1. Follow the Yellow Brick Road: A successful path to an FDIC assisted Bank acquisition Joan Tupin-Crites

2. The Yellow Brick Road Pre-Acquisition – The Bid The Agreement with FDIC Post- Acquisition - Compliance –Credit –Data / Information Technology –Reports & notices –Audit

3. Start with the right TEAM Like Dorothy, in the wizard of OZ, get the right friends on your path; Strategic negotiators Credit personnel Finance IT/ Data support Accounting Of course… Legal Counsel

4. Pre-Acquisition and Bid Overview Very small window for due diligence vs. a non-assisted typical acquisition Team needs to be prepared for quick review and overview Use public data to learn about the “target” bank Bidding may or may not be competitive

5. BID Process Bid is blind Can submit more than one bid Involve Board of Directors and strategic partners for the bid process, think broadly and creatively Legal and financial experts can assist to craft quality financially – successful bid

6. Starting on the Yellow Brick Road Closing day/ evening: –Coordinate Human Resources to assist with the employee questions and issues –Coordinate with Marketing/ sales personnel –Have a plan for all locations – to win the “hearts and minds” of employees AND the new clients and customers of your institution

7. The Agreement with the FDIC The Purchase and Assumption Agreement can include Shared- Loss provisions or leave out Shared- Loss provisions Do not expect any substantial negotiations Review FDIC.gov for the current version FDIC uses Loss-share vs. Non Loss-share

8. Loss Share Loss share is a feature in selected Purchase and Assumption (P&A) Agreements You can bid with or without Loss Share FDIC and Assuming Institution share the losses on a specified pool of assets

9. Purpose of Loss Share FDIC has a statutory duty to safeguard the assets of the FDIC fund. Loss Share is to minimize cost to the FDIC fund: keeps assets in the banking sector restructure problem credits minimizes the FDIC’s operational risk and liquidity needs FDIC minimizes losses through “least-cost resolution” approach

10. Compliance with the “P & A” Agreement – DATA, DATA, DATA Understand the requirements and stipulations of the P&A Agreement Submit certificates timely to recover the FDIC payments Submit data reports, in appropriate formats, to track performance of Covered Assets Comply with audit and site visit requirements

11. Credit Decisions are Key A quality credit team is essential to making the Loss Share profitable for the Institution Sufficient credit personnel to manage the loan pool is required by the P & A Both Commercial and Retail collection specialists need to be considered Quality training & monitoring must occur of the special asset officers Consider external assistance to assist to create the processes and forms needed to comply

12. Credit Decisions Loan amendments/modification must be in accordance with internal underwriting criteria and the P & A agreement Quality documentation is key for all credit decisions to gain reimbursement from FDIC Insure management participation in the credit decisions

13. Getting to OZ With the current economic climate and concern for large number of banks, an FDIC assisted bank acquisition can be a wise strategic move. As counsel, be supportive, but understand and counsel management on the risks and rewards of such a transaction. Thank You – Contact me at joan.tupin-crites@oldnational.com with questions or discussion pointsjoan.tupin-crites@oldnational.com