFLC Bancorp of Leesburg FL

   7.96   7.96   0.95   11.72   6.22   0.89   11.03   0.67   86.61   0.69   16.08   181.40   14.44   181.40   17.09   0.52   1.93   30.95

FFWC

  

FFW Corporation of Wabash IN

   10.14   9.73   1.03   10.53   8.73   0.81   8.33   0.94   114.37   1.85   11.46   116.59   11.82   121.48   14.47   0.68   3.09   35.42

FMCO

  

FMS Fin Corp. of Burlington NJ

   5.27   5.03   0.59   11.49   6.79   0.59   11.49   0.47   78.69   1.08   14.72   162.59   8.57   170.21   14.72   0.12   0.73   10.81

FFNX

  

FSF Financial Corp. of MN(8)

   10.11   9.17   0.83   8.41   5.23   0.35   3.56   1.43   23.34   0.44   19.12   160.81   16.25   177.28   NM   1.40   4.02   NM

FSBI

  

Fidelity Bancorp, Inc. of PA

   6.27   5.82   0.71   10.90   7.64   0.62   9.41   NA   NA   1.02   13.09   147.19   9.23   158.66   15.17   0.48   2.18   28.57

FFFL

  

Fidelity Bankshares, Inc of FL

   5.56   5.50   0.62   10.40   3.37   0.65   10.81   NA   NA   0.51   29.68   301.52   16.76   304.94   28.55   0.40   1.06   31.50

FFKD

  

Fidelity Fad. Bancorp of IN(8)

   8.11   8.11   0.13   1.54   1.30   -0.06   -0.77   0.53   68.80   0.65   NM   108.45   8.79   108.45   NM   0.00   0.00   0.00

FBTC

  

First BancTrust Corp of IL

   11.64   11.64   0.68   5.79   4.88   0.49   4.17   1.25   79.48   1.93   20.49   121.36   14.13   121.36   28.41   0.24   1.92   39.34

FBRI

  

First Bancorp of Indiana of IN

   12.92   12.05   0.69   4.71   4.20   0.34   2.33   0.39   112.89   0.72   23.79   109.93   14.20   117.81   NM   0.58   2.80   66.67

FBSI

  

First Bancshares, Inc. of MO

   10.33   10.14   0.83   8.32   6.67   0.78   7.83   0.97   46.78   0.72   14.99   121.13   12.51   123.34   15.94   0.16   0.79   11.85

FCAP

  

First Capital, Inc. of IN

   10.50   9.07   0.86   7.97   6.03   0.86   8.03   1.16   51.82   0.79   16.58   132.05   13.86   152.86   16.45   0.60   2.92   48.39

FCFL

  

First Community Bk Corp of FL

   10.47   10.28   0.92   8.45   3.73   0.86   7.04   0.05   NA   1.26   26.82   206.48   21.62   210.43   28.93   0.00   0.00   0.00

FDEF

  

First Defiance Fin. Corp of OH

   11.60   9. 80   1.16   9.77   7.36   0.83   6.97   0.28   312.07   1.16   23.59   132.49   15.37   156.85   19.05   0.80   3.07   41.67

FFFS

  

First Fed Serv KHC of IL(45.0)

   26.34   26.34   1.46   6.86   3.69   1.46   6.86   0.10   312.41   0.41   27.08   143.17   37.71   143.17   27.08   0.00   0.00   0.00

FFBN

  

First Fed. Bancshares of AR

   10.46   10.46   1.04   9.80   6.76   0.94   8.82   0.48   48.94   0.29   14.79   144.32   15.10   144.32   16.44   0.44   2.12   31.43

FTFC

  

First Fed. Capital Corp. of WI (8)

   7.72   5.27   1.08   14.12   5.46   0.47   6.10   0.33   116.85   0.53   18.31   234.92   18.13   344.20   NM   0.60   2.02   37.04

FFBI

  

First Federal Bancshares of IL

   6.99   6.48   0.69   5.75   8.38   0.67   5.55   0.55   54.59   0.69   11.93   124.16   8.68   134.12   12.36   0.44   2.16   25.73

FFSX

  

First Federal Bankshares of IA

   11.42   8.46   0.88   7.88   6.52   0.74   6.66   NA   NA   0.99   15.35   118.25   13.51   159.71   18.15   0.40   1.75   26.85

FFBZ

  

First Federal Bncrp, Inc of OH(8)

   8.87   8.87   0.75   8.24   4.27   0.65   7.06   0.48   148.18   0.80   23.39   187.95   16.67   187.95   27.29   0.24   1.83   42.86

FFCN

  

First Fin. Holdings Inc. of SC

   6.66   5.74   1.05   15.27   6.63   0.94   13.62   0.53   113.45   0.81   15.07   232.17   15.45   269.37   16.91   0.88   2.88   43.35

FFHS

  

First Franklin Corp. of OH

   8.64   8.64   0.41   4.75   3.39   0.25   2.82   NA   NA   0.72   29.49   142.11   12.28   142.11   NM   0.32   1.57   46.38

FKFS

  

First Keystone Fin., Inc of PA

   4.99   4.99   0.46   8.20   6.05   0.24   4.25   0.55   68.72   0.71   16.52   152.43   7.60   152.43   31.86   0.44   1.97   32.59

CASH

  

First Midwest Fin., Inc. of IA

   5.92   5.47   0.55   9.40   8.10   0.62   10.61   0.12   583.41   1.32   12.35   116.99   6.92   126.58   10.94   0.52   2.48   30.59

FMSB

  

First Mutual Bncshrs Inc of WA*

   5.68   5.68   1.00   17.06   6.82   0.88   15.11   0.12   768.20   1.11   14.67   234.59   13.33   234.59   16.56   0.36   1.48   21.69

FNFG

  

First Niagara Fin. Group of NY*

   20.28   17.09   1.05   5.72   3.29   1.03   5.59   0.27   301.93   1.31   30.37   150.11   30.45   178.17   31.10   0.32   2.45   74.42

FNFI

  

First Niles Fin., Inc of OH

   15.83   15.83   1.06   6.39   4.11   0.89   5.18   1.09   71.51   1.78   24.34   165.33   26.17   165.33   28.91   0.60   3.24   NM

FPTB

  

First PacTrust Bancorp of CA

   11.76   11.76   0.77   5.69   4.24   0.76   5.63   NA   NA   0.70   23.59   143.04   16.03   143.04   23.83   0.44   1.85   43.56

FPFC

  

First Place Fin. Corp. of OH

   9.93   6.62   0.80   7.28   5.01   0.55   5.01   0.65   112.87   1.07   19.97   125.98   12.51   188.91   29.02   0.56   3.02   60.22

FBNW

  

FirstBank NW Corp. of WA

   9.51   6.67   0.91   9.49   6.12   0.69   7.13   0.35   252.89   1.29   16.33   120.21   11.43   171.42   21.73   0.68   2.41   39.31

FFIC

  

Flushing Fin. Corp. of NY*

   7.40   7.20   1.18   15.45   6.44   1.17   15.31   0.21   152.15   0.47   15.53   234.87   17.37   241.37   15.66   0.36   1.97   30.51

FKKY

  

Frankfort First Bancorp of NY

   12.81   12.81   0.73   5.67   3.35   0.73   5.67   NA   NA   0.07   29.83   171.04   21.91   171.04   29.83   1.12   4.69   NM

FBTX

  

Franklin Bank Corp of TX

   8.28   6.33   0.44   4.96   3.64   0.37   4.21   0.31   60.83   0.22   27.44   135.14   11.19   176.94   32.38   0.00   0.00   0.00

GUPB

  

GFSB Bancorp, Inc of Gallup NM(8)

   7.76   7.76   0.70   9.09   7.15   0.68   8.89   1.08   67.72   1.11   13.98   122.68   9.52   122.68   14.28   0.50   2.52   35.21

GSLA

  

GS Financial Corp. of LA

   13.55   13.55   0.24   1.75   2.14   0.12   0.83   0.56   51.87   0.70   NM   85.64   11.61   85.64   NM   0.40   2.14   NM

GTPS

  

Great American Bancorp of IL

   10.79   10.48   0.76   6.99   6.52   0.72   6.57   0.04   NA   1.05   15.33   110.87   11.96   114.13   16.31   0.44   1.72   26.35

PEDE

  

