Exhibit 99.3

 

  

CONVERSION VALUATION APPRAISAL REPORT

  

Prepared for:

  

FFBW, Inc.

Waukesha, Wisconsin

 

 

As Of:

May 19, 2017

  

Prepared By:

 

Keller & Company, Inc.

555 Metro Place North

Suite 524

Dublin, Ohio 43017

(614) 766-1426

  

KELLER & COMPANY

 

 

KELLER & COMPANY, INC.

FINANCIAL INSTITUTION CONSULTANTS

555 METRO PLACE NORTH

SUITE 524

DUBLIN, OHIO 43017

____________________________

 

(614) 766-1426     (614) 766-1459 FAX

 

June 5, 2017

 

The Boards of Directors

First Federal Bank of Wisconsin

FFBW, Inc.

1617 E. Racine Avenue

Waukesha, Wisconsin 53186

 

To the Boards:

 

We hereby submit an independent appraisal (“Appraisal”) of the pro forma market value of the to-be-issued stock of FFBW, Inc. (the "Corporation"), which is the mid-tier holding company of First Federal Bank of Wisconsin, Waukesha, Wisconsin, (“First Federal” or the "Bank"). Such stock is to be issued in connection with the application by the Corporation to complete a minority stock offering, with FFBW, MHC, a federally chartered mutual holding company, to own approximately 55 percent of the shares of the Corporation, with 45 percent of the shares of the Corporation to be offered to the public. This appraisal was prepared and provided to the Corporation in accordance with the appraisal requirements of the Federal Reserve Board and the Office of the Comptroller of the Currency.

 

Keller & Company, Inc. is an independent, financial institution consulting firm that serves both thrift institutions and banks. The firm is a full-service consulting organization, as described in more detail in Exhibit A, specializing in business and strategic plans, stock valuations, conversion and reorganization appraisals, market studies and fairness opinions for thrift institutions and banks. The firm has affirmed its independence in this transaction with the preparation of its Affidavit of Independence, a copy of which is included as Exhibit C.

 

Our appraisal is based on the assumption that the data and material provided to us by the Corporation, First Federal and the independent auditors, Wipfli, LLP, are both accurate and complete. We did not verify the financial statements provided to us, nor did we conduct independent valuations of the Bank’s assets and liabilities. We have also used information from other public sources, but we cannot assure the accuracy of such material.

 

In the preparation of this appraisal, we held discussions with the management of the Corporation and the Bank, with the law firm of Luse Gorman, PC, the Bank’s conversion counsel, and with Wipfli, LLP. Further, we viewed the Corporation’s local economy and primary market area.

 

 

Boards of Directors

First Federal Bank of Wisconsin

FFBW, Inc.

June 5, 2017

Page 2

 

This valuation must not be considered to be a recommendation as to the purchase of stock in the Corporation, and we can provide no guarantee or assurance that any person who purchases shares of the Corporation's stock will be able to later sell such shares at a price equivalent to the price designated in this appraisal.

 

Our valuation will be updated as required and will give consideration to any new developments in the Corporation's operation that have an impact on operations or financial condition. Further, we will give consideration to any changes in general market conditions and to specific changes in the market for publicly traded thrift institutions. Based on the material impact of any such changes on the pro forma market value of the Corporation as determined by this firm, we will make necessary adjustments to the Corporation's appraised value in such appraisal update.

 

It is our opinion that as of May 19, 2017, the pro forma market value or appraised value of FFBW, Inc. was $50,000,000 at the midpoint of the valuation range, with a minority public offering of $22,250,000 or 2,225,000 shares at $10 per share and foundation shares of 25,000 shares at $10 per share or $250,000 for a combined 45.0 percent of the total value or $22,500,000 or 2,250,000 shares at $10 per share.

 

Very truly yours,

 

KELLER & COMPANY, INC.

 

/s/ Keller & Company, Inc.

 

 

 

 

CONVERSION VALUATION APPRAISAL REPORT

  

Prepared for:

  

FFBW, Inc.

 

Waukesha, Wisconsin

  

 

As Of:

May 19, 2017

 

 

TABLE OF CONTENTS

 

		PAGE
INTRODUCTION		1
I.	Description of First Federal Bank of Wisconsin
	General	4
	Performance Overview	8
	Income and Expense	10
	Yields and Costs	15
	Interest Rate Sensitivity	17
	Lending Activities	19
	Nonperforming Assets	24
	Investments	27
	Deposit Activities	28
	Borrowings	28
	Subsidiaries	28
	Office Properties	29
	Management	30
II.	Description of Primary Market Area	32
III.	Comparable Group Selection
	Introduction	38
	General Parameter
	Merger/Acquisition	39
	Trading Exchange	40
	IPO Date	40
	Geographic Location	41
	Asset Size	41
	Mutual Holding Companies	42
	Balance Sheet Parameters
	Introduction	43
	Cash and Investments to Assets	44
	Mortgage-Backed Securities to Assets	44
	One- to Four-Family Loans to Assets	44
	Total Net Loans to Assets	45
	Total Net Loans and Mortgage-Backed Securities to Assets	45
	Borrowed Funds to Assets	46
	Equity to Assets	46
	Performance Parameters
	Introduction	48

 

 

TABLE OF CONTENTS (cont.)

 

		PAGE
III.	Comparable Group Selection (cont.)
	Performance Parameters (cont.) Return on Average Assets	48
	Return on Average Equity	49
	Net Interest Margin	49
	Operating Expenses to Assets	50
	Noninterest Income to Assets	50
	Asset Quality Parameters	50
	Introduction	50
	Nonperforming Assets to Total Assets	51
	Repossessed Assets to Assets	51
	Loan Loss Reserve to Assets	52
	The Comparable Group	52
IV.	Analysis of Financial Performance	53
V.	Market Value Adjustments
	Earnings Performance	56
	Market Area	61
	Financial Condition	62
	Asset, Loan and Deposit Growth	65
	Dividend Payments	66
	Subscription Interest	67
	Liquidity of Stock	68
	Management	69
	Marketing of the Issue	71
VI.	Valuation Methods
	Introduction	72
	Valuation Methods	72
	Valuation Range	73
	Price to Book Value Method	73
	Price to Core Earnings Method	74
	Price to Assets Method	75
	Valuation Analysis and Summary	76
	Valuation Conclusion	77

 

 

LIST OF EXHIBITS

 

NUMERICAL		PAGE
EXHIBITS
1	Balance Sheets - At March 31, 2017 and at December 31, 2016	78
2	Balance Sheets - At December 31, 2012 through 2015	79
3	Statement of Income for the Twelve Months Ended March 31, 2017 and the Year Ended December 31, 2016	80
4	Statements of Income for the Years Ended December 31, 2012 through 2015	81
5	Selected Financial Information	82
6	Income and Expense Trends	83
7	Normalized Earnings Trend	84
8	Performance Indicators	85
9	Volume/Rate Analysis	86
10	Yield and Cost Trends	87
11	Net Portfolio Value	88
12	Loan Portfolio Composition	89
13	Loan Maturity Schedule	90
14	Loan Originations and Purchases, Sales and Repayments	91
15	Delinquent Loans	92
16	Nonperforming Assets	94
17	Classified Assets	95
18	Allowance for Loan Losses	96
19	Investment Portfolio Composition	97
20	Mix of Deposits	98
21	Certificates of Deposit by Maturity	99
22	Borrowed Funds Activity	100
23	Offices of First Federal Bank of Wisconsin	101
24	Management of the Bank	102
25	Key Demographic Data and Trends	103
26	Key Housing Data	104
27	Major Sources of Employment	105
28	Unemployment Rates	106
29	Market Share of Deposits	107
30	National Interest Rates by Quarter	108

 

 

LIST OF EXHIBITS (cont.)

 

NUMERICAL		PAGE
EXHIBITS
31	Thrift Share Data and Pricing Ratios	109
32	Key Financial Data and Ratios	116
33	Share Data and Pricing Ratios - Mutual Holding Companies	123
34	Key Financial Data and Ratios - Mutual Holding Companies	125
35	Recently Converted Thrift Institutions	127
36	Acquisitions and Pending Acquisitions	128
37	Balance Sheets Parameters - Comparable Group Selection	129
38	Operating Performance and Asset Quality Parameters - Comparable Group Selection	131
39	Balance Sheet Ratios - Final Comparable Group	133
40	Operating Performance and Asset Quality Ratios - Final Comparable Group	134
41	Balance Sheet Totals - Final Comparable Group	135
42	Balance Sheet - Asset Composition Most Recent Quarter	136
43	Balance Sheet - Liability and Equity Most Recent Quarter	137
44	Income and Expense Comparison - Trailing Four Quarters	138
45	Income and Expense Comparison as a Percent of Average Assets	139
46	Yields, Costs and Earnings Ratios - Trailing Four Quarters	140
47	Reserves and Supplemental Data	141
48	Comparable Group Ratios - Full Conversion	142
49	Valuation Analysis and Conclusions - Full Conversion	143
50	Pro Forma Effects of Conversion Proceeds - Minimum - Full Conversion	144
51	Pro Forma Effects of Conversion Proceeds - Midpoint - Full Conversion	145
52	Pro Forma Effects of Conversion Proceeds - Maximum - Full Conversion	146
53	Pro Forma Effects of Conversion Proceeds - Maximum, as Adjusted - Full Conversion	147
54	Summary of Valuation Premium or Discount - Full Conversion	148
55	Comparable Group Ratios - Minority Offering	149
56	Valuation Analysis and Calculation - Minority Offering	150
57	Projected Effect of Conversion Proceeds - Minimum - Minority Offering	151
58	Projected Effect of Conversion Proceeds - Midpoint - Minority Offering	152
59	Projected Effect of Conversion Proceeds - Maximum - Minority Offering	153
60	Projected Effect of Conversion Proceeds - Maximum, as adjusted - Minority Offering	154
61	Summary of Valuation of Valuation Premium or Discount - Minority Offering	155

 

 

ALPHABETICAL EXHIBITS		PAGE
A	Background and Qualifications	156
B	RB 20 Certification	160
C	Affidavit of Independence	161

 

 

INTRODUCTION

 

Keller & Company, Inc. is an independent appraisal firm for financial institutions and has prepared this Conversion Valuation Appraisal Report ("Report") to provide the pro forma market value of the to-be-issued common stock of FFBW, Inc. (the “Corporation”), which will be formed as a mid-tier holding company to own all of the common stock of First Federal Bank of Wisconsin (“First Federal” or the “Bank”), Waukesha, Wisconsin. Under the Plan of Conversion, the Corporation will be majority owned by FFBW, MHC, a federally chartered mutual holding company, which will own 55.0 percent of the Corporation. The Corporation will sell to the public 44.5 percent of the appraised value of the Corporation as determined in this Report in a minority stock offering and will give 25,000 shares or 0.5 percent to the new foundation for a combined 45.0 percent of shares issued with the remaining 55.0 percent of the shares outstanding held by FFBW, MHC. The shares of common stock are to be issued in connection with the Bank’s Application for Approval of a Minority Stock Offering and Reorganization from a federally chartered mutual savings and loan association to a federally chartered stock savings and loan association as a subsidiary of a mid-tier holding company.

 

The Application is being filed with the Office of the Comptroller of the Currency (“OCC”), the Federal Reserve Board (“FRB”) and the Securities and Exchange Commission ("SEC"). Such Application for Conversion has been reviewed by us, including the Prospectus and related documents, and discussed with the Bank’s management and the Bank’s conversion counsel, Luse Gorman, PC, Washington, D.C.

 

This conversion appraisal was prepared based on regulatory guidelines entitled "Guidelines for Appraisal Reports for the Valuation of Savings Institutions Converting from the Mutual to Stock Form of Organization," and the Revised Guidelines for Appraisal Reports and represents a full appraisal report. The Report provides detailed exhibits based on the Revised Guidelines and a discussion on each of the factors that need to be considered. Our valuation will be updated in accordance with the Revised Guidelines and will consider any changes in market conditions for thrift institutions.

 

 

Introduction (cont.)

 

The pro forma market value is defined as the price at which the stock of the Corporation after conversion would change hands between a typical willing buyer and a typical willing seller when the former is not under any compulsion to buy and the latter is not under any compulsion to sell, and with both parties having reasonable knowledge of relevant facts in an arm's-length transaction. The appraisal assumes the Bank is a going concern and that the shares issued by the Corporation in the conversion are sold in noncontrol blocks.

 

As part of our appraisal procedure, we have reviewed the financial statements for the five years ended December 31, 2012, 2013, 2014, 2015 and 2016, and unaudited financial statements for the three months ended March 31, 2016 and 2017, and discussed them with First Federal’s management and with First Federal’s independent auditors, Wipfli, LLP, Milwaukee, Wisconsin. We have also discussed and reviewed with management other financial matters and have reviewed internal projections. We have reviewed the Corporation's preliminary Form S-1 and the related filings and discussed them with management and with the Bank’s conversion counsel.

 

To gain insight into the Bank’s local market condition, we have visited First Federal’s main office and four branches and have traveled the surrounding area. The Bank has reduced its number of offices to four as of May 30, 2017, with the closing of its downtown Waukesha office. The Bank will not be selling this office but simply donating the building to the City of Waukesha. In addition, the Bank will have a one-time severance cost related to this office closing of $82,000.

 

We have studied the economic and demographic characteristics of the primary market area, and analyzed the Bank’s primary market area relative to Wisconsin and the United States. We have also examined the competitive market within which First Federal operates, giving consideration to the area's numerous financial institution offices, mortgage banking offices, and credit union offices and other key market area characteristics, both positive and negative.

 

 

Introduction (cont.)

 

We have given consideration to the market conditions for securities in general and for publicly traded thrift stocks in particular. We have examined the performance of selected publicly traded thrift institutions and compared the performance of First Federal to those selected institutions.

 

Our valuation is not intended to represent and must not be interpreted to be a recommendation of any kind as to the desirability of purchasing the to-be-outstanding shares of common stock of the Corporation. Giving consideration to the fact that this appraisal is based on numerous factors that can change over time, we can provide no assurance that any person who purchases the stock of the Corporation in this mutual-to-stock conversion will subsequently be able to sell such shares at prices similar to the pro forma market value of the Corporation as determined in this conversion appraisal.

 

 

I.

DESCRIPTION OF FIRST FEDERAL BANK OF WISCONSIN

 

GENERAL

 

First Federal Bank of Wisconsin (“First Federal”) was organized in 1922 as a state-chartered mutual savings and loan association with the name, Industrial Building and Loan Association of Waukesha. The Bank converted to a federal chartered savings and loan association in 1971 and changed its name to First Federal Savings and Loan Association. In 2007, the Bank changed its name to First Federal Bank of Wisconsin. Then in 2014, the Bank merged with Bay View Federal Savings and Loan Association, Milwaukee, Wisconsin, another mutual savings and loan association with $130.0 million in assets.

 

First Federal conducts its business from its main office in Waukesha, to the east of downtown Waukesha. First Federal also has three branches, one in Milwaukee, one in Brookfield, and one on the west side of Waukesha, with all offices in Waukesha County. The Bank’s primary retail market area is focused on Waukesha County, extending into the southern portion of Milwaukee County.

 

First Federal’s deposits are insured up to applicable limits by the Federal Deposit Insurance Corporation ("FDIC") in the Bank Insurance Fund ("BIF"). The Bank is also subject to certain reserve requirements of the Board of Governors of the Federal Reserve Bank (the "FRB"). First Federal is a member of the Federal Home Loan Bank (the "FHLB") of Chicago and is regulated by the OCC. As of March 31, 2017, First Federal had assets of $236,230,000 deposits of $180,835,000 and equity of $34,155,000.

 

First Federal has been principally engaged in the business of serving the financial needs of the public in its local communities and throughout its primary market area as a community-oriented institution. First Federal has been involved in the origination of one- to four-family mortgage loans, which represented 53.1 percent of its loan originations during the three months ended March 31, 2017. One- to four-family mortgage loan originations represented

 

 

General (cont.)

 

a stronger 68.3 percent of loan originations in the year ended December 31, 2016. At March 31, 2017, 48.3 percent of the Bank’s gross loans consisted of residential real estate loans on one- to four-family dwellings, compared to a higher 51.2 percent at December 31, 2012, with the primary sources of funds being retail deposits from residents in its local communities and to a lesser extent, FHLB advances. The Bank is also an originator of multi-family loans, commercial real estate loans, construction loans, commercial business loans and consumer loans. Consumer loans include automobile loans, loans on deposit accounts and other secured and unsecured personal loans.

 

The Bank had cash and investments of $52.0 million, or 22.0 percent of its assets, excluding FHLB stock which totaled $739,000 or 0.3 percent of assets at March 31, 2017. The Bank had $21.8 million of its investments in mortgage-backed and related securities representing 9.2 percent of assets. Deposits, principal payments, FHLB advances and equity have been the primary sources of funds for the Bank’s lending and investment activities.

 

The total amount of stock to be sold by the Corporation in the minority stock offering will be $22,250,000 or 2,225,000 shares at $10 per share, representing 44.5 percent of the midpoint fully converted appraised value of $50.0 million, with another 25,000 shares to be issued to the the new foundation. The net conversion proceeds will be $21.2 million, net of conversion expenses of approximately $1,100,000. The actual cash proceeds to the Bank of $ 10.58 million will represent 50.0 percent of the net conversion proceeds. The ESOP will represent 8.0 percent of a 49.0 percent minority offering or 96,000 shares at $10 per share, representing $1,960,000 or 3.92 percent of the total value. The Bank’s net proceeds will be used to fund new loans and to invest in securities following their initial deployment to short term investments. The Bank may also use the proceeds to expand services, expand operations or acquire other financial service organizations, diversify into other businesses, or for any other purposes authorized by law. The Corporation will use its proceeds to fund the ESOP and to invest in short-term deposits.

 

 

General (cont.)

 

The Bank has experienced a modest deposit decrease over the past three fiscal years, with deposits decreasing 4.6 percent from December 31, 2014, to December 31, 2016, or an average of 2.3 percent per year. From December 31, 2015, to December 31, 2016, deposits increased by $433,000 or 0.2 percent, compared to a decrease of 4.8 percent in fiscal 2015. For the three months ended March 31, 2017, deposits decreased a moderate 3.4 percent or 13.4 percent on an annualized basis.

 

The Bank has experienced a decrease in its loan portfolio during the past three years and in the most recent three months and has focused on monitoring its asset quality position, on controlling its net interest margin and on maintaining a reasonable equity to assets ratio. Equity to assets increased from 13.89 percent of assets at December 31, 2014, to 14.07 percent at December 31, 2016, and then increased to 14.46 percent at March 31, 2017, impacted by the Bank’s merger in May 2014 with Bay View Federal Savings and Loan Association, Milwaukee, Wisconsin.

 

The primary lending strategy of First Federal has been to focus on the origination of adjustable-rate and fixed-rate one-to four-family mortgage loans, the origination of home equity loans, commercial real estate loans, multi-family loans, and commercial loans, with less activity in construction loans and consumer loans.

 

The Bank’s share of one- to four-family mortgage loans has decreased slightly from 51.0 percent of gross loans at December 31, 2015, to 48.5 percent at March 31, 2017. Commercial real estate loans decreased from 25.0 percent to 23.6 percent, and multi-family loans increased from 15.0 percent of loans to 18.8 percent of loans. Construction loans decreased from 3.0 percent of loans to 2.5 percent from December 31, 2015, to March 31, 2017. All types of real estate loans, including home equity loans, as a group decreased slightly from 94.0 percent of gross loans at December 31, 2015, to 93.4 percent at March 31, 2017. The decrease in real estate loans was offset by the Bank’s increases in commercial business loans and consumer loans. The

 

 

General (cont.)

 

Bank’s share of consumer loans increased from a minimal 1.0 percent to 1.3 percent during the same time period, and commercial business loans increased from 5.0 percent to 5.4 percent of gross loans.

 

Management's internal strategy has also included continued emphasis on maintaining an adequate and appropriate level of allowance for loan losses relative to loans and nonperforming assets in recognition of the more stringent requirements within the industry to establish and maintain a higher level of general valuation allowances and also in recognition of the Bank’s stronger growth in loans. At December 31, 2015, First Federal had $1,551,000 in its loan loss allowance or 0.89 percent of gross loans, and 39.60 percent of nonperforming loans with the loan loss allowance decreasing to $1,478,000 and representing a similar 0.87 percent of gross loans and a higher 84.89 percent of nonperforming loans at March 31, 2017.

 

The basis of earnings for the Bank has been interest income from loans and investments with the net interest margin being the key determinant of net earnings with an emphasis on strengthening noninterest income and reducing noninterest expenses. With a primary dependence on net interest margin for earnings, current management will focus on striving to strengthen the Bank’s net interest margin without undertaking excessive credit risk combined with controlling the Bank’s interest risk position and continue to pursue reducing noninterest expenses, reduce nonperforming assets, and strengthening noninterest income.

 

 

PERFORMANCE OVERVIEW

 

The financial position of First Federal at fiscal year end December 31, 2012, through December 31, 2016 and at March 31, 2017, is shown in Exhibits 1 and 2, and the earnings performance of First Federal for the fiscal years ended December 31, 2012, through 2016 and for the three months ended March 31, 2017, is shown in Exhibits 3 and 4. Exhibit 5 provides selected financial data at December 31, 2014 through 2016 and at March 31, 2017. First Federal has experienced a decrease in its loan portfolio, asset base, cash and investments, and deposits from December 31, 2014 through March 31, 2017. The most recent trend for the Bank from December 31, 2016, to March 31, 2017, was a modest decrease in assets, a modest decrease in cash and investments, a minimal decrease in loans with a modest decrease in deposits.

 

With regard to the Bank’s historical financial condition, First Federal has experienced a minimal decrease in assets from December 31, 2014, through March 31, 2017, with a minimal decrease in loans, a minimal decrease in deposits and a minimal increase in the dollar level of equity.

 

The Bank witnessed a decrease in assets of $5.3 million or 2.2 percent for the period of December 31, 2014, to March 31, 2017, representing an average annual decrease of 1.00 percent. Over the past two fiscal periods, the Bank experienced its largest dollar decrease in assets of $ 1.1 million in 2016, due primarily to a $5.2 million decrease in loans, with a $3.5 million increase in cash and investments. During the Bank’s prior fiscal year of 2015, assets increased $1.1 million or 0.5 percent, compared to an increase of $121.6 million or 101.4 percent in 2014, due to the merger with Bay View Federal.

 

First Federal’s net loan portfolio, which includes mortgage loans and nonmortgage loans, decreased from $170.1 million at December 31, 2014, to $166.1 million at March 31, 2017, and represented a total decrease of $4.1 million, or 2.4 percent. The average annual decrease during that period was 1.06 percent. For the year ended December 31, 2016, net loans decreased $5.2 million or 3.0 percent to $167.6 million, compared to a decrease of $1.5 million or 0.9 percent to $166.1 million in the three months ended March 31, 2017.

 

 

Performance Overview (cont.)

 

First Federal has obtained funds through deposits and FHLB advances with a moderate use of FHLB advances totaling $19.8 million at March 31, 2017. The Bank’s competitive rates for deposits in its local market in conjunction with its focus on service have been the sources for competing for retail deposits. Deposits increased $433,000 or 2.4 percent from December 31, 2015 to 2016, and decreased $3.8 million or 2.1 percent, or 8.2 percent, annualized, to $180.8 million at March 31, 2017, from December 31, 2016.

 

The Bank witnessed a slight increase in its dollar equity level from December 31, 2014 to March 31, 2017. At December 31, 2014, the Bank had an equity level of $33.5 million, representing a 13.89 percent equity to assets ratio and increased to $34.2 million at December 31, 2015, representing a higher 14.08 percent equity to assets ratio. At December 31, 2016, equity was $34.0 million and a similar 14.07 percent of assets, and then increased to $34.2 million and a slightly higher 14.46 percent at March 31, 2017.

 

The overall increase in the equity to assets ratio from December 31, 2014, to March 31, 2017, was enhanced by the Bank’s decrease in assets. The dollar level of equity increased $613,000 or 1.8 percent from December 31, 2014, to March 31, 2017, representing an average annual increase of 0.81 percent.

 

 

INCOME AND EXPENSE

 

Exhibit 6 presents selected operating data for First Federal. This table provides key income and expense figures in dollars for the years ended December 31, 2014, 2015 and 2016 and for the three months ended March 2016 and 2017.

 

First Federal witnessed a modest increase in its dollar level of interest income from 2014 to 2016. Interest income was $7.5 million in 2014 and a higher $9.1 million in 2015. Interest income then decreased in the year ended December 31, 2016, to $8.9 million or $256,000, compared to an increase of $1,635,000 in 2015. In the three months ended March 31, 2017, interest income decreased to $2.13 million or $8.5 million, annualized.

 

The Bank’s interest expense also experienced a moderate increase from 2014 to 2016. Interest expense increased from $909,000 in 2014 to $1.3 million in 2015, representing an increase of $374,000 or 41.1 percent. Interest expense then increased by $350,000 or 27.3 percent in 2016 to $1.63 million. In the three months ended March 31, 2017, interest expense was $377,000 or a lower $1.51 million, annualized. Such increase in interest income from 2014 through March 31, 2017, notwithstanding the smaller increase in interest expense, resulted in a modest dollar increase in annual net interest income but a decrease in net interest margin. Net interest income increased in the year ended December 31, 2015, to $7,838,000, then decreased to $7,232,000 in 2016 and then decreased to $1,756,000 in the three months ended March 31, 2017, or $7,248,000, annualized.

 

The Bank has made provisions for loan losses in each of the past three years of 2014 through 2016 and in the three months ended March 31, 2017. The amounts of those provisions were determined in recognition of the Bank’s levels of loans, nonperforming assets, charge-offs and repossessed assets. The loan loss provisions were $523,000 in 2014, $360,000 in 2015, $844,000 in 2016 and $51,000 in the three months ended March 31, 2017. The impact of these loan loss provisions has been to provide First Federal with a general valuation allowance of $1,478,000 at March 31, 2017, or 0.88 percent of gross loans and 84.89 percent of nonperforming loans.

 

 

Income and Expense (cont.)

 

Total other income or noninterest income indicated an increase in dollars from 2014 to 2016 and then a decrease in the three months ended March 31, 2017. Noninterest income was $108,000 or 0.04 percent of assets in 2014 and a higher $606,000 in 2015 or 0.25 percent of assets. In the year ended December 31, 2016, noninterest income was a higher $866,000, representing 0.36 percent of assets. In the three months ended March 31, 2017, noninterest income was $199,000 or 0.34 percent of assets, on an annualized basis. Noninterest income consists primarily of gains and losses on the sale of loans, securities and real estate owned, service charges and other income.

 

The Bank’s general and administrative expenses or noninterest expenses increased from $6.52 million for the year of 2014 to $6.69 million for the year ended December 31, 2015, representing an increase of 2.6 percent, then increased to $7.24 million for the year ended December 31, 2016, or an 8.2 percent increase, and then increased to $1,821,000 or $7,284,000, annualized for the three months ended March 31, 2017. On a percent of average assets basis, operating expenses decreased from 3.15 percent of average assets for the year ended December 31, 2014, to 2.78 percent for the year ended December 31, 2015, then increased to 2.96 percent for the year ended December 31, 2016, and then increased to 3.07 percent for the three months ended March 31, 2017, annualized.

 

The net earnings position of First Federal has indicated volatility from 2014 through 2016. The annual net income (loss) figures for the years of 2014, 2015 and 2016 were $(298,000), $978,000 and $171,000, respectively, and $81,000 for the three months ended March 31, 2017, representing returns on average assets of (0.14) percent, 0.41 percent and 0.07 percent for fiscal years 2014, 2015 and 2016, respectively, and 0.14 percent for the three months ended March 31, 2017, annualized.

 

Exhibit 7 provides the Bank’s normalized earnings or core earnings for the twelve months ended March 31, 2017. The Bank’s normalized earnings typically eliminate any nonrecurring income and expense items. There was one expense adjustment, resulting in the normalized

 

 

Income and Expense (cont.)

 

income being higher than actual earnings for the twelve months ended March 31, 2017, and equal to $65,000. The core income adjustment was a reduction in provision for loan losses of $309,000.

 

The key performance indicators comprised of selected performance ratios, asset quality ratios and capital ratios are shown in Exhibit 8 to reflect the results of performance. The Bank’s return on average assets changed from (0.14) percent in 2014, to 0.41 percent in 2015, to 0.07 percent in 2016, and then to 0.14 percent in the three months ended March 31, 2017, with the lower earnings in 2016 due partially to the Bank’s higher provision for loan loss.

 

The Bank’s net interest rate spread decreased from 3.51 percent in 2014 to 3.49 percent in 2015, then decreased to 3.17 percent in 2016, and then decreased to 3.11 percent in the three months ended March 31, 2017. The Bank’s net interest margin indicated a somewhat similar trend, increasing from 3.56 percent in 2014 to 3.57 percent in 2015, then decreased to 3.26 percent in 2016, and decreased to 3.21 percent in the three months ended March 31, 2017. First Federal’s net interest rate spread decreased 2 basis points from 2014 to 2015, then decreased 32 basis points in 2016 and then decreased 6 basis points in the first quarter of 2017. The Bank’s net interest margin followed a similar overall trend, increasing 1 basis point from 2014 to 2015, then decreasing 31 basis points from 2015 to 2016 and then decreasing 5 basis points in the first quarter of 2017.

 

The Bank’s return on average equity increased from 2014 to 2016, and then increased again in the first quarter of 2017. The return on average equity increased from (1.10) percent in 2014, to 2.83 percent in 2015, then decreased to 0.49 percent in 2016, and then increased to 0.95 in the first quarter of 2017, annualized.

 

First Federal’s ratio of average interest-earning assets to interest-bearing liabilities increased modestly from 110.0 percent at December 31, 2014, to 112.0 percent at December 31,

 

 

Income and Expense (cont.)

 

2015, then remained at 112.0 percent at December 31, 2016, and then increased to 114.0 percent at March 31, 2017. The Bank’s overall increase in its ratio of interest-earning assets to interest-bearing liabilities is primarily the result of the Bank’s decrease in its asset level.

 

The Bank’s ratio of noninterest expenses to average assets decreased from 3.15 percent in 2014 to 2.78 percent in 2015, then increased to 2.96 percent in 2016, and then increased to 3.02 percent in the three months ended March 31, 2017. Another key noninterest expense ratio reflecting efficiency of operation is the ratio of noninterest expenses to noninterest income plus net interest income referred to as the "efficiency ratio." The industry norm is 55.9 percent for all thrifts and 70.5 percent for thrifts with assets of $100.0 million to $1.0 billion, with the lower the ratio indicating higher efficiency. The Bank has been characterized with a moderately lower level of efficiency historically reflected in its higher efficiency ratio, which decreased from 97.53 percent in 2014 to 79.22 percent in 2015, increased to 89.39 percent in 2016, and then increased to 93.05 percent in the three months ended March 31, 2017.

 

Earnings performance can be affected by an institution's asset quality position. The ratio of nonperforming loans to total loans is a key indicator of asset quality. First Federal witnessed a decrease in its nonperforming loans ratio from December 31, 2014 to March 31, 2017, and the ratio is modestly above the industry norm. Nonperforming loans, by definition, consist of loans delinquent 90 days or more, troubled debt restructurings that have not been performing for at least three months, and nonaccruing loans. First Federal’s nonperforming loans consisted of nonaccrual loans with no loans accruing but past due, and no nonaccruing troubled debt restructured loans. The ratio of nonperforming loans to total loans was 1.04 percent at March 31, 2017, decreasing from 1.69 percent at December 31, 2016, and decreasing from 1.98 percent at December 31, 2014.

 

Two other indicators of asset quality are the Bank’s ratios of allowance for loan losses to total loans and also to nonperforming loans. The Bank’s allowance for loan losses was 0.68

 

 

Income and Expense (cont.)

 

percent of loans at December 31, 2014, increased to 0.89 percent at December 31, 2015, then decreased to 0.87 percent of loans at December 31, 2016, and then increased to 0.88 percent at March 31, 2017. As a percentage of nonperforming loans, First Federal’s allowance for loan losses to nonperforming loans was 34.30 percent at December 31, 2014, a slightly higher 39.60 percent at December 31, 2015, a higher 50.97 percent at December 31, 2016, and a higher 84.89 percent at March 31, 2017.

 

Exhibit 9 provides the changes in net interest income due to rate and volume changes for the fiscal year ended December 31, 2016, and for the three months ended March 31, 2017. For the year ended December 31, 2016, net interest income decreased $606,000, due to a decrease in interest income of $256,000, increased by a $350,000 increase in interest expense. The decrease in interest income was due to a decrease due to rate of $283,000, reduced by an increase due to volume of $27,000. The increase in interest expense was due to a $345,000 increase due to rate, accented by a $5,000 increase due to volume.

 

For the three months ended March 31, 2017, net interest income decreased $134,000, due to a decrease in interest income of $162,000, reduced by a decrease in interest expense of $28,000. The decrease in interest income was due to a decrease due to volume of $77,000, accented by a decrease due to rate of $85,000. The decrease in interest expense was due to a decrease due to volume of $33,000, reduced by an increase due to rate of $5,000.

 

 

YIELDS AND COSTS

 

The overview of yield and cost trends for the years ended December 31, 2014, 2015 and 2016 and for the three months ended March 31, 2017, can be seen in Exhibit 10, which offers a summary of key yields on interest-earning assets and costs of interest-bearing liabilities.

 

First Federal’s weighted average yield on its loan portfolio decreased 16 basis points from fiscal year 2014 to 2016, from 4.64 percent to 4.48 percent and then decreased 6 basis points to 4.42 percent for the three months ended March 31, 2017. The yield on investment securities increased from 2.00 percent to 2.27 percent from 2014 to 2016 or 27 basis points, and then increased to 2.32 percent in the three months ended March 31, 2017. The combined weighted average yield on all interest-earning assets decreased 4 basis points to 3.99 percent from fiscal year 2014 to 2016 and then decreased 5 basis points to 3.94 percent in the three months ended March 31, 2017.

 

First Federal’s weighted average cost of interest-bearing liabilities increased 29 basis points to 0.83 percent from fiscal year 2014 to 2016, which was more than the Bank’s 4 basis point decrease in yield, resulting in a decrease in the Bank’s net interest rate spread of 33 basis points from 3.49 percent to 3.16 percent from 2014 to 2016. The Bank’s cost of interest-bearing liabilities then decreased 3 basis points to 0.80 percent, which was less than the Bank’s 8 basis point decrease in yield, resulting in a decrease in the Bank’s net interest rate spread. The Bank’s interest rate spread decreased 2 basis points in the three months ended March 31, 2017. The Bank’s net interest margin decreased from 3.54 percent in 2014 to 3.25 percent in fiscal year 2016, representing a decrease of 29 basis points and then decreased to 3.25 percent in the three months ended March 31, 2017.

 

The Bank’s ratio of average interest-earning assets to interest-bearing liabilities was 111.0 percent for the year ended December 31, 2014, and was also 111.0 percent for the year ended

 

 

Yields and Costs (cont.)

 

December 31, 2015, then increased to 113.0 percent for the year ended December 31, 2016, and then increased to 115.0 percent at March 31, 2017.

 

 

INTEREST RATE SENSITIVITY

 

First Federal has monitored its interest rate sensitivity position and focused on maintaining a reasonable level of interest rate risk exposure by maintaining higher shares of adjustable-rate residential mortgage loans, commercial real estate loans and multi-family loans and adjustable-rate home equity loans to offset its moderate share of fixed-rate residential mortgage loans. First Federal recognizes the thrift industry’s historically higher interest rate risk exposure, which caused a negative impact on earnings and economic value of equity in the past as a result of significant fluctuations in interest rates, specifically rising rates in the past. Such exposure was due to the disparate rate of maturity and/or repricing of assets relative to liabilities commonly referred to as an institution’s “gap.” The larger an institution’s gap, the greater the risk (interest rate risk) of earnings loss due to a decrease in net interest margin and a decrease in economic value of equity or portfolio loss. In response to the potential impact of interest rate volatility and negative earnings impact, many institutions have taken steps to reduce their gap position. This frequently results in a decline in the institution’s net interest margin and overall earnings performance. First Federal has responded to the interest rate sensitivity issue by increasing its shares of adjustable-rate one to four family loans and commercial real estate loans.

