This document provides financial metrics and performance ratios for banks and thrifts of different asset sizes. Several charts show trends and comparisons between 1984-2012 for return on assets, return on equity, net interest margin, and other ratios. Transaction activity and pricing multiples from 2012-2013 are also examined. The analysis finds that larger institutions generally achieved higher profitability and returns, while smaller banks traded at higher price-to-book value multiples. The document examines key differences in the operating performance and market valuation of institutions based on their asset size.

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3. U.S. Bancorp (USB) Associated (ASBC) Commerce (CBSH) Huntington (HBAN)
Yield / Cost of Funds 4Q12 4Q11 Δ 4Q12 4Q11 Δ 4Q12 4Q11 Δ 4Q12 4Q11 Δ
Commercial & Industrial 3.41 3.82 (0.41) 3.92 4.13 (0.21) 3.29 3.53 (0.24) 3.88 4.01 (0.13)
Commercial Real Estate 4.43 4.57 (0.14) 4.11 4.39 (0.28) 4.33 4.67 (0.34) 4.19 3.99 0.20
1-4 Residential Mortgage 4.35 4.75 (0.40) 4.59 4.71 (0.12) 4.15 4.64 (0.49) 4.07 4.30 (0.23)
Total Loans 3.55 3.60 (0.05) 3.98 4.27 (0.29) 4.64 5.01 (0.37) 4.13 4.28 (0.15)
Total Securities (TE) 2.48 2.91 (0.43) 2.79 2.76 0.03 2.59 2.56 0.03 2.43 2.46 (0.03)
COF - IB Deposits 0.38 0.48 (0.10) 0.30 0.53 (0.23) 0.28 0.37 (0.09) 0.42 0.61 (0.19)
Net Int Margin (TE) 3.55 3.60 (0.05) 3.32 3.21 0.11 3.35 3.44 (0.09) 3.45 3.38 0.07
30-Day LIBOR 0.27 0.35 (0.08) <> base for C&I loans
5 Year Swap 0.81 1.31 (0.50) <> base for 5-year CRE loans
Source: company quarterly reports and the Federal Reserve's H.15 (selected interest rates-daily)

4. 5.0%
4.5%
4.0%
3.5%
3.0%
2.5%
2.0%
84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
Assets > $10B Assets $1-10B Assets $100M-$1B

5. 80%
75%
70%
65%
60%
55%
50%
45%
40%
Assets > $10B Assets $1-10B Assets $100M-$1B Assets < $100M
1998 2005 2012

6. 2.0%
1.5%
1.0%
0.5%
0.0%
84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
-0.5%
-1.0%
Assets > $10B Assets $1-10B Assets $100M-$1B

7. 18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
-2% 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12
-4%
-6%
-8%
-10%
-12%
Assets > $10B Assets $1-10B Assets $100M-$1B

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Current Current
84-89 90-99 00-07 08-12 00-12 84-12 YTD ROE 10Y UST
Spread vs. 84-12
Assets > $10B 1.7% 7.4% 9.1% 3.3% 7.6% 7.1% 9.1% 1.8% 7.2% 0.2%
Assets $1-10B -1.7% 7.6% 8.3% -1.5% 6.9% 5.6% 9.9% 1.8% 8.1% 2.5%
Assets $100M-$1B -4.6% 5.7% 6.6% 0.4% 5.8% 5.0% 7.7% 1.8% 5.9% 0.9%
Assets < $100M -2.5% 3.8% 3.3% 0.5% 2.9% 2.3% 6.2% 1.8% 4.4% 2.1%
All Insured Institutions -3.0% 7.1% 8.4% 2.2% 7.2% 6.6% 9.0% 1.8% 7.2% 0.6%

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10. 600 $300
566
550
504
500 481 $250
463 458 463
450
399
400 $200
Bank & Thrift Transactions
357
Deal Value ($B)
350
305 283 309 323
300 280 $150
261 272 278
232 233
250 217 216 215
200 177 175 $100
150
100 $50
50
0 $0
Bank & Thrift Transactions Deal Value

11. 90 16,000
Number of Bank & Thrift Transactions
80 77
14,000
Aggregate Deal Value ($Millions)
70
64 12,000
58 58 58
60
54 53 10,000
52
48 48 48
50
41 40 8,000
38
40 37 36
6,000
30
4,000
20
14
10 2,000
0 0
Number of Deals Total Deal Value ($M)
Source: Mercer Capital and SNL Financial, LC

