The document provides an overview of economic and banking industry trends in July 2010. Key points: - The US economy showed weakening data with falling consumer confidence and downward GDP revisions. Unemployment fell but largely due to fewer people in the labor force. - For banks, returns are expected to be in the single digits over the next 5 years due to headwinds like a slow economic recovery, higher FDIC costs, and new regulations. However, banks that focus on profitable customers and 3-year strategies may fare better. - Lending activity remains low as deposits outpace loans. Competition is fierce for larger commercial loans. Interest rates fell further, putting pressure on banks' margins. -

1. MONTHLY ALCO PACKAGE
JULY 2010
www.pcbb.com www.bancinvestment.com

2. BANK ACTIVITY
Economy
The dog days of summer, so far have been filled with weakening economic data and
consternation around financial regulatory reform. Both have caused heartache for bankers and
both are causing bankers to relook at their 2010 budget and decide what will become of 2011.
For the markets in general, equities continue to be more upsetting than US’s World Cup
performance, as the DOW fell 2.49% for the month and the S & P dropped 3.74%. Fixed income
continued its bubble as yields fell some 30bp on average across the bank-related curve.
For the economy, consumer confidence fell by a whopping 9.8 points in June to 52.9%.The 3rd
revision of 1Q GDP dropped by 0.3%, which was the second downward revision and now puts
annualized GDP for the year a little above 3% which is a far cry from the 5.2% once hoped for at
the end of 2009. Construction spending fell by 0.2% in May, distancing itself from its 30.6% peak
in March ’06.
Finally, the month wrapped up with a jobs report that had unemployment falling to 9.5%, its
lowest level since June 2009 and better than expectations. While this would be a data point to
rejoice on, the drop was associated with a huge downward change in the labor force. Adjusting
for that correction, household employment fell sharply during the month. Consequently, the drop
in the unemployment rate is not the positive news it would have been if jobs were being created
more quickly than the labor force was growing. Nearly 1.3mm new jobs have been created in this
survey since the beginning of the year. Nevertheless, 14.6mm people are still officially
unemployed. In addition, there are another 5.9mm people who say they want a job but are not
currently looking for one. In addition, another 8.6mm people are working part-time because of
slack economic conditions. It will take many years before "full employment" is re-attained.
On the strategic front, the month of June has marked a time when more banks than ever have
decided that their long run objectives will be to sell or merge. If you run simulations for an
average bank, 5Y returns come out to single digits because of the following factors: the economy
that will not show strong growth until 2012; higher FDIC insurance assessments; and, regulatory
pressure for greater liquidity, higher capital/reserves, and lower leverage. Add to that core set of
assumptions $115k+ of additional compliance costs and 15% lower revenues due to new
financial regulations, and it is hard to see how this is an industry that will make good use of hard-
to-attract capital for some time.
If that seems like a couple paragraphs of doom and gloom, it is, but there is hope. More than half
the banks have given up hope or are operating as if it was business as usual. With half the year
gone, smart banks are recommitting themselves to restructuring their deposit base to bring in
higher DDA balances and less interest rate sensitive customers by expanding cash management
services, while focusing on acquiring more profitable customers. These banks that continue to
manage asset quality (an area where bankers have made impressive strides), but start working
on customer profitability strategies, can now increase market share for those customers that
really drive profit. Banks that can shift mix from 10% to 20%+ high-value customers, can move
their bank back to double digit returns despite all the above mentioned headwinds.
While the tendency in hard times is to focus on the next 6-month period, banks that devote more
resources and effort to the 3Y horizon will find that moral will improve and the return on that effort
will be fruitful.
Chris Nichols
President & CEO
1 of 18