 

The Bank measures its interest rate risk through the use of its economic value of equity (“EVE”) of the expected cash flows from interest-earning assets and interest-bearing liabilities and any off-balance sheets contracts. The EVE for the Bank is calculated on a quarterly basis by an outside firm, showing the Bank’s EVE to asset ratio, the dollar change in EVE, and the change in the EVE ratio for the Bank under rising and falling interest rates. Such changes in EVE ratio under changing rates are reflective of the Bank’s interest rate risk exposure.

 

There are numerous factors which have a measurable influence on interest rate sensitivity in addition to changing interest rates. Such key factors to consider when analyzing interest rate sensitivity include the loan payoff schedule, accelerated principal payments, sale of fixed-rate loans, deposit maturities, interest rate caps on adjustable-rate mortgage loans and deposit withdrawals.

 

 

Interest Rate Sensitivity (cont.)

 

Exhibit 11 provides the Bank’s EVE levels and ratios as of March 31, 2017, based on the most recent calculations and reflects the changes in the Bank’s EVE levels under rising and declining interest rates.

 

The Bank’s change in its EVE level at March 31, 2017, based on a rise in interest rates of 100 basis points was a 3.6 percent decrease, representing a dollar decrease in equity value of $1,409,000. In contrast, based on a decline in interest rates of 100 basis points, the Bank’s EVE level was estimated to decrease 1.00 percent or $400,000 at March 31, 2017. The Bank’s exposure increases to a 7.8 percent decrease under a 200 basis point rise in rates, representing a dollar decrease in equity of $3,033,000. The Bank’s exposure is not reasonably measurable based on a 200 basis point decrease in interest rates, due to the currently low level of interest rates.

 

The Bank’s post shock EVE ratio based on a 200 basis point rise in interest rates is 15.82 percent and indicates a 67 basis point decrease from its 16.49 percent based on no change in interest rates.

 

The Bank is aware of its interest rate risk exposure under rapidly rising rates and falling rates. Due to First Federal’s recognition of the need to control its interest rate exposure, the Bank has been moderately active in the origination of adjustable-rate loans. The Bank plans to increase its lending activity in the future and continue to maintain a moderate share of adjustable-rate loans. The Bank will also continue to focus on strengthening its EVE ratio, recognizing the planned conversion and minority stock offering will strengthen the Bank’s equity level and EVE ratio, based on any change in interest rates.

 

 

LENDING ACTIVITIES

 

First Federal has focused its lending activity on the origination of conventional mortgage loans secured by one- to four-family dwellings, commercial real estate and multi-family loans, home equity loans, construction loans, commercial business loans and consumer loans. Exhibit 12 provides a summary of First Federal’s loan portfolio by loan type at December 31, 2015 and 2016, and at March 31, 2017.

 

The primary loan type for First Federal has been residential loans secured by one- to four-family dwellings, representing a moderate 48.3 percent of the Bank’s gross loans as of March 31, 2017. This share of loans has seen a slight decrease from 51.2 percent at December 31, 2015 The second largest real estate loan type as of March 31, 2017, was commercial real estate loans, which comprised a strong 23.7 percent of gross loans at March 31, 2017, compared to 24.2 percent as of December 31, 2015. The third largest real estate loan type was multi-family loans, which comprised a moderate 18.8 percent of gross loans at March 31, 2017, compared to a lesser 15.5 percent at December 31, 2015. The fourth largest real estate loan category was construction loans, which represented 2.5 percent of gross loans at March 31, 2017, equal to its 2.5 percent at December 31, 2015. These four real estate loan categories represented a strong 93.3 percent of gross loans at March 31, 2017, compared to a similar 93.4 percent of gross loans at December 31, 2015.

 

The Bank had a modest 5.4 percent of loans in commercial business loans at March 31, 2017, up from 5.1 at December 31, 2015. The consumer loan category was the smallest loan category at March 31, 2017, and represented a minimal 1.3 percent of gross loans compared to 1.5 percent at December 31, 2015. Consumer loans were also the smallest loan category at December 31, 2015. The Bank’s consumer loans include savings account loans, automobile loans, and other secured and unsecured loans. The overall mix of loans has witnessed only modest changes from December 31, 2015, to March 31, 2017, with the Bank having decreased its share of one- to four-family loans, offset by an increase in its share of multi-family loans. Commercial real estate loans have also decreased.

 

 

Lending Activities (cont.)

 

The emphasis of First Federal’s lending activity is the origination of conventional mortgage loans secured by one- to four-family residences. Such residences are located primarily in Waukesha County and to a lesser extent in the adjacent Milwaukee County. At March 31, 2017, 48.3 percent of First Federal’s gross loans consisted of loans secured by one- to four-family residential properties, both owner-occupied and nonowner-occupied, excluding construction loans.

 

The Bank offers several types of adjustable-rate mortgage loans ("ARMs"), with adjustment periods of one year, five years, seven years and ten years. The interest rates on ARMs are generally indexed to the weekly average yield on U.S. Treasury rate securities adjusted to a constant maturity of one year. ARMs have a maximum rate adjustment of 2.0 percent at each adjustment period and 6.0 percent for the life of the loan. Rate adjustments are computed by adding a stated margin to the index, the U.S. Treasury securities rate. The Bank normally retains all ARMs which it originates. The majority of ARMs have terms of up to 30 years, which is the maximum term offered, with some loans having terms of 15 and 20 years.

 

The Bank’s one- to four-family mortgage loans remain outstanding for shorter periods than their contractual terms, because borrowers have the right to refinance or prepay. These mortgage loans contain “due on sale” clauses which permit the Bank to accelerate the indebtedness of the loan upon transfer of ownership of the mortgage property.

 

The Bank’s other key mortgage loan product is a fixed-rate mortgage loan with First Federal’s fixed-rate mortgage loans having terms of 10 years, 15 years, and 30 years. Fixed-rate mortgage loans have a maximum term of 30 years. The Bank’s fixed-rate mortgage loans normally conform to Freddie Mac or Fannie Mae underwriting standards. The Bank also originates conforming “jumbo loans” residential mortgage loans. The Bank normally sells its jumbo fixed-rate residential mortgage loans in the secondary market, with the Bank selling these loans servicing released.

 

 

Lending Activities (cont.)

 

The normal loan-to-value ratio for conventional mortgage loans to purchase or refinance one-to four-family dwellings generally does not exceed 85 percent at First Federal, even though the Bank is permitted to make loans up to a 100.0 percent loan-to-value ratio. While the Bank does make loans up to 100.0 percent of loan-to-value, the Bank requires private mortgage insurance for the amount in excess of the 85.0 percent loan-to-value ratio for fixed-rate loans and adjustable-rate loans. Mortgage loans originated by the Bank include due-on-sale clauses enabling the Bank to adjust rates on fixed-rate loans in the event the borrower transfers ownership. The Bank also requires an escrow account for insurance and taxes on loans with a loan-to-value ratio in excess of 85.0 percent.

 

First Federal has also been an originator of adjustable-rate and fixed-rate commercial real estate loans and multi-family loans in the past and will continue to make multi-family and commercial real estate loans. The adjustable-rate loans have rate caps of 2.0 percent at each adjustment period and 6.0 percent over the life of the loan. The Bank had a total of $40.3 million in commercial real estate loans and $32.0 million in multi-family loans at March 31, 2017, or a combined 42.5 percent of gross loans, compared to a lesser 40.0 percent of gross loans at December 31, 2015.

 

The major portion of commercial real estate and multi-family loans are secured by apartment buildings, small retail establishments, office buildings, and other owner-occupied properties used for business. Most of the multi-family and commercial real estate loans are fully amortizing with a term of up to 25 years, with rates on the adjustable-rate loans adjusting at the end of the initial term of three or five years. The maximum loan-to-value ratio is normally 75.0 percent for multi-family loans and 80.0 percent for commercial real estate loans.

 

The Bank also originates commercial development loans. The Bank had $4.2 million or 2.5 percent of gross loans in development loans at March 31, 2017. The maximum loan-to-value ratio is 65.0 percent of the contract price or completed appraised value, whichever is less.

 

 

Lending Activities (cont.)

 

The Bank has not been active in home equity loans or lines of credit, which totaled $1.6 million or 0.9 percent of gross loans at March 31, 2017. The interest rate for home equity lines of credit is tied to the prevailing prime interest rate.

 

First Federal is also an originator of commercial business loans, which represented a modest 5.4 percent of loans at March 31, 2017. The Bank had $9.0 million in commercial business loans at December 31, 2015, or 5.1 percent of loans. These loans are normally floating-rate and indexed to the Wall Street Journal prime rate or fixed-rate with a term of one to seven years.

 

First Federal also offers consumer loans, with these loans totaling only $2.1 million at March 31, 2017, and representing 1.3 percent of gross loans. Consumer loans primarily include automobile loans, share loans, and other secured and unsecured loans.

 

Exhibit 13 provides a loan maturity schedule and breakdown and a summary of First Federal’s fixed- and adjustable-rate loans, indicating a majority of adjustable-rate loans. At December 31, 2017, 61.9 percent of the Bank’s loans due after December 31, 2018, were fixed-rate and 38.1 percent were adjustable-rate. At December 31, 2016, the Bank had 62.7 percent of its loans due on or before December 31, 2021, or in five years or less. The Bank had a lesser 37.3 percent of its loans with a maturity of more than five years.

 

As indicated in Exhibit 14, First Federal experienced a modest increase in its one-to four-family loan originations and a minimal increase in total loan originations from 2014 to 2016, and total loan origination growth continued in the three months ended March 31, 2017, however, one- to four-family loan origination activity decreased. Total loan originations in 2014 were $57.1 million compared to a slightly larger $58.4 million in fiscal year 2016, reflective of higher levels of one- to four-family loans and construction loans originated, increasing from a combined $30.5 million to $41.3 million. Total loan originations were $15.2 million in the three months

 

 

Lending Activities (cont.)

 

ended March 31, 2017, or $60.9 million, annualized, led by one- to four-family loan originations, which totaled $8.1 million or $32.4 million, annualized. The increase in one- to four-family loan originations from 2014 to 2016 of $8.9 million represented 684.6 percent of the $1.3 million aggregate increase in total loan originations from 2014 to 2016, with commercial real estate loan originations decreasing $6.4 million. Multi-family loans decreased $2.0 million from 2014 to 2016, and construction loans increased $1.9 million from 2014 to 2016. In the three months ended March 31, 2017, one- to four-family loans represented 53.1 percent of total loan originations, followed by multi-family loans, responsible for 23.9 percent of total loan originations.

 

Overall, loan originations and purchases exceeded loan sales, principal payments, loan repayments and other deductions in 2014, 2015 and in the three months ended March 31, 2017, and fell short in 2016. In 2014, loan originations and purchases exceeded reductions by $83.7 million, with $82.2 million in loans purchased, then fell short of reductions by $1.4 million in 2016, impacted by $20.2 million in loans sold, and then exceeded reductions by $2.8 million in the three months ended March 31, 2017.

 

 

NONPERFORMING ASSETS

 

First Federal understands asset quality risk and the direct relationship of such risk to delinquent loans and nonperforming assets, including real estate owned. The quality of assets has been a key concern to financial institutions throughout many regions of the country. A number of financial institutions have been confronted with higher levels of nonperforming assets over the past few years and have been forced to recognize significant losses, setting aside major valuation allowances.

 

A sharp increase in nonperforming assets has often been related to specific regions of the country and has frequently been associated with higher risk loans, including commercial real estate loans and multi-family loans and nonowner-occupied single-family loans. First Federal has a modestly higher level of nonperforming assets, with nonperforming assets decreasing noticeably in the three months ended March 31, 2017.

 

Exhibit 15 provides a summary of First Federal’s delinquent loans at December 31, 2014, 2015, and 2016, and at March 31, 2017, indicating an overall decrease in the dollar amount of delinquent loans from December 31, 2014, to March 31, 2017. The Bank had $936,000 in loans delinquent 30 to 89 days at March 31, 2017. Loans delinquent 90 days or more totaled $715,000 at March 31, 2017, with these two categories representing 0.97 percent of gross loans, with all of them one- to four-family real estate loans. At December 31, 2014, delinquent loans of 30 to 89 days totaled $2,501,000 or 1.46 percent of gross loans and loans delinquent 90 days or more totaled $1,513,000 or 0.88 percent of gross loans for a combined total of $4,014,000 and a higher share of 2.34 percent of gross loans, compared to a lower $1,651,000 and a lower 0.97 percent of gross loans at March 31, 2017.

 

It is normal procedure for First Federal’s board to review loans delinquent 90 days or more on a monthly basis, to assess their collectibility and possibly commence foreclosure proceedings. When a loan is delinquent 15 days, the Bank sends a late notice to the borrower and also contact the borrower by a phone call. After 90 days delinquency, a demand letter is sent.

 

 

Nonperforming Assets (cont.)

 

When the loan becomes delinquent 90 days, the Bank considers the loan in default and it is placed on nonaccrual status. A decision as to whether and when to initiate foreclosure proceedings is based on such factors as the amount of the outstanding loan, the extent of the delinquency and the borrower’s ability and willingness to cooperate in curing the delinquency. The Bank generally initiates foreclosure when a loan has been delinquent 90 days and no workout agreement has been reached.

 

Exhibit 16 provides a summary of First Federal’s nonperforming assets at December 31, 2014, 2015 and 2016, and at March 31, 2017. Nonperforming assets, by definition, include loans 90 days or more past due, nonaccruing loans, troubled debt restructurings that have not performed, and repossessed assets. The Bank carried a lower dollar level of nonperforming assets at March 31, 2017, relative to December 31, 2014. First Federal’s level of nonperforming assets was $3,402,000 at December 31, 2014, and a lower $2,578,000 at March 31, 2017, which represented 1.41 percent of assets in 2014 and 1.09 percent March 31, 2017. The Bank’s nonperforming assets included $3,379,000 in nonaccrual loans, $23,000 in loans 90 days or more past due and no real estate owned for a total of $3,402,000 at December 31, 2014. At March 31, 2017, nonperforming assets were a lower $2,578,000 or a lower 1.09 percent of assets and included $1,741,000 in nonaccrual loans, $837,000 in real estate owned, with no loans 90 days or more past due.

 

First Federal’s levels of nonperforming assets were lower than its levels of classified assets. The Bank’s ratios of classified assets to assets, excluding special mention assets, were 0.72 percent of assets at December 31, 2015, and a lower 0.27 percent at March 31, 2017 (reference Exhibit 17). The Bank’s classified assets consisted of $548,000 in substandard assets, with $87,000 in assets classified as doubtful and no assets classified as loss at March 31, 2017. The Bank had $1,755,000 in assets classified as substandard and no assets classified as loss or doubtful at December 31, 2015.

 

 

Nonperforming Assets (cont.)

 

Exhibit 18 shows First Federal’s allowance for loan losses at December 31, 2014, 2015 and 2016, and at March 31, 2017, indicating the activity and the resultant balances. First Federal has witnessed a moderate increase in its balance of allowance for loan losses from $1,167,000 at December 31, 2014, to $1,478,000 at March 31, 2017, in response to its effort to strengthen its ratio of allowance for loan losses to nonperforming loans. The Bank had provisions for loan losses of $523,000 in 2014, $360,000 in 2015, $844,000 in 2016 and $51,000 in the three months ended March 31, 2017.

 

The Bank had total charge-offs of $388,000 in 2014, $116,000 in 2015, $917,000 in 2016, and $86,000 in the three months ended March 31, 2017, with total recoveries of $140,000 in 2015, $86,000 in 2016, and $35,000 in the three months ended March 31, 2017. The Bank’s ratio of allowance for loan losses to gross loans was 0.68 percent at December 31, 2014, a higher 0.87 percent at December 31, 2016, and a similar 0.87 percent at March 31, 2017. Allowance for loan losses to nonperforming loans was 34.30 percent at December 31, 2014, and a higher 50.98 percent at December 31, 2016, and a higher 84.89 percent at March 31, 2017.

 

 

INVESTMENTS

 

The investment and securities portfolio, including certificates of deposit, has been comprised of U.S. government and federal agency securities, municipal securities, interest-bearing deposits, mortgage-backed securities and corporate debt securities. Exhibit 19 provides a summary of First Federal’s investment portfolio at December 31, 2014, 2015 and 2016, and at March 31, 2017, excluding FHLB stock. Investment securities totaled $47.0 million at March 31, 2017, based on fair value, compared to $51.8 million at December 31, 2014. The Bank had $18.3 million in mortgage-backed securities at December 31, 2014, and $21.8 million at March 31, 2017. Mortgage-backed securities represented the largest category of the Bank’s investments at March 31, 2017, followed by municipal securities. In 2014, municipal securities was the largest investment category followed by mortgage-backed securities.

 

The second key component of cash and investments at March 31, 2017, was municipal securities, totaling $15.1 million and representing 32.0 percent of total cash and investments, excluding FHLB stock, compared to $18.4 million and a larger 35.5 percent at December 31, 2014. The Bank had $739,000 in FHLB stock at March 31, 2017. The weighted average yield on investment securities was 2.32 percent for the three months ended March 31, 2017, and a lesser 2.0 percent in 2014.

 

 

DEPOSIT ACTIVITIES

 

The mix of average deposits by amount at December 31, 2014, 2015 and 2016, and at March 31, 2017, is provided in Exhibit 20. There has been a moderate change in total deposits and a modest change in the deposit mix during this period. Total average deposits have increased from $165.4 million at December 31, 2014, to $182.0 million at March 31, 2017, representing an increase of $16.6 million or 10.0 percent. Average certificates of deposit have increased from $80.0 million at December 31, 2014, to $82.1 million at March 31, 2017, representing an increase of $2.1 million or 2.6 percent, while average savings, transaction and MMDA accounts have increased $14.5 million from $85.4 million at December 31, 2014, to $99.9 million at March 31, 2017, or 17.1 percent.

 

Exhibit 21 provides a breakdown of the Bank’s certificates of deposits in amounts of $100,000 or more by maturity. The largest category of these certificates based on maturity is certificates with a maturity of over one year to three years, which represented a strong 66.2 percent of these certificates followed by certificates with a maturity of over three years, which represented a moderate 11.6 percent of certificates.

 

BORROWINGS

 

First Federal has made moderate use of FHLB advances (reference Exhibit 22) in each of the years ended December 31, 2014, 2015 and 2016, and in the three months ended March 31, 2017. The Bank had total FHLB advances of $19.8 million at March 31, 2017, with a weighted cost of 1.37 percent during the period and a balance of a lower $13.8 million at December 31, 2014, with a weighted cost of a higher 1.49 percent during the period.

 

SUBSIDIARIES

 

First Federal has no subsidiaries.

 

 

OFFICE PROPERTIES

 

First Federal had five offices at March 31, 2017, its main office and two branches in Waukesha, a branch in Brookfield, and a branch in Milwaukee. The Bank owns all of its offices (reference Exhibit 23). At March 31, 2017, the Bank’s total investment in fixed assets, based on depreciated cost, was $7.7 million or 3.25 percent of assets. The Bank has now closed one of its three offices in Waukesha, the downtown office, and this former main office has been replaced by its east side Waukesha office. The Bank is donating this office to the city.

 

 

MANAGEMENT

 

Mr. Edward H. Schaefer has served as chief executive officer, president and a director of First Federal Bank since July 2016. Mr. Schaefer served as chief executive officer and president of Citizens Community Bancorp and chief executive officer, president and a director of its wholly owned subsidiary, Citizens Community Federal N.A., from January 2010 to July 2016. Mr. Schaefer was a consultant to the Corporation from October 1, 2009, until January 4, 2010. For the years prior to Citizens Community, Mr. Schaefer held positions of vice president and president of various Norwest Bank entities, most recently as president of Norwest Bank/Wells Fargo, in Eau Claire, Wisconsin. Ms. Nikola B. Schaumberg is chief financial officer of First Federal, a position she has held since November 2012. Ms. Schaumberg has over 18 years of experience in accounting and in the financial services industry, including public accounting with KPMG and eleven years as the controller for Westbury Bank (f/k/a West Bend Savings Bank). Mr. David D. Rosenwald is chief lending officer of First Federal where he oversees all lending for the Bank. Mr. Rosenwald served First Federal as senior vice president– commercial banking division head from February of 2013 to October of 2016 before assuming his current role. Mr. Rosenwald has 35 years of commercial, residential and consumer lending experience, including from 2007 to 2013 with Pyramax Bank as SVP–commercial real estate/residential real estate manager, 2001 to 2006 as SVP–commercial lending officer for Associated Bank. Prior to that Mr. Rosenwald served in various roles for US Bank from 1990 to 2001, including mortgage lender, branch manager and commercial credit officer. Mr. Rosenwald began his banking career with Bank One where he served as a consumer lender, personal banker and indirect lending manager. Mr. Gary L. Wollenzien serves as compliance/internal audit officer, Bank Secrecy Act officer, Community Reinvestment Act officer, security officer and Gramm-Leach-Bliley Act officer of First Federal, positions he has held since March 2015. Mr. Wollenzien previously served as assistant vice president-internal audit manager and senior internal auditor at Guaranty Bank, FSB from April 2012 until November 2014. Mr. Wollenzien served in internal audit consultant roles with Baker Tilly Search & Staffing, LLC from January 2012 until March 2012 and Titus from January 2011 until December 2011. Mr. Wollenzien served as risk & advisory services manager/audit manager with Assurant, Inc., an insurance holding company, almost 10 years. For the 21 years prior to Assurant, Inc., Mr. Wollenzien held positions as audit supervisor,

 

 

Management (cont.)

 

senior internal audit and accountant with Firstar Corporation and First Financial Bank in Milwaukee, Wisconsin. Mr. Duane R. Kilby serves as a vice president and manager of the residential/consumer lending department of First Federal since September 2014. Mr. Kilby has over 34 years of lending experience, with the most recent 16 years in residential. Prior to First Federal, he was a senior mortgage loan officer with Pyramax Bank from November 2008 to September 2014, Associated Bank from April 2001 to November 2008, and an assistant vice president in consumer lending with TCF Bank from May 1995 to March 2001.

 

 

II.

DESCRIPTION OF PRIMARY MARKET AREA

 

First Federal's market area is focused on Waukesha County, Wisconsin, and extends into the southern portion of Milwaukee County. Exhibit 25 shows the trends in population, households and income for Milwaukee County, Waukesha County, Wisconsin and the United States. Milwaukee County’s population increased by 0.8 percent from 2000 to 2010, Waukesha County’s population increased by 8.1 percent, while Wisconsin’s and the United States’ population levels increased by 6.0 percent and 9.7 percent, respectively, during the same time period. Through 2020, population is projected to increase by 0.4 percent, 5.0 percent, 3.5 percent and 7.6 percent in Milwaukee and Waukesha Counties, Wisconsin and the United States respectively.

 

More important is the trend in households. Milwaukee County experienced a 1.6 percent increase in households from 2000 through 2010, compared to increases of 12.9 percent in Waukesha County, 9.4 percent in Wisconsin and 10.7 percent in the United States. All areas are projected to increase in number of households from 2010 through 2020, by 1.3 percent in Milwaukee County, by 4.7 percent in Warren County, as well as Wisconsin and the United States by 3.7 percent and 7.5 percent, respectively.

 

The Milwaukee County had the lowest level per capita income level in both 2000 and 2010 while Waukesha County maintained the highest per capita income level in both years. Per capita income increased in all areas from 2000 to 2010. Milwaukee County’s per capita income increased to $24,254, Waukesha County’s per capita income level increased to $37,282. Wisconsin’s increased to $27,192 and the United States’ increased to $26,059. In 2000, median household income in the two counties were $38,100 in Milwaukee County and $62,839 in Waukesha County, with Wisconsin at $43,791 and the United States with a median household income of $41,994. Median household income increased from 2000 to 2010 by 14.4 percent, 20.4 percent, 19.6 percent and 19.2 percent to $43,599, $75,689, $52,374 and $50,046 in Milwaukee County, Waukesha County, Wisconsin and the United States, respectively. All areas are also projected to show increases in their median household income levels from 2010 through 2020. The median household income levels in Milwaukee County, Waukesha County,

 

 

Description of Primary Market Area (cont.)

 

Wisconsin and the United States are projected to increase by 14.0 percent, 11.5 percent, 9.9 percent and 23.1 percent, respectively, to $49,722, $84,386, $57,579 and $61,618, respectively, from 2010 to 2020.

 

Exhibit 26 provides a summary of key housing data for Milwaukee and Waukesha Counties, Wisconsin and the United States. In 2000, Milwaukee County had the lowest rate of owner-occupancy at 52.6 percent, lower than Waukesha County at 76.4 percent, Wisconsin at 68.4 percent and the United States at 66.2 percent. As a result, Milwaukee County supported a higher rate of renter-occupied housing of 47.4 percent, compared to 23.6 percent Waukesha County, 31.6 percent in Wisconsin and 33.8 percent in the United States. In 2010, owner-occupied housing decreased slightly in Milwaukee County to 51.3 percent and increased slightly in Waukesha County to 76.8 percent, decreased in Wisconsin to 68.1 percent and in the United States to 65.4 percent. Conversely, the renter-occupied rates increased slightly in Milwaukee County to 48.7 percent, in Wisconsin to 31.9 percent and in the United States to 34.6 percent. Renter-occupied percentages decreased slightly in Waukesha County to 23.2 percent.

 

Milwaukee County's 2000 median housing value was $103,200, lower than all other areas’ median housing values. The other 2000 median housing values were $170,400 in Waukesha County, $112,200 in Wisconsin with the United States’ median housing value at $119,600. The 2000 median rent in Milwaukee County was $555, which was lower than Waukesha County at $726 the United States at $602, with Wisconsin’s median rent level at the lowest level of $540. In 2010, median housing values had increased in Milwaukee County to $162,900, in Waukesha County to $257,700, in Wisconsin to $169,000 and in the United States to $186,200. The 2010 median rent levels were $786, $906, $749 and $871, in Milwaukee and Waukesha Counties, Wisconsin and the United States, respectively.

 

In 2000, the major source of employment for all areas by industry group, based on share of employment, was the services industry. The services industry was responsible for the majority

 

 

Description of Primary Market Area (cont.)

 

of employment in both counties, Wisconsin and the United States with 47.6 percent, 40.6 percent, 41.5 percent and 46.7 percent of jobs (reference Exhibit 27). The manufacturing industry was the second major employer in Milwaukee and Waukesha Counties and Wisconsin at 18.5 percent, 21.2 percent and 22.2 percent but was the third largest employer in the United States at 14.1 percent The wholesale/retail trade group was the third major overall employer in Milwaukee and Waukesha Counties and Wisconsin at 13.6 percent, 16.6 percent, 14.8 percent, and the wholesale/retail trade group was the second major overall employer in the United States with 15.3 percent of employment. The agriculture/mining group, construction group, transportation/utilities, information and finance/insurance/real estate group combined to provide 20.3 percent of employment in Milwaukee County, 21.6 percent of employment in Waukesha County, 21.5 percent of employment in Wisconsin and 23.9 percent in the United States.

 

In 2010, the services industry, manufacturing industry and wholesale/retail trade industry provided the first, second and third highest levels of employment, respectively, for Milwaukee and Waukesha Counties and Wisconsin. In Milwaukee and Waukesha Counties and Wisconsin the manufacturing sector remained the second higher employer with the wholesale/retail industry third. The services industry accounted for 54.1 percent, 45.5 percent, 46.8 percent and 53.2 percent in Milwaukee County, Waukesha County, Wisconsin and the United States, respectively. The manufacturing trade industry provided for 18.5 percent, 21.2 percent, 22.2 percent and 14.1 percent of employment in Milwaukee County, Waukesha County, Wisconsin and the United States, respectively. The wholesale/retail trade group provided 13.6 percent, 16.6 percent, 14.8 percent, and 14.1 percent of employment in Milwaukee County, Waukesha County, Wisconsin and the United States, respectively. In the 2010 Census, the agriculture/mining, construction, transportation/utilities, information, and finance/insurance/real estate sectors accounted for 18.3 percent, 20.5 percent, 20.6 percent and 21.9 percent in Milwaukee and Waukesha Counties, Wisconsin and the United States, respectively.

 

 

Description of Primary Market Area (cont.)

 

Some of the largest employers in Milwaukee and Waukesha Counties are listed below.

 

Employer		Employees			Product/Service
(Waukesha County)
Anthem Blue Cross Blue Shield		2,000			Insurance
Arandall Corp.		1,000			Printing
Community Memorial Hospital		1,000	+		Healthcare
Cooper Power Systems		2,200			Energy
Fiserv, Inc.		1,000	+		Data Processing
GE Healthcare Bio-Sciences Corp		6,000			Diagnosing Systems
Generac Holding		3,800			Manufacturing
Harley Davidson Motor Co.		2,700			Motorcycles/Accessories
Husco International, Inc.		530			Manufacturing
Kohl’s		7,800			Retail Sales
MetalTek International		500			Manufacturing
Milwaukee Electric Tool Corp.		600			Manufacturing
ProHealth Care		4,800			Healthcare
Quad/Graphics Inc.		7,500			Printing/Marketing
Roundy’s		2,857			Supermarkets
Target Corp.		600			Distribution
(Milwaukee County)
AT & T Wisconsin		3,500			Communications
Aurora Health Care		32,000			Healthcare
BMO Harris		3,400			Financial services
Briggs & Stratton		1,358			Manufacturing small engines
Columbia St. Marys		4,500			Healthcare
FIS		2,800			Financial data
Froedtest Health		10,900			Healthcare
Medical College of Wisconsin		5,300			Medical school
Northwestern Mutual		5,585			Insurance
Potawatomi Bingo Casino		3,000			Entertainment
Rockwell Automation		1,909			Power, controls & information technology
SC Johnson		2,200			Home products, pest control
We Energies		4,300			Electricity, gas & steam utility
Wheaton Franciscan Healthcare		11,000			Heathcare

 

The unemployment rate is another key economic indicator. Exhibit 28 shows the unemployment rates in Milwaukee and Waukesha Counties, Wisconsin and the United States in 2012 through 2016. Milwaukee County’s unemployment rates have been higher than the state and national unemployment rates, while Waukesha County’s rates have been lower than both state and national rates. In 2012, Milwaukee County had an unemployment rate of 8.6 percent, compared to unemployment rates of 5.8 percent in Waukesha County, 7.0 percent in Wisconsin and 8.1 percent in the United States. In 2013, all areas decreased in unemployment to 8.4 percent, 5.5 percent, 6.7 percent and 7.4 percent in Milwaukee and Waukesha Counties,

 

 

Description of Primary Market Area (cont.)

 

Wisconsin and the United States, respectively. In 2014, all areas’ unemployment rates again decreased to 6.9 percent, 4.4 percent, 5.4 percent and 6.2 percent in Milwaukee and Waukesha, Counties, Wisconsin and the United States, respectively. In 2015, Milwaukee County, Waukesha County, Wisconsin and the United States had decreases in unemployment to 5.8 percent, 3.8 percent, 4.6 percent and 5.3 percent, respectively. Through 2016, all areas again had decreases in unemployment to 5.1 percent in Milwaukee County, to 3.6 percent in Waukesha County, and to 4.1 percent and 4.9 percent in Wisconsin and the United States, respectively.

 

Exhibit 29 provides deposit data for banks and thrifts in Milwaukee and Waukesha Counties in which the Bank has its offices. First Federal’s deposit base in Milwaukee County was approximately $66.9 million or a 2.4 percent share of the $2.8 billion total thrift deposits and a 0.1 percent share of the total deposits, which were approximately $47.8 billion as of June 30, 2016. First Federal’s deposit base in Waukesha County was approximately $118.9 million or a 7.4 percent share of the $1.6 billion total thrift deposits and a 1.0 percent share of the total deposits, which were approximately $11.7 billion as of June 30, 2016. The total market area is dominated by banks, with bank deposits accounting for approximately 92.5 percent of deposits at June 30, 2016.

 

Exhibit 30 provides interest rate data for each quarter for the years 2013 through the first quarter of 2017. The interest rates tracked are the Prime Rate, as well as 90-Day, One-Year and Thirty-Year Treasury Bills. Short term interest rates were stable in 2013 and 2014, increased modestly in 2015 and continued to rise in 2016 and in the first quarter of 2017 with 30-year Treasury notes rising in 2013, then decreasing in 2014, and then rising modestly in 2015, 2016 and in the first quarter of 2017.

 

 

SUMMARY

 

In summary, population decreased minimally in Waukesha County from 2000 to 2010, and the number of households also decreased minimally. The 2010 per capita income and median household income levels in Waukesha County were above state and national levels, and the per capita and median household income levels in Milwaukee County were below both state and national levels. Also, Waukesha County’s unemployment rates have been lower than both state and national rates and Milwaukee County’s have been above state and national rates. According to the 2010 Census, median housing values in Waukesha County were above the state median but Milwaukee County’s median housing value was below the national median housing value.

 

The Corporation holds deposits of approximately 4.2 percent of all thrift deposits in the two-county market area as of June 30, 2016, representing a minimal 0.3 percent share of the total deposit base of $59.5 billion.

 

 

III.

COMPARABLE GROUP SELECTION

 

Introduction

 

Integral to the valuation of the Corporation is the selection of an appropriate group of publicly traded thrift institutions, hereinafter referred to as the "comparable group". This section identifies the comparable group and describes each parameter used in the selection of each institution in the group, resulting in a comparable group based on such specific and detailed parameters, current financials and recent trading prices. The various characteristics of the selected comparable group provide the primary basis for making the necessary adjustments to the Corporation's pro forma value relative to the comparable group. There is also a recognition and consideration of financial comparisons with all publicly traded, FDIC-insured thrifts in the United States and all publicly traded, FDIC-insured thrifts in the Midwest region and in Wisconsin.

 

Exhibits 31 and 32 present Share Data and Pricing Ratios and Key Financial Data and Ratios, respectively, both individually and in aggregate, for the universe of 136 publicly traded, FDIC-insured thrifts in the United States ("all thrifts"), excluding mutual holding companies, used in the selection of the comparable group and other financial comparisons. Exhibits 31 and 32 also subclassify all thrifts by region, including the 49 publicly traded Midwest thrifts ("Midwest thrifts") and the 4 publicly traded thrifts in Wisconsin ("Wisconsin thrifts"), and by trading exchange. Exhibits 33 and 34 present Share Data and Pricing Ratios and Key Financial Data and Ratios for the universe of 22 publicly traded mutual holding companies.

 

The selection of the comparable group was based on the establishment of both general and specific parameters using financial, operating and asset quality characteristics of the Corporation as determinants for defining those parameters. The determination of parameters was also based on the uniqueness of each parameter as a normal indicator of a thrift institution's operating philosophy and perspective. The parameters established and defined are considered to be both reasonable and reflective of the Corporation’s basic operation.

 

 

Introduction (cont.)

 

The general parameter requirements for the selection of the peer group candidates included a maximum asset size limit of $800 million, a trading exchange requirement that each candidate be traded on one of the two major stock exchanges, the New York Stock Exchange or the NASDAQ, a geographic parameter that eliminates potential candidates located in the Southwest and West, a merger and acquisition parameter that eliminates any potential candidate that is involved as a seller in a merger and acquisition transaction, and a recent conversion parameter that eliminates any institution that has not been converted from mutual to stock for at least four quarters or prior to December 31, 2016. Due to the general parameter requirement related to trading on NASDAQ or one of the other two major stock exchanges, the size of the peer group institutions results in larger institutions.

 

Inasmuch as the comparable group must consist of at least ten institutions, the parameters relating to asset size and geographic location have been expanded as necessary in order to fulfill this requirement.

 

Due to lack of comparability, there are no mutual holding companies included as potential comparable group candidates.

 

GENERAL PARAMETERS

 

Merger/Acquisition

 

The comparable group will not include any institution that is a proposed seller in a merger or acquisition as of May 19, 2017, due to the price impact of such a pending transaction. There are no pending merger/acquisition transactions involving thrift institutions that were potential comparable group candidates in the Corporation’s city, county or market area as indicated in Exhibit 36.

