1. AMERICA’S COMMUNITY BANKERS MUTUAL COMMUNITY BANK CONFERENCE STRATEGIC PLANNING DISCUSSION Peter J. Ostrowski Ostrowski & Company, Inc. Bank & Thrift Advisors March 8, 2004

2. O&Co Thrift industry nearly failed in the 1980’s due in part to narrow powers Thrift industry nearly failed in the 1980’s due in part to narrow powers Legislative changes enacted to create a level playing field with commercial banks Legislative changes enacted to create a level playing field with commercial banks Over last ten years, little changes in many thrifts Over last ten years, little changes in many thrifts Commercial banks still look very different Commercial banks still look very different

3. O&Co Industry Comparison Looked at mutual institutions in existence in 1993 and still in existence today Looked at mutual institutions in existence in 1993 and still in existence today Reviewed major balance sheet components and profitability at 12/31/93 and 9/30/03 Reviewed major balance sheet components and profitability at 12/31/93 and 9/30/03 Compared balance sheet components and profitability to stock thrifts and banks in existence over the same period Compared balance sheet components and profitability to stock thrifts and banks in existence over the same period Data points are median values Data points are median values

4. O&Co Significant Earning Asset Composition

5. O&Co Significant Loan Composition

6. O&Co Significant Liabilities & Equity

7. O&Co Significant Deposit Composition

8. O&Co Profitability Analysis

9. O&Co Profitability Analysis

10. O&Co Significant Components of Non Int. Income

11. O&Co Profitability Analysis

12. O&Co Profitability Analysis

13. O&Co Change is what happens when the pain of holding on overcomes the fear of letting go. Mutuals have the capability to compete effectively Mutuals have the capability to compete effectively Strategic planning process needs to be proactive and ongoing Strategic planning process needs to be proactive and ongoing All constituents – directors and management need to be “on the same page” All constituents – directors and management need to be “on the same page” Conversion/MHC formation are not strategies by themselves Conversion/MHC formation are not strategies by themselves Creation of a process that enables you to determine what works for you Creation of a process that enables you to determine what works for you

14. O&Co The Planning Process is dynamic

15. O&Co The prosaic reality: “Sustained success is largely a matter of focusing on the right things and making a lot of uncelebrated improvements every day.”

16. O&Co Traditional Profile Mutual headquartered in nonurban market Mutual headquartered in nonurban market Financial Highlights (9/30/03) Financial Highlights (9/30/03) Total Assets$103 million Total Assets$103 million ROAA 1.05% ROAA 1.05% Net Int. Inc./AA 3.46% Net Int. Inc./AA 3.46% Non Int. Inc./AA.34% Non Int. Inc./AA.34% Non Int. Exp./AA 2.04% Non Int. Exp./AA 2.04%

17. O&Co Strategy: Effective execution Effective execution Concentration in 1 – 4’s – 75% Concentration in 1 – 4’s – 75% Low cost operation – one office Low cost operation – one office

18. O&Co Alternative Strategy Mutual Bank headquartered in suburban market Mutual Bank headquartered in suburban market Financial Highlights (9/30/03) Financial Highlights (9/30/03) Total Assets$650 million Total Assets$650 million ROAA 1.24% ROAA 1.24% Net Int. Inc./AA 4.15% Net Int. Inc./AA 4.15% Non Int. Inc./AA 1.72% Non Int. Inc./AA 1.72%

19. O&Co Strategies Increase non-interest revenue Increase non-interest revenue Expand market penetration to leverage infrastructure Expand market penetration to leverage infrastructure Announced two acquisitions Announced two acquisitions $374 million Mutual in a contiguous market $374 million Mutual in a contiguous market $67 million Commercial Bank in a complementary market $67 million Commercial Bank in a complementary market

20. O&Co Alternative Strategy Mutual headquartered in non-urban market Mutual headquartered in non-urban market Financial Highlights (9/30/03) Financial Highlights (9/30/03) Total Assets$195 million Total Assets$195 million ROAA 0.87% ROAA 0.87% Net Int. Inc./AA 3.84% Net Int. Inc./AA 3.84% Non Int. Inc./AA 2.49% Non Int. Inc./AA 2.49%

21. O&Co Strategies Purchased an asset management company to improve non interest income Purchased an asset management company to improve non interest income Net income benefit not as apparent in short term due to aggressive amortization of goodwill incurred in purchase Net income benefit not as apparent in short term due to aggressive amortization of goodwill incurred in purchase

22. O&Co Butler Bank Mutual Bank headquartered in Lowell, MA Mutual Bank headquartered in Lowell, MA Financial Highlights (9/30/03) Financial Highlights (9/30/03) Total Assets$103 million Total Assets$103 million ROAA 1.19% ROAA 1.19% Net Int. Inc./AA 5.81% Net Int. Inc./AA 5.81% Non Int. Inc./AA 0.75% Non Int. Inc./AA 0.75%

23. O&Co Significant Loan Composition

24. O&Co Significant Deposit Composition

25. O&Co Profitability Analysis

26. O&Co Profitability Analysis