Industry Observations September 30, Banking Industry

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1 Industry Observations September 30, 2015 Banking Industry

2 Select Banking Public Company Industry Data (USD in millions, except per share data) Price at 09/30/15 Market Data LTM Operating Data Forward Estimates % of 52 Week High Equity Value Total Assets LTM Revenue LTM Earnings CY 2014 Revenue Estimate CY 2014 Earnings Estimate Company Name Ticker Commercial Banks Bank of Hawaii Corporation BOH $ % $2, $15, $ $ $ $ BOK Financial Corporation BOKF $ % $4, $30, $1, $ $1, $ Fifth Third Bancorp FITB $ % $15, $141, $5, $1, $6, $1, First Financial Bankshares Inc. FFIN $ % $2, $6, $ $97.78 $ $ First Republic Bank FRC $ % $8, $55, $1, $ $1, $ Fulton Financial Corporation FULT $ % $2, $17, $ $ $ $ Hancock Holding Company HBHC $ % $2, $21, $ $ $ $ Prosperity Bancshares Inc. PB $ % $3, $21, $ $ $ $ UMB Financial Corporation UMBF $ % $2, $18, $ $ $ $ Zions Bancorporation ZION $ % $5, $58, $2, $ $2, $ Investment Banking and Brokerage Evercore Partners Inc. EVR $ % $1, $1, $1, $67.11 $1, $ Greenhill & Co., Inc. GHL $ % $ $0.00 $ $32.93 $ $46.62 Morgan Stanley MS $ % $61, $0.00 $35, $3, $35, $5, Piper Jaffray Companies PJC $ % $ $2, $ $61.18 $ $66.14 Raymond James Financial, Inc. RJF $ % $7, $0.00 $5, $ $5, $ The Goldman Sachs Group, Inc. GS $ % $78, $0.00 $34, $7, $34, $7, Mortgage Bankers Federal Home Loan Mortgage Corporation FMCC $ % $7, $1,947, $12, $7, $14, $32.21 Federal National Mortgage Association FNMA $ % $12, $3,225, $23, $11, $20, $ Flagstar Bancorp Inc. FBC $ % $1, $12, $ $60.54 $ $89.45 Nationstar Mortgage Holdings Inc. NSM $ % $1, $17, $1, $ $2, $97.61 Ocwen Financial Corp. OCN $ % $ $8, $1, $ $1, $21.28 Walker & Dunlop, Inc. WD $ % $ $1, $ $72.83 $ $73.43 Notes: LTM (latest twelve months); Enterprise Value (market capitalization less total cash and short-term investments plus short-term borrowings and total long-term debt); EBITDA (earnings before interest, taxes, depreciation and amortization) Source: Capital IQ The material contained in this publication is meant to provide general information regarding valuation topics. This publication does not constitute investment advice with respect to the securities of any company discussed herein, is not intended to provide information upon which to base an investment decision, and should not be construed as such. Professional advice should be obtained before taking any action based on the information contained herein. Publicly available information utilized in this publication has been obtained from sources deemed to be reliable. Houlihan does not guarantee the accuracy or completeness of the information provided within this publication. The material presented reflects information known to the authors at the time this publication was written and this information is subject to change. Houlihan Capital 2

