1. School of Business Commercial Real Estate Conference March 6, 2012 The End of Extend and Pretend A Look at the Recent CRE Loan Experience of Connecticut’s Community Banks Martin J. Geitz, President & CEO

2. Agenda Community Bank Profile Market Conditions Commercial Real Estate Loan Exposure Loan Quality Trends Conclusions

3. Profile of Connecticut’s Community Banks

4. Statistical Profile 46 community banks headquartered in Connecticut Often the largest bank in their home town Connecticut community bank deposit market share: approximately 22% 31 community banks’ data available for this analysis –Total Assets $23.0 billion –Total Loans $16.6 billion –Total Deposits $17.8 billion Community banks account for over 50% of small business loans in US

5. CRE Experience CRE loans are significant balance sheet concentrations for many banks Concentrations have declined slowly since 2009 peak Loan quality indicators are still elevated Expect continued impact of workouts: loan write-downs, foreclosures, distressed sales

6. CRE Market Trends

7. Commercial Real Estate U.S. Price Trends

8. U.S. Home Prices Trends

9. U.S. New Home Sales

10. U.S. Housing Starts

11. CT Housing Permits

12. Community Bank CRE Loan Concentrations

13. Total CRE Loans / Total Loans Data from FDIC UBPR Reports PercentagePercentage

14. Total CRE Loans / Total Loans Number of CT Community Banks in each tier Percentage of Total Loans Dec 2011 June 2011 Dec 2010 June 2010 Dec 2009 June 2009 Dec 2008 June 2008 Dec 2007 50% +765677777 40% - 50%124313332 30% - 40%654574444 20% -30%12 13141112111311 10% to 20%343255657 <10%000000000

15. Total CRE Loans / Total Loans Median PercentagePercentage

16. Non-Owner Occupied CRE / Total Loans PercentagePercentage

17. Non-Owner Occupied CRE / Total Loans Median PercentagePercentage

18. Owner Occupied Non-farm Non-residential CRE Loans / Average Loans PercentagePercentage

19. Owner Occupied Non-farm Non-residential CRE Loans / Average Loans Median PercentagePercentage

20. Median Comparison PercentagePercentage

21. CRE Construction and Development Loans / Total Loans PercentagePercentage

22. CRE Construction and Development Loans / Total Loans Median PercentagePercentage

23. 1 to 4 Family Construction Loans / Total Loans PercentagePercentage

24. 1 to 4 Family Construction Loans / Total Loans Median PercentagePercentage

25. Total CRE Loans / Capital PercentagePercentage

26. Number of CT Community Banks in each tier Percentage of Total Loans Dec 2011 June 2011 Dec 2010 June 2010 Dec 2009 June 2009 Dec 2008 June 2008 Dec 2007 500% +100232311 400% - 500% 454442323 300% - 400% 003458353 200% - 300% 12 1088811910 100% - 200% 109 11 9101310 <100%232102114

27. Total CRE Loans / Capital Median PercentagePercentage

28. Non-Owner Occupied CRE Loans / Capital PercentagePercentage

29. Non-Owner Occupied CRE Loans / Capital Median PercentagePercentage

30. Community Bank CRE Loan Quality

31. Delinquency Trends Loan delinquencies typically forecast loan workouts and, ultimately, charge- offs Delinquencies plateauing for many CT community banks Delinquencies remain high for commercial real estate loans

32. All Loans 90+ Days Past Due PercentagePercentage

33. All Loans 90+ Days Past Due Median PercentagePercentage

34. 1 to 4 Family Construction Loans 90+ Days Past Due PercentagePercentage

35. 1 to 4 Family Construction Loans 90+ Days Past Due Median PercentagePercentage

36. Real Estate Loans 90+ Days Past Due PercentagePercentage

37. Real Estate Loans 90+ Days Past Due Median PercentagePercentage

38. Construction & Land Development Loans 90+ Days Past Due PercentagePercentage

39. Construction & Land Development Loans 90+ Days Past Due Median PercentagePercentage

40. Final Thoughts

41. FDIC Overall Loan Delinquency Trend

42. FDIC CRE Loan Delinquency Trend

43. Conclusions CT community bank CRE exposure has not declined significantly, though C&D loan exposure is down CRE delinquencies appear to be leveling off – but is it a trend? Weak economic growth offers little reason to expect quick improvement in community bank CRE loan conditions

44. Thanks School of Business Commercial Real Estate Conference November 1, 2011