3. BANK ACTIVITY
Lending Activity
Deposit inflows and shrinking loans continue to put pressure on banks to invest. Most community
banks have paid down large amounts of higher cost deposits. Many larger community banks are
also close to stabilizing their nonperforming loan portfolio. With capital bolstered and reserves
padded, the lack of loan volume continues to be a substantial drag on income. We believe that
commercial credits are likely to start to accumulate inventories and boost capital expenditures
and this should soon lead to higher external financing needs (leading to more loan demand).
Competition for credit is fierce, especially for larger sized loans ($1mm plus) and non-real estate
centered credits. Banks that cannot price credit on risk-adjusted and overhead-adjusted bases
are at a real disadvantage. With interest rates falling throughout the month of June, five year
fixed rate loans are competitively priced at approximately 4.75% to 5.25% and 10 year fixed rate
loans at are competitively priced at approximately 5.75% to 6.25%. Banks targeting high quality
credits must be able to match this pricing in order to gain loan business.
Banks have been telling us that they are fearful that FASB will move GAAP to require fair value
for banks’ loans and deposits. If FASB is successful in this endeavor, most banks would cease
extending fixed rate loans beyond two years without the use of hedging instruments. Speaking of
hedging, while the financial regulatory reform has not yet been signed into law, the proposed
changes are intended to make basic hedging more onerous on banks that use simple swaps,
caps and floors. Banks using hedges on their own balance sheet may see increased requirement
for capital, reporting and documentation. Our BLP program offers a simple solution and a viable
alternative to banks that do not want derivatives on their balance sheet.
Ed Kofman
Managing Director - Derivatives Desk
2 of 18

4. BANK ACTIVITY
Certificate of Deposit Issuance
Historically, activity heightens in the brokered CD market during quarter-end months, but this has
not been the case the past few quarters. Overall issuance in the brokered CD market is down
roughly 50% from a year ago. Though the number of banks utilizing brokered deposits may be
down, there remains very strong demand from retail, and rates continue to trade at historical
lows. Further deterioration in the equity market and lower fixed income investment yields will keep
this trend going for July. The combination makes this market an excellent time to issue to the
extent you have use and room for wholesale funds.
Additionally, the vast majority of banks are extending out the curve, 2yrs and out, as bankers are
becoming more and more opportunistic. Step-up callable issues, whereby the bank retains the
option to call if rates further fall or funding is no longer needed, continue to garner more interest
from banks. This tactic efficiently manages convexity, as it allows liability extension while
protecting net interest margin. Also, the premium for the call option is negligible, as investors are
less concerned about these deposits being called. We expect issuance in these liability structures
to become more prevalent as bankers are becoming more comfortable with these deposits.
Lastly, we anticipate rates to tick back up a bit come mid to late July as banks get the quarter
behind them and start to jump back into our market.
Don Saunders
Managing Director - Brokered CD's
3 of 18

5. BANK ACTIVITY
Fixed Income
Historical and current spreads vs. Treasuries for MBS and Agencies are listed below:
MBS Agencies
15Y 30Y 2Y 5Y 10Y 30Y
5YR High 312 238 182 159 175 168
5YR Low 72 59 -16 2 -5 32
5YR Avg 118 125 37 46 46 51
1YR High 153 107 31 50 47 57
1YR Low 97 59 -16 2 -5 32
1YR Avg 121 81 12 22 27 42
90 Day 132 93 31 37 44 50
90 Day Low 100 60 9 2 30 33
90 Day Avg 115 75 21 13 36 41
30 Day 127 89 27 37 36 50
30 Day Low 106 67 13 9 30 44
30 Day Avg 116 78 21 24 33 46
Last 121 82 13 33 31 44
Data Source: Bloomberg
Fixed Income: June was quite a busy month, as we saw more MBS pass-through buyers wade
back into the market. Their wait for higher yield levels never seemed to materialize. The dovish
policy statement from the latest FOMC meeting helped nudge investors off their beach chairs into
the MBS pool party, as it appears the Fed will be on hold for a while. We also saw quite a bit of
selling take place as clients looked to boost loan loss reserves and book gains to improve short-
term performance for the quarter. Our bankers continued to report deposit growth outpacing loan
growth as well as receiving a constant stream of cashflows from their called agencies bonds.
Despite the low yield levels and lofty premiums, investors also focused on short-duration agency
CMOs and replaced called collateral with short-locked out callable agencies.
Treasury yields tanked vs. the prior month as the European debt crises, losses in the equity
markets and concerns of slower global growth weighed on Treasuries. The 2Y yield fell 17bp vs.
the prior month and reached an all time low (in the past 5Y) of 0.60%. The 5Y and 10Y yields
dropped 32bp and 36bp respectively. The 10Y yield fell below 3.00% to 2.93%, a low last seen in
April ’09. The 30Y yield fell as well by 32bp. Agencies performed well due to limited supply.
Spreads tightened by 13bp, 4bp and 2bp respectively in the 2Y, 10Y and 30Y part of the curve.
The 5Y spreads however widened by 24bp. MBS pass thrus held their ground as well, with the
15Y sector tightening by 6bp and 30s coming in 2bp.
Looking ahead, we expect mortgages to continue to perform well as bank demand increases due
to limited loan opportunities and foreign investors’ sponsorship remains strong. Prepayments
speeds should not pick up any time soon despite the lower rate environment due to these factors
deterring homeowners from refinancing: 25% of mortgage holders are upside down on their
notes, tighter underwriting standards, higher refinance fees and weak job growth.
Maxine Lew
Director - Fixed Income
4 of 18