Great Pee Dee Bancorp of SC

   16.86   16.17   0.82   4.70   4.39   0.74   4.29   NA   NA   1.33   22.79   106.16   17.90   110.71   25.00   0.62   4.00   NM

GAFC

  

Greater Atlant. Fin Corp of VA

   3.81   3.56   -0.02   -0.58   -0.67   -1.81   -45.09   0.24   124.18   0.56   NM   94.20   3.59   100.84   NM   0.00   0.00   NM

GCBC

  

Green Co Bcrp KHC of NY (43.9)

   10.48   10.48   1.08   9.89   4.49   1.08   9.89   NA   NA   0.83   22.25   217.63   22.81   217.63   22.25   0.84   2.66   59.15

NFFC

  

NF Financial Corp. of SD

   6.17   5.57   0.50   7.92   7.03   0.38   5.96   0.27   158.46   0.55   14.22   111.83   6.90   123.90   18.91   0.43   2.68   38.05

NMNF

  

NMN Financial, Inc. of MN

   8.87   8.42   1.15   12.22   8.21   0.87   9.22   0.38   224.52   1.06   12.18   147.25   13.07   155.27   16.14   0.88   3.28   40.00

HARB

  

Harbor Florida Bancshares of FL

   10.72   10.56   1.62   14.77   5.35   1.49   13.52   0.09   722.43   0.94   18.69   265.58   28.47   269.50   20.41   0.64   2.06   38.55

HARL

  

Harleyeville Svgs Fin Cp of PA

   6.11   6.11   0.69   11.32   7.19   0.64   10.50   0.04   685.12   0.60   13.90   151.69   9.27   151.69   14.99   0.80   2.79   38.83

KWFG

  

Harrington West Fscl Grp of CA

   4.66   4.19   0.84   16.96   9.39   0.80   16.19   NA   NA   0.86   10.65   175.46   8.18   195.21   11.16   0.40   2.45   26.14

NIFS

  

Ningham Inst. for Sav. of NA*

   8.01   8.01   1.20   14.21   6.67   1.18   14.06   0.09   612.10   0.78   15.00   207.31   16.61   207.31   13.16   0.72   1.71   25.71

HCFC

  

Home City Fin. Corp. of OH

   8.08   7.89   0.43   5.43   5.16   0.42   5.36   NA   NA   0.63   19.38   101.86   8.23   104.36   19.63   0.44   2.87   55.70

HWIN

  

Home Financial Bancorp of IN

   11.83   11.83   0.53   4.76   4.17   0.73   6.55   2.57   25.13   0.80   23.96   110.36   13.06   110.36   17.42   0.12   2.09   50.00

HLPC

  

Home Loan Financial Corp of OH

   14.45   14.45   1.26   8.64   5.74   1.25   8.56   1.48   21.85   0.39   17.42   144.95   20.94   144.95   17.58   0.77   3.95   68.75

HFBC

  

HopFed Bancorp, Inc. of KY

   7.96   7.00   0.74   8.37   6.61   0.67   7.52   0.16   318.37   0.85   15.13   129.33   10.30   147.23   16.83   0.48   2.91   44.04

HRZB

  

Horison Financial Corp. of WA*

   12.26   12.20   1.52   11.82   6.33   1.30   10.10   0.02   NA   1.50   15.79   187.55   22.99   188.45   18.47   0.52   2.66   41.94

HCBK

  

Hudson Cty Bcp KHC of NJ(34.5)*

   6.90   6.90   1.28   16.18   3.31   1.21   15.34   0.14   100.42   0.27   30.21   NM   35.12   NM   31.85   0.72   2.05   62.07

HRBT

  

Hudson River Bancorp Inc of NY(8)*

   10.91   8.23   1.28   11.92   5.83   1.28   11.92   0.70   221.31   2.38   17.15   197.86   21.60   262.32   17.15   0.36   1.94   33.33

ICBC

  

Independence Comm Bnk Cp of NY

   11.93   5.22   1.50   13.67   4.96   1.49   13.60   0.38   152.01   0.93   20.17   155.66   18.57   355.76   20.27   0.96   2.39   48.24

IFSB

  

Independence FSB of DC(8)

   9.92   9.92   -0.12   -1.16   -0.73   -1.22   -12.27   0.74   38.17   0.48   NM   159.63   15.84   159.63   NM   0.00   0.00   NM

JXSB

  

Jckanville Bcp KHC of IL(46.8)

   7.24   6.10   0.26   3.38   2.30   0.18   2.42   1.05   74.67   1.60   NM   154.67   11.20   183.73   NM   0.30   1.97   NM

JFBI

  

Jefferson Bancshares Inc of TN

   30.63   30.63   0.39   1.95   1.15   1.18   5.97   0.54   151.62   1.31   NM   116.25   35.61   116.25   28.46   0.20   1.53   NM

KFED

  

K-Fed Bancorp of CA MHC (39.1)

   9.24   9.24   0.25   2.73   1.19   0.27   2.90   NA   NA   0.49   NM   229.52   21.21   229.52   NM   0.00   0.00   0.00

KNBT

  

KNBT Bancorp, Inc. of PA

   19.34   17.13   -0.48   -2.42   -1.97   0.49   2.49   0.22   195.26   0.97   NM   121.54   23.51   137.26   NM   0.20   1.19   NM

LSBX

  

LSB Corp of No. Andover KA*

   11.96   11.96   1.33   11.08   7.16   1.90   15.80   0.02   NA   1.96   13.96   148.83   17.81   148.83   9.80   0.52   2.64   36.88

LSBI

  

LSB Fin. Corp. of Lafayette IN

   8.44   8.44   0.93   10.85   9.38   0.72   8.45   1.63   48.65   0.88   10.66   111.03   9.37   111.03   13.69   0.60   2.55   27.15

 

RP FINANCIAL, LC.

Financial Services Industry Consultants

1700 North Moore Street, Suite 2210

Arlington, Virginia 22209

(703) 528-1700

 

Exhibit IV-1B (continued)

Weekly Thrift Market Line - Part Two

Prices As Of September 3, 2004

 

         Key Financial Ratios
    Asset Quality Ratios
    Pricing Ratios
    Dividend Data(6)
        

Equity/

Assets

   

Tang.
Equity/

Assets

    Reported Earnings
    Core Earnings
   

NPAs

Assets

   

Resvs/

NPAs

   

Resvs/

Loans

   

Price/

Earning

   

Price/

Book

   

Price/

Assets

   

Price/
Tang.

Book

   

Price/
Core

Earnings

   

Ind.
Div./

Share

   

Dividend

Yield

   

Payout

Ratio(7)

Financial Institution

          ROA(5)
    ROK(5)
    ROI(5)
    ROA(5)
    ROE(5)
                                 
         (%)    (%)    (%)    (%)    (%)    (%)    (%)    (%)    (%)    (%)    (_)    (%)    (%)    (%)    (_)    ($)    (%)    (%)

NASDAQ Listed OTC Companies (continued)

                                                                                          

LARL

  

Laurel Capital Group Inc of PA

    9.14    7.89    0.58    6.61    4.27    0.57    6.47    0.58    115.06    1.17    23.40    154.17    14.09    178.57    23.91    0.80    3.64    NM

LNCB

  

Lincoln Bancorp of IN

    13.86    13.49    0.59    4.29    4.18    0.57    4.13    0.85    77.53    0.89    23.95    101.43    14.06    104.18    24.92    0.52    2.82    67.53

MAFB

  

MAF Bancorp, Inc. of IL

    9.67    6.73    1.19    12.34    6..88    1.08    11.20    0.33    111.46    0.51    14.54    153.06    14.80    219.77    16.02    0.84    1.98    28.77

MFBC

  

MFB Corp. of Nishawaka IN

    8.34    8.34    0.63    7.77    7.07    0.40    5.00    0.78    160.96    1.55    14.14    106.29    8.97    106.29    21.97    0.48    1.68    23.76

MASB

  

MassBank Corp. of Reading MA*

    10.98    10.87    0.76    6.88    4.73    0.65    5.89    0.04    361.56    0.59    21.14    149.20    16.39    150.74    24.71    1.00    2.73    57.80

MTXC

  

Matrix’ Bancorp, Inc. of CO

    4.27    4.27    0.24    5.90    5.35    0.43    10.41    2.55    23.70    0.80    18.70    105.18    4.49    105.18    10.59    0.00    0.00    0.00

MFLR

  