 

 

Trading Exchange

 

It is necessary that each institution in the comparable group be listed on one of the three major stock exchanges, the New York Stock Exchange or the National Association of Securities Dealers Automated Quotation System (NASDAQ). Such a listing indicates that an institution’s stock has demonstrated trading activity and is responsive to normal market conditions, which are requirements for listing. Of the 136 publicly traded, FDIC-insured savings institutions, excluding the 22 mutual holding companies, 6 are traded on the New York Stock Exchange and 69 are traded on NASDAQ. There were an additional 23 traded over the counter and 38 institutions are listed in the Pink Sheets, but they were not considered for the comparable group selection.

 

IPO Date

 

Another general parameter for the selection of the comparable group is the initial public offering ("IPO") date, which must be at least four quarterly periods prior to March 31, 2017, in order to insure at least four consecutive quarters of reported data as a publicly traded institution. The resulting parameter is a required IPO of December 31, 2016, or earlier.

 

 

Geographic Location

 

The geographic location of an institution is a key parameter due to the impact of various economic and thrift industry conditions on the performance and trading prices of thrift institution stocks. Although geographic location and asset size are the two parameters that have been developed incrementally to fulfill the comparable group requirements, the geographic location parameter has nevertheless eliminated regions of the United States distant to the Corporation, including the Southwest and West regions.

 

The geographic location parameter consists of the Midwest, North Central, Southeast and Northeast regions for a total of fifteen states. To extend the geographic parameter beyond those states could result in the selection of similar thrift institutions with regard to financial conditions and operating characteristics, but with different pricing ratios due to their geographic regions. The result could then be an unrepresentative comparable group with regard to price relative to the parameters and, therefore, an inaccurate value.

 

Asset Size

 

Asset size was another key parameter used in the selection of the comparable group. The total asset size for any potential comparable group institution was $800 million or less, due to the general similarity of asset mix and operating strategies of institutions within this asset range, compared to the Corporation, with assets of approximately $236 million. Such an asset size parameter was necessary to obtain an appropriate comparable group of at least ten institutions.

 

In connection with asset size, we did not consider the number of offices or branches in selecting or eliminating candidates, since that characteristic is directly related to operating expenses, which are recognized as an operating performance parameter.

 

 

Mutual Holding Companies

 

The comparable group does not include any mutual holding companies. The percentage of public ownership of individual mutual holding companies indicates a wide range from minimal to 49.0 percent, the largest permissible percentage, causing them to demonstrate certain varying individual characteristics different among themselves and from conventional, publicly- traded companies. A further reason for the elimination of mutual holding companies as potential comparable group candidates relates to the presence of a mid-tier, publicly traded holding company in some, but not all, mutual holding company structures. The presence of mid-tier holding companies can also result in inconsistent and unreliable comparisons among the relatively small universe of 22 publicly traded mutual holding companies as well between those 22 entities and the larger universe of conventional, publicly traded thrift institutions. As a result of the foregoing and other factors, mutual holding companies typically demonstrate higher pricing ratios that relate to their minority ownership structure and are inconsistent in their derivation with those calculated for conventionally structured, publicly traded institutions. In our opinion, it is appropriate to limit individual comparisons to institutions that are 100 percent publicly owned.

 

 

SUMMARY

 

Exhibits 37 and 38 show the 27 institutions considered as comparable group candidates after applying the general financial, geographic and merger/acquisition parameters, with the outlined institutions being those ultimately selected for the comparable group using the balance sheet, performance and asset quality parameters established in this section along with being publicly traded on one of the three major exchanges.

 

BALANCE SHEET PARAMETERS

 

Introduction

 

The balance sheet parameters focused on seven balance sheet ratios as determinants for selecting a comparable group, as presented in Exhibit 37. The balance sheet ratios consist of the following:

 

1.

Cash and investments to assets

 

2.

Mortgage-backed securities to assets

 

3.

One- to four-family loans to assets

 

4.

Total net loans to assets

 

5.

Total net loans and mortgage-backed securities to assets

 

6.

Borrowed funds to assets

 

7.

Equity to assets

 

The parameters enable the identification and elimination of thrift institutions that are distinctly and functionally different from the Corporation with regard to asset mix. The balance sheet parameters also distinguish institutions with a significantly different capital position from the Corporation. The ratio of deposits to assets was not used as a parameter as it is directly related to and affected by an institution's equity and borrowed funds ratios, which are separate parameters.

 

 

Cash and Investments to Assets

 

The Bank’s ratio of cash and investments to assets, excluding mortgage-backed securities, was 12.79 percent at March 31, 2017, and reflects the Corporation’s slightly lower share of investments, lower than the national and state averages of 13.4 percent and 15.5 percent, respectively. The Bank's investments have consisted of U.S. government and federal agency securities, municipal securities, other investments and interest-bearing deposits. For its recent two years ended December 31, 2015, and December 31, 2016, the Corporation’s average ratio of cash and investments to assets was a higher 14.53 percent, ranging from a high of 15.54 percent in 2015 to a low of 13.51 percent in 2016 and was 12.79 percent at March 31, 2017.

 

The parameter range for cash and investments is has been defined as 38.0 percent or less of assets, with a midpoint of 19.5 percent.

 

Mortgage-Backed Securities to Assets

 

At March 31, 2017, the Corporation’s ratio of mortgage-backed securities to assets was 9.2 percent, modestly higher than the national average of 7.2 percent and the regional average of 6.3 percent for publicly traded thrifts.

 

Inasmuch as many institutions purchase mortgage-backed securities as an alternative to both lending, relative to cyclical loan demand and prevailing interest rates, and other investment vehicles, this parameter is also fairly broad at 37.0 percent or less of assets and a midpoint of 18.5 percent.

 

One- to Four-Family Loans to Assets

 

The Corporation’s lending activity is focused on the origination of residential mortgage loans secured by one- to four-family dwellings. One- to four-family loans, including

 

 

One- to Four-Family Loans to Assets (cont.)

 

construction loans and excluding home equity loans, represented 33.6 percent of the Corporation's assets at March 31, 2017, which is similar to its ratio of 35.2 percent at December 31, 2016, and lower than its ratio of 36.9 percent at December 31, 2015. The parameter for this characteristic is 74.00 percent of assets or less in one- to four-family loans with a midpoint of 37.00 percent.

 

Total Net Loans to Assets

 

At March 31, 2017, the Corporation had a 70.44 percent ratio of total net loans to assets and a lower three fiscal year average of 70.32 percent, compared to the national average of a higher 72.1 percent and the regional average of 69.4 percent for publicly traded thrifts. The Corporation's ratio of total net loans to assets changed from 71.19 percent of total assets at December 31, 2015, to 69.37 percent at December 31, 2016, to 70.44 percent at March 31, 2017.

 

The parameter for the selection of the comparable group is from 20.0 percent to 94.0 percent with a midpoint of 57.0 percent. The lower end of the parameter range relates to the fact that, as the referenced national and regional averages indicate, many institutions hold greater volumes of investment securities and/or mortgage-backed securities as cyclical alternatives to lending, but may otherwise be similar to the Corporation.

 

Total Net Loans and Mortgage-Backed Securities to Assets

 

As discussed previously, the Corporation’s shares of mortgage-backed securities to assets and total net loans to assets were 9.23 percent and 70.44 percent, respectively, for a combined share of 79.67 percent. Recognizing the industry and regional ratios of 79.3 percent and 75.7

 

 

Total Net Loans and Mortgage-Backed Securities to Assets (cont.)

 

percent, respectively, the parameter range for the comparable group in this category is 55.0 percent to 94.0 percent, with a midpoint of 74.5 percent.

 

Borrowed Funds to Assets

 

The Corporation had borrowed funds of $19.8 million or 8.37 percent of assets at March 31, 2017, which is lower than current industry averages.

 

The use of borrowed funds by some institutions indicates an alternative to retail deposits and may provide a source of longer term funds. The federal insurance premium on deposits has also increased the attractiveness of borrowed funds. The institutional demand for borrowed funds has decreased in recent years, due to much lower rates paid on deposits. Additionally, many thrifts are not aggressively seeking deposits, since quality lending opportunities have diminished in the current economic environment.

 

The parameter range of borrowed funds to assets is 48.0 percent or less with a midpoint of 24.0 percent.

 

Equity to Assets

 

The Corporation’s equity to assets ratio was 14.5 percent at March 31, 2017, 14.1 percent at December 31, 2016 and 14.1 percent at December 31, 2015, averaging 14.1 percent for the two fiscal years ended December 31, 2016. The Bank’s retained earnings increased in 2015, decreased in 2016, and increased in the three months ended March 31, 2017. After conversion, based on the midpoint value of $50.0 million, with a 45.0 percent minority offering, with 50.0 percent of the net proceeds of the public offering going to the Bank, its equity is projected to increase to 18.1 percent of assets, with the Corporation at 21.5 percent of assets.

 

 

Equity to Assets (cont.)

 

Based on those equity ratios, we have defined the equity ratio parameter to be 8.0 percent to 20.0 percent with a midpoint ratio of 14.0 percent.

 

 

PERFORMANCE PARAMETERS

 

Introduction

 

Exhibit 38 presents five parameters identified as key indicators of the Corporation’s earnings performance and the basis for such performance both historically and the three months ended March 31, 2017. The primary performance indicator is the Corporation's core return on average assets (ROAA). The second performance indicator is the Corporation's core return on average equity (ROAE). To measure the Corporation's ability to generate net interest income, we have used net interest margin. The supplemental source of income for the Corporation is noninterest income, and the parameter used to measure this factor is the ratio of noninterest income to average assets. The final performance indicator is the Corporation's ratio of operating expenses or noninterest expenses to average assets, a key factor in distinguishing different types of operations, particularly institutions that are aggressive in secondary market activities, which often results in much higher operating costs and overhead ratios.

 

Return on Average Assets

 

The key performance parameter is core ROAA. For the twelve months ended March 31, 2017, the Corporation’s core ROAA was 0.06 percent based on a core income of $65,000, as detailed in Item I of this Report. The net ROAA for the year ended December 31, 2016, was 0.7 percent. The Corporation's ROAAs in its most recent three fiscal years ended December 31, 2016, were (0.14) percent, 0.41 percent, and 0.07 percent, respectively, with a three fiscal year average ROAA of 0.11 percent.

 

Considering the historical and current earnings performance of the Corporation, the range for the ROAA parameter based on core income has been defined as 1.00 percent or less with a midpoint of 0.50 percent.

 

 

Return on Average Equity

 

The ROAE has been used as a secondary parameter to eliminate any institutions with an unusually high or low ROAE that is inconsistent with the Corporation's position. This parameter does not provide as much meaning for a newly converted thrift institution as it does for established stock institutions, due to the unseasoned nature of the capital structure of the newly converted thrift and the inability to accurately reflect a mature ROAE for the newly converted thrift relative to other stock institutions.

 

The Corporation’s core ROAE for the twelve months ended March 31, 2017, was 0.19 percent based on its core income and 4.02 percent in the fiscal year ended December 31, 2016.

 

The parameter range for ROAE for the comparable group, based on core income, is 9.00 percent or less with a midpoint of 4.50 percent.

 

Net Interest Margin

 

The Corporation had a net interest margin of 3.20 percent for the twelve months ended March 31, 2017, representing net interest income as a percentage of average interest-earning assets. The Corporation's net interest margin levels in its three fiscal years of 2014 through 2016 were 3.54 percent, 3.55 percent, and 3.25 percent, respectively, averaging 3.45 percent.

 

The parameter range for the selection of the comparable group is from a low of 1.70 percent to a high of 4.20 percent with a midpoint of 2.95 percent.

 

 

Operating Expenses to Assets

 

For the twelve months ended March 31, 2017, the Corporation had a 3.05 percent ratio of operating expense to average assets. In its three fiscal years ended December 31, 2016, the Corporation’s expense ratio averaged 2.96 percent, from a low of 2.78 percent in fiscal year 2015 to a high of 3.15 percent in fiscal year 2014.

 

The operating expense to assets parameter for the selection of the comparable group is from a low of 1.00 percent to a high of 3.50 percent with a midpoint of 2.25 percent.

 

Noninterest Income to Assets

 

Compared to publicly traded thrifts, the Corporation has experienced a lower level of noninterest income as a source of additional income. The Corporation’s ratio of noninterest income to average assets was 0.38 percent for the twelve months ended March 31, 2017. For its three years ended December 31, 2014 through 2016 the Corporation’s ratio of noninterest income to average assets was 0.06 percent, 0.28 percent and 0.33 percent, respectively, for an average of 0.22 percent.

 

The range for this parameter for the selection of the comparable group is 1.10 percent of average assets or less, with a midpoint of 0.55 percent.

 

ASSET QUALITY PARAMETERS

 

Introduction

 

The final set of financial parameters used in the selection of the comparable group are asset quality parameters, also shown in Exhibit 38. The purpose of these parameters is to insure

 

 

Introduction (cont.)

 

that any thrift institution in the comparable group has an asset quality position similar to that of the Corporation. The three defined asset quality parameters are the ratios of nonperforming assets to total assets, repossessed assets to total assets and loan loss reserves to total assets at the end of the most recent period.

 

Nonperforming Assets to Total Assets

 

The Corporation’s ratio of nonperforming assets to assets was 1.09 percent at March 31, 2017, which was higher than the national average of 0.82 percent for publicly traded thrifts and the average of 0.88 percent for Midwest thrifts. The Corporation’s ratio of nonperforming assets to total assets averaged 1.50 for its most recent three fiscal years ended December 31, 2016, from a high of 1.61 percent in 2015, to a low of 1.41 percent 2014.

 

The comparable group parameter for nonperforming assets is 1.40 percent or less of total assets, with a midpoint of 0.70 percent.

 

Repossessed Assets to Assets

 

The Corporation had repossessed assets of $837,000 at March 31, 2017, representing a ratio to total assets of 0.35 percent, following ratios of repossessed assets to total assets of 0.28 percent and zero percent at December 31, 2016, and December 31, 2015, respectively. National and regional averages were 0.16 percent and 0.20 percent, respectively, for publicly traded thrift institutions.

 

The range for the repossessed assets to total assets parameter is 0.50 percent of assets or less with a midpoint of 0.25 percent.

 

 

Loans Loss Reserves to Assets

 

The Corporation had an allowance for loan losses of $ 1,478,000, representing a loan loss allowance to total assets ratio of 0.63 percent at March 31, 2017, which was similar to its 0.64 percent ratio at December 31, 2016, and higher than its 0.48 percent ratio at December 31, 2015.

 

The loan loss allowance to assets parameter range used for the selection of the comparable group required a minimum ratio of 0.10 percent of assets.

 

THE COMPARABLE GROUP

 

With the application of the parameters previously identified and applied, the final comparable group represents ten institutions identified in Exhibits 38, 39 and 40. The comparable group institutions range in size from $241.3 million to $787.4 million with an average asset size of $486.2 million and have an average of 7.0 offices per institution. Two of the comparable group institutions are in New York, two are in Maryland, and one each in Kentucky, Nebraska, Pennsylvania, Ohio, Minnesota and Illinois, and all ten are traded on NASDAQ.

 

The comparable group institutions as a unit have a ratio of equity to assets of 14.46 percent, which is 23.4 percent higher than all publicly traded thrift institutions in the United States; and for the most recent four quarters indicated a core return on average assets of 0.03 percent, lower than all publicly traded thrifts at 0.75 percent and publicly traded Wisconsin thrifts at 0.86 percent.

 

 

IV.

ANALYSIS OF FINANCIAL PERFORMANCE

 

This section reviews and compares the financial performance of the Corporation to all publicly traded thrifts, to publicly traded thrifts in the Midwest region and to Wisconsin thrifts, as well as to the ten institutions constituting the Corporation’s comparable group, as selected and described in the previous section. The comparative analysis focuses on financial condition, earning performance and pertinent ratios as presented in Exhibits 41 through 46.

 

As presented in Exhibits 42 and 43, at March 31, 2017, the Corporation’s total equity of 14.46 percent of assets was higher than the comparable group at 11.27 percent, all thrifts at 11.72 percent, Midwest thrifts at 11.50 percent and Wisconsin thrifts at 12.87 percent. The Corporation had a 70.44 percent share of net loans in its asset mix, lower than the comparable group at 72.60 percent, all thrifts at 72.12 percent, Wisconsin thrifts at 74.06 percent and higher than Midwest thrifts at 69.39 percent. The Corporation’s lower share of net loans and slightly lower 12.79 percent share of cash and investments is primarily the result of its higher 9.23 percent share of mortgage-backed securities. The comparable group had a slightly higher 13.63 percent share of cash and investments and a lower 7.55 percent share of mortgage-backed securities. All thrifts had 7.17 percent of assets in mortgage-backed securities and 13.37 percent in cash and investments. The Corporation’s 76.42 percent share of deposits was lower than the comparable group, all thrifts and Midwest thrifts and higher than Wisconsin thrifts, reflecting the Corporation's lower share of borrowed funds of 8.37 percent. As ratios to assets, the comparable group had deposits of 76.19 percent and borrowings of 11.49 percent. All thrifts averaged a 77.51 percent share of deposits and 9.85 percent of borrowed funds, while Midwest thrifts had a 78.48 percent share of deposits and a 9.08 percent share of borrowed funds. Wisconsin thrifts averaged a 73.01 percent share of deposits and a higher 13.21 percent share of borrowed funds. The Corporation had no goodwill, compared to 0.49 percent for the comparable group, 0.49 percent for all thrifts, 0.23 percent for Midwest thrifts and 0.01 percent for Wisconsin thrifts.

 

 

Analysis of Financial Performance (cont.)

 

Operating performance indicators are summarized in Exhibits 44, 45 and 46 and provide a synopsis of key sources of income and key expense items for the Corporation in comparison to the comparable group, all thrifts, and regional thrifts for the trailing four quarters.

 

As shown in Exhibit 46, for the twelve months ended March 31, 2017, the Corporation had a yield on average interest-earning assets similar to the comparable group and higher than all thrifts, Midwest thrifts and Wisconsin thrifts. The Corporation's yield on interest-earning assets was 3.95 percent compared to the comparable group at 3.92 percent, all thrifts at 3.82 percent, Midwest thrifts at 3.68 percent and Wisconsin thrifts at 3.71 percent.

 

The Corporation's cost of funds for the twelve months ended March 31, 2017, was higher than the comparable group and Midwest thrifts and lower than all thrifts and Wisconsin thrifts. The Corporation had an average cost of interest-bearing liabilities of 0.84 percent compared to 0.82 percent for the comparable group, 0.88 percent for all thrifts, 0.78 percent for Midwest thrifts and 0.88 percent for Wisconsin thrifts. The Corporation's yield on interest-earning assets and interest cost resulted in a net interest spread of 3.11 percent, which was similar to the comparable group at 3.10 percent, higher than all thrifts at 2.94 percent, Midwest thrifts at 2.89 percent and higher than Wisconsin thrifts at 2.83 percent. The Corporation generated a net interest margin of 3.20 percent for the twelve months ended March 31, 2017, based on its ratio of net interest income to average interest-earning assets, which was lower than the comparable group ratio of 3.23 percent. All thrifts averaged a lower 3.10 percent net interest margin for the trailing four quarters, with Midwest thrifts at 3.04 percent and Wisconsin thrifts at a lower 2.98 percent.

 

The Corporation’s major source of earnings is interest income, as indicated by the operations ratios presented in Exhibit 45. The Corporation had $884,000 in provision for loan losses during the twelve months ended March 31, 2017, representing 0.37 percent of average assets. The average provision for loan losses for the comparable group was 0.09 percent, with all thrifts at 0.07 percent, Midwest thrifts at 0.05 percent and Wisconsin thrifts at 0.07 percent.

 

 

Analysis of Financial Performance (cont.)

 

The Corporation's total noninterest income was $914,000 or 0.38 percent of average assets for the twelve months ended March 31, 2017. Such a ratio of noninterest income to average assets was lower than the comparable group at 0.71 percent, and lower than all thrifts at 0.88 percent, Midwest thrifts at 1.00 percent and Wisconsin thrifts at 0.85 percent. For the twelve months ended March 31, 2017, the Corporation’s operating expense ratio was 3.05 percent of average assets, higher than the comparable group at 2.76 percent, all thrifts at 2.96 percent, Midwest thrifts at 3.08 percent, and Wisconsin thrifts at 3.08 percent.

 

The overall impact of the Corporation’s income and expense ratios is reflected in its net income and return on assets. For the twelve months ended March 31, 2017, the Corporation had a net ROAA of zero percent and core ROAA of 0.03 percent. For its most recent four quarters, the comparable group had a higher net ROAA of 0.72 percent and a core ROAA of 0.55 percent. All publicly traded thrifts averaged a higher net ROAA of 0.81 percent and 0.75 percent core ROAA, with Midwest thrifts a 1.00 percent net ROAA and a 0.95 percent core ROAA. The twelve month net ROAA for the 4 Wisconsin thrifts was 0.88 percent and their core ROAA was 0.86 percent.

 

 

V.

MARKET VALUE ADJUSTMENTS

 

This is a conclusive section where adjustments are made to determine the pro forma market value or appraised value of the Corporation based on a comparison of First Federal with the comparable group. These adjustments will take into consideration such key items as earnings performance, primary market area, financial condition, asset and deposit growth, dividend payments, subscription interest, liquidity of the stock to be issued, management, and market conditions or marketing of the issue. It must be noted that all of the institutions in the comparable group have their differences among themselves and relative to the Bank, and, as a result, such adjustments become necessary.

 

EARNINGS PERFORMANCE

 

In analyzing earnings performance, consideration was given to net interest income, the amount and volatility of interest income and interest expense relative to changes in market area conditions and to changes in overall interest rates, the quality of assets as it relates to the presence of problem assets which may result in adjustments to earnings due to provisions for loan losses, the balance of current and historical nonperforming assets and real estate owned, the balance of valuation allowances to support any problem assets or nonperforming assets, the amount and volatility of noninterest income, and the amount and ratio of noninterest expenses. The earnings performance analysis was based on the Bank’s respective net and core earnings for the twelve months ended March 31, 2017, with comparisons to the core earnings of the comparable group, all thrifts and other geographical subdivisions.

 

As discussed earlier, the Bank has experienced decreases in its assets, loans and deposits in one of the past four fiscal years and decreases in the three months ended March 31, 2017. The Bank has experienced lower earnings in four of the past five years with a loss in the year ended December 31, 2014, and is focused on reducing operating expenses, monitoring and reducing its balance of nonperforming assets; monitoring and strengthening its ratio of interest sensitive assets relative to interest sensitive liabilities, thereby maintaining its overall

 

 

Earnings Performance (cont.)

 

interest rate risk; and maintaining adequate allowances for loan losses to reduce the impact of any charge-offs. Historically, the Bank has been characterized with a slightly higher yield on earning assets but a higher cost of funds, resulting in an average net interest margin, which has been slightly above industry averages, but lower than its comparable group, with the trend experiencing a moderate decrease over the past two years and its 3.20 percent net interest margin for the twelve months ended March 31, 2017, was higher than the industry average of 3.10 percent and lower than the comparable group average of 3.23 percent. During its past two years ended December 31, 2016, First Federal’s ratio of interest expense to interest-bearing liabilities has increased noticeably from 0.54 percent in 2014 to 0.83 percent in 2016, and then to 0.84 percent in the twelve months ended March 31, 2017 The Bank’s ratio was higher than the average of 0.82 percent for the comparable group and lower than the average of 0.88 percent for all thrifts. Following the conversion, the Bank will strive to reduce its operating expenses, strive to increase its net interest margin, maintain its noninterest income, gradually increase its net income, increase its return on assets, continue to control its balance of nonperforming and classified assets, and closely monitor its interest rate risk.

 

The Bank has experienced a slight increase in total loan origination activity dominated by mortgage loans with minimal activity in nonmortgage loans, with commercial real estate loan activity decreasing significantly in 2016. Total loan originations in fiscal year 2016 were modestly above originations for 2015, and net loan change in 2015 was an increase of $5.0 million due to lower loans sold compared to a decrease of $1.4 million in 2016, due to higher loan sales. Gross loan originations were modestly higher in fiscal year 2016 compared to 2015, related to higher one-to-four-family loan originations, higher multi-family loans and higher development loans. Originations totaled $58.4 million in 2016, compared to $55.7 million in 2015, with $1.9 million in loan purchases in 2015 and $6.0 million in 2016. In the three months ended March 31, 2017, loan originations were $15.2 million or $60.9 million, annualized. There were no loan purchases in this period.

 

 

Earnings Performance (cont.)

 

From December 31, 2014, to December 31, 2016, four of the seven categories of loans experienced increases in their balances, with multi-family loans increasing the most. Multi-family loans increased by $4.8 million or 17.5 percent, from December 31, 2014, to December 31, 2016. Commercial real estate loans increased by $4.1million or 10.7 percent from December 31, 2014, to December 31, 2016, commercial business loans increased $444,000 or 6.2 percent, and one- to four-family investor-owned loans increased $1.9 million or 5.9 percent. All other loan categories experienced decreases in their balances. Overall, the Bank’s lending activities resulted in a total loan decrease of $1.4 million or 0.8 percent and a net loan decrease of $3.1 million or 1.8 percent from December 31, 2014, to December 31, 2016. In the three months ended March 31, 2017, loans decreased $703,000 or 0.4 percent.

 

The impact of First Federal’s primary lending efforts has been to generate a yield on average interest-earning assets of 3.95 percent for the twelve months ended March 31, 2017, compared to a similar 3.92 percent for the comparable group, 3.82 percent for all thrifts and a lower 3.71 percent for Wisconsin thrifts. The Bank’s ratio of interest income to average assets was 3.62 percent for the twelve months ended March 31, 2017, similar to the comparable group at 3.60 percent, all thrifts at 3.67 percent and higher than Wisconsin thrifts at 3.44 percent.

 

First Federal’s 0.84 percent cost of interest-bearing liabilities for the twelve months ended March 31, 2017, was slightly higher than the comparable group at 0.82 percent, lower than all thrifts at 0.88 percent, higher than Midwest thrifts at 0.78 percent and lower than Wisconsin thrifts at 0.88 percent. The Bank's resulting net interest spread of 3.11 percent for the twelve months ended March 31, 2017, was similar to the comparable group at 3.10 percent, higher than all thrifts at 2.94 percent, higher than Midwest thrifts at 2.89 percent and higher than Wisconsin thrifts at 2.83 percent. The Bank's net interest margin of 3.20 percent, based on average interest-earning assets for the twelve months ended March 31, 2017, was lower than the comparable group at 3.23 percent but higher than all thrifts at 3.10 percent, Midwest thrifts at 3.04 percent and Wisconsin thrifts at 2.98 percent.

 

 

Earnings Performance (cont.)

 

The Bank's ratio of noninterest income to average assets was 0.38 percent for the twelve months ended March 31, 2017, which was moderately lower than the comparable group at 0.71 percent, lower than all thrifts at 0.83 percent, Midwest thrifts at 0.86 percent and Wisconsin thrifts at 0.85 percent.

 

The Bank's operating expenses were higher than the comparable group, all thrifts and Midwest thrifts, and lower than Wisconsin thrifts. For the twelve months ended March 31, 2017, First Federal had an operating expenses to assets ratio of 3.05 percent compared to 2.76 percent for the comparable group, 2.93 percent for all thrifts, 2.98 percent for Midwest thrifts and 3.08 percent for Wisconsin thrifts. First Federal had a higher 91.6 percent efficiency ratio for the twelve months ended March 31, 2017, compared to the comparable group with an efficiency ratio of 74.4 percent. The efficiency ratio for all publicly traded thrifts was 65.7 percent for the most recent twelve months.

 

For the twelve months ended March 31, 2017, First Federal generated a lower ratio of noninterest income, a higher ratio of noninterest expenses and a slightly lower net interest margin relative to its comparable group. The Bank had a 0.37 percent provision for loan losses during the twelve months ended March 31, 2017, compared to the comparable group at 0.09 percent of assets, all thrifts at 0.07 percent and Midwest thrifts at 0.05 percent. The Bank’s allowance for loan losses to total loans of 0.88 percent was lower than the comparable group and lower than all thrifts. The Bank’s 57.33 percent ratio of reserves to nonperforming assets was much lower than the comparable group at 107.44 percent and lower than all thrifts at 124.98 percent and lower than Midwest thrifts at 120.87 percent.

 

As a result of its operations, the Bank's net and core income for the twelve months ended March 31, 2017, were lower than the comparable group. Based on a minimal loss, the Bank had a return on average assets of zero percent for the twelve months ended March 31, 2017, and a return on average assets of 0.07 percent and 0.41 percent in 2016 and 2015, respectively. The Bank’s core return on average assets was a higher 0.06 percent for the twelve months ended

 

 

Earnings Performance (cont.)

 

March 31, 2017, as detailed in Exhibit 7. For their most recent four quarters, the comparable group had a moderately higher net ROAA of 0.72 percent and a higher core ROAA of 0.55 percent, while all thrifts indicated a higher net ROAA and higher core ROAA of 0.81 percent and 0.75 percent, respectively. Midwest thrifts indicated a net ROAA of 1.00 percent and a core ROAA of 0.95 percent.

 

Following its conversion, First Federal’s earnings will continue to be dependent on a combination of the overall trends in interest rates, the consistency, reliability and variation of its noninterest income, overhead expenses and its asset quality and its future needs for provisions for loan losses. Earnings are projected to represent a lower 0.16 percent in fiscal 2017 followed by earnings based on ROAA of 0.42 percent in 2018 and 0.48 percent in 2019. The Bank’s ratio of noninterest income to average assets decreased in 2016 and has consistently been below industry averages. Overhead expenses indicated moderate increases overall during the past two fiscal years.

 

In recognition of the foregoing earnings related factors, considering First Federal’s historical and current performance measures, as well as Business Plan projections, a moderate downward adjustment has been made to the Corporation’s pro forma market value for earnings performance.

 

 

MARKET AREA

 

First Federal's market area is focused on Waukesha County, Wisconsin, but also includes Milwaukee County in Wisconsin. Population decreased minimally in Waukesha County from 2000 to 2010, and the number of households also decreased minimally. The 2010 per capita income and median household income levels in Waukesha County were above state and national levels, and the per capita and median household income levels in Milwaukee County were below both state and national levels. Also, Waukesha County’s unemployment rates have been lower than both state and national rates and Milwaukee County’s have been above state and national rates. According to the 2010 Census, median housing values in Waukesha County were above the state median but Milwaukee County’s median housing value was below the national median housing value.

 

The Corporation holds deposits of approximately 4.2 percent of all thrift deposits in the two-county market area as of June 30, 2016, representing a minimal 0.3 percent share of the total deposit base of $59.5 billion.

 

In recognition of the foregoing factors, we believe that a slight upward adjustment is warranted for the Bank’s market area.

 

 

FINANCIAL CONDITION

 

The financial condition of First Federal is discussed in Section I and shown in Exhibits 1, 2, 5, and 12 through 22, and is compared to the comparable group in Exhibits 41, 42, and 43. The Bank's ratio of total equity to total assets was 14.46 percent at March 31, 2017, which was modestly higher than the comparable group at 11.27 percent, all thrifts at 11.72 percent and Midwest thrifts at 11.50 percent. Based on the minority offering completed at the midpoint of the valuation range, the Corporation's pro forma equity to assets ratio will increase to 21.50 percent and the Bank's pro forma equity to assets ratio will increase to 18.12 percent.

 

The Bank's mix of assets and liabilities indicates both similarities to and variations from its comparable group. First Federal had a modestly lower 70.4 percent ratio of net loans to total assets at March 31, 2017, compared to the comparable group at 72.6 percent. All thrifts indicated a higher 72.1 percent, with Midwest thrifts at a lower 69.4 percent. The Bank's 12.80 percent share of cash and investments was lower than the comparable group at 13.6 percent, while all thrifts were at 13.4 percent and Midwest thrifts were at 15.5 percent. First Federal’s 9.2 percent ratio of mortgage-backed securities to total assets was higher than the comparable group at 7.6 percent and higher than all thrifts at 7.2 percent and higher than Midwest thrifts at 6.3 percent.

 

The Bank's 76.4 percent ratio of deposits to total assets was similar to the comparable group at 76.2 percent, lower than all thrifts at 77.5 percent and lower than Midwest thrifts at 78.5 percent. First Federal’s lower ratio of deposits was due to its higher share of equity. First Federal had a higher equity to asset ratio of 14.5 percent, compared to the comparable group at 11.3 percent of total assets, with all thrifts at 11.7 percent and Midwest thrifts at 11.5 percent. First Federal had a lower share of borrowed funds to assets of 8.4 percent at March 31, 2017, lower than the comparable group at 11.5 percent and lower than all thrifts at 9.85 percent and Midwest thrifts at 9.08 percent. In 2016, total deposits increased by $433,000 or 0.2 percent. During 2015, First Federal’s deposits decreased by $9.3 million or 4.8 percent from $193.5 million to $184.5 million.

 

 

Financial Condition (cont.)

 

First Federal had no goodwill and had a higher share of repossessed real estate at March 31, 2017. The Bank had repossessed real estate of $739,000 or 0.35 percent of assets at March 31, 2017. This compares to ratios of 0.49 percent for goodwill and intangible assets and 0.08 percent for real estate owned, for the comparable group. All thrifts had a goodwill and intangible assets ratio of 0.49 percent and a real estate owned ratio of 0.16 percent.

 

The financial condition of First Federal has not been significantly impacted by its balance of nonperforming assets of $2,578,000 or a higher 1.09 percent of total assets at March 31, 2017, compared to a lower 0.67 percent for the comparable group, 0.82 percent for all thrifts, 0.88 percent for Midwest thrifts and 0.42 percent for Wisconsin thrifts. The Bank's ratio of nonperforming assets to total assets was a higher 1.48 percent at December 31, 2016, and a higher 1.61 percent at December 31, 2015.

 

At March 31, 2017, First Federal had $1,478,000 of allowances for loan losses, which represented 0.63 percent of assets and 0.88 percent of total loans. The comparable group indicated higher allowance ratios, relative to assets and relative to loans, equal to 0.86 percent of assets and a higher 1.08 percent of total loans, while all thrifts had allowances relative to assets and loans that averaged a higher 0.79 percent of assets and a higher 1.05 percent of total loans. Also of major importance is an institution's ratio of allowances for loan losses to nonperforming assets, since a portion of nonperforming assets might eventually be charged off. First Federal’s $1,478,000 of allowances for loan losses represented a lower 57.33 percent of nonperforming assets at March 31, 2017, compared to the comparable group's 107.44 percent, with all thrifts at 124.98 percent, Midwest thrifts at a higher 120.87 percent and Wisconsin thrifts at a higher 227.85 percent. First Federal’s ratio of net charge-offs to average total loans was 0.57 percent for the twelve months ended March 31, 2017, compared to a lower 0.10 percent for the comparable group, 0.13 percent for all thrifts and 0.19 percent for Midwest thrifts.

 

 

Financial Condition (cont.)

 

First Federal has a modest level of interest rate risk. The change in the Bank’s EVE level at March 31, 2017, reflecting the most current information available, based on a rise in interest rates of 100 basis points was a 3.6 percent decrease, representing a dollar decrease in equity value of $1,409,000. The Bank’s exposure increases to a 7.8 percent decrease in its EVE level under a 200 basis point rise in rates, representing a dollar decrease in equity of $3,033,000. The Bank’s post shock EVE ratio at March 31, 2017, assuming a 200 basis point rise in interest rates was 15.82 percent and indicated a 67 basis point decrease from its 16.49 percent based on no change in interest rates.

 

Compared to the comparable group, with particular attention to the Bank’s level and share of nonperforming assets and asset and liability mix and lower share of allowance for loan loss to loans and nonperforming assets, we believe that a downward adjustment is warranted for First Federal’s current financial condition, due to the Bank’s lower share of allowance for loan losses to loans, lower share of allowance for loan losses to nonperforming assets, higher share of real estate owned, and higher share of nonperforming assets currently and historically.