6. BANK ACTIVITY
Credit & Risk Management
Credit Risk: Payment and loss given defaults continue to advance in most regions of the country.
Loan stress and ALLL models should be updated to reflect the changing landscape of both
elevated default rates as well as changing loss given default rates.
Total CRE Payment Default Rate Non‐Real Estate Payment Default
by FDIC Region Rate by FDIC Region
20 6
15
4
10
2
5
0 0
31‐Dec‐07
31‐Dec‐08
31‐Dec‐09
31‐Dec‐07
31‐Dec‐08
31‐Dec‐09
31‐Dec‐07
31‐Dec‐08
31‐Dec‐09
31‐Dec‐07
31‐Dec‐08
31‐Dec‐09
31‐Dec‐07
31‐Dec‐08
31‐Dec‐09
31‐Dec‐07
31‐Dec‐08
31‐Dec‐09
31‐Dec‐07
31‐Dec‐08
31‐Dec‐09
31‐Dec‐07
31‐Dec‐08
31‐Dec‐09
31‐Dec‐07
31‐Dec‐08
31‐Dec‐09
31‐Dec‐07
31‐Dec‐08
31‐Dec‐09
31‐Dec‐07
31‐Dec‐08
31‐Dec‐09
31‐Dec‐07
31‐Dec‐08
31‐Dec‐09
Atlanta Chicago Dallas Kansas New York San Atlanta Chicago Dallas Kansas New York San
City Francisco City Francisco
C&D CRE/Mult C & I Consumer
CRE Loss Given Default Rate Non‐Real Estate Loss Given
by FDIC Region Default Rate by FDIC Region
30 60
20 40
10 20
0 0
31‐Dec‐07
31‐Dec‐08
31‐Dec‐09
31‐Dec‐07
31‐Dec‐08
31‐Dec‐09
31‐Dec‐07
31‐Dec‐08
31‐Dec‐09
31‐Dec‐07
31‐Dec‐08
31‐Dec‐09
31‐Dec‐07
31‐Dec‐08
31‐Dec‐09
31‐Dec‐07
31‐Dec‐08
31‐Dec‐09
31‐Dec‐07
31‐Dec‐08
31‐Dec‐09
31‐Dec‐07
31‐Dec‐08
31‐Dec‐09
31‐Dec‐07
31‐Dec‐08
31‐Dec‐09
31‐Dec‐07
31‐Dec‐08
31‐Dec‐09
31‐Dec‐07
31‐Dec‐08
31‐Dec‐09
31‐Dec‐07
31‐Dec‐08
31‐Dec‐09
Atlanta Chicago Dallas Kansas New York San Atlanta Chicago Dallas Kansas New York San
City Francisco City Francisco
C&D CRE/Mult C & I Consumer
Rate Risk: The efficiency of deposit funding has improved since the implementation of the
national rate cap program. ALM modeling assumptions should be reviewed and changes made if
applicable.
Funding Efficiency
(National Rates vs Libor Curve)
12 Mo. CD
6 Mo. CD
3 Mo. CD
MMDA
(0.30) (0.20) (0.10) ‐ 0.10 0.20 0.30 0.40 0.50
Current Q1‐2010 Q4‐2009 Q3‐2009 Q2‐2009
Doug Hensley
Managing Director
5 of 18