Mayflower Co-Op. Bank of MA*

    8.56    8.51    0.91    10.88    5.19    0.52    6.25    0.04    NA    1.20    19.27    208.16    17.81    209.36    33.54    0.40    2.21    42.55

MCBF

  

Monarch Community Bncrp of MI

    14.39    10.76    0.23    1.35    1.33    -0.08    -0.50    1.98    37.06    0.96    NM    91.94    13.23    122.95    NM    0.20    1.40    NM

MFSF

  

MutualFirst Fin. Inc. of IN

    11.27    11.16    0.91    7.72    6.48    0.80    6.78    0.57    150.16    0.99    15.44    123.39    13.91    124.66    17.56    0.48    2.09    32.21

MYST

  

Myatic Financial, Inc. of MA(8)*

    6.47    6.47    0.37    6.06    2.54    0.19    3.03    NA    NA    0.81    NM    227.20    14.70    227.20    NM    0.46    1.15    45.10

NASB

  

NASB Fin, Inc. of Grandview MO

    9.92    9.68    2.05    19.58    8.20    1.32    12.59    1.44    41.56    0.73    12.19    229.32    22.76    234.98    18.96    0.80    2.21    26.94

NMTB

  

NM Thrift Bancshares of NM

    6.77    4.77    1.11    15.26    9.86    0.80    11.03    0.06    NA    0.99    10.15    140.46    10.06    210.94    14.03    0.90    3.07    31.14

NTBK

  

NetBank, Inc. of Alpharetta GA

    8. 31    6.97    0.66    7.92    6.70    -1.07    -12.91    2.26    39.31    1.11    14.92    118.11    9.82    140.88    NA    0.08    0.73    10.96

NABC

  

New Alliance Bancshares of CT

    21.95    14.20    -0.32    -1.89    -1.09    0.54    3.14    0.22    264.67    1.15    NM    111.96    24.50    173.08    NM    0.16    1.16    NM

NMIL

  

Newmill Bancorp, Inc. of CT*

    7.28    6.10    1.13    15.11    6.60    1.10    14.63    0.21    342.96    1.08    15.15    226.58    16.49    270.19    15.65    0.60    2.37    35.98

FFFD

  

North Central Bancshares of IA

    9.15    8.05    1.27    13.54    9.29    1.27    13.54    0.38    186.66    0.81    10.76    144.07    13.19    163.82    10.76    1.00    2.63    28.33

NEIB

  

Northeast Indiana Bncrp of IN

    11.78    11.78    0.74    6.15    5.31    0.68    5.66    1.08    60.79    0.89    18.83    117.76    13.88    117.76    20.46    0.56    2.63    49.56

NEPF

  

Northeast PA Fin. Corp of PA

    6.52    5.32    -0.03    -0.48    -0.41    -0.07    -1.04    0.90    109.07    2.04    NA    124.69    8.14    153.03    NA    0.24    1.40    NM

NWSB

  

Northwest Bcrp MHC of PA (41.4)

    8.65    6.19    0.88    10.81    4.79    0.81    9.99    0.62    82.68    0.78    20.87    210.27    18.18    293.70    22.59    0.48    2.19    45.71

OCFC

  

OceanFirst Fin. Corp of NJ

    7.29    7.22    1.02    13.43    6.01    0.62    8.14    0.19    307.18    0.73    16.65    222.97    16.26    225.40    27.48    0.80    3.51    58.39

ONFC

  

Onside Finc1 MHC of NY(42.4)

    11.33    8.24    0.70    5.98    3.33    0.59    5.08    0.17    316.97    1.09    30.00    184.05    20.86    253.16    NM    0.38    3.17    NM

PBNC

  

PFS Bancorp Inc. of Aurora IN

    21.76    21.76    0.70    3.13    2.60    0.70    3.13    NA    NA    0.72    NM    118.95    25.88    118.95    NM    0.30    1.37    52.63

PNSB

  

PNSB Financial Corp. of PA(8)

    14.06    14.06    0.89    6.33    3.82    0.43    3.04    0.09    526.49    1.19    26.15    170.42    23.97    170.42    NM    0.80    3.00    NM

PVFC

  

PVF Capital Corp. of Solon OH

    8.39    8.39    1.06    12.51    7.23    0.44    5.26    1.47    38.75    0.69    13.83    167.04    14.02    167.04    32.89    0.27    1.82    25.23

PPBX

  

Pacific Premier Bncrp of CA(8)

    9.77    9.77    1.77    19.96    9.86    2.07    23.26    0.67    77.53    0.62    10.14    140.23    13.70    140.23    8.70    0.00    0.00    0.00

PBCI

  

Pamrapo Bancorp, Inc. of NJ

    8.25    8.25    1.24    15.55    6.99    1.24    15.55    0.23    165.90    0.64    14.31    214.33    17.69    21_.33    14.31    0.84    3.67    52.50

PFKD

  

Park Bancorp of Chicago IL

    11.03    11.03    0.97    8.73    7.18    0.80    7.92    0.37    58.82    0.35    13.92    121.12    13.36    121.12    15.34    0.72    2.28    31.72

PVSA

  

Parkvale Financial Corp of PA

    6.49    5.80    0.62    9.78    6.95    0.58    9.12    0.49    173.63    1.34    14.39    137.26    8.91    153.64    15.42    0.80    3.11    44.69

PRTR

  

Partners Trust Fin. Crp. of NY

    13.98    6.72    0.76    5.45    6.03    0.74    5.27    0.24    233.62    0.91    16._8    90.45    12.65    188.09    17.16    0.24    2.41    40.00

PBHC

  

Pathfinder BC MHC of NY (35.3)*

    7.03    5.50    0.51    6.92    3.79    0.35    4.76    1.21    55.29    0.98    26.36    186.76    13.12    238.58    NM    0.40    2.49    65.57

PFSB

  

PennFed Fin. Services of NJ

    6..22    6.15    0.66    10.18    5.85    0.65    9.90    0.11    286.39    0.48    17.09    174.43    10.85    176.45    17.58    0.40    1.31    22.47

PFDC

  

Peoples Bancorp of Auburn IN

    12.86    12.28    0.98    7.66    6.44    0.93    7.29    0.59    70.25    0.56    15.53    119.66    15.38    125.25    16.32    0.72    3.20    49.66

PBCT

  

Peoples Bank MHC of CT (41.7)*

    10._5    9.80    1.56    16.71    5.49    0.54    5.78    0.33    207.39    0.99    18.23    277.71    30.12    307.35    NM    1.16    3.38    61.70

PCBX

  

Peoples Community Bcrp. of OH

    8.77    8.14    0.33    4.60    3.10    0.32    4.41    NA    NA    1.72    32.22    122.76    10.76    132.13    33.60    0.60    2.55    NM

PSPC

  

Peoples Sidney Fin. Corp of OH

    12.76    12.76    0.69    5.53    4.24    0.69    5.53    1.43    37.19    0.62    23.58    129.72    16.55    129.72    23.58    0.56    3.54    NM

PFSL

  

Pocahontas Bancorp, Inc. of AR

    6.97    4.81    0.76    10.65    7.13    0.74    10.65    1.00    55.63    1.01    14.02    158.60    11.05    229.87    14.02    0.32    1.86    26.02

PBCP

  

Provident Bancorp, Inc. of NY

    19.21    15.19    0.67    4.55    2.14    0.81    5.50    0.31    316.43    1.75    NM    129.75    24.93    164.13    NM    0.16    1.43    66.67

PROV

  

Peoples Fin. Holdings of CA

    8.34    8.33    1.25    15.28    9.47    0.42    5.09    0.08    692.18    0.7_    10.56    161.32    13.45    161.52    31.67    0.40    1.60    16.88

PULS

  

Pulaski Fin Cp of St. Louis MO

    6.81    6.71    1.19    15.12    5.72    0.36    4.55    0.65    135.54    0.97    17.50    255.60    17.41    259.28    NA    0.36    2.00    34.95

RPFG

  

Ranier Pacific Fin Group of WA

    14.34    14.31    -0.27    -2.12    -1.33    -0.34    -2.74    0.07    NA    1.81    NM    139.32    19.98    139.64    NM    0.22    1.22    NM

RIVR

  

River Valley Bancorp of IN

    8.55    8.54    1.01    11.33    7.23    0.77    8.61    NA    NA    1.07    13.83    158.10    13.52    158.33    18.21    0.72    3.30    45.57