3 Select Banking Public Company Valuation Metrics (USD in millions, except per share data) Company Name Commercial Banks Ticker Return On Assets LTM Operating Statistics Return On Equity Revenue Growth Net Income Growth Net Income Margin Multiples Price/ LTM Earnings Bank of Hawaii Corporation BOH 1.1% 15.6% 4.5% 6.2% 28.8% 18.1x BOK Financial Corporation BOKF 1.0% 8.9% 3.9% -2.4% 22.2% 16.6x Fifth Third Bancorp FITB 1.0% 9.2% -0.1% -3.9% 25.2% 12.3x Fortress Investment Group LLC FFIN 4.3% 26.3% 27.9% N/A 14.4% 25.3x First Republic Bank FRC 1.0% 9.9% 9.9% 2.2% 29.2% 21.2x Fulton Financial Corporation FULT 0.8% 7.3% -0.5% -8.1% 22.2% 17.2x Hancock Holding Company HBHC 0.8% 6.3% -3.0% -8.3% 18.8% 13.7x Prosperity Bancshares Inc. PB 1.4% 8.9% 4.5% 4.3% 38.6% 12.1x UMB Financial Corporation UMBF 0.7% 7.3% 0.0% -0.5% 15.1% 20.8x Zions Bancorporation ZION 0.5% 3.9% -5.5% 5.0% 14.1% 18.2x Investment Banking and Brokerage Mean 1.3% 10.4% 4.1% -0.6% 22.9% 17.6x Median 1.0% 8.9% 1.9% -0.5% 22.2% 17.7x Evercore Partners Inc. EVR 7.1% 13.3% 36.5% 2.1% 6.4% 23.5x Greenhill & Co., Inc. GHL 0.0% 0.0% -4.8% -25.1% 12.6% 16.7x Morgan Stanley MS 0.0% 0.0% 2.8% -30.7% 10.2% 12.2x Piper Jaffray Companies PJC 2.9% 7.3% -2.8% -10.6% 9.6% 9.4x Raymond James Financial, Inc. RJF 0.0% 10.5% 7.0% 4.6% 9.7% 14.2x The Goldman Sachs Group, Inc. GS 0.0% 0.0% -3.9% -13.4% 21.9% 9.0x Mean 1.7% 5.2% 5.8% -12.2% 11.7% 14.2x Median 0.0% 3.7% 0.0% -12.0% 10.0% 13.2x Mortgage Bankers Federal Home Loan Mortgage Corporation FMCC 0.4% 140.0% -15.0% -84.3% 56.4% 1.2x Federal National Mortgage Association FNMA 0.4% 191.4% -29.5% -51.4% 50.3% 1.2x Flagstar Bancorp Inc. FBC 0.5% 4.3% 41.6% -51.3% 8.7% 18.5x Nationstar Mortgage Holdings Inc. NSM 1.1% 11.2% 1.8% 28.8% 10.6% 9.8x Ocwen Financial Corp. OCN 2.4% -36.1% -10.7% N/A -28.7% NM Walker & Dunlop, Inc. WD 4.3% 17.5% 41.3% 85.2% 17.2% 9.5x Mean 1.5% 54.7% 4.9% -14.6% 19.1% 8.1x Median 0.8% 14.4% -4.4% -51.3% 13.9% 9.5x Notes: LTM (latest twelve months); NTM (next twelve months); EBITDA (earnings before interest, taxes, depreciation and amortization); TEV (total enterprise value) Source: Capital IQ Houlihan Capital 3

4 Banking Public Company LTM Equity Performance 25.00% 15.00% 5.00% -5.00% % % % % % Commercial Banks Mortgage Bankers S&P 500 Index Investment Banking and Brokerage Dow Jones Industrial Average Note: The indices are derived from the equity performance of the previously listed companies. Source: Capital IQ Houlihan Capital 4