7. BANK ACTIVITY
Funding
How is a bank supposed to take care of its “good” customers with today’s low interest rates?
Most banks are working hard to maintain pricing discipline and bring their funding costs down as
much as possible. Every basis point reduction represents additional income for your bank.
Let’s say your bank has set its deposit rates where it thinks appropriate. How does it handle the
situation when a deposit customer asks whether you can “do any better” than what they see on
the rate board? Some banks will match the rates of a competitor or will pay whatever they think
is necessary to win the customer’s deposit.
Another tactic is to exercise control over the process to prevent the bank’s employees from being
overly generous with rate matching. A bank may give its sales staff discretion to pay a pre-
determined rate bump over the bank’s posted rate. Some reserve this for only the “good”
customers. Typically, the pre-set rate bump is 25 bps – some bumps are even higher.
Unfortunately, there are some flaws with this practice. The first is banks do not typically do a very
good job of defining what a “good” customer is which can result is the exception becoming the
rule. The second is failing to recognize the proportionality of the rate bump. What sounds worse,
a 25 bps rate bump, or paying 150% of the bank’s posted rate? In some instances, there is no
difference between the two. Would you consciously instruct your sales staff to pay 150-125% of
the bank’s posted rates to its customers? Your bank may be doing this right now.
Rate Bumps and Bonus Percentages
Base Rate 25 bps Rate Bump
6.00
5.00
4.00
3.00
4.50 5.00
2.00 4.00
3.00 3.50
1.00 2.00 2.50
1.50
0.50 1.00
0.00
0.75 1.25 1.75 2.25 2.75 3.25 3.75 4.25 4.75 5.25
50% 25% 17% 13% 10% 8% 7% 6% 6% 5%
Combined Rate, and Rate Bump as Percentage of Base Rate
A 25 bps rate bump may have been a reasonable pricing variance with a 4.50% deposit product,
but it may be excessive at today’s interest rate levels. The 12 month FDIC national average CD
rate is .74% currently, and shorter-term products are even lower.
When we work with our Coach clients, we help them review their current pricing practices to
ensure they are positive, and do not result in unintended consequences. Further, we also help
them develop pricing, training, and marketing strategies which have proven to be successful
when adopted by our other clients – and we measure the progress and effectiveness of the
strategies over time. How is your bank doing?
Greg Judge
Liability and Strategic Consulting
6 of 18

8. BANK ACTIVITY
Loan Pricing and Customer Profitability
With the prohibition of paying interest on business checking accounts close to being repealed,
prepare for significant changes and opportunities in the deposit gathering business. While the
rate environment and economic outlook will play a large role in the speed at which changes and
opportunities will occur, the following are few things to expect:
- Decline in off balance sheet sweeps and repo sweeps – Sweeps have typically
existed for two reasons. First, it serves as a mechanism for a bank’s customer to earn
interest while having the liquidity privileges of a checking account. Secondly, customers
have swept their funds to an off balance sheet or repo in a desire to mimic the perceived
increased safety of a money fund or the collateral of a repo. While it is difficult to
estimate how much in total swept funds are done simply to earn a return, we estimate
that at least 50% - 60% of all swept funds would come back on the balance sheet if this
rule passes.
- Significant variations in pricing strategies – Expect some institutions to pay high rates
in an attempt to attract new funds that have historically only resided in money funds
- Relationship based pricing – Look for banks to implement a relationship based pricing
approach where the interest rate paid and the service charge assessed is based on the
overall relationship and not simply one product.
- Increased use of data mining and sensitivity scoring – Combined with a relationship
based pricing approach, expect to see programs base pricing on the sensitivity of the
customer to changing interest rates. Doing so, will provide for more accurate pricing on a
per relationship basis.
The business checking account has historically been the most profitable product at most banks.
Banks will need to implement strategies to ensure that the profits from this account are protected
while concurrently seizing upon the opportunity to attract funds that have historically resided
outside the banking system. Under the current proposed legislation, banks would be permitted to
pay interest on business in a year. Our advice: Start planning now. Put it as a topic on your
ALCO or New Product Committee as the year will go by quickly.
Kim Jackson
Managing Director
Mike Middleton
Managing Director
Loan Pricing and Customer Profitability
7 of 18