 

 

ASSET, LOAN AND DEPOSIT GROWTH

 

During its most recent two fiscal years, First Federal has been characterized by a minimal change in assets and modest changes in loans and deposits. The Bank’s average annual asset change from December 31, 2014, to December 31, 2016, was less than 0.1 percent. This rate compares to a higher 2.4 percent increase for the comparable group, a lower 2.8 percent for all thrifts, and a lower 2.6 percent for Midwest thrifts. The Bank’s minimal change in assets is less than its decrease in net loans during the period of an average annual 0.92 percent with an average annual decrease in cash and investments of 8.1 percent. First Federal’s deposits indicate an average annual decrease of 2.3 percent from December 31, 2014, to December 31, 2016, compared to average growth rates of 3.1 percent for the comparable group, 2.1 percent for all thrifts and 2.5 percent for Midwest thrifts.

 

First Federal’s deposits indicated an increase of 2.3 percent from December 31, 2015 to 2016. Annual deposit change was growth rates of 3.4 percent for the comparable group, 2.6 percent for all thrifts and 2.7 percent for Midwest thrifts. The Bank had $19.8 million in borrowed funds or 8.4 percent of assets at March 31, 2017, compared to the comparable group at 11.5 percent and also had a higher $23.3 million in borrowed funds at December 31, 2015, or 9.6 percent of assets.

 

In spite of its modest deposit decrease, historically, the Bank grew slightly in 2016, and considering the demographics, competition and deposit base trends in its market area, the Bank’s ability to increase its asset, loan and deposit bases in the future is significantly dependent on its capital position combined with its ability to increase its market share by competitively pricing its loan and deposit products, maintaining a high quality of service to its customers and strengthening its loan origination activity, all impacted by the Bank’s performance by the senior management team. First Federal’s primary market area county experienced increases in population and households in Waukesha County between 2000 and 2010, while the surrounding market area counties experienced a minimal increase. The Bank’s primary market area county also indicated 2010 per capita income above Wisconsin’s and that of the United States, and the median

 

 

Asset, Loan and Deposit Growth (cont.)

 

household income level in Waukesha County was also above the state and the national levels. In 2010, the median housing value in Waukesha County was higher than that of Wisconsin and also above that of the United States, and the median rent level was also above both state and national levels.

 

The total deposit base in Waukesha County increased by 8.5 percent from June 30, 2015, to June 30, 2016; and during that period, the number of financial institution offices in Waukesha County increased by two offices. From June 30, 2015, to June 30, 2016, First Federal’s deposit market share in Waukesha County decreased slightly, from 1.1 percent in 2015 to 1.0 percent in 2016.

 

Based on the foregoing factors, we have concluded that no adjustment to the Corporation’s pro forma value is warranted for asset, loan and deposit growth.

 

DIVIDEND PAYMENTS

 

Due to the mid-tier holding company structure of the Corporation, the Corporation will not have the normal structure to pay dividends directly to shareholders, unlike a standard conversion. The payment of cash dividends will not occur in the future based on the current presence of an MHC. Five of the ten institutions in the comparable group paid cash dividends during the most recent year for an average dividend yield of 0.93 percent and an average payout ratio of 16.95 percent. During that twelve month period, the average dividend yield for all thrifts was a lower 1.45 percent with a payout ratio of 54.53 percent.

 

In our opinion, a minimal downward adjustment to the pro forma market value of the Corporation is warranted related to dividend payments.

 

 

SUBSCRIPTION INTEREST

 

In 2016 and year-to-date 2017, investors' interest in new issues has improved. Such interest is possibly related to the improved performance of financial institutions overall, which could be challenged in the future due to the compression of net interest margin. The selective and conservative reaction of IPO investors appears generally to be related to a number of analytical, economic and market-related factors, including the financial performance and condition of the converting thrift institution, the strength of the local economy, housing market conditions, general market conditions for financial institution stocks and stocks overall, aftermarket price trends and the expectation of increased merger/acquisition activity in the thrift industry and their higher pricing multiples.

 

First Federal will direct its offering initially to depositors and residents in its market area. The board of directors and officers anticipate purchasing $1,205,000 or 5.4 percent of the stock offered to the public based on the appraised midpoint valuation and the 45.0 percent minority offering. The Bank will form an ESOP, which plans to purchase 8.0 percent of the total shares issued in the conversion.

 

The Bank has secured the services of FIG Partners, LLC, Chicago, Illinois, to assist in the marketing and sale of the conversion stock.

 

Based on the size of the offering, recent banking conditions, current market conditions, historical local market interest, the terms of the offering, and recent subscription levels for conversions, we believe that no adjustment is warranted for the Bank’s anticipated subscription interest.

 

 

LIQUIDITY/MARKETABILITY OF THE STOCK

 

The Corporation will offer its shares through a subscription and community offering with the assistance of FIG Partners, LLC. The stock of the Corporation will be traded on the NASDAQ Capital Market.

 

The Bank's total public offering is considerably smaller in size than the average market value of the comparable group. The comparable group has an average market value of $62.3 million for the stock outstanding compared to a midpoint public offering of $22.3 million for the Corporation, less the ESOP and the estimated 120,500 shares to be purchased by officers and directors, resulting in shares sold of just 1,898,500 or $19.0 million. The Corporation’s public market capitalization will be approximately 35.7 percent of the size of the public market capitalization of the comparable group. Of the ten institutions in the comparable group, all trade on Nasdaq with those ten institutions indicating an average daily trading volume of over 4,000 shares during the last four quarters.

 

The comparable group has an average of 4,396,048 shares outstanding compared to 2,225,000 shares outstanding for the Corporation based on the midpoint valuation and the minority offering structure.

 

In addition, as a minority offering of an MHC, such structure reduces the marketability of the stock. As a group, MHCs indicate a lower ROAA and a lower ROAE compared to all publicly traded thrifts and a much lower median number of shares outstanding, recognizing the presence of two much larger publicly traded MHCs which inflates the average number of shares outstanding for MHCs. The average trading volume for MHCs is also lower as a group. Due to their control by the MHC, the positive influence of merger and acquisition activity in the overall market of publicly traded thrifts has not been paralleled for publicly traded MHCs.

 

Based on the higher average market capitalization, shares outstanding and daily trading volume relative to the Corporation, we have concluded that a downward adjustment to the Corporation’s pro forma market value is warranted relative to the liquidity of its stock.

 

 

MANAGEMENT

 

Mr. Edward H. Schaefer has served as chief executive officer, president and a director of First Federal Bank since July 2016. Mr. Schaefer served as chief executive officer and president of Citizens Community Bancorp and chief executive officer, president and a director of its wholly owned subsidiary, Citizens Community Federal N.A., from January 2010 to July 2016. Mr. Schaefer was a consultant to the Corporation from October 1, 2009, until January 4, 2010. For the years prior to Citizens Community, Mr. Schaefer held positions of vice president and president of various Norwest Bank entities, most recently as president of Norwest Bank/Wells Fargo, in Eau Claire, Wisconsin. Ms. Nikola B. Schaumberg is chief financial officer of First Federal, a position she has held since November 2012. Ms. Schaumberg has over 18 years of experience in accounting and in the financial services industry, including public accounting with KPMG and eleven years as the controller for Westbury Bank (f/k/a West Bend Savings Bank). Mr. David D. Rosenwald is chief lending officer of First Federal where he oversees all lending for the Bank. Mr. Rosenwald served First Federal as senior vice president– commercial banking division head from February of 2013 to October of 2016 before assuming his current role. Mr. Rosenwald has 35 years of commercial, residential and consumer lending experience, including from 2007 to 2013 with Pyramax Bank as SVP–commercial real estate/residential real estate manager, 2001 to 2006 as SVP–commercial lending officer for Associated Bank. Prior to that Mr. Rosenwald served in various roles for US Bank from 1990 to 2001, including mortgage lender, branch manager and commercial credit officer. Mr. Rosenwald began his banking career with Bank One where he served as a consumer lender, personal banker and indirect lending manager. Mr. Gary L. Wollenzien serves as compliance/internal audit officer, Bank Secrecy Act officer, Community Reinvestment Act officer, security officer and Gramm-Leach-Bliley Act officer of First Federal, positions he has held since March 2015. Mr. Wollenzien previously served as assistant vice president-internal audit manager and senior internal auditor at Guaranty Bank, FSB from April 2012 until November 2014. Mr. Wollenzien served in internal audit consultant roles with Baker Tilly Search & Staffing, LLC from January 2012 until March 2012 and Titus from January 2011 until December 2011. Mr. Wollenzien served as risk & advisory services manager/audit manager with Assurant, Inc., an insurance holding company, almost 10 years. For the 21 years prior to Assurant, Inc., Mr. Wollenzien held positions as audit supervisor,

 

 

Management (cont.)

 

senior internal audit and accountant with Firstar Corporation and First Financial Bank in Milwaukee, Wisconsin. Mr. Duane R. Kilby serves as a vice president and manager of the residential/consumer lending department of First Federal since September 2014. Mr. Kilby has over 34 years of lending experience, with the most recent 16 years in residential. Prior to First Federal, he was a senior mortgage loan officer with Pyramax Bank from November 2008 to September 2014, Associated Bank from April 2001 to November 2008, and an assistant vice president in consumer lending with TCF Bank from May 1995 to March 2001.

 

During its most recent fiscal year, First Federal has experienced a decrease in its net interest margin, typical of the industry, maintained its noninterest income and reduced its noninterest expenses to assets. The Bank did experience a rise in its cost of funds in 2016. The Bank experienced minimal earnings in 2016 impacted by higher provision for loan losses and a tax credit and then modest earnings in the first quarter of 2017, impacted by minimal taxes. The Bank’s asset quality position experienced minimal change from December 31, 2014, to December 31, 2016, with nonperforming assets increasing from 1.41 percent in 2014 to 1.48 percent in 2016 and then decreased to 1.09 percent at March 31, 2017. The Bank has also slightly strengthened its lending activity in 2016 with loan originations rising from $55.7 million in 2015 to $58.4 million in 2016 and continued stronger activity in the first quarter of 2017, to $60.8 million, annualized. The Bank’s management team is confident that the Bank is positioned for continued loan growth and a return to higher profitability following its conversion and minority offering.

 

Overall, we believe the Bank to be professionally and knowledgeably managed, as are the comparable group institutions. It is our opinion that no adjustment to the pro forma market value of the Corporation is warranted for management.

 

 

MARKETING OF THE ISSUE

 

The necessity to build a new issue discount into the stock price of a new conversion continues to be a closely examined issue in recognition of uncertainty among investors as a result of the thrift industry's continued high level of competition, dependence on interest rate trends, volatility in the stock market, speculation on future changes, current legislation related to the regulation of financial institutions and their ability to generate selected income.

 

We believe that a new issue discount applied to the price to book valuation approach is appropriate and necessary in this offering, recognizing the Bank’s weak and volatile earnings. In our opinion, recent market trends, including the recent pricing decreases for the most recent two standard conversions, cause us to conclude that a modest new issue discount is warranted in the case of this offering. Consequently, at this time we have made a modest downward adjustment to the Corporation's pro forma market value related to a new issue discount.

 

 

VI. VALUATION METHODS

 

Introduction

 

As indicated in Section 3 of this Appraisal, in order to moderate the differences among the ten comparable group companies, we will derive their pricing ratios on a fully converted basis by applying pro forma second stage conversion assumptions to their current financial structure. Our application to the Corporation of the market value adjustments relative to the comparable group determined in Section 4 will be the basis for the pro forma market value of the Corporation on a fully converted basis, pursuant to regulatory guidelines.

 

Valuation Methods

 

Historically, the method most frequently used by this firm to determine the pro forma market value of common stock for thrift institutions has been the price to book value ratio method, due to the volatility of earnings in the thrift industry. As earnings in the thrift industry have stabilized and improved in 2015 and 2016, additional attention has been given to the price to core earnings method, particularly considering increases in stock prices during those years. During the past few years, however, as fluctuating earnings have continued and recently rising interest rates have had varying effects on the earnings of individual institutions, depending on the nature of their operations, the price to book value method has continued to be the valuation focus and more meaningful to the objective of discerning commonality and comparability among institutions. In our opinion, the price to book value method is the appropriate method upon which to place primary emphasis in determining the pro forma market value of the Corporation. Additional analytical and correlative attention will be given to the price to core earnings method and the price to assets method.

 

In applying each of the valuation methods, consideration was given to the adjustments to the Corporation’s pro forma market value discussed in Section V. Downward adjustments were

 

 

Valuation Methods (cont.)

 

made for the Bank’s earnings, financial condition, asset, loan and deposit growth, dividends, stock liquidity, and for the marketing of the issue. No adjustments were made for subscription interest and management and balance sheet growth. A modest upward adjustment was made for the Bank’s market area.

 

Valuation Range

 

In addition to the pro forma market value, we have defined a valuation range recognizing the 45 percent public offering and the 55 percent interest in the Corporation to be retained by FFBW, MHC, the parent of the Corporation. The pro forma market value or appraised value will also be referred to as the "midpoint value," with the remaining points in the valuation range based on the number of shares offered to the public. The number of public shares at the minimum will be 15 percent less than at the midpoint; increasing at the maximum to 15 percent over the midpoint; and further increasing at the maximum, as adjusted, commonly referred to as the supermaximum, to 15 percent over the maximum.

 

Price to Book Value Method

 

In the valuation of thrift institutions, the price to book value method focuses on an institution's financial condition. Exhibit 47 shows the average and median price to book value ratios for the comparable group, which were 100.43 percent and 98.99 percent, respectively. The comparable group indicated a moderate range, from a low of 85.83 percent to a high of 114.98 percent. The comparable group had modestly higher average and median price to tangible book value ratios of 107.47 percent and 103.88 percent, respectively, with a range of 85.72 percent to 128.46 percent. Excluding the low and the high in the group, the comparable group's price to book value range narrowed moderately from a low of 95.97 percent to a high of 112.88; and the

 

 

Price to Book Value Method (cont.)

 

comparable group’s price to tangible book value range narrowed modestly from a low of 98.82 percent to a high of 119.10 percent.

 

The Corporation’s book value was $34,155,000 and its tangible book value was an identical $34,155,000 at March 31, 2017. Considering the foregoing factors in conjunction with the adjustments made in Section V, we have determined a fully converted pro forma price to book value ratio of 65.17 percent and a corresponding fully converted price to tangible book value ratio of 65.17 percent at the midpoint. The fully converted price to book value ratio increases from 60.61 percent at the minimum to 72.73 percent at the maximum, as adjusted, while the fully converted price to tangible book value ratio increases from 60.61 percent at the minimum to 72.73 percent at the maximum, as adjusted.

 

The Corporation's fully converted pro forma price to book value ratio of 65.17 percent at the midpoint, as calculated using the prescribed formulary computation indicated in Exhibit 48, is influenced by the Bank’s capitalization and local markets, subscription interest in thrift stocks and overall market and economic conditions. Further, the Corporation's ratio of equity to assets after the completion of the minority public offering at the midpoint of the valuation range will be approximately 18.12 percent compared to 11.27 percent for the comparable group.

 

Price to Core Earnings Method

 

The foundation of the price to core earnings method is the determination of the core earnings base to be used, followed by the calculation of an appropriate price to core earnings multiple. The Corporation’s after tax core earnings for the twelve months ended March 31, 2017, were $65,000 (reference Exhibit 7) and its net earnings was a loss of $7,000 for that period. To opine the pro forma market value of the Corporation using the price to core earnings method, we applied the core earnings base of $65,000.

 

 

Price to Core Earnings Method (cont.)

 

In determining the fully converted price to core earnings multiple, we reviewed the ranges of the price to core earnings and price to net earnings multiples for the comparable group and all publicly-traded thrifts. As indicated in Exhibit 47, the average price to core earnings multiple for the comparable group was 20.58, while the median was a lower 19.19. The average price to net earnings multiple was 18.77, and the median multiple was 17.37. The range of the price to core earnings multiple for the comparable group was from a low of 11.87 to a high of 30.10. The range in the price to core earnings multiple for the comparable group, excluding the high and low ranges, was from a low multiple of 12.94 to a high of 27.85 times earnings for eight of the ten institutions in the group, indicating a modest narrowing of the range.

 

Consideration was given to the adjustments to the Corporation's pro forma market value discussed in Section V combined with the Corporation’s negative actual earnings and minimal core earnings for the twelve months ended March 31, 2017. Due to the Bank’s minimal core resulting in an extremely high price to core earnings multiple exceeding 200, these ratios were deemed not meaningful. In recognition of these factors, the price to core earnings could not be used as a meaningful approach.

 

Price to Assets Method

 

The final valuation method is the price to assets method. This method is not frequently used, since the calculation incorporates neither an institution's equity position nor its earnings performance. Additionally, the prescribed formulary computation of value using the pro forma price to net assets method does not recognize the runoff of deposits concurrently allocated to the purchase of conversion stock or incorporate any adjustment for intangible assets, returning a pro forma price to assets ratio below its true ratio following conversion.

 

Exhibit 47 indicates that the average price to assets ratio of the comparable group was 11.39 percent, and the median was 10.82 percent. The range in the price to assets ratios for the

 

 

Price to Assets Method (cont.)

 

comparable group varied from a low of 8.17 percent to a high of 15.77 percent. The range narrows modestly with the elimination of the two extremes in the group to a low of 9.01 percent and a high of 14.72 percent.

 

Consistent with the previously noted adjustments, it is our opinion that an appropriate price to assets ratio for the Corporation is 17.93 percent at the midpoint, which ranges from a low of 15.61 percent at the minimum to 22.57 percent at the maximum, as adjusted.

 

Valuation Analysis and Summary

 

Exhibits 48 through 52 present the pro forma valuation analysis and conclusions, pricing ratios, use of offering proceeds and a summary of the valuation premiums or discounts relative to the three valuation approaches based on the Corporation as fully converted.

 

Exhibit 52 presents the discounts or premiums of the Corporation’s fully converted pricing ratios relative to those of the comparable group. Based on the Corporation’s fully converted price to book value ratio and its equity of $34,155,000 at March 31, 2017, the Bank’s price to book value ratio of 65.17 percent represents a midpoint discount relative to the comparable group of 35.11 percent. The Corporation’s fully converted price to core earnings multiple was not meaningful due to minimal earnings. Recognizing the Corporation’s March 31, 2017, asset base of $236,230,000, the Corporation’s price to assets ratio of 17.93 percent represents a midpoint premium relative to the comparable group of 57.42 percent.

 

Exhibits 53 through 58 present the pro forma valuation analysis and conclusions, pricing ratios, use of offering proceeds and a summary of the valuation premiums or discounts relative to the three valuation approaches based on the Corporation’s minority offering and the reported pricing ratios of the comparable group in their current mutual holding company structure.

 

 

Valuation Analysis and Summary (cont.)

 

Exhibit 58 presents the discounts or premiums of the Corporation’s minority offering pricing ratios relative to the comparable group. At the midpoint, the Corporation’s minority offering price to book value ratio of 95.81 percent represents a discount of 4.60 percent relative to the comparable group. The price to core earnings multiple was not meaningful for the Corporation at the midpoint or any other of the ranges due to minimal earnings. The Corporation’s price to assets ratio of 19.66 percent at the midpoint represents a premium of 72.61 percent.

 

Valuation Conclusion

 

As presented in Exhibit 46, the fully converted pro forma valuation range of the Corporation is from a minimum of $42,500,000 or 4,250,000 shares at $10.00 per share to a maximum of $57,500,000 or 5,750,000 shares at $10.00 per share, with a maximum, as adjusted, of $66,125,000 or 6,612,500 shares at $10.00 per share. Exhibit 46 also presents in detail the total number of shares to be issued at each valuation range and the respective number of shares issued to the mutual holding company, the public and the foundation.

 

It is our opinion that, as of May 19, 2017, the pro forma market value of the Corporation was $50,000,000 at the midpoint, representing a total of 5,000,000 shares at $10.00 per share, including 2,225,000 shares or 44.5 percent of the total shares offered to the public, 25,000 shares or 0.5 percent of the shares given to the newly formed foundation, and 2,750,000 shares or 55.00 percent of the total shares issued to FFBW, MHC, the mutual holding company.

 

 

EXHIBITS

 

 

NUMERICAL

 

EXHIBITS

 

 

EXHIBIT 1

 

FIRST FEDERAL BANK OF WISCONSIN

WAUKESHA, WISCONSIN

 

Balance Sheet

At March 31, 2017 and December 31, 2016

 

		At March 31,				At December 31,
		2017				2016
ASSETS
Cash and cash equivalents			4,985			$	6,911
Available-for-sale securities; stated at fair value			47,044				48,613
Loans held-for-sale			268				592
Loans, net of allowance for loan losses			165,697				166,974
Premises and equipment, net			7,679				7,610
Foreclosed assets			837				667
FHLB stock, at cost			739				1,347
Accrued interest receivable			776				760
Cash value of life insurance			6,408				6,352
Other assets			1,681				1,729
Total assets		$	236,114			$	241,555
LIABILITIES AND EQUITY
LIABILITIES
Deposits			180,534			$	184,639
Advance payments by borrowers for taxes and insurance			301				33
FHLB advances			19,770				21,277
Accrued interest payable			208				29
Other liabilities			1,146				1,579
Total liabilities			201,959				207,557
EQUITY
Retained earnings			34,204				34,123
Accumulated other comprehensive income (loss)			(49	)			(125	)
Total equity			34,155				33,998
Total liabilities and equity		$	236,114			$	241,555

 

Source: First Federal Bank of Wisconsin's audited financial statements

 

 

EXHIBIT 2

 

FIRST FEDERAL BANK OF WISCONSIN

WAUKESHA, WISCONSIN

 

Balance Sheets

At December 31, 2015 2014, 2013 and 2012

 

		December 31,
		2015				2014				2013				2012
ASSETS
Cash and cash equivalents		$	3,092,743			$	7,363,126			$	5,150,267			$	4,383,065
Interest-bearing deposits in banks			—				1,954,577				5,788,000				16,763,000
Securities held-to-maturity			—				—				12,725,776				2,462,881
Available-for-sale securities, stated at fair value			48,921,004				49,873,950				—				—
Loans held-for-sale			636,200				—				—				—
Loans, net of allowance for loan losses			172,132,417				170,100,586				88,494,128				83,688,128
Premises and equipment			8,008,896				3,836,203				3,321,198				3,395,095
Foreclosed assets			—				—				412,660				1,005,676
FHLB stock, at cost			1,346,700				1,346,700				652,500				577,500
Accrued interest receivable			806,552				809,615				267,352				261,781
Cash value of life insurance			6,149,124				4,469,114				2,550,333				2,451,224
Other assets			1,601,818				1,801,611				566,300				625,055
Total assets		$	242,695,454			$	241,555,482			$	119,928,514			$	115,613,405
LIABILITIES AND RETAINED EARNINGS
LIABILITIES
Deposits		$	184,205,941			$	193,503,311			$	94,370,852			$	93,659,393
Advance payments by borrowers for taxes and insurance			40,863				30,466				17,875				14,643
FHLB advances			23,303,721				13,830,581				12,250,000				8,750,000
Accrued interest payable			28,306				24,535				11,343				16,176
Other liabilities			934,282				624,353				304,688				486,448
Total liabilities			208,513,113				208,013,246				106,954,758				102,926,660
EQUITY
Surplus			—				20,550,000				—				—
Retained earnings			33,951,847				12,675,659				12,973,756				12,686,745
Accumulated other comprehensive income (loss)			230,494				316,577				—				—
Total equity			34,182,341				33,542,236				12,973,756				12,686,745
Total liabilities and equity		$	242,695,454			$	241,555,482			$	119,928,514			$	115,613,405

 

Source: First Federal Bank of Wisconsin’s financial statements

 

 

EXHIBIT 3

 

FIRST FEDERAL BANK OF WISCONSIN

WAUKESHA, WISCONSIN

 

Statement of Income

For the Twelve Months Ended March 31, 2017 and the Year Ended December 31, 2016

 

		Twelve Months				Year  Ended
		Ended				December 31,
		March 31, 2017				2016
Interest and dividend income:
Loans, including fees		$	7,605			$	7,741
Securities
Taxable			863				847
Tax exempt			207				246
Other			28				31
Total interest and dividend income			8,703				8,865
Interest expense:
Interest-bearing deposits			1,351				1,365
Borrowed funds			254				268
Total interest expense			1,605				1,633
Net interest income			7,098				7,232
Provision for loan losses			884				844
Net interest income after provision for loan losses			6,214				6,388
Noninterest income:
Service charges and other fees			251				247
Net gain on sale of loans			335				288
Net gain on sale of securities			123				129
Increase in cash surrender value of insurance			198				198
Other noninterest income			7				4
Total noninterest income			914				866
Noninterest expense:
Salaries and employee benefits			4,104				4,051
Occupancy and equipment			1,039				1,012
Data processing			710				724
Foreclosed assets, net			48				40
Professional fees			464				441
Other			972				971
Total noninterest expense			7,337				7,239
Income before income taxes			(209	)			15
Provision (credit) for income taxes			(202	)			(156	)
Net income		$	(7	)		$	171

 

Source: First Federal Bank of Wisconsin’s audited and unaudited financial statements

 

 

EXHIBIT 4

 

FIRST FEDERAL BANK OF WISCONSIN

WAUKESHA, WISCONSIN

 

Statements of Income

Years Ended December 31, 2012, 2013, 2014 and 2015

 

		December 31,
		2015				2014				2013				2012
Interest and dividend income:
Loans, including fees		$	8,039,928			$	6,646,611			$	3,786,223			$	4,088,863
Securities			1,043,705				834,961				218,756				226,082
Other			10,769				4,678				1,799				2,549
Total interest and dividend income			9,094,402				7,486,250				4,006,778				4,317,494
Interest expense:
Interest-bearing deposits			1,094,235				745,272				368,132				569,077
Borrowed funds			189,030				163,265				64,693				76,784
Total interest expense			1,283,265				908,537				432,825				645,861
Net interest income			7,811,137				6,577,713				3,573,953				3,671,633
Provision for loan losses			360,335				523,250				171,303				230,000
Net interest income after provision for loan losses			7,450,802				6,054,463				3,402,650				3,441,633
Noninterest income:
Service charges and other fees			238,476				164,193				182,385				201,017
Net gain on sale of loans			200,256				71,968				87,671				143,795
Net gain (loss) on sale of securities			15,122				(257,996	)			—				9,897
Net loss on sale of other assets			—				(1,450	)			—				—
Increase in cash surrender value of insurance			175,618				130,748				99,109				99,485
Other noninterest income			4,102				924				1,187				6,361
Total noninterest income			633,574				108,387				370,352				460,555
Noninterest expense:
Salaries and employee benefits			3,749,152				2,836,572				1,737,807				1,729,996
Occupancy and equipment			827,793				829,056				503,865				475,431
Data processing			660,309				441,274				365,888				354,217
Operations of other real estate			—				84,636
Foreclosed assets, net			(25,668	)							108,518				238,638
Professional fees			400,728				278,174				99,326				122,257
Other			1,076,730				2,051,114				548,736				494,808
Total noninterest expense			6,689,044				6,520,826				3,364,140				3,415,347
Income before income taxes			1,395,332				(357,976	)			408,862				486,841
Provision (credit) for income taxes			417,289				(59,879	)			121,851				152,486
Net income		$	978,043			$	(298,097	)		$	287,011			$	334,355

 

Source: First Federal Bank of Wisconsin’s financial statements

 

 

EXHIBIT 5

 

Selected Financial Information

At March 31, 2017 and at December 31, 2014, 2015 and 2016

 

		At.
		March 31,				At December 31,
		2017				2016				2015				2014
		(In thousands)
Selected Financial Condition Data:
Total assets		$	236,230			$	241,555			$	242,695			$	241,555
Cash and cash equivalents			4,985				6,911				3,093				7,363
Available-for-sale securities			47,044				48,613				48,921				51,829
Loans held-for-sale			268				592				636				215
Loans, net			165,697				166,974				172,132				169,886
Premises and equipment, net			7,679				7,610				8,009				3,836
Foreclosed assets, net			837				667				—				—
FHLB stock, at cost			739				1,347				1,347				1,347
Accrued interest receivable			776				760				806				810
Cash value of life insurance			6,408				6,352				6,149				4,469
Other assets			1,681				1,729				1,602				1,800
Total liabilities			201,959				207,557				208,513				208,013
Deposits and escrow			180,835				184,672				184,247				193,534
FHLB advances			19,770				21,277				23,304				13,830
Other liabilities			1,354				1,608				962				649
Total equity			34,155				33,998				34,182				33,542

 

Source: FFBW, Inc.’s Prospectus

 

  

EXHIBIT 6

 

Income and Expense Trends

For the Three Months Ended March 31, 2016 and 2017, and the Years Ended December 31, 2014, 2015 and 2016

 

		For the Three Months Ended								For the Years Ended
		March 31,								December 31,
		2017				2016				2016				2015				2014
		(In thousands)
Selected Operating Data:
Interest and dividend income		$	2,133			$	2,295			$	8,865			$	9,121			$	7,486
Interest expense			377				405				1,633				1,283				909
Net interest income			1,756				1,890				7,232				7,838				6,577
Provision for loan losses			51				11				844				360				523
Net interest income after provision for loan losses			1,705				1,879				6,388				7,478				6,054
Noninterest income			199				151				866				606				108
Noninterest expense			1,821				1,723				7,239				6,689				6,520
Income (loss) before income tax provision (credit)			83				307				15				1,395				(358	)
Provision (credit) for income tax			2				48				(156	)			417				(60	)
Net income (loss)		$	81			$	259			$	171			$	978			$	(298	)

 

Source: FFBW, Inc.’s Prospectus

 

  

EXHIBIT 7

 

First Federal Bank of Wisconsin

Normalized Earnings Trends

Twelve Months Ended March 31, 2017

 

		Twelve Months
		Ended
		March 31,
		2017
		(In thousands)
Net income before taxes		$	(209	)
Adjustments:
Provision for loan loss			308
Normalized earnings before taxes			99
Taxes			34	(1)
Normalized earnings after taxes		$	65

 

(1)

Based on normal tax rate of 34.0%.

 

Source: First Federal’s audited and unaudited financial statements

 

 

EXHIBIT 8

 

Performance Indicators

At or for the Three Months Ended March 31, 2016 and 2017 and

the Years Ended December 31, 2014, 2015 and 2016

 

		At or for the Three Months								Years Ended
		Ended March 31,								December 31,
		2017				2016				2016				2015				2014
Performance Ratios:(1)
Return on average assets			0.14	%			0.42	%			0.07	%			0.41	%			(0.14	)%
Return on average equity			0.95	%			2.99	%			0.49	%			2.83	%			(1.10	)%
Interest rate spread (2)			3.11	%			3.27	%			3.17	%			3.49	%			3.51	%
Net interest margin (3)			3.21	%			3.35	%			3.26	%			3.57	%			3.56	%
Efficiency ratio (4)			93.05	%			84.23	%			89.39	%			79.22	%			97.53	%
Noninterest expense to average total assets			3.02	%			2.73	%			2.96	%			2.78	%			3.15	%
Average interest-earning assets to average interest-bearing liabilities			114.00	%			112.00	%			112.00	%			112.00	%			110.00	%
Average equity to average total assets			14.43	%			14.21	%			14.27	%			14.37	%			13.08	%
Asset Quality Ratios:
Nonperforming assets to total assets			1.09	%			1.39	%			1.48	%			1.61	%			1.41	%
Nonperforming loans to total loans			1.04	%			1.94	%			1.69	%			2.24	%			1.98	%
Allowance for loan losses to nonperforming loans			84.89	%			46.09	%			50.97	%			39.60	%			34.30	%
Allowance for loan losses to total loans			0.88	%			0.89	%			0.87	%			0.89	%			0.68	%
Capital Ratios:
Total capital to risk-weighted assets			21.26	%			21.40	%			21.77	%			21.54	%			21.88	%
Tier 1 capital to risk-weighted assets			20.38	%			20.46	%			20.87	%			20.60	%			21.13	%
Tier 1 capital to total assets			14.43	%			13.96	%			13.93	%			14.00	%			13.60	%

 

(1)

Annualized for the three-month periods ended March 31, 2017 and 2016.

(2)

Represents the difference between the weighted average yield on average interest-earning assets and the weighted average cost of interest-bearing liabilities for the year.

(3)

The net interest margin represents net interest income as a percent of average interest-earning assets for the year.

(4)

The efficiency ratio represents noninterest expense divided by the sum of net interest income and noninterest income.

 

Source:  FFBW, Inc.’s Prospectus

 

  

EXHIBIT 9

 

Volume/Rate Analysis

For the Three Months Ended March 31, 2016 and 2017 and the Years Ended December 31, 2015 and 2016

 

		Three Months Ended March 31,												Years Ended December 31,
		2017 vs. 2016												2016 vs. 2015
		Increase (Decrease)												Increase (Decrease)
		Due to												Due to
		Volume				Rate				Total				Volume				Rate				Total
		(Dollars in thousands)												(Dollars in thousands)
Interest-earning assets:
Loans		$	(66	)		$	(70	)		$	(136	)		$	(12	)		$	(314	)		$	(326	)
Available-for-sale securities			(9	)			(14	)			(23	)			39				10				49
FHLB stock			(2	)			(1	)			(3	)			—				21				21
Total interest-earning assets		$	(77	)		$	(85	)		$	(162	)		$	27			$	(283	)		$	(256	)
Interest-bearing liabilities:
Demand accounts		$	(4	)		$	(1	)		$	(5	)		$	(1	)		$	29			$	28
Money market accounts			5				2				7				4				12				16
Savings accounts			(1	)			(2	)			(3	)			—				(3	)			(3	)
Health savings accounts			—				(5	)			(5	)			—				(6	)			(6	)
Certificates of deposits			(21	)			13				(8	)			(97	)			333				236
Total deposits		$	(21	)		$	7			$	(14	)		$	(94	)		$	365			$	271
Borrowings			(12	)			(2	)			(14	)			99				(20	)			79
Total interest-bearing liabilities			(33	)			5				(28	)			5				345				350
Change in net interest income		$	(44	)		$	(90	)		$	(134	)		$	22			$	(628	)		$	(606	)

 

Source: FFBW, Inc.’s Prospectus

 

  

EXHIBIT 10

 

Yield and Cost Trends

At March 31, 2017, For the Three Months Ended March 31, 2016 and 2017, and

For the Years Ended December 31, 2014, 2015 and 2016

 

						For the
						Three Months Ended								For the Years Ended
		At March 31,				March 31,								December 31,
		2017				2017				2016				2016				2015				2014
		Yield/				Yield/				Yield/				Yield/				Yield/				Yield/
		Rate				Rate				Rate				Rate				Rate				Rate
Interest-earning assets:
Loans			4.09	%			4.42	%			4.58	%			4.48	%			4.66	%			4.64	%
Available-for-sale securities			2.44	%			2.32	%			2.43	%			2.27	%			2.25	%			2.00	%
FHLB stock			3.15	%			1.71	%			2.08	%			2.30	%			0.74	%			0.36	%
Total interest-earning assets			3.72	%			3.94	%			4.09	%			3.99	%			4.13	%			4.03	%
Interest-bearing liabilities:
Demand accounts			0.71	%			0.48	%			0.51	%			0.71	%			0.34	%			0.12	%
Money market accounts			0.51	%			0.35	%			0.33	%			0.32	%			0.29	%			0.28	%
Savings Accounts			0.12	%			0.12	%			0.17	%			0.13	%			0.15	%			0.30	%
Health savings accounts			0.23	%			0.24	%			0.41	%			0.37	%			0.43	%			0.26	%
Certificates of deposit			1.25	%			1.24	%			1.18	%			1.24	%			0.89	%			0.69	%
Total interest-bearing deposits			0.81	%			0.76	%			0.76	%			0.78	%			0.61	%			0.48	%
Borrowings			1.37	%			1.18	%			1.21	%			1.16	%			1.30	%			1.22	%
Total interest-bearing liabilities			0.81	%			0.80	%			0.81	%			0.83	%			0.66	%			0.54	%
Net interest rate spread (1)			2.91	%			3.14	%			3.28	%			3.16	%			3.47	%			3.49	%
Net interest margin (2)			—				3.25	%			3.37	%			3.25	%			3.55	%			3.54	%
Average interest-earning assets to interest-bearing liabilities			—				115.00	%			113.00	%			113.00	%			111.00	%			111.00	%

 

(1)

Interest rate spread represents the difference between the yield on average interest-earning assets and the cost of interest-bearing liabilities.