12. 5.0%
4.5%
4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
# of Deals as a % of Total Institutions
Source: Mercer Capital and SNL Financial, LC

13. 50x 300%
46x 275%
42x 250%
38x 225%
34x 200%
Price / Earnings
Price / TBV
30x 175%
26x 150%
22x 125%
18x 100%
14x NM 75%
10x 50%
Price / Earnings Price / TBV

14. Bank and Thrift Transactions
2012 to 2/6/2013
40
37
35
30
26 26
25
# of Deals
20
15
12 12 12
10 8
5
5
1
0
0% - 25% 25% - 50% 50% - 75% 75% - 100% 100% - 125% 125% - 150% 150% - 175% 175% - 200% 200% or
Greater
Source: Mercer Capital and SNL Financial, LC Price/Tangible Book Value

15. Bank and Thrift Transactions
2012 to 2/6/2013
30%
20%
10%
ROAE
0%
-10%
-20%
-30%
0.0x 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x
Source: Mercer Capital and SNL Financial, LC Price/Tangible Book Value

16. Bank and Thrift Transactions
2012 to 2/6/2013
(excludes targets with ROAA < 0.5%)
20 19
18
16 15
14
12
12
# of Deals
10
8
6 5 5
4 3 3
2
0
0x - 5x 5x - 10x 10x - 15x 15x - 20x 20x - 25x 25x - 30x 30x or Greater
Source: Mercer Capital and SNL Financial, LC Price/Earnings

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18. Cycle
Noncurrent Loans as a % of Total Loans and Leases Announce Credit Loss
Date Seller Mark YE07
5.0% May-10 South Financial 13.0% 24.0%
4.5% Wilmington
Oct-10 13.0% 17.0%
Trust
4.0%
Marshall &
Dec-10 12.1% 21.1%
3.5% Ilsley
3.0% Dec-10 Whitney 6.0% 13.2%
2.5% RBC Bank
Jun-11 11.2% NA
(USA)
2.0% Sterling
Jan-11 12.0% 15.7%
Bancshares
1.5%
Aug-12 Hudson City 1.5% NA
1.0%
Citizens
0.5% Sep-12 6.8% 19.1%
Republic
0.0% Sep-12
West Coast
5.0% 19.1%
Bancorp
Virginia
Jan-13 4.0% 11.5%
Commerce
Assets $1-10B Assets $100M-$1B Feb-13 First M&F 5.4% 14.8%

19. FDIC Metrics $100M - $1B Assets
2006 2012 Change 2006 P/TBV Math (ROA and P/E Variables)
Securities $275,000 $325,000 18.2% 137% 0.75% 0.90% 1.05% 1.20%
Loans 650,000 600,000 -7.7% 10.0x 74% 89% 104% 119%
Earning Assets 925,000 925,000 0.0% 12.5x 93% 112% 130% 149%
Total Assets 994,624 994,624 0.0% 15.0x 112% 134% 156% 178%
Equity 100,306 97,454 -2.8% 17.5x 130% 156% 182% 208%
20.0x 149% 178% 208% 238%
Net Interest Income $37,278 $34,873 -6.5%
Fee Income 12,234 11,538 -5.7%
Total Revenues 49,511 46,410 -6.3%
Operating Expenses 31,499 32,255 2.4%
Operating Income 18,012 14,155 -21.4% 2012 P/TBV Math (ROA and P/E Variables)
Loan Loss Provision 1,705 3,157 85.1% 137% 0.50% 0.65% 0.80% 0.95%
Pre-Tax Income 16,307 10,998 -32.6% 10.0x 50% 64% 79% 94%
Taxes @ 30% 4,892 3,300 -32.6% 12.5x 62% 81% 99% 118%
Net Income $11,415 $7,699 -32.6% 15.0x 74% 97% 119% 141%
17.5x 87% 113% 139% 165%
NIM 4.03% 3.77% -0.26% 20.0x 99% 129% 159% 188%
Fees / Assets 1.23% 1.16% -0.07%
Efficiency Ratio 63.6% 69.5% 5.88%
Net Charge-Offs 0.16% 0.57% 0.41%
Provision / NCOs 164.0% 92.3% nm
Op Income / Assets 1.81% 1.42% -0.39%
ROA 1.15% 0.77% -0.37%
ROE 11.38% 7.90% -3.48%