5 Recent M&A Activity in Banking Industry October 1, 2014 to September 30, 2015 Close Date Target Acquirer Target Company Primary Industry Implied Enterprise Value 3/31/2015 Ally Bank Corp., Portfolio of Residential Mortgage Loans DLJ Mortgage Capital, Inc. Thrifts and Mortgage Finance $ /20/2015 Home Loan Servicing Solutions, Ltd., Portfolio of Re-Performing Shellpoint Mortgage Servicing, LLC Thrifts and Mortgage Finance $ /3/2015 Doral Money Inc. and Management of Doral CLO Portfolio Triumph Capital Advisors, LLC Thrifts and Mortgage Finance $ /7/2015 BMO Harris Bank,11 Phoenix Bank Branches Corporate Partners Capital Group Inc. Regional Banks $ /31/2014 U.S. Century Bank, Branch Location at 8700 S.W. 8th Street Flagami Land Corp. Regional Banks $2.75 9/25/2015 Banc of California, N.A., Two Branch Locations Americas United Bank Regional Banks NA 9/25/2015 Independent Banker's Bank of Florida First National Bankers Bank Regional Banks NA 9/23/2015 Castle Mortgage Corporation N/A Thrifts and Mortgage Finance NA 9/21/2015 General Electric Capital Corporation, Portfolio of 46 Performing Deutsche Bank AG Thrifts and Mortgage Finance NA 9/21/2015 General Electric Capital Corporation, Two Performing Loans with Newcastle Investment Corp. Thrifts and Mortgage Finance NA 9/21/2015 Bank of America Corporation, Five Branch Banking Locations in First National Bank of Pennsylvania Regional Banks NA 9/21/2015 Northwest Georgia Bank FirstBank Regional Banks NA 9/17/2015 CU Bank Shares, Inc. Park Cities Financial Group, Inc. Regional Banks NA 9/15/2015 Louisiana Bancorp, Inc. Home Bancorp, Inc. Thrifts and Mortgage Finance NA 9/14/2015 First Banks Inc., 8 Florida Branches Fidelity Bank Diversified Banks NA 9/11/2015 Goldwater Bank, N.A. Weststar Mortgage Corporation Regional Banks NA 9/11/2015 First Scottsdale Bank, National Association Arizona Bank & Trust, Inc. Regional Banks NA 9/11/2015 Fairmount Bancorp, Inc. Hamilton Bancorp, Inc. (Maryland) Thrifts and Mortgage Finance NA 9/4/2015 American Union Savings and Loan Association, S.B. Central Federal Savings and Loan Association of Regional Banks NA 9/4/2015 America California Bank First National Bank of Northern California Regional Banks NA 9/4/2015 State Bank Corp., Yuma Branch Facility 1st Bank Yuma Regional Banks NA 9/4/2015 City National Bank Of New Jersey Corporation, Branch Assets Bethpage Federal Credit Union Regional Banks NA 9/2/2015 Cornerstone Bancshares Inc. (nka:smartfinancial, Inc.) SmartFinancial, Inc. Regional Banks NA 9/1/2015 Magna Bank Pinnacle Bank (Nashville TN) Regional Banks NA 9/1/2015 Palmetto Bancshares Inc. United Community Banks, Inc. Regional Banks NA 8/31/2015 Independent Bank, A Branch at 210 South Saginaw St. Isabella Bank Regional Banks NA 8/31/2015 Susquehanna Bank, Two Branches in Berkeley County and West MVB Bank, Inc. Regional Banks NA 8/31/2015 H&R Block Bank, Certain Assets And Liabilities BofI Federal Bank Regional Banks NA 8/28/2015 Sun National Bank, Branch in Hammonton, New Jersey Cape Bank Regional Banks NA 8/28/2015 Patapsco Bancorp Inc. Howard Bancorp Inc. Regional Banks NA 8/24/ Mortgage Group, LLC, Reverse Mortgage Origination Open Mortgage, LLC Thrifts and Mortgage Finance NA 8/23/2015 Bank of America, National Association, 12 South Carolina Bank South State Bank Diversified Banks NA 8/22/2015 Bank of Stapleton (Stapleton, NE) Community First Bank Regional Banks NA 8/21/2015 Community Bancorporation of New Mexico Inc. Heartland Financial USA, Inc. Regional Banks NA 8/20/2015 Focus Business Bank Heritage Bank of Commerce Regional Banks NA 8/17/2015 Old National Bank, Five Branches Mainsource Bank Regional Banks NA 8/14/2015 Kasson State Bank Home Federal Savings Bank (Rochester, MN) Regional Banks NA 8/14/2015 Old National Bank, 12 Branch Offices in Southern Illinois First Mid-Illinois Bank & Trust, National Regional Banks NA 8/14/2015 LNB Bancorp Inc. Northwest Bancshares, Inc. Regional Banks NA 8/7/2015 Nicolet Bankshares Inc., Neillsville and Fairchild Branches Unity Bank (Augusta, WI) Regional Banks NA 8/5/2015 Bank of the Carolinas Corp. Bank of the Ozarks, Inc. Regional Banks NA 8/3/2015 Flagstar Bank, FSB, Saginaw Branch Isabella Bank Regional Banks NA 8/3/2015 IMB HoldCo LLC CIT Group Inc. Regional Banks NA 8/1/2015 Finance And Thrift Company, Inc. Pan American Bank Regional Banks NA 8/1/2015 Pine River Bank Corp. National Bank Holdings Corp. Regional Banks NA 8/1/2015 First Federal Savings and Loan Association of Bucks County First Savings Bank Of Perkasie (nka:penn Regional Banks NA 7/31/2015 1st Portfolio Holding Corporation WashingtonFirst Bankshares Inc. Thrifts and Mortgage Finance NA 7/31/2015 Rabobank, N.A., Redding Branch Plumas Bank Regional Banks NA 7/31/2015 CapitalMark Bank & Trust Pinnacle Bank (Nashville TN) Regional Banks NA 7/31/2015 Anadarko Bank and Trust Company Bank of Commerce Regional Banks NA 7/31/2015 FBC Bancshares, Inc. First Financial Bankshares Inc. Regional Banks NA 7/31/2015 Weststar Mortgage, Inc. The J.G. Wentworth Company Thrifts and Mortgage Finance NA 7/31/2015 Colonial American Bank OceanFirst Bank Regional Banks NA 7/31/2015 Asia Bancshares, Inc. Cathay General Bancorp Regional Banks NA 7/31/2015 Susquehanna Bancshares, Inc. BB&T Corporation Regional Banks NA 7/27/2015 American First Financial Inc. WTTJ Corporation Thrifts and Mortgage Finance NA Source: Capital IQ Houlihan Capital 5