(2)

Net interest margin represents net interest income divided by total interest-earning assets.

 

Source: FFBW, Inc.’s Prospectus

 

  

EXHIBIT 11

 

Net Portfolio Value

At March 31, 2017

 

														NPV as a Percentage of Present
Change in						Estimated Increase								Value of Assets (3)
Interest Rates		Estimated				(Decrease) in NPV								NPV				Increase/
(Basis Points) (1)		NPV (2)				$ Amount (2)				% Change				Ratio (4)				(Decrease)
		(Dollars in thousands)																(Basis Points)
+300		$	33,798			$	(4,862	)			(12.6	)%			15.34	%			(115	)
+200			35,627				(3,033	)			(7.8	)%			15.82	%			(67	)
+100			37,251				(1,409	)			(3.6	)%			16.21	%			(28	)
—			38,660				0				—				16.49	%			—
-100			38,260				(400	)			(1.0	)%			16.06	%			(43	)

 

(1)

Assumes an immediate uniform change in interest rates at all maturities.

(2)

NPV is the discounted present value of expected cash flows form assets, liabilities and off-balance sheet contracts.

(3)

Present value of assets represents the discounted present value of incoming cash flows on interest-earning assets.

(4)

NPV Ratio represents NPV divided by the present value of assets.

 

Source: FFBW, Inc.'s Prospectus

 

  

EXHIBIT 12

 

Loan Portfolio Composition

At March 31, 2017, and,

At December 31, 2014, 2015 and 2016

(Dollars in thousands) 

 

										At December 31,
		At March 31, 2015								2016								2015								2014
		Amount				Percent				Amount				Percent				Amount				Percent				Amount				Percent
Commercial
Development		$	4,222				2.50	%		$	2,526				1.50	%		$	4,340				2.50	%		$	2,639				3.00	%
Real estate			40,275				23.70	%			42,276				24.70	%			42,213				24.20	%			38,177				25.00	%
Commercial and industrial			9,137				5.40	%			7,617				4.50	%			8,972				5.10	%			7,173				5.00	%
Residential real estate and consumer
One- to four-family owner-occupied			48,688				28.50	%			50,284				29.40	%			56,086				32.10	%			59,080				32.00	%
One- to four-family investor-owned			33,683				19.80	%			34,633				20.30	%			33,353				19.10	%			32,713				19.00	%
Multifamily			31,983				18.80	%			31,905				18.70	%			26,963				15.50	%			27,152				15.00	%
Consumer			2,132				1.30	%			1,582				0.90	%			2,555				1.50	%			5,256				1.00	%
Total loans receivable			170,120				100.00	%			170,823				100.00	%			174,482				100.00	%			172,190				100.00	%
Deferred loan costs (fees)			(84	)							(88	)							(77	)							(71	)
Loans in process			(2,861	)							(2,283	)							(722	)							(852	)
Allowance for loan losses			(1,478	)							(1,478	)							(1,551	)							(1,167	)
			(4,423	)							(3,849	)							(2,350	)							(2,090	)
Total loans receivable, net		$	165,697							$	166,974							$	172,132							$	170,100

 

Source: FFWB, Inc.'s Prospectus

 

  

EXHIBIT 13

 

Loan Maturity Schedule

At December 31, 2016

 

														One- to Four-				One- to Four-
Due During the Years Ending		Commercial				Commercial				Commercial				Family Owner-				Family -Investor
December 31,		Development				Real Estate				and Industrial				Occupied				Owned				Multi-family				Consumer				Total
		(Dollars in thousands)
2017		$	998			$	2,517			$	3,335			$	5,759			$	3,209			$	3,004			$	1,122			$	19,944
2018			172				4,992				504				2,382				1,299				1,821				135				11,305
2019			464				7,895				2,568				2,298				1,874				9,311				29				24,439
2020 to 2021			892				13,550				944				1,268				10,602				7,640				—				34,896
2022 to 2026			—				6,876				266				2,143				1,841				5,145				270				16,541
2027 to 2031			—				398				—				3,109				1,104				239				—				4,850
2032 and beyond			—				6,048				—				33,325				14,704				4,745				26				58,848
Total		$	2,526			$	42,276			$	7,617			$	50,284			$	34,633			$	31,905			$	1,582			$	170,823

 

Fixed and Adjustable-Rate Loan Schedule

 

		Due After December 31, 2017
		Fixed				Adjustable				Total
		(Dollars in thousands)
Commercial:
Development		$	1,528				—			$	1,528
Real estate			28,969				10,790				39,759
Commercial and industrial			4,282				—				4,282
Residential real estate and consumer:
One- to four-family owner-occupied			17,575				26,950				44,525
One- to four-family investor-owned			17,577				13,847				31,424
Multi-family			23,366				5,535				28,901
Consumer			95				365				460
Total			93,392				57,487				150,879

 

Source: FFBW, Inc.'s Prospectus

 

  

EXHIBIT 14

 

Loan Originations, Purchases, Sales and Repayments

For the Three Months Ended March 31, 2016, and

For the Years Ended December 31, 2014, 2015 and 2016

 

		Three Months
		Ended
		March 31,				Years Ended December 31,
		2017				2016				2015				2014
		(In thousands)
Loans originated:
Commercial:
Development			45				1,873				832				—
Real estate			2,518				9,011				16,784				15,415
Commercial and industrial			901				2,637				2,582				3,724
Residential real estate and consumer:
One- to four-family owner-occupied			6,583				33,688				26,885				18,178
One- to four-family investor-owned			1,504				5,783				6,212				12,368
Multi-family			3,642				5,380				2,340				7,382
Consumer			40				76				70				73
Total loans originated			15,233				58,448				55,705				57,140
Loans purchased:
Commercial:
Real estate			—				5,975				1,890				24,787
Commercial and industrial			—				—				—				—
Residential real estate and consumer:
One- to four-family owner-occupied			—				—				—				22,342
One- to four-family investor-owned			—				—				—				21,787
Multi-family			—				—				—				13,231
Consumer			—				—				—				22
Total loans purchased			—				5,975				1,890				82,169
Loans sold:
Commercial real estate
Commercial and industrial			—				—				3,064				—
Residential real estate and consumer:
One- to four-family owner-occupied			4,683				20,175				14,434				4,646
One- to four-family investor-owned			—				—				—				—
Multi-family			—				—				—				—
Consumer			—				—				—				—
Total loans sold			4,683				20,175				17,498				4,646
Other:
Principal repayments and other			(7,728	)			(45,601	)			(35,079	)			(50,966	)
Net loan activity			2,822				(1,353	)			5,018				83,697

 

Source: FFBW, Inc.'s Prospectus

 

   

EXHIBIT 15

 

Loan Delinquencies

At March 31, 2017, and at December 31, 2014, 2015 and 2016

 

		Loans Delinquent For
		30-89 Days								90 Days and Over								Total
		Number				Amount				Number				Amount				Number				Amount
		(Dollars in thousands)
At March 31, 2017
Commercial:
Development			—			$	—				—			$	—				—			$	—
Real estate			—				—				—				—				—				—
Commercial and industrial			—				—				—				—				—				—
Residential real estate and consumer:
One- to four-family owner-occupied			6				789				1				290				7				1,079
One- to four-family investor-occupied			1				147				2				425				3				572
Multi-family			—				—				—				—				—				—
Consumer			—				—				—				—				—				—
Total			7			$	936				3			$	715				10			$	1,651
At December 31, 2016
Commercial:
Development			—			$	—				—			$	—				—			$	—
Real estate			—				—				—				—				—				—
Commercial and industrial			1				54				—				—				1				54
Residential real estate and consumer:
One- to four-family owner-occupied			10				1,743				2				407				12				2,150
One- to four-family investor-occupied			2				170				3				567				5				737
Multi-family			—				—				—				—				—				—
Consumer			1				2				—				—				1				2
Total			14			$	1,969				5			$	974				19			$	2,943
At December 31, 2015
Commercial:
Development			—			$	—				1			$	566				1			$	566
Real estate			—				—				—				—				—				—
Commercial and industrial			2				162				—				—				2				162
Residential real estate and consumer:
One- to four-family owner-occupied			5				691				3				715				8				1,406
One- to four-family investor-occupied			7				650				7				1,004				14				1,654
Multi-family			—				—				—				—				—				—
Consumer			3				117				2				200				5				317
Total			17			$	1,620				13			$	2,485				30			$	4,105

 

Source: FFBW, Inc.'s Prospectus

  

 

EXHIBIT 15 (continued)

 

Loan Delinquencies

At March 31, 2017, and at December 31, 2014, 2015 and 2016

 

		Loans Delinquent For
		30-89 Days								90 Days and Over								Total
		Number				Amount				Number				Amount				Number				Amount
		(Dollars in thousands)
At December 31, 2014
Commercial:
Development			2			$	1,083				—			$	—				2			$	1,083
Real estate			—				—				—				—				—				—
Commercial and industrial			1				118				—				—				1				118
Residential real estate and consumer:
One- to four-family owner-occupied			6				958				6				1,107				12				2,065
One- to four-family investor-occupied			1				170				4				363				5				533
Multi-family			—				—				—				—				—				—
Consumer			2				172				2				43				4				215
Total			12			$	2,501				12			$	1,513				24			$	4,014

 

Source: FFBW, Inc.'s Prospectus

 

 

EXHIBIT 16

 

Nonperforming Assets

At March 31, 2017, and at December 31, 2014, 2015 and 2016

 

		At March 31,				At December 31,
		2017				2016				2015				2014
		(Dollars in thousands)
Nonaccrual loans:
Commercial:
Development		$	—			$	—			$	566			$	646
Real estate			—				—				—				—
Commercial and industrial			—				126				—				—
Residential real estate and consumer:
One- to four-family owner-occupied			1,229				1,698				1,871				1,410
One- to four-family investor-owned			512				827				1,003				825
Multi-family			—				248				277				306
Consumer			—				—				200				192
Total		$	1,741			$	2,899			$	3,917			$	3,379
Accruing loans 90 days or more past due:
Commercial:
Development		$	—			$	—			$	—			$	—
Real estate			—				—				—				—
Commercial and industrial			—				—				—				—
Residential real estate and consumer:
One- to four-family owner-occupied			—				—				—				—
One- to four-family investor-owned			—				—				—				—
Multi-family			—				—				—				—
Consumer			—				—				—				23
Total loans 90 days or more past due			—				—				—				23
Total nonperforming loans		$	1,741			$	2,899			$	3,917			$	3,402
Real estate owned			837				667				—				—
Other nonperforming assets			—				—				—				—
Total nonperforming assets		$	2,578			$	3,566			$	3,917			$	3,402
Troubled debt restructurings:
Commercial:
Development		$	—			$	—			$	566			$	646
Real estate			14				14				—				—
Commercial and industrial			211				127				—				—
Residential real estate and consumer:
One- to four-family owner-occupied			1,586				2,104				1,685				2,600
One- to four-family investor-owned			2,108				2,454				927				997
Multi-family			220				468				277				306
Consumer			—				—				177				—
Total		$	4,139			$	5,167			$	3,632			$	4,549
Ratios:
Total nonperforming loans to total loans			1.02	%			1.69	%			2.24	%			1.98	%
Total nonperforming loans to total assets			0.74	%			1.20	%			1.61	%			1.41	%
Total nonperforming assets to total assets			1.09	%			1.48	%			1.61	%			1.41	%

 

Source: FFWB, Inc.'s Prospectus

 

 

EXHIBIT 17

 

Classified Assets

At March 31, 2017, and at December 31, 2015 and 2016

(Dollars in thousands)

 

		At				At
		March 31,				December 31,
		2017				2016				2015
Classification of assets:
Special mention		$	3,771			$	3,758			$	4,261
Substandard			548				1,090				1,755
Doubtful			87				90				0
Loss			0				0				0
Total classified assets			4,406			$	4,938			$	6,016

 

Source: FFBW, Inc.'s Prospectus

 

 

EXHIBIT 18

 

Allowance for Loan Losses

At for the Three Months Ended March 31, 2016 and 2017, and

For the Years Ended December 31, 2014, 2015 and 2016

 

		Three Months Ended								Years Ended
		March 31,								December 31,
		2017				2016				2016				2015				2014
		(Dollars in thousands)
Allowance at beginning of period		$	1,478			$	1,551			$	1,551			$	1,167			$	1,033
Charge-offs:
Commercial:
Development		$	—			$	—			$	—			$	—			$	—
Real estate			—				—				—				—				—
Commercial and industrial			—				—				—				—				—
Residential real estate and consumer:
One- to four-family owner-occupied			4				—				255				22				204
One- to four-family investor-owned			82				—				493				74				145
Multi-family			—				—				—				—				—
Consumer			—				—				169				20				40
Total charge-offs			86				0				917				116				389
Recoveries:
Commercial:
Development		$	—			$	—			$	—			$	—			$	—
Real estate			—				—				—				—				—
Commercial and industrial			—				—				—				—				—
Residential real estate and consumer:
One- to four-family owner-occupied			18				—				—				140				—
One- to four-family investor-owned			17				—				—				—				—
Multi-family			—				—				—				—				—
Consumer			—				—				—				—				—
Total recoveries			35				0				0				140				0
Net charge-offs (recoveries)			51				0				917				(24	)			389
Transfer to hold-for-sale			—				—				—				—				—
Provision for loan losses			51				11				844				360				523
Balance at end of year		$	1,478			$	1,562			$	1,478			$	1,551			$	1,167
Ratios:
Net charge-offs to average loans outstanding			0.03	%			0.00	%			0.53	%			(0.01	)%			0.27	%
Allowance for loan losses to nonperforming loans at end of year			84.89	%			46.09	%			50.98	%			39.60	%			34.30	%
Allowance for loan losses to total loans ant end of year			0.87	%			0.89	%			0.87	%			0.89	%			0.68	%

 

Source: FFBW Inc.'s Prospectus

 

   

EXHIBIT 19

 

Investment Portfolio Composition

At March 31, 2017 and at December 31, 2014, 2015 and 2016

 

										At December 31,
		At March 31, 2017								2016								2015								2014
		Amortized				Estimated				Amortized				Estimated				Amortized				Estimated				Amortized				Estimated
Security Type		Cost				Fair Value				Cost				Fair Value				Cost				Fair Value				Cost				Fair Value
		(In thousands)
U.S. government and agency securities		$	3,675			$	3,704			$	3,885			$	3,919			$	7,124			$	7,246			$	11,064			$	11,194
State and political subdivision securities			15,030				15,074				15,606				15,562				19,378				19,625				18,162				18,387
Mortgage-backed securities			22,053				21,810				23,156				22,892				14,322				14,289				18,329				18,323
Certificates of deposits			1,250				1,263				1,000				1,014				995				990				1,960				1,955
Corporate debt securities			5,110				5,193				5,159				5,226				6,771				6,771				1,826				1,970
Total		$	47,118			$	47,044			$	48,806			$	48,613			$	48,590			$	48,921			$	51,341			$	51,829

 

Source: FFBW, Inc.'s Prospectus

 

   

EXHIBIT 20

 

Mix of Average Deposit Accounts

For the Three Months Ended March 31, 2017 and the Years Ended December 31, 2014, 2015 and 2016

 

		For the Three Months Ended
		March 31,								For the Years Ended December 31,
		2017								2016								2015								2014
		(Dollars in thousands)
Deposit type:
		Average				Percent				Average				Percent				Average				Percent				Average				Percent
		Balance				of Total				Balance				of Total				Balance				of Total				Balance				of Total
Noninterest-bearing checking		$	13,384				7.35	%		$	11,508				6.20	%		$	9,489				4.99	%		$	10,508				6.35	%
Interest-bearing checking			4,962				2.73	%			7,779				4.19	%			7,931				4.17	%			7,438				4.50	%
Money market			52,881				29.05	%			49,629				26.74	%			48,523				25.50	%			43,284				26.17	%
Statement savings			17,035				9.36	%			17,618				9.49	%			17,615				9.26	%			12,806				7.74	%
Health savings			11,667				6.41	%			11,558				6.23	%			11,438				6.01	%			11,328				6.85	%
Certificates of deposit			82,075				45.10	%			87,476				47.14	%			95,316				50.08	%			80,000				48.38	%
Total deposits			182,004				100.00	%			185,568				100.00	%			190,312				100.00	%			165,364				100.00	%

 

Source: FFBW, Inc.'s Prospectus

 

   

EXHIBIT 21

 

Certificates of Deposit By Maturity

At March 31, 2017

 

		At
		March 31,
		2017
		(In thousands)
Three months or less		$	2,071
Over three months through six months			1,934
Over six months through one year			3,813
Over one year to three years			23,222
Over three years			4,061
Total		$	35,101

 

Source: FFBW, Inc.’s Prospectus

 

   

EXHIBIT 22

 

Borrowed Funds

At or for the Three Months Ended March 31, 2016 and 2017, and

At or for the Years Ended December 31, 2014, 2015 and 2016

 

		At or for the Three Months
		Ended March 31,								At or for the Years Ended December 31,
		2017				2016				2016				2015				2014
		(Dollars in thousands)
Balance at end of period		$	19,770			$	23,797			$	21,277			$	23,304			$	13,831
Average balance during period			19,742				23,856				23,147				14,573				13,369
Maximum outstanding at any month end			19,750				24,250				24,250				23,250				16,650
Weighted average interest rate at end of period			1.37	%			1.25	%			1.21	%			1.45	%			1.49	%
Average interest rate during period			1.18	%			1.21	%			1.16	%			1.30	%			1.22	%

 

Source: FFBW, Inc.’s Prospectus

 

  

EXHIBIT 23

 

OFFICES OF FIRST FEDERAL BANK OF WISCONSIN

WAUKESHA, WISCONSIN

As of March 31, 2017

 

		Owned		Year		Net Book
		or		Acquired or		Value of Real
Location		Leased		Leased		Property
						($000)
Corporate Headquarters:
1360 South Moorland Road
Brookfield, Wisconsin 53005		Owned		2015		$	4,200
Branch Offices:
West Office
1801 Summit Avenue
Waukesha, Wisconsin 53188		Owned		1984			162
East Office
1617 East Racine Avenue
Waukesha, Wisconsin 53186		Owned		2012			1,023
Bay View Office
3974 South Howell Avenue
Milwaukee, Wisconsin 53207		Owned		1972			411
Downtown Office (1)
134 Wisconsin Avenue
Waukesha, Wisconsin 53186		Owned		1980			191

 

(1)

On July 1, 2017, we expect to consummate the donation of our branch located at 134 Wisconsin Avenue, Waukesha, Wisconsin, which will reduce our net income for the third quarter of 2017. See, “Management’s Discussion and Analysis of Financial Condition and Results of Operation of First Federal Bank of Wisconsin—Anticipated Increase in Noninterest Expense.”

 

Source: FFBW, Inc.’s Prospectus

 

   

EXHIBIT 24

 

DIRECTORS AND MANAGEMENT OF THE BANK

At March 31, 2017

 

						Director		Term
Name		Position(s) Held with the Bank		Age		Since		Expires
Edward H. Schaefer		President, Chief Executive Officer and Director		55		2016		2020
Thomas C. Martin		Director		76		1995		2018
Michael J. Pjevach		Director		54		2015		2018
James A. Tarantino		Director		59		2008		2019
Thomas L. McKeever		Director		53		2011		2019
Stephen W. Johnson		Director		65		2002		2020
Gary D. Riley		Director		71		2007		2019
Daniel D. Resheter, Jr.		Director		60		1992		2019
Kathryn Gutenkunst		Director		55		2007		2018
Nikola B. Schaumberg		Chief Financial Officer				—		—
Gary L. Wollenzien		Compliance/Internal Audit/Bank Secrecy Act				—		—
Duane R. Kilby		Vice President, Manager Residential Lending				—		—
David D. Rosenwald		Chief Lending Officer				—		—

 

Source: FFBW, Inc.’s Prospectus

 

  

EXHIBIT 25

 

Key Demographic Data and Trends

Milwaukee and Waukesha Counties,

Wisconsin and the United States

2000, 2010 and 2020

 

		2000				2010				% Change				2020				% Change
Population
Milwaukee County			940,164				947,735				0.8	%			951,408				0.4	%
Waukesha County			360,767				389,891				8.1	%			409,364				5.0	%
Wisconsin			5,363,675				5,686,986				6.0	%			5,887,190				3.5	%
United States			281,421,906				308,745,538				9.7	%			332,139,637				7.6	%
Households
Milwaukee County			377,729				383,591				1.6	%			388,428				1.3	%
Waukesha County			135,229				152,663				12.9	%			159,863				4.7	%
Wisconsin			2,084,544				2,279,768				9.4	%			2,363,096				3.7	%
United States			105,480,101				116,716,292				10.7	%			125,527,510				7.5	%
Per Capita Income
Milwaukee County		$	19,939			$	24,254				21.6	%			—				—
Waukesha County			29,164				37,282				27.8	%			—				—
Wisconsin			21,271				27,192				27.8	%			—				—
United States			22,162				26,059				17.6	%			—				—
Median Household Income
Milwaukee County		$	38,100			$	43,599				14.4	%		$	49,722				14.0	%
Waukesha County			62,839				75,689				20.4	%			84,386				11.5	%
Wisconsin			43,791				52,374				19.6	%			57,579				9.9	%
United States			41,994				50,046				19.2	%			61,618				23.1	%

 

Source: U.S. Census and ESRI

 

  

EXHIBIT 26

 

Key Housing Data

Milwaukee and Waukesha Counties,

Wisconsin and the United States

2000 & 2010

 

Occupied Housing Units		2000				2010
Milwaukee County			377,729				383,591
Waukesha County			135,229				152,663
Wisconsin			2,084,544				2,279,768
United States			105,480,101				116,716,292
Occupancy Rate
Milwaukee County
Owner-Occupied			52.6	%			51.3	%
Renter-Occupied			47.4	%			48.7	%
Waukesha County
Owner-Occupied			76.4	%			76.8	%
Renter-Occupied			23.6	%			23.2	%
Wisconsin
Owner-Occupied			68.4	%			68.1	%
Renter-Occupied			31.6	%			31.9	%
United States
Owner-Occupied			66.2	%			65.4	%
Renter-Occupied			33.8	%			34.6	%
Median Housing Values
Milwaukee County		$	103,200			$	162,900
Waukesha County			170,400				257,700
Wisconsin			112,200				169,000
United States			119,600				186,200
Median Rent
Milwaukee County		$	555			$	786
Waukesha County			726				906
Wisconsin			540				749
United States			602				871

 

Source: U.S. Census Bureau

 

  

EXHIBIT 27

 

Major Sources of Employment by Industry Group

Milwaukee and Waukesha Counties

Wisconsin and the United States

2000 and 2010

 

		2000
		Milwaukee				Waukesha								United
Industry Group		County				County				Wisconsin				States
Agriculture/Mining			0.3	%			0.4	%			2.8	%			1.9	%
Construction			4.0	%			6.3	%			5.9	%			6.8	%
Manufacturing			18.5	%			21.2	%			22.2	%			14.1	%
Wholesale/Retail			13.6	%			16.6	%			14.8	%			15.3	%
Transportation/Utilities			5.3	%			4.1	%			4.5	%			5.2	%
Information			3.0	%			3.1	%			2.2	%			3.1	%
Finance, Insurance & Real Estate			7.7	%			7.7	%			6.1	%			6.9	%
Services			47.6	%			40.6	%			41.5	%			46.7	%

 

		2010
		Milwaukee				Waukesha								United
		County				County				Wisconsin				States
Agriculture/Mining			0.6	%			0.5	%			2.4	%			1.9	%
Construction			3.6	%			5.6	%			5.6	%			6.2	%
Manufacturing			15.0	%			18.2	%			18.4	%			10.4	%
Wholesale/Retail			12.9	%			15.8	%			14.2	%			14.5	%
Transportation/Utilities			4.6	%			3.9	%			4.5	%			4.9	%
Information			2.2	%			1.9	%			1.8	%			2.2	%
Finance, Insurance & Real Estate			7.3	%			8.6	%			6.3	%			6.7	%
Services			54.1	%			45.5	%			46.8	%			53.2	%

 

Source: Bureau of the Census

 

   

EXHIBIT 28

 

Unemployment Rates

Milwaukee and Waukesha Counties,

Wisconsin and the United States

For the Years 2012 through 2016

 

Location		2012				2013				2014				2015				2016
Milwaukee County			8.6	%			8.4	%			6.9	%			5.8	%			5.1	%
Waukesha County			5.8	%			5.5	%			4.4	%			3.8	%			3.6	%
Wisconsin			7.0	%			6.7	%			5.4	%			4.6	%			4.1	%
United States			8.1	%			7.4	%			6.2	%			5.3	%			4.9	%

 

Source: Local Area Unemployment Statistics - U.S. Bureau of Labor Statistics

 

  

EXHIBIT 29 

 

Market Share of Deposits

Milwaukee and Waukesha Counties

June 30, 2016 

 

		Milwaukee County				First Federal’s				First Federal’s
		Deposits				Deposits				Share
		($000)				($000)				(%)
Banks		$	44,968,755				—				—
Thrifts			2,844,739			$	66,929				2.4	%
Total		$	47,813,494			$	66,929				0.1	%

 

		Waukesha County				First Federal’s				First Federal’s
		Deposits				Deposits				Share
		($000)				($000)				(%)
Banks		$	10,097,389				—				—
Thrifts			1,599,478			$	118,852				7.4	%
Total		$	11,696,867			$	118,852				1.0	%

 

		Total				First Federal’s				First Federal’s
		Deposits				Deposits				Share
		($000)				($000)				(%)
Banks		$	55,066,144				—				—
Thrifts			4,444,217			$	185,781				4.2	%
Total		$	59,510,361			$	185,781				0.3	%

 

Source: FDIC

 

  

EXHIBIT 30

 

National Interest Rates by Quarter

2013 - 1st Quarter of 2017

 

		1st Qtr.				2nd Qtr.				3rd Qtr.				4th Qtr.
		2013				2013				2013				2013
Prime Rate			3.25	%			3.25	%			3.25	%			3.25	%
90-Day Treasury Bills			0.06	%			0.04	%			0.04	%			0.05	%
1-Year Treasury Bills			0.11	%			0.11	%			0.09	%			0.10	%
30-Year Treasury Notes			3.14	%			3.70	%			3.69	%			3.96	%

 

		1st Qtr.				2nd Qtr.				3rd Qtr.				4th Qtr.
		2014				2014				2014				2014
Prime Rate			3.25	%			3.25	%			3.25	%			3.25	%
90-Day Treasury Bills			0.05	%			0.04	%			0.13	%			0.07	%
1-Year Treasury Bills			0.13	%			0.11	%			0.14	%			0.13	%
30-Year Treasury Notes			3.56	%			3.34	%			3.07	%			2.75	%

 

		1st Qtr.				2nd Qtr.				3rd Qtr.				4th Qtr.
		2015				2015				2015				2015
Prime Rate			3.25	%			3.25	%			3.25	%			3.50	%
90-Day Treasury Bills			0.03	%			0.01	%			0.01	%			0.16	%
1-Year Treasury Bills			0.26	%			0.28	%			0.32	%			0.62	%
30-Year Treasury Notes			2.54	%			3.20	%			2.87	%			3.01	%

 

		1st Qtr.				2nd Qtr.				3rd Qtr.				4th Qtr.
		2016				2016				2016				2016
Prime Rate			3.50	%			3.50	%			3.50	%			3.75	%
90-Day Treasury Bills			0.24	%			0.30	%			0.32	%			0.51	%
1-Year Treasury Bills			0.53	%			0.58	%			0.57	%			0.81	%
30-Year Treasury Notes			2.61	%			2.26	%			2.40	%			2.97	%

 

		1st Qtr.
		2017
Prime Rate			4.00	%
90-Day Treasury Bills			0.92	%
1-Year Treasury Bills			1.17	%
30-Year Treasury Notes			2.92	%

 

Source: The Wall Street Journal

 

  

EXHIBIT 31

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

SHARE DATA AND PRICING RATIOS

PUBLICLY-TRADED, FDIC-INSURED SAVINGS INSTITUTIONS

(EXCLUDING MUTUAL HOLDING COMPANIES)

 

ALL RATIOS/FINANCIAL DATA AS OF MOST RECENT FOUR QUARTERS

 

								PER SHARE																				PRICING RATIOS
												52 Week				Earnings								12 Month				Price/Net				Price/Core				Price/				Price/Tang.				Price/
								Price				Change				(EPS)				Assets				Div.				Earnings				Earnings				Book Value				Book Value				Assets
				State		Exchange		($)				(%)				($)				($)				($)				(X)				(X)				(X)				(X)				(X)
SZBI		SOUTHFIRST BANCSHARES		AL		OTC PINK			31.74				66.7				0.60				125.39				0.14				9.17				6.63				39.74				39.74				4.39
ABNK		ALTAPACIFIC BANCORP		CA		OTC PINK			20.51				13.4				0.80				60.01				0.07				12.90				13.06				100.29				106.28				17.20
BOFI		BOFI HOLDING		CA		NASDAQ			3.66				22.4				2.00				128.91				0.08				13.07				13.20				219.58				221.44				20.27
BYFC		BROADWAY FINANCIAL CORP		CA		NASDAQ			12.60				(6.2	)			0.08				14.67				0.14				22.63				22.63				110.37				110.37				12.34
MLGF		MALAGA FINANCIAL CORP		CA		OTC BB			15.58				14.6				2.08				166.03				2.89				12.26				12.26				118.99				118.99				15.36
PROV		PROVIDENT FINANCIAL HOLDINGS		CA		NASDAQ			24.56				9.4				0.90				150.62				0.51				20.72				19.84				111.34				112.01				12.38
FBNK		FIRST CONNECTICUT BANCORP		CT		NASDAQ			33.75				55.4				0.96				178.54				0.29				25.83				25.83				151.50				154.42				13.89
SIFI		SI FINANCIAL GROUP		CT		NASDAQ			45.20				0.9				0.93				126.88				0.15				15.11				28.67				104.15				117.28				11.07
UBNK		UNITED FINANCIAL BANCORP		CT		NASDAQ			26.50				35.1				0.98				130.03				0.47				17.36				18.10				131.76				164.67				13.08
WSFS		WSFS FINANCIAL CORP		DE		NASDAQ			17.80				41.3				2.04				215.52				0.24				22.52				23.44				209.82				291.19				21.32
ACFC		ATLANTIC COAST FINANCIAL CORP		FL		NASDAQ			0.36				26.2				0.57				58.55				0.00				13.37				17.72				137.79				139.05				13.01
EVER		EVERBANK FINANCIAL CORP		FL		NYSE			20.50				29.1				1.14				219.13				0.24				17.09				16.94				122.75				146.03				8.89
FFHD		FIRSTATLANTIC BANK		FL		OTC BB			17.67				NM				0.63				72.89				0.63				20.08				22.19				142.62				149.53				17.35
SBCP		SUNSHINE BANCORP		FL		NASDAQ			20.95				NM				0.07				116.50				0.00				NM				NM				144.41				178.82				17.97
ABCB		AMERIS BANCORP		GA		NASDAQ			7.62				55.8				2.06				197.36				0.30				22.38				21.95				249.05				321.48				23.36
CHFN		CHARTER FINANCIAL CORP		GA		NASDAQ			16.19				45.7				0.82				97.65				0.19				23.99				25.88				143.89				171.64				20.14
TBNK		TERRITORIAL BANCORP		HI		NASDAQ			14.05				19.6				1.67				192.00				0.86				18.66				19.12				132.64				132.81				16.23
AJSB		AJS BANCORP		IL		OTC BB			25.95				1.0				0.28				93.72				0.56				54.11				60.60				112.22				112.22				16.17
AFBA		ALLIED FIRST BANCORP		IL		OTC BB			15.15				(59.6	)			4.56				177.23				0.00				0.08				0.14				NM				NM				0.20
BFIN		BANKFINANCIAL CORP		IL		NASDAQ			9.40				22.8				0.39				84.23				0.21				37.23				36.30				136.34				137.37				17.24
BFFI		BEN FRANKLIN FINANCIAL		IL		OTC BB			17.85				NM				(1.66	)			122.80				0.00				NM				NM				109.33				109.33				9.45
GTPS		GREAT AMERICAN BANCORP		IL		OTC BB			48.72				45.5				1.78				401.70				1.11				18.54				19.30				87.88				94.29				8.22
IROQ		IF BANCORP		IL		NASDAQ			27.00				7.5				1.14				146.84				1.01				17.46				19.32				115.56				116.58				13.55
JXSB		JACKSONVILLE BANCORP		IL		NASDAQ			27.95				20.4				1.83				179.35				1.40				17.10				19.69				134.68				146.26				17.45

 

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

SHARE DATA AND PRICING RATIOS

PUBLICLY-TRADED, FDIC-INSURED SAVINGS INSTITUTIONS

(EXCLUDING MUTUAL HOLDING COMPANIES)

 

ALL RATIOS/FINANCIAL DATA AS OF MOST RECENT FOUR QUARTERS

 

								PER SHARE																				PRICING RATIOS
												52 Week				Earnings								12 Month				Price/Net				Price/Core				Price/				Price/Tang.				Price/
								Price				Change				(EPS)				Assets				Div.				Earnings				Earnings				Book Value				Book Value				Assets
				State		Exchange		($)				(%)				($)				($)				($)				(X)				(X)				(X)				(X)				(X)
MCPH		MIDLAND CAPITAL HOLDINGS CORP		IL		OTC PINK			59.00				16.2				(0.12	)			323.94				0.00				NM				NM				65.72				65.72				6.03
RYFL		ROYAL FINANCIAL		IL		OTC BB			18.65				8.8				0.70				123.27				0.61				17.57				17.57				89.32				91.93				9.98
SUGR		SUGAR CREEK FINANCIAL CORP		IL		OTC BB			11.11				NM				0.17				110.67				0.00				82.06				73.42				107.14				107.14				12.61
AMFC		AMB FINANCIAL CORP		IN		OTC BB			34.00				31.2				1.75				208.80				0.88				9.37				9.37				85.06				86.54				7.85
DSFN		DSA FINANCIAL CORP		IN		OTC BB			10.25				9.9				0.48				78.22				1.24				22.92				23.40				117.02				119.18				14.06
FDLB		FIDELITY FEDERAL BANCORP		IN		OTC PINK			7.80				(60.0	)			10.82				540.12				0.00				0.92				1.26				NM				NM				1.85
FCAP		FIRST CAPITAL		IN		NASDAQ			9.99				22.7				1.86				222.29				0.51				18.15				18.75				153.48				171.58				15.18
NWIN		NORTHWEST INDIANA BANCORP		IN		OTC BB			16.50				30.8				3.20				319.43				1.11				12.27				13.68				133.32				138.89				12.29
TDCB		THIRD CENTURY BANCORP		IN		OTC BB			13.33				42.9				0.58				106.63				0.22				19.91				17.24				97.63				98.97				10.83
UCBA		UNITED COMMUNITY BANCORP		IN		NASDAQ			13.95				29.8				0.82				124.49				0.55				21.59				22.41				121.40				128.82				14.22
WEIN		WEST END INDIANA BANCSHARES		IN		OTC BB			8.34				32.6				1.92				269.55				1.78				15.89				15.10				119.94				123.18				11.32
CFFN		CAPITOL FEDERAL FINANCIAL		KS		NASDAQ			15.75				10.3				0.60				66.43				0.85				24.38				24.38				147.48				147.48				22.02
PBSK		POAGE BANKSHARES		KY		NASDAQ			8.25				17.5				0.65				123.69				1.62				30.00				27.86				112.85				117.68				15.77
CTUY		CENTURY NEXT FINANCIAL CORP		LA		OTC BB			12.00				29.9				2.41				232.46				0.00				10.37				10.50				109.99				109.99				10.75
FPBF		FPB FINANCIAL CORP		LA		OTC PINK			11.00				21.4				1.42				144.89				0.00				11.97				12.59				126.58				126.58				11.73
HIBE		HIBERNIA BANCORP		LA		OTC BB			23.00				3.8				0.31				147.42				1.77				68.55				68.55				97.12				97.12				14.41
HFBL		HOME FED BANCORP OF LOUISIANA		LA		NASDAQ			13.85				28.4				1.92				210.02				1.53				15.05				15.45				126.64				127.31				13.76
BHBK		BLUE HILLS BANCORP		MA		NASDAQ			28.25				30.6				0.32				92.33				0.10				55.78				63.75				123.44				127.05				19.33
BLMT		BSB BANCORP INC.		MA		NASDAQ			7.85				25.7				1.32				236.96				0.00				21.40				21.40				159.97				160.33				11.92
GTWN		GEORGETOWN BANCORP		MA		NASDAQ			28.25				29.5				0.40				173.08				0.00				64.75				64.75				156.21				157.35				14.96
MTGB		MEETINGHOUSE BANCORP		MA		OTC BB			14.80				(1.5	)			0.29				179.21				0.00				56.03				NM				113.56				116.74				9.07
EBSB		MERIDIAN BANCORP		MA		NASDAQ			21.60				31.5				0.64				82.77				0.11				28.59				31.55				161.52				165.31				22.11
PLRM		PILGRIM BANCSHARES		MA		OTC BB			39.25				22.4				0.43				112.28				0.00				36.98				38.78				154.07				154.07				14.16
PVBC		PROVIDENT BANCORP		MA		NASDAQ			17.00				58.4				0.66				82.43				0.46				31.74				36.12				201.44				201.44				25.42