RVSB

  

Riverview Bancorp, Inc. of WA

    12._5    10.93    1.43    11.53    7.33    1.44    11.60    0.34    259.48    1.16    13.64    148.88    19.14    175.09    13.55    0.62    3.01    41.06

ROME

  

Rome Bncp Inc MNC of NY (38.5)*

    13.40    13.40    0.58    4.22    1.25    0.73    5.28    0.52    131.83    0.82    NM    341.67    45.79    341.67    NM    0.60    2.09    NM

SVBI

  

Severn Bancorp, Inc. of MD

    8.76    8.71    2.14    24.41    7.87    2.05    23.31    0.26    327.27    0.87    12.70    279.74    24.51    281.46    13.31    0.40    1.09    13.89

SFFS

  

Sound Fad Bancorp, Inc. of NY

    13._7    12.14    0.73    4.76    3.64    0.73    4.76    0.19    ___.__    0.55    27.45    140.56    19.21    158.19    27.45    _.__    1.71    47.06

SSFC

  

South Street Fin. Corp. of MC*

    12.02    12.02    0.41    3.50    _.__    0.41    3.50    NA    NA    0.39    NM    123.52    14.84    123.52    NM    0.40    3.91    NM

SHBC

  

Southern Missouri Bncrp of MO

    8.32    7.40    0.97    11.14    8.42    0.98    11.23    0.11    ___.__    0.79    11.88    132.03    10.98    148.39    11.79    0.36    2.37    28.13

STSA

  

Sterling Financial Corp of MA

    6.52    4.14    0.87    13.56    5.61    _.__    13.20    0.27    268.20    1.19    17.82    187.53    12.23    295.38    18.30    0.00    0.00    0.00

STBI

  

Sturgis Bancorp, Inc. of MI

    9.97    8.20    0.77    7.79    5.86    _.__    4.75    2.01    39.28    1.07    17.07    130.35    13.00    158.55    28.00    0.36    _.__    43.90

SYNF

  

Synergy Financial Group of NJ

    13.06    12.96    0.52    3.68    2.98    0.52    3.68    NA    NA    0.77    33.52    123.84    16.17    124.73    33.52    0.16    1.54    51.61

THRD

  

TF Fin. Corp. of Newtown PA

    9.17    8.43    -0.60    -6.56    -4.77    -0.56    -6.11    0.46    76.24    0.52    NM    138.36    12.69    150.49    NM    0.68    2.48    NM

TONE

  

Tierone Corp. of Lincoln ME

    11.69    11.69    1.06    7.58    6.11    0.97    6.94    0.25    366.68    1.00    16.38    146.53    17.13    146.53    17.91    0.20    0.95    15.50

TSBK

  

Timberland Bancorp, Inc. of WA

    16.40    16.40    1.27    7.53    6.36    1.22    7.22    0.59    152.07    1.16    15.71    124.40    20.40    124.40    16.39    0.60    2.62    41.10

TRST

  

TrustCo Bank Corp NY of NY

    7.53    7.53    1.97    24.03    5.74    1.68    20.45    0.10    NA    4.14    17.43    NM    33.59    NM    20.48    0.60    4.65    NM

UCBC

  

Union Community Bancorp of IN

    12.17    11.91    0.75    5.66    5.57    0.75    5.66    NA    NA    0.52    17.96    105.28    13.65    114.61    17.96    0.60    3.34    60.00

UCFC

  

United Community Pin. of OH

    11.19    9.49    1.04    8.14    6.04    0.83    6.49    0.66    113.54    0.91    16.57    145.79    16.31    ___.__    20.78    0.30    2.62    43.48

UPFCE

  

united PanAa Fin. Corp of CA

    6.62    6.62    1.00    15.11    5.71    0.97    14.64    NA    NA    4.52    17.53    ___.__    16.32    246.38    18.09    0.00    0.00    0.00

UTBI

  

United Tenn. Bankshares of TN

    13.84    13.22    1.73    12.14    9.50    1.68    11.79    0.50    153.57    1.22    10.53    125.97    17.43    131.81    10.85    0.36    2.01    21.10

WSFS

  

WSFS Financial Corp. of D_(_)*

    7.40    7.36    1.11    12._2    6.89    1.06    12.20    0.24    409.68    1.62    14.51    198.74    14.72    200.00    15.25    0.24    0.48    6.92

WVFC

  

MVS Financial Corp. of PA

    7.38    7.38    0.62    8. 02    5.4_    0.62    _.02    NA    NA    1.72    18.25    149.62    11.04    149.62    18.25    0.64    3.62    65.98

WSBI

  

Warwick Community Bncrp of NY(_)*

    9.47    9.15    0.13    1.34    0.6_    0.10    1.04    0.16    309.64    1.24    NM    214.76    20.33    222.26    NM    0.60    1._5    NM

WFSI.

  

Washington Federal. Inc. of WA

    15.05    14.25    1.82    12.6_    6.67    1.82    12.68    0.22    158.54    0.51    14.98    184.33    27.75    194.71    14.98    0.84    3.26    __.__

WAYN

  

Wayne Savings Bancshares of OH

    10.88    10.50    0.65    5.59    _.__    0.62    5.34    NA    NA    NA    24.54    143.05    15.56    148.23    25.73    0.48    3.01    73.85

WYPT

  

Waypoint Financial Corp of PA(_)

    7.21    4.19    0.63    8.30    3.65    0.48    6.35    0.36    ___.__    1.17    27.42    235.83    17.16    249.07    NM    0.56    2.00    54.90

WCFB

  

Wbetr Cty Fad MNC of IA (39.0)

    21.56    21.45    1.07    5.00    2.22    1.07    5.00    NA    NA    0.51    NM    225.38    48.60    226.51    NM    0.68    5.04    NM

WBFC

  

Wells Fin. Corp. of Wells MN

    12.68    12.6_    1.20    9.72    8.55    0.59    4.7_    0.10    398.15    0.46    11.70    111.27    14.11    111.27    23.82    0.68    3.24    37.93

WGBC

  

Willow Grove Bancorp Inc of PA

    11.26    11.15    0.72    5.58    3.65    0.60    4.68    NA    NA    0.98    27.42    161.90    18.23    163.46    32.69    0.44    2.59    70.97

 

Exhibit IV-2

Historical Stock Price lndices(1)

 

Year/Qtr. Ended

    DJIA
    S&P
500
    NASDAQ
Composite
   

SNL

Thrift

Index

   

SNL

Bank

Index

1995:    Quarter 1    4157.7    500.7    817.2    278.4    152.1
     Quarter 2    4556.1    544.8    933.5    313.5    171.7
     Quarter 3    4789.1    584.4    1,043.5    362.3    195.3
     Quarter 4    5117.1    615.9    1,052.1    376.5    207.6
1996:    Quarter 1    5587.1    645.5    1,101.4    382.1    225.1
     Quarter 2    5654.6    670.6    1,185.0    387.2    224.7
     Quarter 3    5882.2    687.3    1,226.9    429.3    249.2
     Quarter 4    6442.5    737.0    1,280.7    483.6    280.1
1997:    Quarter 1    6583.5    757.1    1,221.7    527.7    292.5
     Quarter 2    7672.8    885.1    1,442.1    624.5    333.3
     Quarter 3    7945.3    947.3    1,685.7    737.5    381.7
     Quarter 4    7908.3    970.4    1,570.4    814.1    414.9
1998:    Quarter 1    8799.8    1101.8    1,835.7    869.3    456.1
     Quarter 2    8952.0    1133.8    1,894.7    833.5    457.7
     Quarter 3    7842.6    1017.0    1,693.8    651.3    363.5
     Quarter 4    9181.4    1229.2    2,192.7    705.9    439.6
1999:    Quarter 1    9786.2    1286.4    2,461.4    707.6    448.4
     Quarter 2    10970.8    1372.7    2,686.1    695.6    479.3
     Quarter 3    10337.0    1282.7    2,746.2    609.1    409.9
     Quarter 4    11497.1    1469.3    4,069.3    562.4    416.7
2000:    Quarter 1    10921.9    1498.6    4,572.8    545.6    421.2
     Quarter 2    10447.9    1454.6    3,966.1    567.8    387.4
     Quarter 3    10650.9    1436.5    3,672.8    718.3    464.6
     Quarter 4    10786.9    1320.3    2,470.5    874.3    479.4
2001:    Quarter 1    9878.8    1160.3    1,840.3    885.2    459.2
     Quarter 2    10502.4    1224.4    2,160.5    964.5    493.7
     Quarter 3    8847.6    1040.9    1,498.8    953.9    436.6
     Quarter 4    10021.5    1148.1    1,950.4    918.2    473.7
2002:    Quarter 1    10403.9    1147.4    1,845.4    1006.7    498.3
     Quarter 2    9243.3    989.8    1,463.2    1121.4    468.9
     Quarter 3    7591.9    815.3    1,172.1    984.3    396.8
     Quarter 4    8341.6    879.8    1,335.5    1073.2    419.1
2003:    Quarter 1    7992.1    848.2    1,341.2    1096.2    401.0
     Quarter 2    8985.4    974.5    1,622.8    1266.6    476.1
     Quarter 3    9275.1    996.0    1,786.9    1330.9    490.9
     Quarter 4    10453.9    1112.0    2,003.4    1482.3    548.6
2004:    Quarter 1    10357.7    1126.2    1,994.2    1585.3    562.2
     Quarter 2    10435.5    1140.8    2,047.8    1437.8    546.6