6 S&P Capital IQ - Sector Last 3 Month Equity Performance 10.0% Change in Market Cap by S&P Capital IQ Sector 5.0% 0.0% -5.0% -10.0% -15.0% -20.0% -25.0% 6/30/2015 7/31/2015 8/31/2015 9/30/2015 Energy Materials Industrials Cosnumer Discretionary Healthcare Financials Information Technology Telecommunication Services Utilities Consumer Staples Note: The indices are derived from the equity performance of the S&P Capital IQ Sectors. Source: Capital IQ Houlihan Capital 6

7 M&A Deal Flow Statistics by S&P Capital IQ Sector 18,000 M&A Deal Count - Number of Transactions 16,000 14,000 12,000 10,000 8,000 9,405 7,817 7,897 7,284 8,880 6,999 7,348 7,136 8,553 6,953 7,072 6,094 6,533 6,307 6,663 7,416 6,000 4,000 2,000 4,966 4,382 4,565 4,592 6,513 4,019 4,391 4,836 5,224 4,687 4,831 4,747 4,557 4,490 4,509 4,726 0 $1,000 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q M&A Deals - USA & Canada M&A Deals - Rest of the World M&A Deal Count - Total Transaction Value ($ Billions) $900 $800 $700 $381.7 $600 $500 $400 $460.2 $322.2 $294.7 $321.0 $372.5 $336.4 $366.7 $334.2 $393.6 $312.2 $299.1 $401.0 $371.3 $364.0 $417.7 $300 $200 $100 $244.1 $208.0 $350.1 $225.5 $344.7 $233.3 $252.9 $249.4 $329.9 $391.7 $241.5 $266.1 $414.0 $372.0 $362.1 $484.1 $0 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q Transaction Value - USA & Canada Transaction Value - Rest of World Houlihan Capital 7

8 M&A Deal Flow Statistics by S&P Capital IQ Sector Percentage Dollars Invested by Sector 3Q15 Consumer Discretionary Consumer Staples Energy Financials Healthcare Industrials Information Technology Materials Telecommunications Services Utilities Not Listed Houlihan Capital 8

9 About Houlihan Capital Houlihan Capital is a leading, solutions-driven valuation, financial advisory and boutique investment banking firm. We pride ourselves on being thought leaders in an ever-changing landscape. Houlihan Capital is SOC-compliant, a FINRA and SIPC member and committed to the highest levels of professional ethics and standards. Valuation & Financial Advisory We provide an array of services that include enterprise valuations, portfolio valuation, valuation of carried interest, transaction opinions, tax and financial reporting compliance, purchase price allocations, and a wide variety of consulting services through our Financial Advisory Group. Growth Finance Services Our team works with early stage and growth companies to create a comprehensive report that can be used in investor and lender presentations. Investment Banking Through our Investment Banking Group, we offer sell side/buy side advisory, private placement and capital raises. Special Situations Through our Special Situations desk, we provide services that fit outside the archetypal verticals, including liquidity solutions, transactional advisory, and secondary market advisory and trading. For additional information about our Industry expertise and services, visit: Andrew Smith Paul Clark Michael Norton asmith@houlihan.com pclark@houlihan.com mnorton@houlihan.com