 

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

SHARE DATA AND PRICING RATIOS

PUBLICLY-TRADED, FDIC-INSURED SAVINGS INSTITUTIONS

(EXCLUDING MUTUAL HOLDING COMPANIES)

 

ALL RATIOS/FINANCIAL DATA AS OF MOST RECENT FOUR QUARTERS

 

								PER SHARE																				PRICING RATIOS
												52 Week				Earnings								12 Month				Price/Net				Price/Core				Price/				Price/Tang.				Price/
								Price				Change				(EPS)				Assets				Div.				Earnings				Earnings				Book Value				Book Value				Assets
				State		Exchange		($)				(%)				($)				($)				($)				(X)				(X)				(X)				(X)				(X)
RNDB		RANDOLPH BANCORP		MA		NASDAQ			15.90				NM				0.48				81.99				0.00				32.29				34.44				129.38				147.48				18.90
WEBK		WELLESLEY BANCORP		MA		NASDAQ			17.01				37.0				1.63				279.07				0.00				16.13				16.23				107.26				107.48				9.42
WNEB		WESTERN NEW ENGLAND BANCORP		MA		NASDAQ			20.50				24.6				0.16				68.33				0.08				65.63				87.50				133.76				145.23				15.37
BYBK		BAY BANCORP		MD		NASDAQ			88.50				62.9				0.18				59.31				0.00				43.61				49.06				125.20				131.27				13.24
IFSB		COLOMBO BANK		MD		OTC PINK			21.25				28.6				0.14				129.46				0.00				3.21				3.75				NM				NM				0.35
HBK		HAMILTON BANCORP		MD		NASDAQ			18.50				15.3				0.14				145.00				7.03				NM				NM				100.07				121.92				10.59
MBCQ		MB BANCORP		MD		OTC BB			15.05				NM				(0.84	)			67.89				0.00				NM				NM				120.33				120.33				21.80
SVBI		SEVERN BANCORP		MD		NASDAQ			8.50				42.6				1.28				64.95				1.90				5.63				19.46				99.31				100.28				11.09
EGDW		EDGEWATER BANCORP		MI		OTC BB			14.58				NM				0.67				227.90				0.00				24.78				23.06				85.04				87.69				7.28
FFNM		FIRST FED OF NO MICHIGAN BANCORP		MI		OTC BB			36.00				8.9				0.24				85.30				0.62				32.50				39.00				105.98				110.95				9.14
FBC		FLAGSTAR BANCORP		MI		NYSE			12.60				31.4				3.01				247.31				3.52				9.37				9.82				119.96				160.08				11.40
NWBB		NEW BANCORP		MI		OTC BB			25.50				NM				(0.41	)			148.18				0.00				NM				NM				77.96				81.01				9.79
STBI		STURGIS BANCORP		MI		OTC BB			12.30				53.6				1.37				191.23				0.70				11.86				12.70				91.81				114.52				8.50
WBKC		WOLVERINE BANCORP		MI		NASDAQ			22.40				27.8				2.21				206.12				2.14				14.74				14.74				112.42				112.54				15.81
HMNF		HMN FINANCIAL		MN		NASDAQ			23.20				60.3				1.59				151.74				0.67				11.35				12.36				103.74				107.70				11.90
REDW		REDWOOD FINANCIAL		MN		OTC PINK			25.85				27.9				7.78				601.76				2.96				5.81				5.82				61.66				74.66				7.51
WEFP		WELLS FINANCIAL CORP		MN		OTC PINK			17.70				54.8				3.24				332.61				5.33				15.29				15.25				144.67				155.92				14.90
CCFC		CCSB FINANCIAL CORP		MO		OTC PINK			19.67				20.0				0.40				123.70				0.14				31.50				40.65				92.11				92.44				10.19
CFDB		CENTRAL FEDERAL S&L ASSN OF ROLLA		MO		OTC PINK			9.50				NM				0.07				41.31				0.00				NM				NM				110.82				110.82				30.26
NASB		NASB FINANCIAL		MO		OTC BB			19.52				15.6				3.65				253.55				1.04				10.14				10.25				124.24				134.30				14.59
QRRY		QUARRY CITY S&L ASSN		MO		OTC BB			19.50				16.1				0.35				126.07				0.00				40.14				46.83				68.54				71.18				11.14
ASBB		ASB BANCORP		NC		NASDAQ			75.00				40.3				0.10				52.27				0.26				NM				NM				NM				NM				65.05
ENFC		ENTEGRA FINANCIAL CORP		NC		NASDAQ			19.48				36.2				0.99				199.93				0.08				23.89				27.50				114.97				120.05				11.83
KSBI		KS BANCORP		NC		OTC BB			19.90				69.3				1.78				274.49				0.26				11.24				12.35				76.45				76.45				7.29

 

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

SHARE DATA AND PRICING RATIOS

PUBLICLY-TRADED, FDIC-INSURED SAVINGS INSTITUTIONS

(EXCLUDING MUTUAL HOLDING COMPANIES)

 

ALL RATIOS/FINANCIAL DATA AS OF MOST RECENT FOUR QUARTERS

 

								PER SHARE																				PRICING RATIOS
												52 Week				Earnings								12 Month				Price/Net				Price/Core				Price/				Price/Tang.				Price/
								Price				Change				(EPS)				Assets				Div.				Earnings				Earnings				Book Value				Book Value				Assets
				State		Exchange		($)				(%)				($)				($)				($)				(X)				(X)				(X)				(X)				(X)
LSFG		LIFESTORE FINANCIAL GROUP		NC		OTC PINK			31.30				14.8				1.76				264.22				0.00				10.40				11.16				66.36				68.45				6.93
LTLB		LITTLE BANK, SSB		NC		OTC PINK			9.95				18.0				0.96				112.92				0.17				15.36				15.53				129.27				129.27				13.06
EQFN		EQUITABLE FINANCIAL CORP		NE		NASDAQ			20.11				NM				0.38				68.02				0.00				26.97				26.97				124.85				129.91				15.07
MCBK		MADISON COUNTY FINANCIAL		NE		OTC PINK			20.00				13.6				1.50				115.60				0.66				15.00				15.96				108.02				113.29				19.46
GUAA		GUARANTY BANCORP		NH		OTC PINK			33.00				0.0				2.76				479.55				1.29				6.70				10.95				44.18				44.35				3.86
CSBK		CLIFTON BANCORP INC.		NJ		NASDAQ			20.30				7.1				0.19				59.51				0.23				85.21				85.21				123.12				123.12				27.21
DLNO		DELANCO BANCORP		NJ		OTC PINK			23.65				32.6				0.08				137.11				0.00				NM				37.50				87.34				87.34				8.75
ISBC		INVESTORS BANCORP (MHC)		NJ		NASDAQ			18.05				23.5				0.62				74.95				0.27				23.19				23.57				142.52				147.34				19.19
KRNY		KEARNY FINANCIAL CORP		NJ		NASDAQ			12.40				21.9				0.22				51.42				0.08				68.41				68.41				120.40				133.54				29.27
MGYR		MAGYAR BANCORP (MHC)		NJ		NASDAQ			42.00				31.6				0.22				100.96				0.00				59.09				52.00				157.58				157.77				12.88
MSBF		MB BANCORP		NJ		NASDAQ			14.75				28.4				0.23				80.79				0.00				71.74				71.74				169.58				169.58				20.42
NFBK		NORTHFIELD BANCORP		NJ		NASDAQ			24.00				9.6				0.54				79.34				0.29				33.37				34.00				140.78				150.54				22.71
OCFC		OCEANFIRST FINANCIAL CORP		NJ		NASDAQ			16.25				59.4				0.72				161.70				0.39				39.14				39.14				158.31				217.77				17.43
ORIT		ORITANI FINANCIAL CORP		NJ		NASDAQ			21.00				0.2				1.01				87.50				1.12				16.83				20.48				144.80				144.80				19.43
PFS		PROVIDENT FINANCIAL SERVICES		NJ		NYSE			16.84				28.0				1.33				143.77				0.69				19.44				19.58				136.41				206.14				17.98
WAWL		WAWEL BANK		NJ		OTC PINK			31.17				NM				(0.10	)			34.94				0.00				NM				NM				150.00				150.00				14.77
AF		ASTORIA FINANCIAL CORP		NY		NYSE			33.50				29.5				0.71				143.85				0.16				28.89				28.89				121.07				136.64				14.26
CARV		CARVER BANCORP		NY		NASDAQ			2.14				(29.9	)			(0.55	)			189.08				0.00				NM				NM				NM				NM				1.94
DCOM		DIME COMMUNITY BANCSHARES		NY		NASDAQ			18.30				15.2				1.94				160.38				0.55				10.46				NM				134.35				149.05				12.66
ESBK		ELMIRA SAVINGS BANK		NY		NASDAQ			28.19				19.9				1.64				216.96				0.95				13.17				13.85				102.47				137.14				9.96
FSBC		FSB COMMUNITY BANKSHARES		NY		NASDAQ			17.00				10.9				0.52				139.49				0.00				28.08				29.20				99.12				101.96				10.47
PFDB		PATRIOT FEDERAL BANK		NY		OTC PINK			18.02				33.6				0.53				147.51				0.00				17.64				18.70				72.65				73.74				6.34
SNNY		SUNNYSIDE BANCORP		NY		OTC BB			7.15				15.9				(0.16	)			114.21				0.00				NM				NM				98.52				98.52				11.67
TRST		TRUSTCO BANK CORP NY		NY		NASDAQ			20.30				29.5				0.43				49.05				0.25				18.26				19.15				180.05				180.46				16.00

 

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

SHARE DATA AND PRICING RATIOS

PUBLICLY-TRADED, FDIC-INSURED SAVINGS INSTITUTIONS

(EXCLUDING MUTUAL HOLDING COMPANIES)

 

ALL RATIOS/FINANCIAL DATA AS OF MOST RECENT FOUR QUARTERS

 

								PER SHARE																				PRICING RATIOS
												52 Week				Earnings								12 Month				Price/Net				Price/Core				Price/				Price/Tang.				Price/
								Price				Change				(EPS)				Assets				Div.				Earnings				Earnings				Book Value				Book Value				Assets
				State		Exchange		($)				(%)				($)				($)				($)				(X)				(X)				(X)				(X)				(X)
ASBN		ASB FINANCIAL CORP		OH		OTC PINK			11.60				15.2				1.19				137.55				0.00				12.10				12.00				93.75				103.75				10.47
CFBK		CENTRAL FEDERAL CORP		OH		NASDAQ			15.00				58.5				0.13				26.68				0.00				16.46				16.46				84.25				84.25				8.02
CNNB		CINCINNATI BANCORP		OH		OTC BB			17.61				NM				0.45				90.31				0.00				21.11				21.11				90.05				93.87				10.52
CIBN		COMMUNITY INVESTORS BANCORP		OH		OTC PINK			25.00				16.3				9.41				1,791.89				3.09				1.59				1.49				NM				NM				0.84
FDEF		FIRST DEFIANCE FINANCIAL CORP		OH		NASDAQ			10.00				28.9				3.21				275.77				0.88				15.42				15.72				151.78				201.92				17.95
FNFI		FIRST NILES FINANCIAL		OH		OTC PINK			22.50				35.0				0.09				87.36				0.25				NM				NM				105.36				105.36				12.59
HCFL		HOME CITY FINANCIAL CORP		OH		OTC PINK			8.90				28.0				2.06				195.11				1.88				11.26				11.66				111.59				111.59				11.89
HLFN		HOME LOAN FINANCIAL CORP		OH		OTC BB			15.35				29.9				2.23				146.53				1.43				12.11				12.11				165.64				166.98				18.43
MWBC		MW BANCORP INC		OH		OTC BB			22.50				NM				1.18				145.24				0.00				17.80				60.00				122.66				123.53				14.46
PPSF		PEOPLES-SIDNEY FINANCIAL CORP		OH		OTC PINK			28.18				7.9				0.41				90.53				0.39				21.71				21.19				74.41				74.41				9.83
PFOH		PERPETUAL FEDERAL SAVINGS BANK		OH		OTC PINK			14.50				34.0				2.05				158.25				0.84				13.07				13.14				97.42				97.42				16.94
UCFC		UNITED COMMUNITY FINANCIAL CORP		OH		NASDAQ			7.20				42.1				0.40				47.13				0.11				20.85				21.38				155.60				159.46				17.70
VERF		VERSAILLES FINANCIAL CORP		OH		OTC BB			25.80				30.0				(0.32	)			139.36				1.29				NM				NM				89.11				89.11				15.86
WAYN		WAYNE SAVINGS BANCSHARES		OH		NASDAQ			11.55				44.1				0.87				163.63				0.69				20.46				20.46				125.88				133.13				10.88
BNCL		BENEFICIAL MUTUAL BANCORP		PA		NASDAQ			1.81				16.9				0.34				75.92				0.78				47.06				50.00				119.40				144.40				21.07
ESSA		ESSA BANCORP		PA		NASDAQ			24.80				8.1				0.67				155.15				0.33				21.76				26.04				97.53				107.84				9.40
HARL		HARLEYSVILLE SAVINGS FIN CORP		PA		OTC PINK			25.90				21.1				1.64				204.29				1.12				14.02				14.47				128.64				128.64				11.26
MLVF		MALVERN BANCORP		PA		NASDAQ			18.31				31.5				1.82				133.93				0.00				11.57				25.37				150.21				150.75				15.72
NWBI		NORTHWEST BANCSHARES		PA		NASDAQ			21.06				24.6				0.49				95.37				0.59				34.37				37.42				146.31				207.13				17.66
PBIP		PRUDENTIAL BANCORP		PA		NASDAQ			37.00				24.7				0.40				71.06				2.24				44.63				51.00				173.47				173.47				25.12
QNTO		QUAINT OAK BANCORP		PA		OTC PINK			17.85				6.8				0.82				113.93				0.00				15.62				13.92				126.21				133.44				11.24
STND		STANDARD FINANCIAL CORP		PA		NASDAQ			20.94				9.1				1.17				186.37				1.92				22.65				23.04				100.00				114.82				14.22
WVFC		WVS FINANCIAL CORP		PA		NASDAQ			20.82				31.7				0.76				169.35				0.60				19.67				19.67				96.89				96.89				8.83
CWAY		COASTWAY BANCORP		RI		NASDAQ			11.00				40.5				0.79				146.71				0.00				22.29				21.74				135.36				135.67				12.00

 

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

SHARE DATA AND PRICING RATIOS

PUBLICLY-TRADED, FDIC-INSURED SAVINGS INSTITUTIONS

(EXCLUDING MUTUAL HOLDING COMPANIES)

 

ALL RATIOS/FINANCIAL DATA AS OF MOST RECENT FOUR QUARTERS

 

								PER SHARE																				PRICING RATIOS
												52 Week				Earnings								12 Month				Price/Net				Price/Core				Price/				Price/Tang.				Price/
								Price				Change				(EPS)				Assets				Div.				Earnings				Earnings				Book Value				Book Value				Assets
				State		Exchange		($)				(%)				($)				($)				($)				(X)				(X)				(X)				(X)				(X)
FCPB		FIRST CAPITAL BANCSHARES		SC		OTC PINK			49.51				68.5				0.57				96.28				0.00				17.53				19.98				69.28				69.28				10.38
FSGB		FIRST FEDERAL OF SOUTH CAROLINA		SC		OTC PINK			37.33				NM				0.02				3.21				0.00				NM				NM				NM				NM				NM
CASH		META FINANCIAL GROUP		SD		NASDAQ			14.63				94.1				3.27				452.80				0.49				27.06				25.65				221.47				412.97				19.55
AFCB		ATHENS BANCSHARES CORP		TN		NASDAQ			16.40				28.9				1.91				246.51				0.00				17.54				18.31				118.92				127.57				13.59
SFBK		SFB BANCORP		TN		OTC PINK			12.81				(7.7	)			1.56				134.73				5.02				20.71				29.10				124.95				126.67				23.97
UNTN		UNITED TENNESSEE BANKSHARES		TN		OTC PINK			5.50				(6.8	)			1.81				238.44				0.95				11.33				11.26				84.57				84.57				8.60
BAFI		BANCAFFILIATED		TX		OTC PINK			14.52				0.0				27.97				2,300.35				14.37				2.68				2.68				NM				35.97				3.26
TBK		TRIUMPH BANCORP		TX		NASDAQ			32.30				63.0				1.15				146.09				0.00				22.43				20.98				161.15				192.11				17.66
ANCB		ANCHOR BANCORP		WA		NASDAQ			14.40				6.9				0.73				175.78				0.26				35.55				36.55				108.40				108.81				14.76
FSBW		FS BANCORP		WA		NASDAQ			14.60				48.2				3.59				270.61				0.47				10.40				10.67				130.25				151.87				13.79
RVSB		RIVERVIEW BANCORP		WA		NASDAQ			8.90				70.2				0.32				43.71				0.08				22.34				21.03				125.44				157.49				16.36
TSBK		TIMBERLAND BANCORP		WA		NASDAQ			16.25				77.2				1.55				132.79				0.34				14.45				13.91				156.42				168.93				16.87
BKMU		BANK MUTUAL CORP		WI		NASDAQ			26.13				24.2				0.37				57.97				0.21				25.41				25.41				149.92				153.34				16.22
HWIS		HOME BANCORP WISCONSIN		WI		OTC PINK			28.90				32.6				0.17				160.23				0.00				72.94				NM				98.10				98.10				7.74
WSBF		WATERSTONE FINANCIAL		WI		NASDAQ			22.10				33.4				0.87				60.83				0.31				20.98				21.22				130.82				131.67				30.00
WBB		WESTBURY BANCORP		WI		NASDAQ			7.85				9.6				0.86				180.13				0.32				24.21				28.92				117.76				119.11				11.56

 

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

SHARE DATA AND PRICING RATIOS

PUBLICLY-TRADED, FDIC-INSURED SAVINGS INSTITUTIONS

(EXCLUDING MUTUAL HOLDING COMPANIES)

 

ALL RATIOS/FINANCIAL DATA AS OF MOST RECENT FOUR QUARTERS

 

		PER SHARE																				PRICING RATIOS
						52 Week				Earnings								12 Month				Price/Net				Price/Core				Price/				Price/Tang.				Price/
		Price				Change				(EPS)				Assets				Div.				Earnings				Earnings				Book Value				Book Value				Assets
		($)				(%)				($)				($)				($)				(X)				(X)				(X)				(X)				(X)
ALL INSTITUTIONS
AVERAGE			20.44				25.85				1.37				181.53				0.73				24.03				25.28				121.91				131.35				14.14
HIGH			88.50				94.10				27.97				2,300.35				14.37				85.21				87.50				249.05				412.97				65.05
LOW			0.36				(60.00	)			(1.66	)			3.21				0.00				0.08				0.14				39.74				35.97				0.20
AVERAGE FOR STATE
WI			21.25				24.95				0.57				114.79				0.21				35.89				25.18				124.15				125.56				16.38
AVERAGE BY REGION
MID-ATLANTIC			23.02				23.37				0.62				111.52				0.76				27.80				31.09				127.86				142.70				16.27
MIDWEST			19.24				18.87				1.49				205.06				0.73				18.97				18.53				103.63				108.82				12.05
NORTH CENTRAL			18.68				28.43				2.08				212.14				1.10				18.88				20.37				118.87				140.97				16.05
NORTHEAST			21.93				22.38				0.77				156.99				0.21				26.66				26.50				122.43				129.41				12.95
SOUTHEAST			23.07				28.53				1.02				147.67				0.48				13.77				15.09				103.82				114.62				15.64
SOUTHWEST			17.78				24.42				5.86				530.21				2.95				21.84				21.79				103.58				114.85				11.93
WEST			14.51				27.57				1.37				133.51				0.57				18.30				18.23				131.37				138.90				15.56
AVERAGE BY EXCHANGE
NYSE			20.86				29.50				1.55				188.52				1.15				18.70				18.81				125.05				162.22				13.13
NASDAQ			19.85				28.61				0.96				134.85				0.54				25.68				27.24				133.50				147.75				16.69
OTC BB			19.76				15.05				1.00				164.42				0.60				21.29				21.32				103.72				106.55				11.82
OTC PINK			22.39				17.82				2.66				304.10				1.25				11.95				11.60				81.09				84.12				10.21

 

  

EXHIBIT 32

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

KEY FINANCIAL DATA AND RATIOS

PUBLICLY-TRADED FDIC-INSURED SAVINGS INSTITUTIONS

MOST RECENT FOUR QUARTERS

 

						ASSETS AND EQUITY												PROFITABILITY																CAPITAL ISSUES
						Total				Total				Total								Core								Core						Number of				Mkt. Value
						Assets				Equity				Tang. Equity				ROAA				ROAA				ROAE				ROAE						Shares				of Shares
				State		($000)				($000)				($000)				(%)				(%)				(%)				(%)				Exchange		Outstanding				($000)
SZBI		SOUTHFIRST BANCSHARES		AL			88,882				9,810				9,810				0.48				0.65				4.34				5.96			OTC PINK			708,871				3,899
ABNK		ALTAPACIFIC BANCORP		CA			348,011				59,687				56,309				1.28				1.27				7.92				7.87			OTC PINK			5,799,076				59,846
BOFI		BOFI HOLDING		CA			8,167,876				753,671				747,521				1.62				1.60				18.04				17.86			NASDAQ			63,359,001				1,655,571
BYFC		BROADWAY FINANCIAL CORP		CA			426,686				47,747				47,715				0.57				0.57				4.66				4.61			NASDAQ			29,076,708				52,629
MLGF		MALAGA FINANCIAL CORP		CA			990,803				127,912				127,912				1.24				1.24				9.28				9.28			OTC BB			5,967,699				152,176
PROV		PROVIDENT FINANCIAL HOLDINGS		CA			1,192,155				132,555				131,811				0.60				0.62				5.34				5.58			NASDAQ			7,915,116				147,617
FBNK		FIRST CONNECTICUT BANCORP		CT			2,838,331				260,176				255,359				0.55				0.55				5.99				5.99			NASDAQ			15,897,698				394,263
SIFI		SI FINANCIAL GROUP		CT			1,549,588				164,727				146,326				0.74				0.39				7.07				3.76			NASDAQ			12,212,904				171,591
UBNK		UNITED FINANCIAL BANCORP		CT			6,603,987				655,866				524,579				0.77				0.74				7.67				7.40			NASDAQ			50,786,671				863,881
WSFS		WSFS FINANCIAL CORP		DE			6,765,270				687,336				495,447				1.03				0.99				9.88				9.46			NASDAQ			31,390,074				1,442,374
ACFC		ATLANTIC COAST FINANCIAL CORP		FL			908,000				85,842				85,053				0.96				0.74				10.69				8.19			NASDAQ			15,509,061				118,179
EVER		EVERBANK FINANCIAL CORP		FL			27,838,086				2,016,332				1,694,536				0.52				0.53				7.60				7.66			NYSE			127,036,740				2,474,676
FFHD		FIRSTATLANTIC BANK		FL			436,951				53,191				50,690				0.88				0.80				6.84				6.18			OTC BB			5,994,955				75,836
SBCP		SUNSHINE BANCORP		FL			930,401				115,830				93,523				0.09				(0.03	)			0.70				(0.25	)		NASDAQ			7,986,074				167,228
ABCB		AMERIS BANCORP		GA			6,892,032				646,437				500,919				1.12				1.14				11.46				11.64			NASDAQ			34,921,474				1,609,880
CHFN		CHARTER FINANCIAL CORP		GA			1,467,812				205,500				172,233				0.91				0.84				6.10				5.64			NASDAQ			15,030,926				295,658
TBNK		TERRITORIAL BANCORP		HI			1,877,563				229,786				229,479				0.88				0.86				7.21				7.05			NASDAQ			9,778,974				304,811
AJSB		AJS BANCORP		IL			201,568				29,041				29,039				0.30				0.26				2.03				1.78			OTC BB			2,150,718				32,583
AFBA		ALLIED FIRST BANCORP		IL			93,524				10,133				10,133				2.46				1.41				27.73				15.86			OTC BB			527,688				190
BFIN		BANKFINANCIAL CORP		IL			1,620,036				204,780				203,386				0.49				0.49				3.64				3.69			NASDAQ			19,233,760				279,274
BFFI		BEN FRANKLIN FINANCIAL		IL			85,274				7,368				7,368				(1.40	)			(1.42	)			(14.54	)			(14.68	)		OTC BB			694,419				8,055
GTPS		GREAT AMERICAN BANCORP		IL			180,455				16,868				15,723				0.44				0.42				4.70				4.51			OTC BB			449,227				14,824
IROQ		IF BANCORP		IL			580,068				68,039				67,421				0.77				0.69				6.66				6.01			NASDAQ			3,950,408				78,613
JXSB		JACKSONVILLE BANCORP		IL			319,242				41,366				38,086				1.03				0.89				7.42				6.44			NASDAQ			1,780,000				55,714
MCPH		MIDLAND CAPITAL HOLDINGS CORP		IL			120,700				11,067				11,067				(0.04	)			(0.13	)			(0.38	)			(1.38	)		OTC PINK			372,600				7,273

 

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

KEY FINANCIAL DATA AND RATIOS

PUBLICLY-TRADED FDIC-INSURED SAVINGS INSTITUTIONS

MOST RECENT FOUR QUARTERS

 

						ASSETS AND EQUITY												PROFITABILITY																CAPITAL ISSUES
						Total				Total				Total								Core								Core						Number of				Mkt. Value
						Assets				Equity				Tang. Equity				ROAA				ROAA				ROAE				ROAE						Shares				of Shares
				State		($000)				($000)				($000)				(%)				(%)				(%)				(%)				Exchange		Outstanding				($000)
RYFL		ROYAL FINANCIAL		IL			309,047				34,512				33,540				0.63				0.63				5.02				5.00			OTC BB			2,507,112				30,837
SUGR		SUGAR CREEK FINANCIAL CORP		IL			94,756				11,146				11,146				0.15				0.17				1.33				1.45			OTC BB			856,220				11,944
AMFC		AMB FINANCIAL CORP		IN			204,967				18,927				18,604				0.87				0.87				9.08				9.08			OTC BB			981,638				16,099
DSFN		DSA FINANCIAL CORP		IN			126,650				15,227				14,948				0.63				0.62				4.73				4.66			OTC BB			1,619,183				17,811
FDLB		FIDELITY FEDERAL BANCORP		IN			456,271				65,494				64,937				2.25				1.65				16.31				11.93			OTC PINK			844,763				8,448
FCAP		FIRST CAPITAL		IN			741,919				73,396				65,665				0.84				0.81				8.38				8.09			NASDAQ			3,337,552				112,642
NWIN		NORTHWEST INDIANA BANCORP		IN			913,626				84,203				80,830				1.02				0.92				10.71				9.62			OTC BB			2,860,157				112,261
TDCB		THIRD CENTURY BANCORP		IN			135,705				15,058				14,858				0.56				0.64				5.00				5.78			OTC BB			1,272,697				14,700
UCBA		UNITED COMMUNITY BANCORP		IN			522,171				61,173				57,629				0.66				0.63				5.51				5.27			NASDAQ			4,194,404				74,241
WEIN		WEST END INDIANA BANCSHARES		IN			286,958				27,073				26,354				0.73				0.76				7.39				7.79			OTC BB			1,064,582				32,470
CFFN		CAPITOL FEDERAL FINANCIAL		KS			9,161,863				1,368,175				1,367,760				0.90				0.89				6.01				5.97			NASDAQ			137,915,672				2,017,706
PBSK		POAGE BANKSHARES		KY			458,227				64,035				61,404				0.54				0.58				3.64				3.92			NASDAQ			3,704,704				72,242
CTUY		CENTURY NEXT FINANCIAL CORP		LA			239,429				23,412				23,412				1.08				1.07				11.12				10.97			OTC BB			1,030,000				25,750
FPBF		FPB FINANCIAL CORP		LA			298,815				27,702				27,702				1.10				1.04				10.63				10.08			OTC PINK			2,062,426				35,061
HIBE		HIBERNIA BANCORP		LA			124,690				18,509				18,509				0.21				0.21				1.32				1.32			OTC BB			845,843				17,974
HFBL		HOME FED BANCORP OF LOUISIANA		LA			410,591				44,621				44,379				0.97				0.94				8.63				8.37			NASDAQ			1,955,039				56,501
BHBK		BLUE HILLS BANCORP		MA			2,470,618				386,906				375,913				0.38				0.32				2.22				1.89			NASDAQ			26,759,953				477,665
BLMT		BSB BANCORP INC.		MA			2,158,725				160,920				160,517				0.59				0.59				7.73				7.74			NASDAQ			9,110,077				257,360
GTWN		GEORGETOWN BANCORP		MA			318,632				30,531				30,295				0.24				0.24				2.46				2.46			NASDAQ			1,840,920				47,680
MTGB		MEETINGHOUSE BANCORP		MA			119,878				9,572				9,312				0.16				0.02				2.00				0.21			OTC BB			668,919				10,870
EBSB		MERIDIAN BANCORP		MA			4,436,239				607,297				593,420				0.84				0.77				5.76				5.25			NASDAQ			53,596,105				980,809
PLRM		PILGRIM BANCSHARES		MA			253,012				23,259				23,259				0.40				0.39				4.21				4.07			OTC BB			2,253,439				35,830
PVBC		PROVIDENT BANCORP		MA			795,698				100,426				100,426				0.83				0.74				6.23				5.55			NASDAQ			9,652,448				202,219
RNDB		RANDOLPH BANCORP		MA			481,161				70,300				61,708				0.62				0.58				5.32				5.05			NASDAQ			5,868,726				90,965
WEBK		WELLESLEY BANCORP		MA			693,450				60,924				60,802				0.62				0.62				6.73				6.71			NASDAQ			2,484,852				65,352

 

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

KEY FINANCIAL DATA AND RATIOS

PUBLICLY-TRADED FDIC-INSURED SAVINGS INSTITUTIONS

MOST RECENT FOUR QUARTERS

 

						ASSETS AND EQUITY												PROFITABILITY																CAPITAL ISSUES
						Total				Total				Total								Core								Core						Number of				Mkt. Value
						Assets				Equity				Tang. Equity				ROAA				ROAA				ROAE				ROAE						Shares				of Shares
				State		($000)				($000)				($000)				(%)				(%)				(%)				(%)				Exchange		Outstanding				($000)
WNEB		WESTERN NEW ENGLAND BANCORP		MA			2,076,018				238,396				219,747				0.32				0.24				2.88				2.20			NASDAQ			30,380,231				318,992
BYBK		BAY BANCORP		MD			620,200				65,554				62,524				0.35				0.32				2.89				2.58			NASDAQ			10,456,098				82,080
IFSB		COLOMBO BANK		MD			200,929				20,132				20,132				0.11				0.09				1.11				0.88			OTC PINK			1,552,000				698
HBK		HAMILTON BANCORP		MD			494,992				52,358				42,965				0.10				0.01				0.95				0.05			NASDAQ			3,413,646				52,399
MBCQ		MB BANCORP		MD			129,197				23,402				23,402				(1.19	)			(1.32	)			(6.48	)			(7.21	)		OTC BB			1,902,900				28,163
SVBI		SEVERN BANCORP		MD			787,394				87,930				87,039				1.99				0.58				17.21				5.03			NASDAQ			12,123,179				87,287
EGDW		EDGEWATER BANCORP		MI			152,212				13,038				12,643				0.31				0.33				3.49				3.75			OTC BB			667,898				11,087
FFNM		FIRST FED OF NO MICHIGAN BANCORP		MI			344,167				29,678				28,378				0.28				0.24				2.96				2.51			OTC BB			4,034,675				31,470
FBC		FLAGSTAR BANCORP		MI			14,053,094				1,335,598				1,000,878				1.23				1.17				11.84				11.29			NYSE			56,824,802				1,601,891
NWBB		NEW BANCORP		MI			103,220				12,954				12,471				(0.28	)			(0.31	)			(2.20	)			(2.36	)		OTC BB			696,600				10,101
STBI		STURGIS BANCORP		MI			398,464				36,880				29,572				0.73				0.68				7.93				7.39			OTC BB			2,083,741				33,861
WBKC		WOLVERINE BANCORP		MI			434,124				61,030				60,973				1.18				1.18				7.46				7.46			NASDAQ			2,106,153				68,618
HMNF		HMN FINANCIAL		MN			681,169				78,108				75,248				1.08				0.99				9.22				8.46			NASDAQ			4,488,923				81,025
REDW		REDWOOD FINANCIAL		MN			263,903				32,144				26,552				1.32				1.32				10.81				10.80			OTC PINK			438,551				19,823
WEFP		WELLS FINANCIAL CORP		MN			264,496				27,235				25,268				0.96				0.96				9.75				9.78			OTC PINK			795,213				39,403
CCFC		CCSB FINANCIAL CORP		MO			94,584				10,463				10,422				0.33				0.25				2.93				2.25			OTC PINK			764,629				9,634
CFDB		CENTRAL FEDERAL S&L ASSN OF ROLLA		MO			73,872				20,174				20,174				0.16				0.13				0.59				0.47			OTC PINK			1,788,020				22,350
NASB		NASB FINANCIAL		MO			1,879,558				220,777				204,233				1.49				1.47				12.82				12.65			OTC BB			7,413,009				274,281
QRRY		QUARRY CITY S&L ASSN		MO			51,397				8,358				8,046				0.28				0.24				1.71				1.49			OTC BB			407,691				5,728
ASBB		ASB BANCORP		NC			794,611				85,811				85,811				0.19				(0.22	)			1.74				(2.03	)		NASDAQ			15,203,000				516,902
ENFC		ENTEGRA FINANCIAL CORP		NC			1,293,045				133,068				127,421				0.54				0.47				4.70				4.12			NASDAQ			6,467,550				152,958
KSBI		KS BANCORP		NC			359,450				34,257				34,257				0.66				0.60				6.80				6.20			OTC BB			1,309,500				26,190
LSFG		LIFESTORE FINANCIAL GROUP		NC			269,265				28,118				27,264				0.67				0.63				6.29				5.86			OTC PINK			1,019,091				18,660
LTLB		LITTLE BANK, SSB		NC			362,090				36,598				36,598				0.85				0.84				8.45				8.32			OTC PINK			3,206,520				47,296
EQFN		EQUITABLE FINANCIAL CORP		NE			241,259				35,826				26,747				0.56				0.57				4.72				4.78			NASDAQ			3,390,702				34,755

 