9. BANK ACTIVITY
BIG Metrics - 1Q Performance Summary
Michael Stinson
Vice President – BIG Metrics
8 of 18

10. INTEREST RATE RECAP
06/30/10 05/28/10 4/30/10 6/30/09
SHORT RATES Now Prior Change Prior Change Now Change
Fed Funds 0.25% 0.25% 0.00% 0.25% 0.00% 0.25% 0.00%
Prime 3.25% 3.25% 0.00% 3.25% 0.00% 3.25% 0.00%
1M Libor 0.35% 0.35% 0.00% 0.28% 0.07% 0.31% 0.04%
2M Libor 0.43% 0.43% 0.00% 0.32% 0.11% 0.41% 0.02%
3M Libor 0.53% 0.54% 0.00% 0.35% 0.19% 0.60% -0.06%
4M Libor 0.60% 0.60% 0.00% 0.40% 0.20% 0.78% -0.18%
5M Libor 0.67% 0.67% 0.00% 0.46% 0.21% 0.96% -0.29%
6M Libor 0.75% 0.75% 0.00% 0.53% 0.22% 1.11% -0.36%
1Y Libor 1.17% 1.20% -0.03% 1.02% 0.16% 1.61% -0.44%
TREASURY RATES
2Y Note 0.61% 0.77% -0.16% 1.02% -0.42% 1.11% -0.50%
3Y Note 0.97% 1.23% -0.27% 1.57% -0.60% 1.61% -0.64%
4Y Note 1.43% 1.75% -0.32% 2.13% -0.70% 2.11% -0.68%
5Y Note 1.78% 2.09% -0.32% 2.55% -0.78% 2.54% -0.77%
7Y Note 2.41% 2.75% -0.34% 3.28% -0.87% 3.21% -0.79%
10Y Note 2.93% 3.29% -0.36% 3.83% -0.90% 3.53% -0.59%
30Y Bond 3.89% 4.21% -0.32% 4.71% -0.82% 4.33% -0.44%
SWAPS FIX VS. 3M LIBOR
2Y Swap 0.97% 1.23% -0.26% 1.19% -0.22% 1.53% -0.56%
3Y Swap 1.33% 1.66% -0.33% 1.81% -0.48% 2.14% -0.81%
4Y Swap 1.71% 2.06% -0.35% 2.31% -0.60% 2.62% -0.92%
5Y Swap 2.05% 2.43% -0.38% 2.73% -0.68% 2.96% -0.92%
7Y Swap 2.34% 2.93% -0.60% 3.32% -0.99% 3.42% -1.08%
10Y Swap 2.56% 3.37% -0.81% 3.82% -1.26% 3.77% -1.22%
15Y Swap 3.00% 3.75% -0.75% 4.26% -1.26% 4.06% -1.05%
Month to Month Treasury Yield Change
-0.15%
-0.16%
-0.20%
-0.25%
-0.27%
-0.30%
-0.34% -0.32%
-0.32% -0.32%
-0.35%
-0.36%
-0.40%
2Y Note 3Y Note 4Y Note 5Y Note 7Y Note 10Y Note 30Y Bond
9 of 18