As of September 3, 2004

    10260.2    1113.6    1,844.5    1493.5    563.3

 

(1) End of period data.

 

Sources:  SNL Securities and Wall Street Journal.

 

EXHIBIT IV-3

Historical Thrift Stock Indices

 

<lndex Values>

 

     Index Values
    Price Appreciation (%)
     07/30/04
    06/30/04
    12/31/03
    07/31/03
    1 Month
    YTD
    LTM

All Pub. Traded Thrifts

    1,441.2    1,437.8    1,482.3    1,292.7    0.24    -2.77    11.48

MHC Index

    2,573.5    2,529.0    2,663.5    2,067.4    1.76    -3.38    24.48

Stock Exchange Indexes

                                   

AMEX Thrifts

    563.9    549.8    547.2    448.2    2.57    3.06    25.82

NYSE Thrifts

    897.6    899.1    927.9    826.7    -0.16    -3.27    8.58

OTC Thrifts

    1,795.8    1,780.5    1,832.1    1,539.3    0.86    -1.98    16.67

Geographic Indexes

                                   

Mid-Atlantic Thrifts

    3,421.9    3,438.5    3,767.0    3,078.1    -0.48    -9.16    11.17

Midwestern Thrifts

    3,144.4    3,154.5    3,266.1    2,922.0    -0.32    -3.73    7.61

New England Thrifts

    1,430.4    1,420.5    1,304.3    1,110.0    0.69    9.67    28.86

Southeastern Thrifts

    1,387.1    1,393.0    1,469.6    1,223.9    -0.42    -5.61    13.34

Southwestern Thrifts

    1,123.7    1,126.8    1,191.3    963.5    -0.28    -5.68    16.62

Western Thrifts

    1,323.2    1,311.8    1,311.9    1,198.7    0.87    0.86    10.38

Asset Size Indexes

                                   

Less than $250M

    1,337.6    1,339.8    1,372.1    1,205.3    -0.16    -2.51    10.98

$250M to $500M

    3,234.8    3,234.5    3,331.7    2,963.6    0.01    -2.91    9.15

$500M to $1B

    1,710.5    1,689.9    1,763.0    1,524.4    1.21    -2.98    12.21

$lB to $5B

    2,187.1    2,183.1    2,239.1    1,945.5    0.19    -2.32    12.42

0ver $5B

    854.2    852.1    879.0    767.1    0.25    -2.82    11.36

Pink Indexes

                                   

Pink Thrifts

    383.9    387.2    390.2    333.4    -0.87    -1.63    15.14

Less than $75M

    470.4    468.6    409.0    353.4    0.37    15.01    33.10

Over $75M

    397.5    401.3    400.5    341.9    -0.93    -0.73    16.26

Comparative Indexes

                                   

Dow Jones Industrials

    10,139.7    10,435.48    10,543.92    9,233.8    -2.83    -3.01    9.81

S&P 500

    1,101.7    1,140.8    1,111.9    990.3    -3.43    -0.92    11.25

 

All SNL indexes are market-value weighted, i.e., an institution’s effect on an index is proportionate to that institution’s market capitalization. All SNL thrift indexes, except for the SNL MHC Index, began at 100 on March 30, 1984. The SNL MHC Index began at 201.082 on Dec. 31,1992, the level of the SNL Thrift Index on that date. On March 30, 1984, the S&P 500 closed at 159.2 and the Dow Jones Industrials stood at 1,164.9.

 

Mid-Atlantic: DE, DC, MD, NJ, NY, PA, PR; Midwest: IA, IL, IN, KS, KY, MI, MN, MO, ND, NE, OH, SD, WI;

New England: CT, MA, ME, NH, RI, VT; Southeast: AL, AR, FL, GA, MS, NC, SC, TN, VA, WV;

Southwest: CO, LA, NM, OK, TX, UT; West: AZ, AK, CA, HI, ID, MT, NV, OR, WA, WY

 

46    SNL Financial    AUGUST 2004

 

Exhibit IV-4

Illinois Thrift Acquisitions 2001-Present

 

                              Target Financials at Announcement
    Deal Terms and Pricing at Announcement

Announce
Date

   

Complete
Date

   

Buver Short
Name

        

Target
Name

         Total
Assets
    E/A
    ROAA
    ROAE
    NPAs/
Assets
    Rsrvs/
NPLs
    Deal
Value
    Value/
Share
    P/B
    P/TB
    P/E
    P/A
    Prem/
Cdeps
                              ($000)    (%)    (%)    (%)    (%)    (%)    ($M)    ($)    (%)    (%)    (x)    (%)    (%)

06/05/2004

    Pending    MAF Bancorp Inc.    IL    Chesterfield Financial Corp.    IL    360,899    20.72    0.58    2.89    0.10    344.71    128.5    31.50    163.21    164.23    52.50    35.60    26.50

04/08/2004

    Pending    Northbrook Investments    IL    North Bancshares, Inc.    IL    133,746    10.09    0.28    2.71    0.00    NM    23.9    22.75    192.96    192.96    NM    19.74    20.43

01/09/2004

    05/28/2004    MB Financial Inc.    IL    First SecurltyFed Financial, Inc.    IL    490,842    16.55    1.74    10.50    NA    NA    150.2    35.25    156.95    157.09    15.81    30.59    30.28

12/17/2002

    07/21/2003    MAF Bancorp Inc.    IL    Fidelity Bancorp Inc.    IL    698,915    8.01    1.20    15.39    0.23    150.04    101.4    31.00    170.61    170.61    12.45    14.51    12.42

07/22/2002

    01/03/2003    Midwest Bane Holdings Inc.    IL    Big Foot Financial Corporation    IL    219,628    12.96    0.47    3.72    NA    NA    33.6    21.27    112.80    112.80    27.63    15.30    4.74

06/27/2002

    10/17/2002    Bement Bancshares Inc.    IL    CGB&L Financial Group, Inc.    IL    9,626    14.93    0.18    1.15    1.98    NA    2.1    20.50    128.52    128.52    NM    21.82    8.65

06/14/2001

    11/30/2001    Polish National Alliance    IL    PS Financial, Inc.    IL    111,982    14.49    0.86    6.07    0.32    79.55    18.1    14.00    110.24    110.24    15.73    16.16    3.63

02/08/2001

    05/16/2001    MB Financial Inc.    IL    FSL Holdings, Inc.    IL    211,039    13.15    1.00    7.90    0.17    293.70    41.3    165.00    148.87    148.87    19.76    19.57    9.02

01/23/2001

    07/02/2001    Charter One Financial    OH    Alliance Bancorp    IL    1,971,597    7.86    1.01    12.52    0.31    121.32    241.3    24.65    147.05    148.20    13.18    12.24    8.42
                             
  
  
  
  
  
  
  
  
  
  
  
  
                    Average:         467,586    13.20    0.81    6.98    0.44    197.86              147.91    148.17    22.44    20.61    13.79
                    Median:         219,628    13.15    0.86    6.07    0.23    221.87              148.87    148.87    19.76    19.57    9.02

 

Source:  SNL Financial, LC.