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

KEY FINANCIAL DATA AND RATIOS

PUBLICLY-TRADED FDIC-INSURED SAVINGS INSTITUTIONS

MOST RECENT FOUR QUARTERS

 

						ASSETS AND EQUITY												PROFITABILITY																CAPITAL ISSUES
						Total				Total				Total								Core								Core						Number of				Mkt. Value
						Assets				Equity				Tang. Equity				ROAA				ROAA				ROAE				ROAE						Shares				of Shares
				State		($000)				($000)				($000)				(%)				(%)				(%)				(%)				Exchange		Outstanding				($000)
MCBK		MADISON COUNTY FINANCIAL		NE			362,977				65,410				62,373				1.33				1.25				7.27				6.85			OTC PINK			3,140,000				70,650
GUAA		GUARANTY BANCORP		NH			466,016				40,689				40,533				0.60				0.37				6.58				4.02			OTC PINK			971,787				17,978
CSBK		CLIFTON BANCORP INC.		NJ			1,371,545				303,098				303,098				0.33				0.33				1.42				1.39			NASDAQ			23,046,435				373,122
DLNO		DELANCO BANCORP		NJ			129,627				12,990				12,990				0.06				0.24				0.60				2.37			OTC PINK			945,425				11,345
ISBC		INVESTORS BANCORP (MHC)		NJ			23,193,955				3,123,245				3,021,406				0.87				0.85				6.11				6.00			NASDAQ			309,449,388				4,449,882
KRNY		KEARNY FINANCIAL CORP		NJ			4,585,308				1,114,652				1,005,416				0.42				0.42				1.69				1.69			NASDAQ			89,176,477				1,342,106
MGYR		MAGYAR BANCORP (MHC)		NJ			587,683				48,031				47,940				0.22				0.25				2.63				3.05			NASDAQ			5,820,746				75,670
MSBF		MB BANCORP		NJ			461,616				55,611				55,611				0.32				0.32				2.41				2.41			NASDAQ			5,714,000				94,281
NFBK		NORTHFIELD BANCORP		NJ			3,850,094				621,303				581,001				0.69				0.69				4.24				4.19			NASDAQ			48,526,658				874,450
OCFC		OCEANFIRST FINANCIAL CORP		NJ			5,196,395				572,038				415,822				0.58				0.58				5.62				5.66			NASDAQ			32,136,892				905,618
ORIT		ORITANI FINANCIAL CORP		NJ			4,012,764				538,525				538,525				1.23				1.00				8.64				7.07			NASDAQ			45,860,066				779,621
PFS		PROVIDENT FINANCIAL SERVICES		NJ			9,500,465				1,251,933				828,996				0.95				0.94				7.11				7.05			NYSE			66,082,283				1,708,227
WAWL		WAWEL BANK		NJ			74,934				7,371				7,371				(0.29	)			(0.63	)			(2.90	)			(6.17	)		OTC PINK			2,144,701				11,067
AF		ASTORIA FINANCIAL CORP		NY			14,558,652				1,714,073				1,518,792				0.48				0.48				4.21				4.22			NYSE			101,210,478				2,075,827
CARV		CARVER BANCORP		NY			698,874				51,419				51,226				(0.29	)			(0.02	)			(3.77	)			(0.22	)		NASDAQ			3,696,087				13,528
DCOM		DIME COMMUNITY BANCSHARES		NY			6,005,430				565,868				510,078				1.27				0.07				13.12				0.78			NASDAQ			37,445,853				760,151
ESBK		ELMIRA SAVINGS BANK		NY			573,573				55,722				41,634				0.76				0.73				7.82				7.46			NASDAQ			2,643,652				57,103
FSBC		FSB COMMUNITY BANKSHARES		NY			270,840				28,610				27,806				0.38				0.36				4.12				3.94			NASDAQ			1,941,688				28,349
PFDB		PATRIOT FEDERAL BANK		NY			141,246				12,324				12,143				0.37				0.35				4.07				3.80			OTC PINK			957,544				8,953
SNNY		SUNNYSIDE BANCORP		NY			90,624				10,738				10,738				(0.14	)			(0.29	)			(1.15	)			(2.39	)		OTC BB			793,500				10,577
TRST		TRUSTCO BANK CORP NY		NY			4,867,040				432,686				432,133				0.88				0.85				9.90				9.57			NASDAQ			99,229,029				778,948
ASBN		ASB FINANCIAL CORP		OH			272,209				30,396				27,466				0.87				0.88				7.95				8.01			OTC PINK			1,979,034				28,498
CFBK		CENTRAL FEDERAL CORP		OH			434,726				41,449				41,442				0.54				0.54				5.28				5.31			NASDAQ			16,294,910				34,871
CNNB		CINCINNATI BANCORP		OH			155,266				18,130				17,400				0.51				0.51				4.41				4.41			OTC BB			1,719,250				16,333
CIBN		COMMUNITY INVESTORS BANCORP		OH			141,903				12,339				11,805				0.53				0.57				6.06				6.48			OTC PINK			79,192				1,188

 

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

KEY FINANCIAL DATA AND RATIOS

PUBLICLY-TRADED FDIC-INSURED SAVINGS INSTITUTIONS

MOST RECENT FOUR QUARTERS

 

						ASSETS AND EQUITY												PROFITABILITY																CAPITAL ISSUES
						Total				Total				Total								Core								Core						Number of				Mkt. Value
						Assets				Equity				Tang. Equity				ROAA				ROAA				ROAE				ROAE						Shares				of Shares
				State		($000)				($000)				($000)				(%)				(%)				(%)				(%)				Exchange		Outstanding				($000)
FDEF		FIRST DEFIANCE FINANCIAL CORP		OH			2,477,263				293,018				220,289				1.19				1.17				10.01				9.84			NASDAQ			8,983,206				444,759
FNFI		FIRST NILES FINANCIAL		OH			97,243				11,618				11,618				0.10				(0.18	)			0.81				(1.38	)		OTC PINK			1,113,172				12,245
HCFL		HOME CITY FINANCIAL CORP		OH			155,819				16,607				16,607				1.06				1.03				9.81				9.50			OTC PINK			798,618				18,528
HLFN		HOME LOAN FINANCIAL CORP		OH			205,221				22,823				22,653				1.55				1.55				14.11				14.11			OTC BB			1,400,505				37,814
MWBC		MW BANCORP INC		OH			128,605				15,158				15,055				0.85				0.25				6.99				2.08			OTC BB			885,473				18,595
PPSF		PEOPLES-SIDNEY FINANCIAL CORP		OH			112,748				14,898				14,898				0.45				0.46				3.39				3.46			OTC PINK			1,245,410				11,084
PFOH		PERPETUAL FEDERAL SAVINGS BANK		OH			390,874				67,944				67,944				1.32				1.31				7.57				7.54			OTC PINK			2,470,032				66,197
UCFC		UNITED COMMUNITY FINANCIAL CORP		OH			2,195,354				249,806				243,523				0.89				0.86				7.44				7.25			NASDAQ			46,581,370				388,489
VERF		VERSAILLES FINANCIAL CORP		OH			57,472				10,229				10,229				(0.23	)			(0.40	)			(1.31	)			(2.25	)		OTC BB			412,387				9,114
WAYN		WAYNE SAVINGS BANCSHARES		OH			455,189				39,332				37,206				0.54				0.54				6.00				6.02			NASDAQ			2,781,839				49,517
BNCL		BENEFICIAL MUTUAL BANCORP		PA			5,742,747				1,013,756				838,016				0.47				0.44				2.48				2.34			NASDAQ			75,637,684				1,210,203
ESSA		ESSA BANCORP		PA			1,778,610				171,439				154,956				0.44				0.36				4.41				3.65			NASDAQ			11,463,785				167,142
HARL		HARLEYSVILLE SAVINGS FIN CORP		PA			758,284				66,386				66,386				0.80				0.78				9.32				9.02			OTC PINK			3,711,853				85,373
MLVF		MALVERN BANCORP		PA			878,580				91,970				91,657				1.47				0.67				14.11				6.41			NASDAQ			6,560,162				138,157
NWBI		NORTHWEST BANCSHARES		PA			9,698,968				1,170,663				826,572				0.53				0.49				4.26				3.91			NASDAQ			101,699,406				1,712,618
PBIP		PRUDENTIAL BANCORP		PA			571,689				82,817				82,817				0.59				0.51				3.40				2.96			NASDAQ			8,045,544				143,613
QNTO		QUAINT OAK BANCORP		PA			215,466				19,201				18,163				0.76				0.86				8.36				9.40			OTC PINK			1,891,150				24,226
STND		STANDARD FINANCIAL CORP		PA			486,420				69,153				60,229				0.63				0.62				4.38				4.31			NASDAQ			2,610,000				69,165
WVFC		WVS FINANCIAL CORP		PA			340,073				30,989				30,989				0.45				0.45				4.96				4.93			NASDAQ			2,008,144				30,022
CWAY		COASTWAY BANCORP		RI			645,972				57,288				57,149				0.57				0.59				6.26				6.39			NASDAQ			4,403,096				77,539
FCPB		FIRST CAPITAL BANCSHARES		SC			54,274				8,130				8,130				0.61				0.53				4.05				3.50			OTC PINK			563,728				5,632
FSGB		FIRST FEDERAL OF SOUTH CAROLINA		SC			77,313				4,743				4,438				0.61				0.73				9.67				11.57			OTC PINK			24,066,545				108,059
CASH		META FINANCIAL GROUP		SD			4,213,386				371,786				199,416				0.84				0.89				8.99				9.49			NASDAQ			9,305,079				823,499
AFCB		ATHENS BANCSHARES CORP		TN			439,639				50,233				46,839				0.85				0.81				7.18				6.90			NASDAQ			1,783,428				59,745
SFBK		SFB BANCORP		TN			61,744				11,848				11,685				1.13				0.81				5.69				4.07			OTC PINK			458,270				14,802

 

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

KEY FINANCIAL DATA AND RATIOS

PUBLICLY-TRADED FDIC-INSURED SAVINGS INSTITUTIONS

MOST RECENT FOUR QUARTERS

 

						ASSETS AND EQUITY												PROFITABILITY																CAPITAL ISSUES
						Total				Total				Total								Core								Core						Number of				Mkt. Value
						Assets				Equity				Tang. Equity				ROAA				ROAA				ROAE				ROAE						Shares				of Shares
				State		($000)				($000)				($000)				(%)				(%)				(%)				(%)				Exchange		Outstanding				($000)
UNTN		UNITED TENNESSEE BANKSHARES		TN			200,002				20,336				20,336				0.76				0.76				7.33				7.38			OTC PINK			838,809				17,196
BAFI		BANCAFFILIATED		TX			640,533				60,842				58,059				1.27				1.27				13.55				13.56			OTC PINK			278,450				20,884
TBK		TRIUMPH BANCORP		TX			2,641,067				289,345				242,814				0.95				1.03				7.34				7.90			NASDAQ			18,078,247				466,419
ANCB		ANCHOR BANCORP		WA			440,281				59,956				59,743				0.42				0.41				3.06				3.00			NASDAQ			2,504,740				64,998
FSBW		FS BANCORP		WA			827,925				87,682				75,193				1.36				1.32				12.96				12.61			NASDAQ			3,059,503				114,211
RVSB		RIVERVIEW BANCORP		WA			983,963				128,260				102,298				0.75				0.79				5.57				5.86			NASDAQ			22,510,890				160,953
TSBK		TIMBERLAND BANCORP		WA			923,751				99,634				92,274				1.22				1.27				11.25				11.67			NASDAQ			6,956,568				155,827
BKMU		BANK MUTUAL CORP		WI			2,648,639				286,641				280,072				0.65				0.64				5.91				5.86			NASDAQ			45,691,790				429,503
HWIS		HOME BANCORP WISCONSIN		WI			144,074				11,370				11,370				0.11				0.02				1.37				0.30			OTC PINK			899,190				11,150
WSBF		WATERSTONE FINANCIAL		WI			1,790,163				410,690				407,829				1.43				1.43				6.33				6.30			NASDAQ			29,430,123				537,100
WBB		WESTBURY BANCORP		WI			733,578				72,021				71,180				0.51				0.42				4.81				4.04			NASDAQ			4,072,540				84,790

 

 

KELLER 8s COMPANY

Dublin, Ohio

614-766-1426

 

KEY FINANCIAL DATA AND RATIOS

PUBLICLY-TRADED FDIC-INSURED SAVINGS INSTITUTIONS

MOST RECENT FOUR QUARTERS

 

		ASSETS AND EQUITY												PROFITABILITY																CAPITAL ISSUES
		Total				Total				Total								Core								Core						Number of		Mkt. Value
		Assets				Equity				Tang. Equity				ROAA				ROAA				ROAE				ROAE						Shares		of Shares
		($000)				($000)				($000)				(%)				(%)				(%)				(%)				Exchange		Outstanding		($000)
ALL INSTITUTIONS
AVERAGE			1,848,351				213,155				188,308				0.81				0.75				6.85				6.33					16,742,341			302,833
MEDIAN			459,922				58,488				56,729				0.63				0.62				6.00				5.61					3,364,127			65,775
HIGH			27,838,086				3,123,245				3,021,406				2.46				1.65				27.73				17.86					309,449,388			4,449,882
LOW			51,397				4,743				4,438				(1.40	)			(1.42	)			(14.54	)			(14.68	)				79,192			190
AVERAGE FOR STATE
WI			1,329,114				195,181				192,613				0.88				0.86				5.96				5.84					20,023,411			265,636
AVERAGE BY REGION
MID-ATLANTIC			3,170,508				434,688				373,826				0.76				0.71				5.31				4.95					34,744,950			611,497
MIDWEST			826,344				92,385				81,526				1.00				0.95				8.56				8.15					6,643,110			114,815
NORTH CENTRAL			1,571,679				203,496				184,204				0.96				0.96				7.29				7.28					15,440,681			308,987
NORTHEAST			2,309,287				249,509				228,865				0.67				0.51				6.22				4.75					20,643,724			336,801
SOUTHEAST			2,498,447				208,593				177,032				0.64				0.63				7.82				7.63					15,417,914			336,047
SOUTHWEST			725,854				77,405				69,146				1.00				1.04				8.38				8.66					4,041,668			103,765
WEST			1,617,901				172,689				167,026				1.27				1.27				11.97				11.91					15,692,828			286,864
AVERAGE BY EXCHANGE
NYSE			16,487,574				1,579,484				1,260,801				0.72				0.71				7.56				7.45					87,788,576			1,965,155
NASDAQ			2,383,581				293,594				264,809				0.83				0.75				6.54				5.91					25,386,307			442,023
OTC			295,072				32,728				31,490				0.87				0.82				7.69				7.23					1,849,054			37,451
OTC PINK			236,745				27,228				26,469				0.91				0.84				7.90				7.32					2,190,473			26,369

 

   

EXHIBIT 33

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

SHARE DATA AND PRICING RATIOS

PUBLICLY-TRADED, FDIC-INSURED MUTUAL HOLDING COMPANIES

 

ALL RATIOS/FINANCIAL DATA AS OF MOST RECENT FOUR QUARTERS

 

								PER SHARE																				PRICING RATIOS
												52 Week				Earnings								12 Month				Price/Net				Price/Core				Price/				Price/Tang.				Price/
								Price				Change				(EPS)				Assets				Div.				Earnings				Earnings				Book Value				Book Value				Assets
				State		Exchange		($)				(%)				($)				($)				($)				(X)				(X)				(X)				(X)				(X)
CULL		CULLMAN BANCORP (MHC)		AL		OTC BB			0.36				(14.8	)			1.07				106.47				0.78				21.50				21.50				150.23				150.23				21.60
MFDB		MUTUAL FEDERAL BANCORP (MHC)		IL		OTC BB			9.40				57.1				0.10				23.36				0.00				55.00				55.00				136.14				136.14				23.54
MSVB		MID-SOUTHERN SAVINGS BANK, FSB (MHC)		IN		OTC PINK			26.13				NM				0.88				136.62				0.00				23.30				20.71				116.28				116.28				15.01
KFFB		KENTUCKY FIRST FED BANCORP (MHC)		KY		NASDAQ			75.00				(3.7	)			0.16				36.14				0.21				56.19				56.19				122.65				160.25				24.88
BVFL		BV FINANCIAL (MHC)		MD		OTC BB			20.51				(6.6	)			(0.07	)			55.76				0.00				NM				NM				94.96				95.67				11.48
ABBB		AUBURN BANCORP (MHC)		ME		OTC BB			7.62				NM				0.58				138.44				0.00				17.00				17.00				78.32				79.01				7.12
LBCP		LIBERTY BANCORP (MHC)		MO		OTC BB			11.60				13.2				1.52				130.57				1.19				12.66				12.66				128.94				137.40				14.74
WAKE		WAKE FOREST BANCSHARES (MHC)		NC		OTC PINK			12.60				4.9				0.87				92.21				0.58				19.29				20.72				84.45				84.45				18.20
ISBC		INVESTORS BANCORP (MHC)		NJ		NASDAQ			14.40				12.1				0.62				74.95				0.27				22.50				22.87				138.26				142.93				18.61
LPBC		LINCOLN PARK BANCORP (MHC)		NJ		OTC BB			14.52				65.3				0.64				185.20				0.00				19.14				19.14				100.16				100.41				6.61
MGYR		MAGYAR BANCORP (MHC)		NJ		NASDAQ			28.25				19.9				0.22				100.96				0.00				54.55				48.00				145.45				145.63				11.89
FSBC		FSB COMMUNITY BANKSHARES (MHC)		NY		NASDAQ			33.50				26.2				0.52				139.49				0.00				27.31				28.40				96.40				99.16				10.18
GOVB		GOUVERNEUR BANCORP (MHC)		NY		OTC PINK			16.40				44.0				0.58				62.54				0.14				31.90				35.58				137.96				137.96				29.58
GCBC		GREENE COUNTY BANCORP (MHC)		NY		NASDAQ			15.15				(28.3	)			1.07				109.28				0.24				21.40				21.20				262.31				262.31				20.96
HTWC		HOMETOWN BANCORP (MHC)		NY		OTC BB			34.00				NM				(0.18	)			51.52				0.00				NM				NM				91.72				113.39				5.59
LSBK		LAKE SHORE BANCORP INC (MHC)		NY		NASDAQ			17.85				21.4				0.60				80.32				0.00				27.12				54.23				138.35				138.35				20.26
NECB		NORTHEAST COMMUNITY BANCORP (MHC)		NY		NASDAQ			7.85				11.0				0.40				59.29				0.00				19.75				19.75				100.38				101.41				13.32
SCAY		SENECA-CAYUGA BANCORP (MHC)		NY		OTC PINK			3.66				12.3				(0.44	)			114.84				0.00				NM				NM				112.80				116.67				10.36
GVFF		GREENVILLE FED FINANCIAL CORP (MHC)		OH		OTC BB			25.95				10.6				0.26				69.82				0.00				34.04				34.04				108.59				110.90				12.68
TFSL		TFS FINANCIAL CORPORATION (MHC)		OH		NASDAQ			88.50				1.1				0.29				46.40				0.29				65.66				65.66				379.28				383.10				41.03
WMPN		WILLIAM PENN BANCORP (MHC)		PA		OTC BB			2.14				14.2				0.71				86.38				0.00				33.79				33.32				147.54				147.54				27.77
OFED		OCONEE FEDERAL FINANCIAL CORP (MHC)		SC		NASDAQ			1.81				26.0				0.92				74.66				0.00				25.54				27.33				191.37				202.76				31.48

 

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

SHARE DATA AND PRICING RATIOS

PUBLICLY-TRADED, FDIC-INSURED MUTUAL HOLDING COMPANIES

PRICES AS OF MARCH 31, 2017

ALL RATIOS/FINANCIAL DATA AS OF MOST RECENT FOUR QUARTERS

 

		PER SHARE																				PRICING RATIOS
						52 Week				Earnings								12 Month				Price/Net				Price/Core				Price/				Price/Tang.				Price/
		Price				Change				(EPS)				Assets				Div.				Earnings				Earnings				Book Value				Book Value				Assets
		($)				(%)				($)				($)				($)				(X)				(X)				(X)				(X)				(X)
ALL INSTITUTIONS
AVERAGE			21.24				15.05				0.51				89.78				0.17				30.93				32.28				139.21				143.73				18.04
HIGH			88.50				65.30				1.52				185.20				1.19				65.66				65.66				379.28				383.10				41.03
LOW			0.36				(28.30	)			(0.44	)			23.36				0.00				12.66				12.66				78.32				79.01				5.59
AVERAGE BY REGION
MID-ATLANTIC			15.96				20.98				0.42				100.65				0.05				26.00				24.67				125.27				126.44				15.27
MIDWEST			45.00				13.02				0.34				62.47				0.10				46.84				46.32				172.59				181.33				23.43
NORTHEAST			17.00				10.83				0.39				94.47				0.05				18.06				22.02				127.28				131.03				14.67
SOUTHEAST			4.92				5.37				0.95				91.11				0.45				22.11				23.18				142.02				145.81				23.76
AVERAGE BY EXCHANGE
NASDAQ			31.37				9.52				0.53				80.17				0.11				35.56				38.18				174.94				181.77				21.40
OTC BB			14.01				15.44				0.51				94.17				0.22				21.46				21.41				115.18				118.97				14.57
OTC PINK			14.70				15.30				0.47				101.55				0.18				18.62				19.25				112.87				113.84				18.29

 

  

EXHIBIT 34

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

KEY FINANCIAL DATA AND RATIOS

PUBLICLY-TRADED, FDIC-INSURED MUTUAL HOLDING COMPANIES

MOST RECENT FOUR QUARTERS

 

						ASSETS AND EQUITY												PROFITABILITY																CAPITAL ISSUES
						Total				Total				Total								Core								Core						Number of				Mkt. Value
						Assets				Equity				Tang. Equity				ROAA				ROAA				ROAE				ROAE						Shares				of Shares
				State		($000)				($000)				($000)				(%)				(%)				(%)				(%)				Exchange		Outstanding				($000)
CULL		CULLMAN BANCORP (MHC)		AL			273,036				39,273				39,273				1.04				1.03				6.87				6.85			OTC BB			2,564,458				58,983
MFDB		MUTUAL FEDERAL BANCORP (MHC)		IL			77,888				13,479				13,479				0.42				0.42				2.47				2.50			OTC BB			3,334,273				18,339
MSVB		MID-SOUTHERN SAVINGS BANK, FSB (MHC)		IN			177,603				22,923				22,923				0.63				0.72				4.91				5.57			OTC PINK			1,300,000				26,650
KFFB		KENTUCKY FIRST FED BANCORP (MHC)		KY			306,566				62,180				47,583				0.45				0.45				2.18				2.18			NASDAQ			8,483,501				76,267
BVFL		BV FINANCIAL (MHC)		MD			167,221				20,207				20,055				(0.12	)			(0.28	)			(1.00	)			(2.29	)		OTC BB			2,999,124				19,194
ABBB		AUBURN BANCORP (MHC)		ME			69,675				6,336				6,281				0.42				0.42				4.62				4.62			OTC BB			503,284				4,962
LBCP		LIBERTY BANCORP (MHC)		MO			439,172				50,232				47,119				1.18				1.17				10.22				10.16			OTC BB			3,363,500				64,747
WAKE		WAKE FOREST BANCSHARES (MHC)		NC			106,521				22,952				22,952				0.95				0.89				4.42				4.12			OTC PINK			1,155,210				19,384
ISBC		INVESTORS BANCORP (MHC)		NJ			23,193,955				3,123,245				3,021,406				0.87				0.85				6.11				6.00			NASDAQ			309,449,388				4,316,819
LPBC		LINCOLN PARK BANCORP (MHC)		NJ			338,148				22,334				22,282				0.38				0.38				5.51				5.51			OTC BB			1,825,845				22,367
MGYR		MAGYAR BANCORP (MHC)		NJ			587,683				48,031				47,940				0.22				0.25				2.63				3.05			NASDAQ			5,820,746				69,849
FSBC		FSB COMMUNITY BANKSHARES (MHC)		NY			270,840				28,610				27,806				0.38				0.36				4.12				3.94			NASDAQ			1,941,688				27,572
GOVB		GOUVERNEUR BANCORP (MHC)		NY			139,014				29,811				29,811				0.92				0.83				4.34				3.93			OTC PINK			2,222,749				41,121
GCBC		GREENE COUNTY BANCORP (MHC)		NY			929,170				74,260				74,260				1.03				1.04				12.71				12.80			NASDAQ			8,502,614				194,710
HTWC		HOMETOWN BANCORP (MHC)		NY			119,886				7,311				5,921				(0.35	)			(0.35	)			(5.74	)			(5.74	)		OTC BB			2,326,939				6,702
LSBK		LAKE SHORE BANCORP INC (MHC)		NY			489,062				71,620				71,620				0.76				0.38				5.08				2.53			NASDAQ			6,088,674				99,063
NECB		NORTHEAST COMMUNITY BANCORP (MHC)		NY			724,756				96,168				95,257				0.72				0.72				5.13				5.18			NASDAQ			12,223,802				96,568
SCAY		SENECA-CAYUGA BANCORP (MHC)		NY			273,384				25,112				24,282				(0.38	)			(0.68	)			(4.20	)			(7.48	)		OTC PINK			2,380,500				28,328
GVFF		GREENVILLE FED FINANCIAL CORP (MHC)		OH			160,466				18,731				18,335				0.38				0.38				3.22				3.22			OTC BB			2,298,411				20,341
TFSL		TFS FINANCIAL CORPORATION (MHC)		OH			13,155,641				1,422,999				1,407,752				0.64				0.65				5.68				5.70			NASDAQ			283,511,967				5,398,068
WMPN		WILLIAM PENN BANCORP (MHC)		PA			314,503				59,221				59,221				0.81				0.83				4.41				4.47			OTC BB			3,641,018				87,348
OFED		OCONEE FEDERAL FINANCIAL CORP (MHC)		SC			482,547				79,390				74,914				1.22				1.15				7.55				7.07			NASDAQ			6,463,039				151,881

 

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

KEY FINANCIAL DATA AND RATIOS

PUBLICLY-TRADED, FDIC-INSURED MUTUAL HOLDING COMPANIES

MOST RECENT FOUR QUARTERS

 

		ASSETS AND EQUITY												PROFITABILITY																CAPITAL ISSUES
		Total				Total				Total								Core								Core						Number of		Mkt. Value
		Assets				Equity				Tang. Equity				ROAA				ROAA				ROAE				ROAE						Shares		of Shares
		($000)				($000)				($000)				(%)				(%)				(%)				(%)				Exchange		Outstanding		($000)
ALL INSTITUTIONS
AVERAGE			1,945,306				242,928				236,385				0.57				0.53				4.15				3.81					30,563,670			493,148
MEDIAN			289,975				34,542				34,542				0.64				0.55				4.52				4.30					3,166,699			50,052
HIGH			23,193,955				3,123,245				3,021,406				1.22				1.17				12.71				12.80					309,449,388			5,398,068
LOW			69,675				6,336				5,921				(0.38	)			(0.68	)			(5.74	)			(7.48	)				503,284			4,962
AVERAGE BY REGION
MID-ATLANTIC			4,920,302				654,608				634,181				0.84				0.82				5.98				5.88					64,747,224			903,115
MIDWEST			2,775,633				308,062				302,014				0.63				0.64				5.47				5.50					59,785,630			1,107,933
NORTHEAST			376,973				42,404				41,905				0.64				0.55				5.65				4.83					4,523,781			62,378
SOUTHEAST			287,368				47,205				45,713				1.13				1.08				6.85				6.53					3,394,236			76,749
AVERAGE BY EXCHANGE
NASDAQ			4,460,024				556,278				540,949				0.78				0.77				5.97				5.88					71,387,269			1,158,977
OTC			217,777				26,347				25,774				0.64				0.62				5.18				5.07					2,539,650			33,665
OTC PINK			174,131				25,200				24,992				0.34				0.22				2.36				1.50					1,764,615			28,871

 

   

EXHIBIT 35

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

RECENT STANDARD CONVERSIONS

PRICE CHANGES FROM IPO DATE

December 31, 2015 through May 19, 2017

 

								Percentage Price Change
								From Initial Trading Date
				Conversion				One				One				One				Through
Company Name		Ticker		Date		Exchange		Day				Week				Month				5/19/2017
Best Hometown Bancorp		BTHT		4/30/2016		OTC Pink			8.50				8.50				8.50				30.00
Community Savings Bancorp		CCSB		1/10/2017		OTC Pink			30.00				30.00				30.00				42.00
HV Bancorp, Inc.		HVBC		1/12/2017		NASDAQ			36.70				41.30				39.90				42.50
FCSB Financial Corp.		PCSB		4/21/2017		NASDAQ			64.60				63.50				63.60				66.40
				AVERAGE					34.95	%			35.83	%			35.50	%			45.23	%
				MEDIAN					33.35				35.65				34.95				42.25
				HIGH					64.60				63.50				63.60				66.40
				LOW					8.50				8.50				8.50				30.00

 

   

EXHIBIT 36

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

RECENT ACQUISITIONS AND PENDING ACQUISITIONS

COUNTY, CITY OR MARKET AREA OF FIRST FEDERAL BANK OF WISCONSIN

 

NONE

(that were potential comparable group candidates)

 

  

EXHIBIT 37

 

KELLER & COMPANY

Dublin, Ohio

(614) 766-1426

 

COMPARABLE GROUP SELECTION

 

BALANCE SHEET PARAMETERS

 

Most Recent Quarter

 

General Parameters:

Regions: Mid-Atlantic, MIdwest, North Central and Northeast

Asset size: < $800 Million

Stock trades on NASDAQ, NYSE or NYSE Market

No Recent Acquisition Announcement

 

						Total Assets ($000)				Cash & Securities/ Assets (%)				MBS/ Assets (%)				1-4 Fam. Loans/ Assets (%)				Total Net Loans/ Assets (%)				Total Net Loans & MBS/ Assets (%)				Borrowed Funds/ Assets (%)				Equity/ Assets (%)
		FIRST FEDERAL BANK OF WISCONSIN		WI			236,230				12.79				9.23				33.57				70.44				79.68				8.37				14.46
		DEFINED PARAMETERS FOR																					20.00	-			55.00	-							8.00	-
		INCLUSION IN COMPARABLE GROUP					< 800,000				< 38.00				< 37.00				< 74.00				94.00				94.00				< 48.00				20.00
IROQ		IF BANCORP		IL			580,068				14.74				5.78				25.52				75.27				81.05				11.76				11.73
JXSB		JACKSONVILLE BANCORP		IL			319,242				20.65				13.91				16.82				57.78				71.69				2.29				12.96
FCAP		FIRST CAPITAL		IN			741,919				24.98				16.75				18.09				51.37				68.12				0.01				9.89
UCBA		UNITED COMMUNITY BANCORP		IN			522,171				22.42				17.82				28.53				52.54				70.36				2.22				11.72
PBSK		POAGE BANKSHARES		KY			458,227				12.18				6.01				39.31				75.05				81.06				2.51				13.97
GTWN		GEORGETOWN BANCORP		MA			318,632				2.54				6.06				36.74				87.05				93.11				13.41				9.58
PVBC		PROVIDENT BANCORP		MA			795,698				10.89				5.27				13.20				78.48				83.75				6.27				12.62
RNDB		RANDOLPH BANCORP		MA			481,161				9.67				8.45				50.05				69.21				77.66				8.97				14.61
WEBK		WELLESLEY BANCORP		MA			693,450				10.50				2.45				53.99				83.08				85.53				15.04				8.79
BYBK		BAY BANCORP		MD			620,200				11.08				5.16				27.20				78.08				83.24				3.22				10.57
HBK		HAMILTON BANCORP		MD			494,992				9.43				16.52				37.03				66.42				82.94				5.76				10.58
SVBI		SEVERN BANCORP		MD			787,394				12.02				3.78				39.78				76.37				80.15				13.14				11.17
WBKC		WOLVERINE BANCORP		MI			434,124				23.71				0.00				16.11				73.85				73.85				20.04				14.06
HMNF		HMN FINANCIAL		MN			681,169				15.48				0.15				21.08				80.91				81.06				0.00				11.47
EQFN		EQUITABLE FINANCIAL CORP		NE			241,259				2.72				0.29				23.59				92.36				92.65				2.77				12.07
MGYR		MAGYAR BANCORP (MHC)		NJ			587,683				4.08				9.06				30.64				78.56				87.62				5.89				8.17
MSBF		MB BANCORP		NJ			461,616				8.84				5.34				38.58				79.72				85.06				5.38				12.05
CARV		CARVER BANCORP		NY			698,874				20.30				7.21				20.02				75.69				82.90				6.44				7.36
ESBK		ELMIRA SAVINGS BANK		NY			573,573				8.68				2.71				54.87				78.77				81.48				7.32				9.71
FSBC		FSB COMMUNITY BANKSHARES		NY			270,840				7.07				3.87				72.36				83.51				87.38				20.98				10.56

 

 

KELLER & COMPANY

Dublin, Ohio

(614) 766-1426

COMPARABLE GROUP SELECTION

 

BALANCE SHEET PARAMETERS

Most Recent Quarter

 

General Parameters:

Regions: Mid-Atlantic, MIdwest, North Central and Northeast

Asset size: < $800 Million

Stock trades on NASDAQ, NYSE or NYSE Market

No Recent Acquisition Announcement

 

						Total Assets ($000)				Cash & Securities/ Assets (%)				MBS/ Assets (%)				1-4 Fam. Loans/ Assets (%)				Total Net Loans/ Assets (%)				Total Net Loans & MBS/ Assets (%)				Borrowed Funds/ Assets (%)				Equity/ Assets (%)
		FIRST FEDERAL BANK OF WISCONSIN		WI			236,230				12.79				9.23				33.57				70.44				79.68				8.37				14.46
		DEFINED PARAMETERS FOR																					20.00	-			55.00	-							8.00	-
		INCLUSION IN COMPARABLE GROUP					< 800,000				< 38.00				< 37.00				< 74.00				94.00				94.00				< 48.00				20.00
CFBK		CENTRAL FEDERAL CORP		OH			434,726				16.39				0.13				15.63				79.63				79.76				3.11				9.53
WAYN		WAYNE SAVINGS BANCSHARES		OH			455,189				10.07				13.04				38.98				73.02				86.06				5.63				8.64
PBIP		PRUDENTIAL BANCORP		PA			571,689				16.45				16.31				40.04				61.13				77.44				12.24				14.49
STND		STANDARD FINANCIAL CORP		PA			486,420				10.79				3.63				56.67				78.44				82.07				10.28				14.22
WVFC		WVS FINANCIAL CORP		PA			340,073				37.70				36.25				19.16				21.80				58.05				47.69				9.11
CWAY		COASTWAY BANCORP		RI			645,972				6.56				0.00				44.83				81.31				81.31				19.33				8.87
WBB		WESTBURY BANCORP		WI			733,578				11.44				8.49				21.59				74.05				82.54				3.16				9.82

 

 

Exhibit 38

 

KELLER & COMPANY

Dublin, Ohio

(614) 766-1426

 

COMPARABLE GROUP SELECTION

 

OPERATING PERFORMANCE AND ASSET QUALITY RATIOS

Most Recent Four Quarters

 

General Parameters:

Regions: Mid-Atlantic, MIdwest, North Central and Northeast

Asset size: < $800 Million

Stock trades on NASDAQ, NYSE or NYSE Market

No Recent Acquisition Announcement

 