11. PROJECTED FEDERAL FUNDS
Survey Date: 6/9/2010
Dealer Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011
Action Economics 0.25% 0.25% 0.75% 1.50% n/a n/a
Bank of America* 0.25% 0.25% 0.25% 0.25% 0.50% 0.50%
Bank of Montreal 0.25% 0.25% 0.75% 1.25% 1.50% 2.00%
Barclays Capital * 0.25% 0.25% 0.25% 0.75% 1.25% 1.75%
BOT-Mitsubishi 0.50% 1.00% 1.50% 2.00% 2.50% 3.00%
CIBC World Markets 0.25% 0.25% 0.50% 1.00% 1.50% 2.25%
Credit Suisse FB * 0.25% 0.25% 0.50% 1.00% 1.25% 1.50%
Danske Bank 0.25% 0.25% 0.50% 1.00% 1.50% 2.00%
Deutsche Bank * 0.25% 0.75% 1.25% 1.75% n/a n/a
Fannie Mae 0.25% 0.25% 0.25% 0.25% 0.75% 1.00%
First Trust Adv. 0.25% 0.25% 0.50% 1.00% 1.75% 2.50%
Goldman Sachs Group 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
ING Barings 0.25% 0.75% 1.25% n/a n/a n/a
Janney Montgomery 0.25% 0.25% 0.25% 0.75% 1.25% 1.50%
Moodys Capital Markets 0.25% 0.25% 0.50% 1.00% 1.50% 2.00%
JP Morgan Chase * 0.25% 0.25% 0.25% 0.50% n/a n/a
Morgan Stanley * 0.25% 0.25% 0.50% 1.50% 2.00% 2.50%
Nomura Securities 0.25% 0.25% 0.25% 0.50% 0.75% 1.00%
Raymond James 0.25% 0.25% 0.25% 0.50% 1.00% 1.50%
Scotia Capital 0.25% 0.25% 0.75% 1.25% 1.75% 2.25%
Standard Chartered 0.25% 0.25% 0.25% 0.25% n/a n/a
State Street Global 0.25% 0.25% 0.25% 0.25% 0.25% 0.50%
UBS 0.25% 0.50% n/a n/a n/a n/a
Wells Fargo & Co 0.25% 0.25% 0.25% 0.50% 1.50% 2.00%
Median 0.25% 0.25% 0.50% 0.88% 1.38% 1.88%
Average 0.26% 0.33% 0.52% 0.86% 1.26% 1.67%
High 0.50% 1.00% 1.50% 2.00% 2.50% 3.00%
Low 0.25% 0.25% 0.25% 0.25% 0.25% 0.25%
*Primary Dealers
10 of 18

12. SHORT TERM MARKET EXPECTATIONS
FEDERAL FUNDS FUTURES
Federal Funds Futures
Jul-10 0.25
Aug-10 0.25 1.00
Sep-10 0.25
Oct-10 0.25 0.75
Nov-10 0.25
Dec-10 0.25 0.50
0.50 0.50
Jan-11 0.25
Feb-11 0.25 0.25
0.25 0.25 0.25
Mar-11 0.25
Apr-11 0.50 0.00
May-11
Nov-10
Mar-11
Jul-10
Aug-10
Sep-10
Oct-10
Dec-10
Jan-11
Feb-11
Apr-11
May-11 0.50
EURODOLLAR FUTURES
Sep-10 0.66 Eurodollar Futures
Dec-10 0.77
2.50
Mar-11 0.84 2.40
Jun-11 0.94 2.00
Sep-11 1.09 1.95
Dec-11 1.29 1.50
Mar-12 1.49
1.09
Jun-12 1.72 1.00
Sep-12 1.95 0.66 0.84
Dec-12 2.19 0.50
Mar-11
Mar-12
Mar-13
Sep-10
Dec-10
Jun-11
Sep-11
Dec-11
Jun-12
Sep-12
Dec-12
Mar-13 2.40
Jun-13 2.61
PRIME RATE FUTURES
Sep-10 3.36 Prime Rate Futures
Dec-10 3.47 5.25
5.10
Mar-11 3.54
Jun-11 3.64 4.75
4.65
Sep-11 3.79
4.25
Dec-11 3.99
3.99
Mar-12 4.19
3.75
Jun-12 4.42
3.36
Sep-12 4.65
3.25
Dec-12 4.89
Mar-11
Mar-12
Mar-13
Sep-10
Dec-10
Jun-11
Sep-11
Dec-11
Jun-12
Sep-12
Dec-12
Mar-13 5.10
11 of 18

13. LONG TERM MARKET EXPECTATIONS
TREASURIES NOW as of 7/01/2010
Current Treasury Curve
1YR 0.32
2YR 0.64 3.30
3.30
3YR 1.01
2.95
5YR 1.81
2.55
10YR 2.95
1.81
1.80
1.05
1.01
0.32 0.64
0.30
1YR 2YR 3YR 5YR 10YR
TREASURIES 1Y FORWARD as of 7/01/2010
1YR 0.97 1Y Forward vs. Now
2YR 1.35
3.27
3YR 1.78 3.30
5YR 2.49 2.95
10YR 3.27 2.55
2.49
1.78 1.81
1.80
1.35
1.01
1.05
0.97 0.64
0.30 0.32
1YR 2YR 3YR 5YR 10YR
TREASURIES 2Y FORWARD as of 7/01/2010
2Y Forward vs. Now
1YR 1.74
2YR 2.18
3.70 3.53
3YR 2.60
3.17
5YR 3.17 2.95
2.85 2.60
10YR 3.53
2.18
2.00 1.81
1.74
1.01
1.15
0.64
0.32
0.30
1YR 2YR 3YR 5YR 10YR
12 of 18