 

EXHIBIT IV-5

Royal Savings Bank

Director and Senior Management Summary Resumes

 

Name

    Age(1)
   

Position with Royal Savings Bank

and

Principal Occupation During the

Past Five Years

    Director of
Royal
Savings
Bank
Since
    Year
Term
Expires
Alan W. Bird    64    Chairman of the Board and Senior Vice President – Investments. President of McDevitt & Bird Investments Management Co., Elizabeth, Illinois.    1972     
Donald A. Moll    63    Director, President and Chief Executive Officer.    2004     
John T. Dempsey    66    Director, Investment Portfolio Manager, Barrington Asset Management, Inc., Barrington, Illinois.    1999     
Barbara K. Minster    75    Director, Former President of Royal Savings Bank.    1995     
Peter C. Rolewicz    66    Director, Attorney and Former Chief Executive Officer of Royal Savings Bank.    1992     
Rodolfo Sema    62    Director, Retired High School Principal, Chicago, Illinois.    2000     
(1) Age as of June 30, 2004.

 

Neil Brodzinski (61) has been employed with Royal Saving Bank since May 2003 and serves as Senior Vice President/Chief Executive Officer and Treasurer. From July 2001 to May 2003, Mr. Brodzinski served as Senior Vice President, Cashier and Chief Financial Officer of New Covenant Community Bank in Forest Park, Illinois during its organization as a de novo bank. From 1998 to 1999. Mr. Brodzinski assisted in obtaining regulatory approval for another de novo bank, Village Bank and Trust, in Munster, Indiana and served as Vice President.

 

Andrew Morua (43) has been employed as Senior Vice President of Royal Savings Bank since July 2003 and was appointed Secretary of Royal Savings Bank in August 2004. From 1999 to 2003, Mr. Morua served as Regional Vice President of Advance Bank in Chicago, Illinois.

 

Robert Necastro (58) has been employed by Royal Savings Bank as Senior Vice President since January 2004. Prior to joining Royal Savings Bank, Mr. Necastro served as Vice President of Centier Bank in Whiting, Indiana from June 2003 to January 2004 and as Vice President of Advance Bank in Chicago, Illinois from October 1999 to May 2003.

 

Kelly A. Wilson (32) has been employed by Royal Savings Bank as Vice President – Operations/IT since August 2003. Prior to joining Royal Savings Bank, Ms. Wilson was employed by Advance Bank in Chicago, Illinois. While at Advance Bank, Ms. Wilson served as a Systems Specialist from 1997-1999, as Assistant Branch Administrator from 1999-2000 and as Assistant Vice President/Data Resource Manager from 2000 until August 2003.

 

Source:  Royal Savings’ prospectus.

 

EXHIBIT IV-6

Royal Savings Bank

Pro Forma Regulatory Capital Ratios

 

           Pro Forma at June 30, 2004 Based on
  
    

Historical at

June 30, 2004

     1,700,000 Shares Sold
at $10.00
Per Share (Minimum
of Offering Range)
     2,000,000 Shares Sold
at $10.00
Per Share (Midpoint
of Offering Range)
     2,300,000 Shares Sold
at $10.00
Per Share (Maximum
of Offering Range)
     2,645,000 Shares Sold
at $10.00
Per Share
(15% above Maximum
of Offering Range)
  
     Amount
    Percent of
Assets
     Amount
     Percent of
Assets
     Amount
     Percent of
Assets
     Amount
     Percent of
Assets
     Amount
     Percent of
Assets
  
     (Dollars in Thousands)  

Historical capital

    $ 12,699    13.72 %   $ 18,636     18.72 %   $ 19,501     19.63 %   $ 20,617     20.52 %   $ 21,900     21.52 %
    
  
 
 
 
 
 
 
 
 

Tier I capital (Leverage):

                                                                      

Actual

    $ 12,912    13.85     $ 18,599     18.80     $ 19,714     19.71     $ 20,830     20.59     $ 22,113     21.59  

Requirement

      3,729    4.00       3,957     4.00       4,001     4.00       4,046     4.00       4,097     4.00  
    
  
 
 
 
 
 
 
 
 

Excess

    $ 9,183    9.85 %   $ 14,642     14.80 %   $ 15,713     15.71 %   $ 16,784     16.59 %   $ 18,016     17.59 %
    
  
 
 
 
 
 
 
 
 

Tier I Risk-based capital:

                                                                      

Actual

    $ 12,912    27.57     $ 18,599     38.75     $ 19,714     40.88     $ 20,830     43.00     $ 22,113     45.40  

Requirement

      2,810    6.00       2,880     6.00       2,893     6.00       2,907     6.00       2,922     6.00  
    
  
 
 
 
 
 
 
 
 

Excess

    $ 10,102    21.57 %   $ 15,719     32.75 %   $ 16,821     34.88 %   $ 17,923     37.00 %   $ 19,191     39.40 %
    
  
 
 
 
 
 
 
 
 

Total Risk-based capital:

                                                                      

Actual

    $ 13,148    28.07     $ 18,835     39.24     $ 19,950     41.37     $ 21,066     43.48     $ 22,349     45.89  

Requirement

      4,684    10.00       4,800     10.00       4,822     10.00       4,845     10.00       4,870     10.00  
    
  
 
 
 
 
 
 
 
 

Excess

    $ 8,464    18.06 %   $ 14,035     29.24 %   $ 15,128     31.37 %   $ 16,221     33.48 %   $ 17,479     35.89 %
    
  
 
 
 
 
 
 
 
 

Net Proceeds After Capital Infused (50% of Net Proceeds)

                 $ 7,727           $ 9,202           $ 10,678           $ 12,375        

Less: common stock acquired by the ESOP

                   (1,360 )           (1,600 )           (1,840 )           (2,116 )      

Less: common stock acquired by the recognition plan

                   (680 )           (800 )           (920 )           (1,058 )      
                 
       
       
       
     

Pro Forma Increase

                 $ 5,687           $ 6,802           $ 7,918           $ 9,201        
                 
       
       
       
     

 

Source: Royal Savings’ prospectus.

 

EXHIBIT IV-7

PRO FORMA ANALYSIS SHEET

Royal Savings Bank

Prices as of September 3, 2004

 

         

Subject at

Midpoint (1)

     Peer Group
     Illinois Companies
     All Public Thrifts
  

Final Valuation Pricing ___________

   

Symbol

      Mean
     Median
     Mean
     Median
     Mean
     Median
  

Price-earnings multiple =

    P/E    215.97 x   18.94 x   18.83 x   16.59 x   15.33 x   17.60 x   16.31 x

Price-core earnings multiple =

    P/CE    NM x   19.90 x   18.49 x   19.35 x   16.31 x   19.55 x   17.70 x

Price-book ratio =

    P/B    69.43 %   120.21 %   116.73 %   126.94 %   121.36 %   159.51 %   148.88 %

Price-tangible book ratio =

    P/TB    69.43 %   121.81 %   117.79 %   138.36 %   121.36 %   173.56 %   162.87 %

Price-assets ratio =

    P/A    18.41 %   15.35 %   13.47 %   12.34 %   12.48 %   17.02 %   14.72 %

 

Valuation Parameters

 

Pre-Conversion Earnings (Y)

    $ 84,423  (Yr End 6/04)   ESOP Stock Purchases (E)      8.00 %(4)

Pre-Conversion Core Earning

      ($65,011 ) (Yr End 6/04)   Cost of ESOP Borrowings (S)      0.00 %

Pre-Conversion Book Value __

    $ 12,698,813     ESOP Amortization (T)      10.00 years  

Pre-Conv. Tang. Book Value __

    $ 12,698,813     Stock Programs Amount (M)      4.00 %

Pre-Conversion Assets (A)

    $ 92,538,807     Stock Programs Vesting (N)      5.00 years (4)

Reinvestment Rate:

      2.090 %   Fixed Expenses    $ 800,000  

Tax rate (TAX)

      34.00 %   Variable Expenses      1.75 %

A-T Reinvestment Rate(R)

      1.38 %   Percent Sold      100.00 %

Est. Conversion Expenses (2)

      5.48 %   Foundation Cash Contribution    $ 100,000  

Insider Purchases

    $ 1,000,000     Foundation Stock Contrib. (D)    $ 500,000  

Price/Share

    $ 10.00     MHC Assets    $ 0  
             Foundation Tax Benefit (Z)    $ 204,000  

 

Calculation of Pro Forma Value After Conversion

 

    1.  