20. 22.0x
20.0x
18.0x
16.0x
14.0x
12.0x
10.0x
8.0x
6.0x
4.0x
2.0x
0.0x
$100 Million - $1 Billion $1 Billion - $10 Billion > $10 Billion

21. 325%
300%
275%
250%
225%
200%
175%
150%
125%
100%
75%
50%
25%
0%
$100 Million - $1 Billion $1 Billion - $10 Billion > $10 Billion

22. 20- Year Public Market P/E Relative to 20-Year Average
Median Price/Earnings YE09 YE10 YE11 YE12 13-Feb Average YE09 YE10 YE11 YE12 13-Feb
$100 Million - $1 Billion 14.7x 13.6x 11.8x 11.6x 12.8x 13.6x 108% 100% 87% 85% 94%
$1 Billion - $10 Billion 15.0x 15.1x 12.9x 12.7x 13.4x 14.2x 106% 106% 91% 89% 94%
> $10 Billion 19.1x 17.5x 13.4x 12.9x 13.6x 15.2x 126% 115% 88% 85% 89%
Median Acquisition P/E nm nm nm 33.5x 32.0x
20- Year Public Market P/TBV Relative to 20-Year Average
Median Price/TBV YE09 YE10 YE11 YE12 13-Feb Average YE09 YE10 YE11 YE12 13-Feb
$100 Million - $1 Billion 75% 77% 68% 81% 82% 116% 65% 66% 59% 70% 70%
$1 Billion - $10 Billion 109% 122% 104% 121% 122% 164% 67% 74% 63% 74% 74%
> $10 Billion 153% 155% 132% 139% 142% 218% 70% 71% 61% 64% 65%
Median Acquisition P/TBV 114% 116% 104% 117% 101%
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23. Buyer Multiples Seller Multiples
Years to
Announce P/E Fwd Deal Val P/E Fwd Expense Earn Back Credit Buyer's
Date Buyer / Seller P/TBV P/E LTM Est ($M) P/TBV P/E LTM Est Saves TBVPS Dil Mark IRR Shares Comments
In-market deal that provides for
2/6/13 Renasant / First M&F 157% 18.1x 15.4x $146 122% 23.3x 16.1x 25% 2.5 5% 20% flat improved market share in key markets
and expense saves
United Bankshares / > cost of Strategic deal that further shifts center
1/29/13 155% 23.5x 15.5x $495 183% 21.0x 16.8x 25% 3-4 4% -3%
Virginia Commerce capital of gravity to N. Va. from W. Va.
EPS accretion 12% in first full year;
PacWest Bancorp / First
11/6/12 172% 16.4x 11.8x $235 170% 21.1x NA 50% 3.5 4% 18% 20% FCAL to become 8th largest CA-based
California
public bank
Investors disliked TBVPS earn-back,
Columbia Banking / -10% 1st
9/25/12 120% 16.0x 14.0x $509 145% 13.8x 21.4x 25% 7.0 5% >15% but 20/33% EPS accretion for
West Coast Bancorp 6 wks
FY13/14E. Portland/I-5 play
Significant footprint expansion; 6-8%
FirstMerit / Citizens -22% 1st FY14E EPS accretion. Street concern
9/12/12 164% 15.2x 14.2x $1,291 130% 2.6x 4.3x 22% 2.5 7% 18%
Republic 8 wks re: relative size and who FMER had to
out-bid
Street liked the deal due to capital
M&T Bank Corp. / +15% 1st accretion, in-fill in high density
8/27/12 219% 13.7x 11.0x $3,813 84% NM 12.7x 24% Accretive 2% 18%
Hudson City 8 wks markets, low-risk balance sheet and
~8% EPS accretion for FY14E

24. 150%
Pro Forma Bank
140%
+ Net expense saves
130% + P/E Expansion
Price / Tangible Book Value (%)
= Large P/TB
120% Expansion
110% Senior Bank
100%
90% Junior Bank
80%
70%
60%
9.0x 9.5x 10.0x 10.5x 11.0x 11.5x 12.0x 12.5x 13.0x 13.5x 14.0x
Price / Earnings (x) Multiple

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