14. OTHER IMPORTANT DATA
LIBOR MARKET EXPECTATIONS
1YR 2YR 3YR 5YR 10YR
LIBOR 6M Forward 0.93 1.28 1.68 2.37 3.20
LIBOR 1Y Forward 1.22 1.65 2.05 2.68 3.39
LIBOR 2Y Forward 2.08 2.48 2.81 3.26 3.75
LIBOR 6M Forward
LIBOR 1Y Forward 2Y Forward vs. 1Y Forward vs. 6M Forward
LIBOR 2Y Forward
4.25
3.75
3.50 3.39
3.20
2.75
2.81
2.05
2.08
2.00
1.68
1.25 1.22
0.93
0.50
1YR 2YR 3YR 5YR 10YR
BALTIC DRY INDEX - 1 YEAR HISTORY
Last Price 2406
High 11/19/09 4661
Average 3133
Low 9/24/09 2163
13 of 18

15. OTHER IMPORTANT DATA
OIL PRICES (INFLATION) - 5 YEAR HISTORY
Last Price 75.63
High 7/03/08 145.29
Average 74.11
Low 12/19/08 33.87
UNEMPLOYMENT RATE (JOBS PICTURE) - 5 YEAR HISTORY
Last Price 9.7
High 10/31/09 10.1
Average 6.2
Low 10/31/06 4.4
14 of 18

16. OTHER IMPORTANT DATA
GDP (UNDERLYING ECONOMIC GROWTH) - 5Y HISTORY
Last Price 3.0
High 12/31/09 5.6
Average 1.3
Low 03/31/09 -6.4
1 MONTH LIBOR (APPROX. BANK FUNDING COSTS) - 5Y HISTORY
Ask price 0.035125
High 9/07/07 5.82375
Average 3.14229
Low 3/01/10 0.22813
15 of 18

17. BOND YIELD FORECAST
Market Yield Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q2 2011
US 3 M Libor 0.53 0.59 0.74 1.05 1.43 1.83
US 3M Libor
2.10
1.83
1.75
1.43
1.40
1.05
0.70
0.74
0.53
0.35
Market Yield Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q2 2011
Market Yield Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011
Fed Funds Target 0.25 0.25 0.25 0.50 1.00 1.25
Fed Funds Rate
1.50
1.25
1.25
1.00
1.00
0.75
0.50
0.50
0.25
0.25
Market Yield Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011
Market Yield Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011
US 10Y 2.94 3.48 3.70 3.89 4.08 4.37
US 2Y 0.64 1.16 1.44 1.73 2.10 2.47
spread 2.52 2.56 2.48 2.33 2.12 1.93
US 10Y
10Y VS 2Y US 2Y
4.50
4.37
3.48
3.89
3.50
2.94
2.50 2.47
2.10
1.50
1.44
0.50 0.64
Market Yield Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011
16 of 18