V=

  

P/E * (Y)

    V=    $ 20,000,000     
            1 - P/E * PCT * ((1-X-E-M-C-D)* R- (1-TAX)*E/T - (1-TAX)*M/N)                 
    2.  

V=

  

P/B * B

        V=    $ 20,000,000     
            1 - P/B*PCT*(1-X-E-M)                     
    3.  

V=

  

P/A* (A+Z)

        V=    $ 20,000,000     
            1 - P/A*PCT*(1-X-E-M-C-D)                     

 

Conclusion

    Shares Issued
to MHC
    Shares Sold
to public
    Foundation
Shares
    Total Shares
Issued
    Price Per
Share
    Aggregate
Mark. Val of
Stock Issued
    Full Value of
Total Shares

Supermaximum

    0    2,595.000    50,000    2,645,000    $ 10.00    $ 26,450,000    $ 26,450,000

Maximum

    0    2,250,000    50,000    2,300,000      10.00      23,000,000    $ 23,000,000

Midpoint

    0    1,950,000    50,000    2,000,000      10.00      20,000,000    $ 20,000,000

Minimum

    0    1,650,000    50,000    1,700,000      10.00      17,000,000    $ 17,000,000
(1) Pricing ratios shown reflect the midpoint value.

 

(2) Estimated offering expenses at midpoint of the offering.

 

Exhibit IV-8

PRO FORMA EFFECT OF CONVERSION PROCEEDS

Royal Savings Bank

At the Minimum of the Range

 

1.   

Conversion Proceeds

         
    

Offering Proceeds

    $ 17,000,000  
    

Less: Estimated Offering Expenses

      1,047,450  
         
    

Net Conversion Proceeds

    $ 15,952,550  
2.   

Estimated Additional Income from Conversion Proceeds

         
    

Net Conversion Proceeds

    $ 15,952,550  
    

Less: Cash/Stock Contribution to Foundation

      (600,000 )
    

Less: Cash Contribution to MHC

      0  
    

Less: Non-Cash Stock Purchases (1)

      (2,040,000 )
         
    

Net Proceeds Reinvested

    $ 13,312,550  
    

Estimated net incremental rate of return

      1.38 %
         
    

Earnings Increase

    $ 183,633  
    

Less: Estimated cost of ESOP borrowings

      0  
    

Less: Amortization of ESOP borrowings(2)

      89,760  
    

Less: Stock Programs Vesting(3)

      89,760  
         
    

Net Earnings Increase

    $ 4,113  

 

               Before
Conversion
    

Net
Earnings

Increase

    After
Conversion
  

3.

   

Pro Forma Earnings

                               
    

12 Months ended June 30, 2004 (reported)

    $ 84,423     $ 4,113    $ 88,536  
    

12 Months ended June 30, 2004 (core)

      ($65,011 )   $ 4,113      ($60,898 )
          Before
Conversion
    Net Cash
Proceeds
     Tax Benefit
of Foundation
   

After

Conversion

  

4.

   

Pro Forma Net Worth

                               
    

June 30, 2004

    $ 12,698,813    $ 13,312,550     $ 204,000    $ 26,215,363  
    

June 30, 2004 (Tangible)

    $ 12,698,813    $ 13,312,550     $ 204,000    $ 26,215,363  
                                     
          Before
Conversion
    Net Cash
Proceeds
     Tax Benefit
of Foundation
    After
Conversion
  

5.

   

Pro Forma Assets

                               
    

June 30, 2004

    $ 92,538,807    $ 13,312,550     $ 204,000    $ 106,055,357  

 

(1) Includes ESOP purchases equal to 8% of the offering, and stock program purchases equal to 4% of the offering.

 

(2) ESOP stock amortized over 10 years, amortization expense is tax effected at: 34.00%

 

(3) Stock programs amortized over 5 years, amortization expense is tax effected at: 34.00%

 

Exhibit IV-8

PRO FORMA EFFECT OF CONVERSION PROCEEDS

Royal Savings Bank

At the Midpoint of the Range

 

1.   

Conversion Proceeds

         
    

Offering Proceeds

    $ 20,000,000  
    

Less: Estimated Offering Expenses

      1,095,750  
         
    

Net Conversion Proceeds

    $ 1,8,904,250  
2.   

Estimated Additional Income from Conversion Proceeds

         
    

Net Conversion Proceeds

    $ 18,904,250  
    

Less: Cash/Stock Contribution to Foundation

      (600,000 )
    

Less: Cash Contribution to MHC

      0  
    

Less: Non-Cash Stock Purchases(1)

      (2,400,000 )
         
    

Net Proceeds Reinvested

    $ 15,904,250  
    

Estimated net incremental rate of return

      1.38 %
         
    

Earnings Increase

    $ 219,383  
    

Less: Estimated cost of ESOP borrowings

      0  
    

Less: Amortization of ESOP borrowings(2)

      105,600  
    

Less: Stock Programs Vesting(3)

      105,600  
         
    

Net Earnings Increase

    $ 8,183  

 

              Before
Conversion
     Net
Earnings
Increase
    After
Conversion
  
3.  

Pro Forma Earnings

                        
   

12 Months ended June 30, 2004 (reported)

    $ 84,423     $ 8,183    $ 92,606  
   

12 Months ended June 30, 2004 (core)

      ($65,011 )   $ 8,183      ($56,828 )
         Before
Conversion
    Net Cash
Proceeds
     Tax Benefit
of Foundation
    After
Conversion
  
4.  

Pro Forma Net Worth

                               
   

June 30, 2004

    $ 12,698,813    $ 15,904,250     $ 204,000    $ 28,807,063  
   

June 30, 2004 (Tangible)

    $ 12,698,813    $ 15,904,250     $ 204,000    $ 28,807,063  
         Before
Conversion
    Net Cash
Proceeds
     Tax Benefit
of Foundation
    After
Conversion
  

5.

  

Pro Forma Assets

                               
   

June 30, 2004

    $ 92,538,807    $ 15,904,250     $ 204,000    $ 108,647,057  

 

(1) Includes ESOP purchases equal to 8% of the offering, and stock program purchases equal to 4% of the offering.

 

(2) ESOP stock amortized over 10 years, amortization expense is tax effected at: 34.00%

 

(3) Stock programs amortized over 5 years, amortization expense is tax effected at: 34.00%

 

Exhibit IV-8

PRO FORMA EFFECT OF CONVERSION PROCEEDS

Royal Savings Bank

At the Maximum of the Range

 

1.

   

Conversion Proceeds

         
    

Offering Proceeds

    $ 23,000,000  
    

Less: Estimated Offering Expenses

      1,144,050  
         
    

Net Conversion Proceeds

    $ 21,855,950  

2.

   

Estimated Additional Income from Conversion Proceeds

         
    

Net Conversion Proceeds

    $ 21,855,950  
    

Less: Cash/Stock Contribution to Foundation

      (600,000 )
    

Less: Cash Contribution to MHC

      0  
    

Less: Non-Cash Stock Purchases(1)

      (2,760,000 )
         
    

Net Proceeds Reinvested

    $ 18,495,950  
    

Estimated net incremental rate of return

      1.38 %
         
    

Earnings Increase

    $ 255,133  
    

Less: Estimated cost of ESOP borrowings

      0  
    

Less: Amortization of ESOP borrowings(2)

      121,440  
    

Less: Stock Programs Vesting(3)

      121,440  
         
    

Net Earnings Increase

    $ 12,253  

 

             

Before

Conversion

     Net
Earnings
Increase
    After
Conversion
  
3.  

Pro Forma Earnings

                               
   

12 Months ended June 30, 2004 (reported)

    $ 84,423     $ 12,253    $ 96,676  
   

12 Months ended June 30, 2004 (core)

      ($65,011 )   $ 12,253      ($52,758 )
         Before
Conversion
    Net Cash
Proceeds
     Tax Benefit
of Foundation
    After
Conversion
  
4.  

Pro Forma Net Worth

                               
   

June 30, 2004

    $ 12,698,813    $ 18,495,950     $ 204,000    $ 31,398,763  
   

June 30, 2004 (Tangible)

    $ 12,698,813    $ 18,495,950     $ 204,000    $ 31,398,763  
         Before
Conversion
    Net Cash
Proceeds
     Tax Benefit
of Foundation
    After
Conversion
  

5.

  

Pro Forma Assets

                               
   

June 30, 2004

    $ 92,538,807    $ 18,495,950     $ 204,000    $ 111,238,757  

 

(1) Includes ESOP purchases equal to 8% of the offering, and stock program purchases equal to 4% of the offering.

 

(2) ESOP stock amortized over 10 years, amortization expense is tax effected at: 34.00%

 

(3) Stock programs amortized over 5 years, amortization expense is tax effected at: 34.00%

 

Exhibit IV-8

PRO FORMA EFFECT OF CONVERSION PROCEEDS

Royal Savings Bank

At the Supermaximum Value

 

1.   

Conversion Proceeds

         
     Offering Proceeds    $ 26,450,000  
     Less: Estimated Offering Expenses      1,199,595  
         
    

Net Conversion Proceeds

    $ 25,250,405  
2.   

Estimated Additional Income from Conversion Proceeds

         
    

Net Conversion Proceeds

    $ 25,250,405  
    

Less: Cash/Stock Contribution to Foundation

      (600,000 )
    

Less: Cash Contribution to MHC

      0  
    

Less: Non-Cash Stock Purchases (1)

      (3,174,000 )
         
    

Net Proceeds Reinvested

    $ 21,476,405  
    

Estimated net incremental rate of return

      1.38 %
         
    

Earnings Increase

    $ 296,246  
    

Less: Estimated cost of ESOP borrowings

      0  
    

Less: Amortization of ESOP borrowings(2)

      139,656  
    

Less: Stock Programs Vesting (3)

      139,656  
         
    

Net Earnings Increase

    $ 16,934  

 

               Before
Conversion
     Net
Earnings
Increase
    After
Conversion
  
3.   

Pro Forma Earnings

                               
    

12 Months ended June 30, 2004 (reported)

    $ 84,423     $ 16,934    $ 101,357  
    

12 Months ended June 30, 2004 (core)

      ($65,011 )   $ 16,934      ($48,078 )
          Before
Conversion
    Net Cash
Proceeds
     Tax Benefit
of Foundation
    After
Conversion
  
4.   

Pro Forma Net Worth

                               
    

June 30, 2004

    $ 12,698,813    $ 21,476,405     $ 204,000    $ 34,379,218  
    

June 30, 2004 (Tangible)

    $ 12,698,813    $ 21,476,405     $ 204,000    $ 34,379,218  
          Before
Conversion
    Net Cash
Proceeds
     Tax Benefit
of Foundation
    After
Conversion
  
5.   

Pro Forma Assets

                               
     June 30, 2004    $ 92,538,807    $ 21,476,405     $ 204,000    $ 114,219,212  

 

(1) Includes ESOP purchases equal to 8% of the offering, and stock program purchases equal to 4% of the offering.

 

(2) ESOP stock amortized over 10 years, amortization expense is tax effected at: 34.00%

 

(3) Stock programs amortized over 5 years, amortization expense is tax effected at: 34.00%

 

EXHIBIT IV-9

Peer Group Core Earnings Analysis

 

RP FINANCIAL, LC.

Financial Services Industry Consultants

1700 North Moore Street, Suite 2210

Arlington, Virginia 22209

(703) 528-1700

 

Core Earnings Analysis

Comparable Institution Analysis

For the Twelve Months Ended June 30, 2004

 

         Net Income
to
Common
    Less: Net
Gains (Loss)
    Tax Effect
@ 34%
    Less: Extd
Items
    Estimated
Core Income
to Common
    Shares
    Estimated
core EPS
         ($000)    ($000)    ($000)    ($000)    ($000)    ($000)    ($)

Comparable Group

                                   

AMFC

  

AMB Fin. Corp. of Munster IN

    1,013    92    -31    0    1,074    975    1.10

CIBI

  

Community Inv. Bncp. Inc of ON(1)

    878    -123    42    0    797    1,097    0.73

FFNC

  

FFN Corporation of Wabash IN(1)

    2,462    -772    262    0    1,952    1,285    1.52

FBTC

  

First BancTrust Corp of IL

    1,528    -641    218    0    1,105    2,500    0.44

FB_I

  

First Bancorp of Indiana of IN(1)

    1,418    -1,093    372    0    697    1,624    0.43

FNFI

  

First Niles Fin., Inc. of ON

    1,040    -247    84    0    877    1,376    0.64

GTPS

  

Great American Bancorp of IL

    1,228    -110    37    0    1,155    735    1.57

HWEN

  

Home Financial Bancorp of IN(1)

    325    177    -60    0    442    1,356    0.33

NEIB

  

Northeast Indiana Bncrp of IN

    1,652    -179    61    0    1,534    1,468    1.04

PBNC

  

PFS Bancorp Inc. of Aurora IN

    847    0    0    0    847    1,474    0.57

 

(1) Financial information is for the quarter ending March 31, 2004.

 

Source:  Audited and unaudited financial statements, corporate reports and offering circulars, and RP Financial, LC. calculations. The information provided in this table has been obtained from sources we believe are reliable, but we cannot guarantee the accuracy or completeness of such information.

 

Copyright (c) 2004 by RP Financial, LC.

 

EXHIBIT V-1

RP Financial, LC.

Firm Qualifications Statement

 

RP® FINANCIAL, LC.    

Financial Services Industry Consultants

   FIRM QUALIFICATION STATEMENT

 

 

RP Financial provides financial and management consulting and valuation services to the financial services industry nationwide, particularly federally-insured financial institutions. RP Financial establishes long-term client relationships through its wide array of services, emphasis on quality and timeliness, hands-on involvement by our principals and senior consulting staff, and careful structuring of strategic plans and transactions. RP Financial’s staff draws from backgrounds in consulting, regulatory agencies and investment banking, thereby providing our clients with considerable resources.

 

STRATEGIC AND CAPITAL PLANNING

 

RP Financial’s strategic and capital planning services are designed to provide effective workable plans with quantifiable results. RP Financial analyzes strategic options to enhance shareholder value or other established objectives. Our planning services involve conducting situation analyses; establishing mission statements, strategic goals and objectives; and identifying strategies for enhancement of franchise value, capital management and planning, earnings improvement and operational issues. Strategy development typically includes the following areas: capital formation and management, asset/liability targets, profitability, return on equity and market value of stock. Our proprietary financial simulation model provides the basis for evaluating the financial impact of alternative strategies and assessing the feasibility/compatibility of such strategies with regulations and/or other guidelines.

 

MERGER AND ACQUISITION SERVICES

 

RP Financial’s merger and acquisition (M&A) services include targeting candidates and potential acquirors, assessing acquisition merit, conducting detailed due diligence, negotiating and structuring transactions, preparing merger business plans and financial simulations, rendering fairness opinions and assisting in implementing post-acquisition strategies. Through our financial simulations, comprehensive in-house data bases, valuation expertise and regulatory knowledge, RP Financial’s M&A consulting focuses on structuring transactions to enhance shareholder returns.

 

VALUATION SERVICES

 

RP Financial’s extensive valuation practice includes valuations for a variety of purposes including mergers and acquisitions, mutual-to-stock conversions, ESOPs, subsidiary companies, mark-to-market transactions, loan and servicing portfolios, non-traded securities, core deposits, FAS 107 (fair market value disclosure), FAS 122 (loan servicing rights) and FAS 123 (stock options). Our principals and staff are highly experienced in performing valuation appraisals which conform with regulatory guidelines and appraisal industry standards. RP Financial is the nation’s leading valuation firm for mutual-to-stock conversions of thrift institutions.

 

OTHER CONSULTING SERVICES AND DATA BASES

 

RP Financial offers a variety of other services including branching strategies, feasibility studies and special research studies, which are complemented by our quantitative and computer skills. RP Financial’s consulting services are aided by its in-house data base resources for commercial banks and savings institutions and proprietary valuation and financial simulation models.

 

RP Financial’s Key Personnel (Years of Relevant Experience)

 

Gregory E. Dunn, Senior Vice President

James P. Hennessey, Senior Vice President

James J. Oren, Senior Vice President

William E. Pommerening, Managing Director

Ronald S. Riggins, Managing Director

 

Washington Headquaters    

Rosslyn Center

1700 North Moore Street, Suite 2210

Arlington, VA 22209

www.rpfinancial.com

  

Telephone: (703) 528-1700

Fax No: (703) 528-1788

Toll-Free No: (866) 723-0594

E-Mail: mail@rpfinancial.com