18. KEY UPCOMING DATES
FOMC MEETING DATES FOMC VOTING MEMBERS
01/28/09 0.00- 0.25% Risk to Growth 1 Ben Bernanke (Chairman)
03/18/09 0.00- 0.25% Risk to Growth 2 James Bullard
04/29/09 0.00- 0.25% Risk to Growth 3 William Dudley
06/24/09 0.00- 0.25% Risk to Growth 4 Elizabeth Duke
08/12/09 0.00- 0.25% Risk to Growth 5 Thomas Hoenig
09/23/09 0.00- 0.25% Risk to Growth 6 Donald Kohn
11/04/09 0.00- 0.25% Risk to Growth 7 Sandra Pianalto
12/16/09 0.00- 0.25% Risk to Growth 8 Eric Rosengren
01/27/10 0.00- 0.25% Risk to Growth 9 Daniel Tarullo
03/16/10 0.00- 0.25% Risk to Growth 10 Kevin Warsh
04/29/10 0.00- 0.25% Risk to Growth
06/24/10 0.00- 0.25% Risk to Growth FOMC ALTERNATE MEMBERS
08/12/10 1 Christine Cumming
09/23/10 2 Charles Evans
11/04/10 3 Richard Fisher
12/16/10 4 Narayana Kocherlakota
01/26/11 5 Charles Plosser
KEY UPCOMING ECONOMIC DATA
Date Indicator Date Indicator
7/1/2010 Construction Spending MoM 7/16/2010 Consumer Price Index
7/1/2010 ISM Manufacturing & Prices Paid 7/19/2010 NAHB Housing Market Index
7/1/2010 Vehicle Sales 7/20/2010 Building Permits & Housing Starts
7/1/2010 Pending Home Sales 7/22/2010 Leading Indicators
7/2/2010 Employment Report 7/22/2010 Existing Home Sales
7/8/2010 Consumer Credit 7/22/2010 House Price Index
7/9/2010 Wholesale Inventories 7/26/2010 New Home Sales
7/13/2010 Monthly Budget Statement 7/26/2010 Chicago Fed Nat Activity Index
7/13/2010 Trade Balance 7/27/2010 S&P/ Case Shiller Home Price Ind
7/14/2010 Advance Retail Sales 7/27/2010 Richmond Fed Manufact. Index
7/14/2010 Business Inventories 7/27/2010 Consumer Confidence
7/14/2010 Import Price Index 7/28/2010 Durable Goods Orders
7/15/2010 Empire Manufacturing 7/30/2010 GDP Price Index
7/15/2010 Producer Price Index 7/30/2010 Personal Consumption
7/15/2010 Industrial Production 7/30/2010 Chicago Purchasing Manager
7/15/2010 Capacity Utilization 7/30/2010 NAPM-Milwaukee
7/16/2010 U. of Michigan Confidence 7/30/2010 Core PCE QoQ
17 of 18

19. DISCLAIMER
The information contained in this document is privileged and confidential. If the reader of this message is
not involved in trading or financial service activities, or responsible for delivering this message to the
intended recipient, you are hereby notified that any distribution or copying of this communication is strictly
prohibited. If you have received this communication in error, please notify the Banc Investment Group
immediately at 877-777-0412. This information does not constitute either an offer to sell or a solicitation
of an offer to buy any of the securities referred to herein. Offers to sell and solicitations of offers to buy
the securities are made only by, and this information must be read in conjunction with, the final
Prospectus Supplement and the related Prospectus or, if not registered under the securities laws, the
final Offering Memorandum (the “Offering Document”). Information contained herein does not purport to
be complete and is subject to the same qualifications and assumptions, and should be considered by
investors only in the light of the same warnings, lack of assurances and representations and other
precautionary matters, as disclosed in the Offering Document. This information may include certain
assumptions and no representation is made that it is accurate or complete or that any returns indicated
will be achieved. Changes to assumptions may have a material impact on returns. Past performance is
not indicative of future results. Price and availability are subject to change without notice. Past
performance is no guarantee of future results. Investment return and principal value of mutual fund
investments may fluctuate so that investor’s shares, when redeemed, may be worth more or less than
their original cost. Mutual funds are not FDIC insured, not bank guaranteed and may lose value.
Customers should rely on their own outside counsel, regulator, or accounting firm to address specific
circumstances. Additional information is available on request. Banc Investment Group is a member of
FINRA and SIPC, and the sister company of Pacific Coast Bankers' Bank. This document cannot be
reproduced or redistributed outside of your institution without the written consent of the Banc Investment
Group. Banc Investment Group is the sister company of PCBB, and all securities are offer through BIG.
Source for data is Bloomberg, dealer provided documents and proprietary calculations or research. This
package is created specifically for independent banks as an added monthly service and provided by
Steve Brown, Chris Nichols and the rest of the team at Banc Investment Group.
340 Pine Street, Suite 401, San Francisco, CA 94104
ph. 877-777-0412
18 of 18