										OPERATING PERFORMANCE																				ASSET QUALITY
																		Net				Operating				Noninterest
						Total				Core				Core				Interest				Expenses/				Income/				NPA/				REO/				Reserves/
						Assets				ROAA				ROAE				Margin (2)				Assets				Assets				Assets				Assets				Assets
						($000)				(%)				(%)				(%)				(%)				(%)				(%)				(%)				(%)
		FIRST FEDERAL BANK OF WISCONSIN		WI			236,230				0.03				0.19				3.23				3.05				0.38				1.09				0.35				0.63
		DEFINED PARAMETERS FOR																	1.70	-			1.00	-
		INCLUSION IN COMPARABLE GROUP					< 800,000				< 1.00				< 9.00				4.20				3.50				< 1.10				< 1.40				< 0.50				> 0.10
IROQ		IF BANCORP		IL			580,068				0.69				6.01				3.25				2.43				0.67				0.44				0.09				0.93
JXSB		JACKSONVILLE BANCORP		IL			319,242				0.89				6.44				3.57				3.15				1.30				0.48				0.00				0.94
FCAP		FIRST CAPITAL		IN			741,919				0.81				8.09				3.24				2.66				0.77				1.19				0.63				0.46
UCBA		UNITED COMMUNITY BANCORP		IN			522,171				0.63				5.27				2.83				2.65				0.89				0.54				0.01				0.88
PBSK		POAGE BANKSHARES		KY			458,227				0.58				3.92				4.04				3.31				0.53				1.18				0.16				0.51
GTWN		GEORGETOWN BANCORP		MA			318,632				0.24				2.46				3.53				3.12				0.31				0.30				0.00				0.82
PVBC		PROVIDENT BANCORP		MA			795,698				0.74				5.55				3.60				2.60				0.53				0.20				0.00				1.08
RNDB		RANDOLPH BANCORP		MA			481,161				0.58				5.05				3.14				5.13				3.10				0.46				0.00				0.68
WEBK		WELLESLEY BANCORP		MA			693,450				0.62				6.71				3.23				2.24				0.25				0.09				0.00				0.78
BYBK		BAY BANCORP		MD			620,200				0.32				2.58				4.03				4.14				1.43				2.47				0.20				0.46
HBK		HAMILTON BANCORP		MD			494,992				0.01				0.05				3.30				2.48				0.25				0.71				0.09				0.42
SVBI		SEVERN BANCORP		MD			787,394				0.58				5.03				3.11				2.89				0.77				1.32				0.12				1.14
WBKC		WOLVERINE BANCORP		MI			434,124				1.18				7.46				3.20				1.73				0.28				1.42				0.02				2.15
HMNF		HMN FINANCIAL		MN			681,169				0.99				8.46				4.11				3.38				1.16				0.67				0.09				1.45
EQFN		EQUITABLE FINANCIAL CORP		NE			241,259				0.57				4.78				3.55				3.13				1.03				1.25				0.20				1.40
MGYR		MAGYAR BANCORP (MHC)		NJ			587,683				0.25				3.05				3.31				2.66				0.30				2.74				NM				0.54
MSBF		MB BANCORP		NJ			461,616				0.32				2.41				3.07				2.22				0.23				1.51				0.00				0.97
CARV		CARVER BANCORP		NY			698,874				(0.02	)			(0.22	)			2.99				3.85				0.47				1.53				0.17				0.66
ESBK		ELMIRA SAVINGS BANK		NY			573,573				0.73				7.46				3.25				2.73				1.00				0.91				0.03				0.74
FSBC		FSB COMMUNITY BANKSHARES		NY			270,840				0.36				3.94				2.90				3.29				1.07				0.00				0.00				0.37

 

 

KELLER & COMPANY

Dublin, Ohio

(614) 766-1426

 

COMPARABLE GROUP SELECTION

 

OPERATING PERFORMANCE AND ASSET QUALITY RATIOS

Most Recent Four Quarters

 

General Parameters:

Regions: Mid-Atlantic, MIdwest, North Central and Northeast

Asset size: < $800 Million

Stock trades on NASDAQ, NYSE or NYSE Market

No Recent Acquisition Announcement

 

										OPERATING PERFORMANCE																				ASSET QUALITY
																		Net				Operating				Noninterest
						Total				Core				Core				Interest				Expenses/				Income/				NPA/				REO/				Reserves/
						Assets				ROAA				ROAE				Margin (2)				Assets				Assets				Assets				Assets				Assets
						($000)				(%)				(%)				(%)				(%)				(%)				(%)				(%)				(%)
		FIRST FEDERAL BANK OF WISCONSIN		WI			236,230				0.03				0.19				3.23				3.05				0.38				1.09				0.35				0.63
		DEFINED PARAMETERS FOR																	1.70	-			1.00	-
		INCLUSION IN COMPARABLE GROUP					< 800,000				< 1.00				< 9.00				4.20				3.50				< 1.10				< 1.40				< 0.50				> 0.10
CFBK		CENTRAL FEDERAL CORP		OH			434,726				0.54				5.31				3.06				2.16				0.27				0.21				0.05				1.59
WAYN		WAYNE SAVINGS BANCSHARES		OH			455,189				0.54				6.02				3.25				2.62				0.43				0.34				0.00				0.67
PBIP		PRUDENTIAL BANCORP		PA			571,689				0.51				2.96				2.79				1.93				0.18				2.92				0.10				0.60
STND		STANDARD FINANCIAL CORP		PA			486,420				0.62				4.31				2.90				2.25				0.54				0.21				0.05				0.79
WVFC		WVS FINANCIAL CORP		PA			340,073				0.45				4.93				1.74				2.71				0.15				0.07				0.00				0.12
CWAY		COASTWAY BANCORP		RI			645,972				0.59				6.39				3.36				3.06				1.21				0.82				0.07				0.39
WBB		WESTBURY BANCORP		WI			733,578				0.42				4.04				3.24				2.91				0.89				0.10				0.00				0.74

 

 

Exhibit 39

 

KELLER & COMPANY

Dublin, Ohio

(614) 766-1426

FINAL COMPARABLE GROUP

 

BALANCE SHEET RATIOS

Most Recent Quarter

 

						Total Assets ($000)				Cash & Securities/ Assets (%)				MBS/ Assets (%)				1-4 Fam. Loans/ Assets (%)				Total Net Loans/ Assets (%)				Total Net Loans & MBS/ Assets (%)				Borrowed Funds/ Assets (%)				Equity/ Assets (%)
		FIRST FEDERAL BANK OF WISCONSIN		WI			236,230				12.79				9.23				33.57				70.44				79.68				8.37				14.46
		DEFINED PARAMETERS FOR																					20.00	-			55.00	-							8.00	-
		INCLUSION IN COMPARABLE GROUP					< 800,000				< 38.00				< 37.00				< 74.00				94.00				94.00				< 48.00				20.00
EQFN		EQUITABLE FINANCIAL CORP		NE			241,259				2.60				0.28				23.59				92.36				92.65				2.77				14.85
FSBC		FSB COMMUNITY BANKSHARES		NY			270,840				7.07				3.87				72.36				83.51				87.38				20.98				10.56
WVFC		WVS FINANCIAL CORP		PA			340,073				37.70				36.25				19.16				21.80				58.05				47.69				9.11
CFBK		CENTRAL FEDERAL CORP		OH			434,726				16.39				0.13				15.63				79.63				79.76				3.11				9.53
PBSK		POAGE BANKSHARES		KY			458,227				12.18				6.01				39.31				75.05				81.06				2.51				13.97
HBK		HAMILTON BANCORP		MD			494,992				9.43				16.52				37.03				66.42				82.94				5.76				10.58
ESBK		ELMIRA SAVINGS BANK		NY			573,573				8.68				2.71				54.87				78.77				81.48				7.32				9.71
IROQ		IF BANCORP		IL			580,068				14.74				5.78				25.52				75.27				81.05				11.76				11.73
HMNF		HMN FINANCIAL		MN			681,169				15.48				0.15				21.08				80.91				81.06				0.00				11.47
SVBI		SEVERN BANCORP		MD			787,394				12.02				3.78				39.78				76.37				80.15				13.14				11.17
				AVERAGE			486,232				13.63				7.55				34.83				73.01				80.56				11.50				11.27
				MEDIAN			476,610				12.10				3.83				31.27				77.57				81.06				6.54				10.88
				HIGH			787,394				37.70				36.25				72.36				92.36				92.65				47.69				14.85
				LOW			241,259				2.60				0.13				15.63				21.80				58.05				0.00				9.11

 

 

Exhibit 40

 

KELLER & COMPANY

Dublin, Ohio

(614) 766-1426

FINAL COMPARABLE GROUP

 

OPERATING PERFORMANCE AND ASSET QUALITY RATIOS

Most Recent Four Quarters

 

										OPERATING PERFORMANCE																				ASSET QUALITY
						Total Assets ($000)				Core ROAA (%)				Core ROAE (%)				Net Interest Margin (%)				Operating Expenses/ Assets (%)				Noninterest Income/ Assets (%)				NPA/ Assets (%)				REO/ Assets (%)				Reserves/ Assets (%)
		FIRST FEDERAL BANK OF WISCONSIN		WI			236,230				0.03				0.19				3.23				3.05				0.38				1.09				0.35				0.63
		DEFINED PARAMETERS FOR																	1.70	-			1.00	-
		INCLUSION IN COMPARABLE GROUP					< 800,000				< 1.00				< 9.00				4.20				3.50				< 1.10				< 1.40				< 0.50				> 0.10
EQFN		EQUITABLE FINANCIAL CORP		NE			241,259				0.57				4.78				3.55				3.13				1.03				1.25				0.20				1.40
FSBC		FSB COMMUNITY BANKSHARES		NY			270,840				0.36				3.94				2.90				3.29				1.07				0.00				0.00				0.37
WVFC		WVS FINANCIAL CORP		PA			340,073				0.45				4.93				1.74				2.71				0.15				0.07				0.00				0.12
CFBK		CENTRAL FEDERAL CORP		OH			434,726				0.54				5.31				3.06				2.16				0.27				0.21				0.05				1.59
PBSK		POAGE BANKSHARES		KY			458,227				0.58				3.92				4.04				3.31				0.53				1.18				0.16				0.51
HBK		HAMILTON BANCORP		MD			494,992				0.01				0.05				3.30				2.48				0.25				0.71				0.09				0.42
ESBK		ELMIRA SAVINGS BANK		NY			573,573				0.73				7.46				3.25				2.73				1.00				0.91				0.03				0.74
IROQ		IF BANCORP		IL			580,068				0.69				6.01				3.25				2.43				0.67				0.44				0.09				0.93
HMNF		HMN FINANCIAL		MN			681,169				0.99				8.46				4.11				3.38				1.16				0.67				0.09				1.45
SVBI		SEVERN BANCORP		MD			787,394				0.58				5.03				3.11				2.89				0.77				1.32				0.12				1.14
				AVERAGE			486,232				0.55				4.99				3.23				2.85				0.69				0.68				0.08				0.87
				MEDIAN			476,610				0.58				4.98				3.25				2.81				0.72				0.69				0.09				0.84
				HIGH			787,394				0.99				8.46				4.11				3.38				1.16				1.32				0.20				1.59
				LOW			241,259				0.01				0.05				1.74				2.16				0.15				0.00				0.00				0.12

 

 

Exhibit 41

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

COMPARABLE GROUP CHARACTERISTICS AND BALANCE SHEET TOTALS

 

														Most Recent Quarter
								Number of Offices		Exchange				Total Assets ($000)				Int. Earning Assets ($000)				Total Net Loans ($000)				Goodwill and Intang. ($000)				Total Deposits ($000)				Total Equity ($000)
SUBJECT
FIRST FEDERAL BANK OF WISCONSIN				WAUKESHA		WI		5			-				236,230				215,228				166,409				0				180,534				34,155
COMPARABLE GROUP
CFBK		CENTRAL FEDERAL CORP		FAIRLAWN		OH		4			NASDAQ				434,726				418,324				355,905				0				377,999				41,449
ESBK		ELMIRA SAVINGS BANK		ELMIRA		NY		13			NASDAQ				573,573				514,019				459,652				12,340				470,257				55,722
EQFN		EQUITABLE FINANCIAL CORP		GRAND ISLAND		NE		6			NASDAQ				241,259				215,782				216,560				289				194,755				35,826
FSBC		FSB COMMUNITY BANKSHARES		FAIRPORT		NY		5			NASDAQ				270,840				256,260				229,241				0				182,934				28,610
HBK		HAMILTON BANCORP		TOWSON		MD		5			NASDAQ				494,992				444,182				330,860				9,393				410,757				52,358
HMNF		HMN FINANCIAL		ROCHESTER		MN		13			NASDAQ				681,169				655,712				563,002				1,256				598,152				78,108
IROQ		IF BANCORP		WATSEKA		IL		6			NASDAQ				580,068				550,705				442,052				0				438,832				68,039
PBSK		POAGE BANKSHARES		ASHLAND		KY		10			NASDAQ				458,227				426,650				346,881				2,283				378,551				64,035
SVBI		SEVERN BANCORP		ANNAPOLIS		MD		4			NASDAQ				787,394				702,078				620,573				334				573,238				87,930
WVFC		WVS FINANCIAL CORP		PITTSBURGH		PA		5			NASDAQ				340,073				324,488				74,540				0				145,565				30,989
		Average						7							486,232				450,820				363,927				2,590				377,104				54,307
		Median						6							476,610				435,416				351,393				312				394,654				54,040
		High						13							787,394				702,078				620,573				12,340				598,152				87,930
		Low						4							241,259				215,782				74,540				0				145,565				28,610

 

 

Exhibit 42

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

BALANCE SHEET

ASSET COMPOSITION - MOST RECENT QUARTER

 

								As a Percent of Total Assets
																								Repo-												Interest				Interest				Capitalized
				Total				Cash &								Net				Loan Loss				sessed				Goodwill				Non-Perf.				Earning				Bearing				Loan
				Assets				Invest.				MBS				Loans				Reserves				Assets				& Intang.				Assets				Assets				Liabilities				Servicing
				($000)				(%)				(%)				(%)				(%)				(%)				(%)				(%)				(%)				(%)				(%)
SUBJECT
FIRST FEDERAL BANK OF WISCONSIN					236,230				12.79				9.23				70.44				0.63				0.35				0.00				1.09				91.11				84.79				0.00
COMPARABLE GROUP
EQFN		EQUITABLE FINANCIAL CORP			241,259				2.60				0.28				88.29				1.34				0.19				0.12				1.19				89.44				72.36				0.33
FSBC		FSB COMMUNITY BANKSHARES			270,840				7.07				3.87				83.51				0.37				0.00				0.00				0.00				94.62				85.41				0.30
WVFC		WVS FINANCIAL CORP			340,073				37.70				36.25				21.80				0.12				0.00				0.00				0.07				95.42				84.35				0.00
CFBK		CENTRAL FEDERAL CORP			434,726				16.39				0.13				79.63				1.59				0.05				0.00				0.21				96.23				72.66				0.00
PBSK		POAGE BANKSHARES			458,227				12.18				6.01				75.05				0.51				0.16				0.50				1.18				93.11				72.87				0.08
HBK		HAMILTON BANCORP			494,992				9.43				16.52				66.42				0.42				0.09				1.90				0.71				89.74				83.53				0.00
ESBK		ELMIRA SAVINGS BANK			573,573				8.68				2.71				78.77				0.74				0.03				2.15				0.91				89.62				76.95				0.30
IROQ		IF BANCORP			580,068				14.74				5.78				75.27				0.93				0.09				0.00				0.44				94.94				81.90				0.11
HMNF		HMN FINANCIAL			681,169				15.48				0.15				80.91				1.45				0.09				0.18				0.67				96.26				64.70				0.24
SVBI		SEVERN BANCORP			787,394				12.02				3.78				76.37				1.14				0.12				0.04				1.32				89.16				78.19				0.07
		Average			486,232				13.63				7.55				72.60				0.86				0.08				0.49				0.67				92.85				77.29				0.14
		Median			476,610				12.10				3.83				77.57				0.84				0.09				0.08				0.69				93.87				77.57				0.10
		High			787,394				37.70				36.25				88.29				1.59				0.19				2.15				1.32				96.26				85.41				0.33
		Low			241,259				2.60				0.13				21.80				0.12				0.00				0.00				0.00				89.16				64.70				0.00
ALL THRIFTS (136)
		Average			1,848,351				13.37				7.17				72.12				0.79				0.16				0.49				0.82				92.52				76.35				0.11
MIDWEST THRIFTS (49)
		Average			826,344				15.48				6.31				69.39				0.83				0.20				0.23				0.88				92.12				76.93				0.13
WISCONSIN THRIFTS (4)
		Average			1,329,114				6.61				8.96				74.06				0.86				0.11				0.01				0.42				91.25				76.63				0.12

 

 

Exhibit 43

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

BALANCE SHEET COMPARISON
LIABILITIES AND EQUITY - MOST RECENT QUARTER

 

												As a Percent of Assets
				Total Liabilities ($000)				Total Equity ($000)				Total Deposits (%)				Total Borrowings (%)				Other Liabilities (%)				Preferred Equity (%)				Common Equity (%)				Acc. Other Compr. Income (%)				Retained Earnings (%)				Total Equity (%)				Tier 1 Capital (%)				Total Risk-Based Capital (%)
SUBJECT
FIRST FEDERAL BANK OF WISCONSIN					202,075				34,155				76.42				8.37				0.75				0.00				14.46				(0.02	)			14.48				14.46				14.43				21.26
COMPARABLE GROUP
EQFN		EQUITABLE FINANCIAL CORP			202,786				35,826				80.72				2.65				0.68				0.00				14.85				(0.01	)			5.66				14.85				11.97				13.91
FSBC		FSB COMMUNITY BANKSHARES			242,230				28,610				67.54				20.98				0.92				0.00				10.56				(0.03	)			6.66				10.56				10.70				18.45
WVFC		WVS FINANCIAL CORP			309,084				30,989				42.80				47.69				0.39				0.00				9.11				(0.08	)			8.21				9.11				9.24				17.37
CFBK		CENTRAL FEDERAL CORP			393,277				41,449				86.95				3.11				0.41				0.00				9.53				0.00				(3.36	)			9.53				9.66				12.46
PBSK		POAGE BANKSHARES			394,192				64,035				82.61				2.51				0.91				0.00				13.97				(0.03	)			6.52				13.97				13.52				21.01
HBK		HAMILTON BANCORP			442,634				52,358				82.98				5.76				0.68				0.00				10.58				(0.30	)			6.89				10.58				8.51				13.37
ESBK		ELMIRA SAVINGS BANK			517,851				55,722				81.99				7.32				0.98				1.69				8.02				(0.00	)			0.77				9.71				8.24				13.96
IROQ		IF BANCORP			512,029				68,039				75.65				11.76				0.86				0.00				11.73				(0.10	)			8.33				11.73				11.70				16.98
HMNF		HMN FINANCIAL			603,061				78,108				87.81				0.00				0.72				0.00				11.47				(0.12	)			3.42				11.47				11.55				14.68
SVBI		SEVERN BANCORP			699,464				87,930				72.80				13.14				0.27				0.41				10.75				0.00				3.03				11.17				10.36				14.62
		Average			431,661				54,307				76.19				11.49				0.68				0.21				11.06				(0.07	)			4.61				11.27				10.55				15.68
		Median			418,413				54,040				81.36				6.54				0.70				0.00				10.67				(0.03	)			6.09				10.87				10.53				14.65
		High			699,464				87,930				87.81				47.69				0.98				1.69				14.85				0.00				8.33				14.85				13.52				21.01
		Low			202,786				28,610				42.80				0.00				0.27				0.00				8.02				(0.30	)			(3.36	)			9.11				8.24				12.46
ALL THRIFTS (136)
		Average			1,635,177				213,155				77.51				9.85				0.79				0.05				11.62				(0.11	)			5.71				11.72				11.49				18.14
MIDWEST THRIFTS (49)
		Average			733,959				92,385				78.48				9.08				0.86				0.00				11.50				(0.11	)			5.94				11.50				11.28				18.92
WISCONSIN THRIFTS (4)
		Average			1,133,933				195,181				73.01				13.21				0.91				0.00				12.87				(0.15	)			6.70				12.87				13.14				18.49

 

 

Exhibit 44

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

INCOME AND EXPENSE COMPARISON

TRAILING FOUR QUARTERS

($000)

 

				Interest Income				Interest Expense				Net Interest Income				Provision for Loss				Gain (Loss) on Sale				Total Non-Int. Income				Total Non-Int. Expense				Net Income Before Taxes				Income Taxes				Net Income				Core Income
SUBJECT
FIRST FEDERAL BANK OF WISCONSIN					8,703				1,605				7,098				884				123				914				7,337				(209	)			(202	)			(7	)			65
COMPARABLE GROUP
EQFN		EQUITABLE FINANCIAL CORP			8,706				1,168				7,538				440				0				2,473				7,540				2,031				741				1,290				1,305
FSBC		FSB COMMUNITY BANKSHARES			9,392				2,167				7,225				142				36				2,888				8,909				1,330				323				1,007				963
WVFC		WVS FINANCIAL CORP			7,109				1,571				5,538				43				10				505				3,635				2,378				847				1,531				1,521
CFBK		CENTRAL FEDERAL CORP			14,407				2,950				11,457				230				0				1,176				9,374				3,133				1,046				2,087				2,099
PBSK		POAGE BANKSHARES			19,102				2,352				16,750				1,249				(2	)			2,411				15,181				3,404				997				2,407				2,594
HBK		HAMILTON BANCORP			15,553				2,765				12,788				1,290				253				1,247				12,298				552				64				488				28
ESBK		ELMIRA SAVINGS BANK			20,889				4,369				16,520				487				180				5,748				15,630				6,331				1,989				4,337				4,134
IROQ		IF BANCORP			21,272				3,635				17,637				511				435				3,866				14,087				7,163				2,643				4,520				4,076
HMNF		HMN FINANCIAL			27,247				1,151				26,096				(645	)			(10	)			7,935				23,042				11,829				4,680				7,149				6,560
SVBI		SEVERN BANCORP			30,750				8,562				22,188				(350	)			0				6,057				22,753				5,526				(10,014	)			15,540				4,540
		Average			17,443				3,069				14,374				340				90				3,431				13,245				4,368				332				4,036				2,782
		Median			17,328				2,559				14,654				335				5				2,681				13,193				3,269				922				2,247				2,347
		High			30,750				8,562				26,096				1,290				435				7,935				23,042				11,829				4,680				15,540				6,560
		Low			7,109				1,151				5,538				(645	)			(10	)			505				3,635				552				(10,014	)			488				28
ALL THRIFTS (136)
		Average			62,296				11,731				50,565				1,450				269				16,647				44,145				21,706				7,341				14,351				13,276
MIDWEST THRIFTS (49)
		Average			26,812				4,621				22,191				193				208				19,104				29,119				12,103				3,995				8,108				7,720
WISCONSIN THRIFTS (4)
		Average			44,097				8,648				35,449				1,041				161				39,685				55,445				18,642				7,104				11,531				11,293

 

 

Exhibit 45

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

INCOME AND EXPENSE COMPARISON

AS A PERCENTAGE OF AVERAGE ASSETS

 

				Interest Income				Interest Expense				Net Interest Income				Provision for Loss				Gain (Loss) on Sale				Total Non-Int. Income				Total Non-Int. Expense				Net Income Before Taxes				Income Taxes				Net Income				Core Income
SUBJECT
FIRST FEDERAL BANK OF WISCONSIN					3.62				0.67				2.95				0.37				0.05				0.38				3.05				(0.09	)			(0.08	)			0.00				0.03
COMPARABLE GROUP
EQFN		EQUITABLE FINANCIAL CORP			3.80				0.51				3.29				0.19				0.00				1.08				3.29				0.89				0.32				0.56				0.57
FSBC		FSB COMMUNITY BANKSHARES			3.53				0.82				2.72				0.05				0.01				1.09				3.35				0.50				0.12				0.38				0.36
WVFC		WVS FINANCIAL CORP			2.11				0.47				1.64				0.01				0.00				0.15				1.08				0.71				0.25				0.45				0.45
CFBK		CENTRAL FEDERAL CORP			3.71				0.76				2.95				0.06				0.00				0.30				2.41				0.81				0.27				0.54				0.54
PBSK		POAGE BANKSHARES			4.27				0.53				3.74				0.28				(0.00	)			0.54				3.39				0.76				0.22				0.54				0.58
HBK		HAMILTON BANCORP			3.26				0.58				2.68				0.27				0.05				0.26				2.57				0.12				0.01				0.10				0.01
ESBK		ELMIRA SAVINGS BANK			3.67				0.77				2.90				0.09				0.03				1.01				2.75				1.11				0.35				0.76				0.73
IROQ		IF BANCORP			3.62				0.62				3.00				0.09				0.07				0.66				2.40				1.22				0.45				0.77				0.69
HMNF		HMN FINANCIAL			4.11				0.17				3.93				(0.10	)			(0.00	)			1.20				3.47				1.78				0.71				1.08				0.99
SVBI		SEVERN BANCORP			3.94				1.10				2.84				(0.04	)			0.00				0.78				2.91				0.71				NM				1.99				0.58
		Average			3.60				0.63				2.97				0.09				0.02				0.71				2.76				0.86				0.30				0.72				0.55
		Median			3.69				0.60				2.93				0.07				0.00				0.72				2.83				0.78				0.27				0.55				0.58
		High			4.27				1.10				3.93				0.28				0.07				1.20				3.47				1.78				0.71				1.99				0.99
		Low			2.11				0.17				1.64				(0.10	)			(0.00	)			0.15				1.08				0.12				0.01				0.10				0.01
ALL THRIFTS (136)
		Average			3.67				0.57				3.09				0.07				0.02				0.83				2.93				0.98				0.31				0.81				0.75
MIDWEST THRIFTS (49)
		Average			3.57				0.54				3.03				0.05				0.02				0.86				2.98				0.95				0.27				1.00				0.95
WISCONSIN THRIFTS (4)
		Average			3.44				0.61				2.83				0.07				0.03				0.85				3.08				1.07				0.39				0.88				0.86

 

 

Exhibit 46

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

YIELDS, COSTS AND EARNINGS RATIOS

TRAILING FOUR QUARTERS

 

				Yield on				Cost of				Net				Net
				Int. Earning				Int. Bearing				Interest				Interest												Core				Core
				Assets				Liabilities				Spread				Margin *				ROAA				ROAE				ROAA				ROAE
				(%)				(%)				(%)				(%)				(%)				(%)				(%)				(%)
SUBJECT
FIRST FEDERAL BANK OF WISCONSIN					3.95				0.84				3.11				3.23				0.00				(0.02	)			0.03				0.19
COMPARABLE GROUP
EQFN		EQUITABLE FINANCIAL CORP			4.10				0.68				3.42				3.55				0.56				4.72				0.57				4.78
FSBC		FSB COMMUNITY BANKSHARES			3.77				0.95				2.82				2.90				0.38				4.12				0.36				3.94
WVFC		WVS FINANCIAL CORP			2.23				0.56				1.67				1.74				0.45				4.96				0.45				4.93
CFBK		CENTRAL FEDERAL CORP			3.85				1.02				2.82				3.06				0.54				5.28				0.54				5.31
PBSK		POAGE BANKSHARES			4.61				0.73				3.88				4.04				0.54				3.64				0.58				3.92
HBK		HAMILTON BANCORP			4.02				0.79				3.23				3.30				0.10				0.95				0.01				0.05
ESBK		ELMIRA SAVINGS BANK			4.10				1.00				3.11				3.25				0.76				7.82				0.73				7.46
IROQ		IF BANCORP			3.93				0.78				3.15				3.25				0.77				6.66				0.69				6.01
HMNF		HMN FINANCIAL			4.29				0.27				4.02				4.11				1.08				9.22				0.99				8.46
SVBI		SEVERN BANCORP			4.31				1.40				2.91				3.11				1.99				17.21				0.58				5.03
		Average			3.92				0.82				3.10				3.23				0.72				6.46				0.55				4.99
		Median			4.06				0.78				3.13				3.25				0.55				5.12				0.58				4.98
		High			4.61				1.40				4.02				4.11				1.99				17.21				0.99				8.46
		Low			2.23				0.27				1.67				1.74				0.10				0.95				0.01				0.05
ALL THRIFTS (136)
		Average			3.82				0.88				2.94				3.10				0.81				6.85				0.75				6.33
MIDWEST THRIFTS (49)
		Average			3.68				0.78				2.89				3.04				1.00				8.56				0.95				8.15
WISCONSIN THRIFTS (4)
		Average			3.71				0.88				2.83				2.98				0.88				5.96				0.86				5.84

 

* Based on average interest-earning assets.

 

 

Exhibit 47

 

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

RESERVES AND SUPPLEMENTAL DATA

 

				RESERVES AND SUPPLEMENTAL DATA
				Reserves/ Gross Loans (%)				Reserves/ NPA (%)				Net Chargeoffs/ Average Loans (%)				Provisions/ Net Chargeoffs (%)				Effective Tax Rate (%)
SUBJECT
FIRST FEDERAL BANK OF WISCONSIN					0.88				57.33				0.57				91.32				NM
COMPARABLE GROUP
EQFN		EQUITABLE FINANCIAL CORP			1.47				112.67				0.02				2,315.79				36.20
FSBC		FSB COMMUNITY BANKSHARES			0.43				0.00				0.00				18,000.00				20.39
WVFC		WVS FINANCIAL CORP			0.53				157.60				0.00				NA				36.05
CFBK		CENTRAL FEDERAL CORP			1.89				NM				0.02				NM				33.09
PBSK		POAGE BANKSHARES			0.67				43.45				0.42				164.99				29.73
HBK		HAMILTON BANCORP			0.62				58.88				0.90				103.78				17.06
ESBK		ELMIRA SAVINGS BANK			0.91				81.57				0.15				130.91				31.07
IROQ		IF BANCORP			1.20				210.68				0.13				18.86				36.77
HMNF		HMN FINANCIAL			1.72				215.99				(0.55	)			76.88				39.59
SVBI		SEVERN BANCORP			1.40				86.14				(0.07	)			62.17				NM
		Average			1.08				107.44				0.10				2,609.17				31.11
		Median			1.06				86.14				0.02				117.35				33.09
		High			1.89				215.99				0.90				18,000.00				39.59
		Low			0.43				0.00				(0.55	)			18.86				17.06
ALL THRIFTS (136)
		Average			1.05				124.98				0.13				1,585.42				30.40
MIDWEST THRIFTS (49)
		Average			1.13				120.87				0.19				407.45				29.03
WISCONSIN THRIFTS (4)
		Average			1.03				227.85				0.08				797.33				27.57

 

 

Exhibit 48

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

COMPARABLE GROUP MARKET, PRICING AND FINANCIAL RATIOS

STOCK PRICES AS OF MAY 19, 2017

FINANCIAL DATA/ALL RATIOS MOST RECENT FOUR QUARTERS

 

				Market Data																Pricing Ratios																				Dividends												Financial Ratios
																								Price/								Price/				Price/				12 Mo.
				Market				Price/				12 Mo.				Bk. Value				Price/				Book				Price/				Tang.				Core				Div./				Dividend				Payout				Equity/				Core				Core
				Value				Share				EPS				/Share				Earnings				Value				Assets				Bk. Val.				Earnings				Share				Yield				Ratio				Assets				ROAA				ROAE
				($M)				($)				($)				($)				(X)				(%)				(%)				(%)				(X)				($)				(%)				(%)				(%)				(%)				(%)
FIRST FEDERAL BANK OF WISCONSIN
		Midpoint			50,000				10.00				0.04				15.35				NM				95.88				19.66				95.88				NM				0.00				0.00				0.00				27.52				0.06				0.22
		Minimum			42,500				10.00				0.04				16.50				NM				86.28				16.91				86.28				NM				0.00				0.00				0.00				25.76				0.06				0.24
		Maximum			57,500				10.00				0.03				14.49				NM				104.38				22.37				104.38				NM				0.00				0.00				0.00				29.20				0.06				0.21
		Maximum, as adjusted			66,125				10.00				0.03				13.75				NM				112.99				25.38				112.99				NM				0.00				0.00				0.00				31.03				0.06				0.19
ALL THRIFTS (136)
		Average			302,836				20.37				1.37				19.62				24.03				121.70				14.13				131.12				25.28				0.73				3.26				54.43				11.72				0.75				6.33
		Median			65,775				17.94				0.78				14.54				19.67				120.15				13.55				126.58				20.48				0.26				1.42				30.19				11.03				0.86				5.84
WISCONSIN THRIFTS (4)
		Average			265,636				21.25				0.57				12.64				35.89				124.15				16.38				125.56				25.18				0.21				1.38				32.62				12.87				0.86				5.84
		Median			257,147				24.12				0.62				13.30				24.81				124.29				13.89				125.39				25.41				0.26				1.61				36.25				10.32				0.53				4.95
COMPARABLE GROUP (10)
		Average			62,292				14.17				0.82				13.87				18.77				100.43				11.39				107.47				20.58				0.17				0.93				16.95				11.27				0.55				4.99
		Median			64,760				15.12				0.71				15.39				17.37				98.99				10.82				103.88				19.19				0.06				0.40				7.02				10.88				0.58				4.98
COMPARABLE GROUP
CFBK		CENTRAL FEDERAL CORP			34,871				2.18				0.13				2.54				16.77				85.83				8.17				85.72				16.92				0.00				0.00				0.00				9.53				0.54				5.31
ESBK		ELMIRA SAVINGS BANK			57,103				20.23				1.64				21.08				12.34				95.97				9.32				128.46				12.94				0.92				4.26				56.10				9.71				0.73				7.46
EQFN		EQUITABLE FINANCIAL CORP			28,324				10.35				0.38				10.44				27.24				99.14				14.72				102.26				27.22				0.00				0.00				0.00				14.85				0.57				4.78
FSBC		FSB COMMUNITY BANKSHARES			52,399				14.93				0.52				14.73				28.71				101.36				10.70				104.26				30.10				0.00				0.00				0.00				10.56				0.36				3.94
HBK		HAMILTON BANCORP			81,025				14.99				0.14				15.34				NM				97.72				10.34				119.10				NM				0.00				0.00				0.00				10.58				0.01				0.05
HMNF		HMN FINANCIAL			78,613				17.35				1.59				17.40				10.91				99.71				11.43				103.50				11.87				0.16				0.80				14.04				11.47				0.99				8.46
IROQ		IF BANCORP			100,846				19.80				1.14				17.22				17.37				114.98				13.48				116.01				19.19				0.12				1.45				30.00				11.73				0.69				6.01
PBSK		POAGE BANKSHARES			72,417				19.50				0.65				17.28				30.00				112.85				15.77				117.65				27.85				0.28				1.44				43.08				13.97				0.58				3.92
SVBI		SEVERN BANCORP			87,300				7.10				1.28				7.25				5.55				97.93				10.93				98.89				18.96				0.00				0.00				0.00				11.17				0.58				5.03
WVFC		WVS FINANCIAL CORP			30,022				15.25				0.76				15.43				20.07				98.83				9.01				98.82				20.13				0.20				1.34				26.32				9.11				0.45				4.93

 

  

EXHIBIT 49

 

KELLER & COMPANY

Columbus, Ohio

614-766-1426

VALUATION ANALYSIS AND CALCULATION - FULL CONVERSION

 

First Federal Bank of Wisconsin

Stock Prices as of May 19, 2017

 

Pricing ratios and parameters:				Midpoint				Comparable  Group								All Thrifts
Pro Forma		Symbol		Ratios				Average				Median				Average				Median
Price to earnings		P/E			NM				18.77				17.37				24.03				19.67
Price to core earnings		P/CE			NM				20.58				19.19				25.28				20.48
Price to book value		P/B			65.17	%			100.43	%			98.99	%			121.70	%			120.15	%
Price to tangible book value		P/TB			65.17	%			107.47	%			103.88	%			131.12	%			126.58	%
Price to assets		P/A			17.93	%			11.39	%			10.82	%			14.13	%			13.55	%

 

Pre conversion earnings		(Y)		$	(7,000	)		For the twelve months ended March 31, 2017
Pre conversion core earnings		(CY)		$	65,000			For the twelve months ended March 31, 2017
Pre conversion book value		(B)		$	34,155,000			At March 31, 2017
Pre conversion tang. book value		(TB)		$	34,155,000			At March 31, 2017
Pre conversion assets		(A)		$	236,230,000			At March 31, 2017

 

Conversion expense		(X)			2.20	%			Percent sold				(PCT)								100.00	%
ESOP stock purchase		(E)			8.00	%			Option % granted				(OP)								10.00	%
ESOP cost of borrowings, net		(S)			0.00	%			Est. option value				(OV)								28.28	%
ESOP term (yrs.)		(T)			20				Option maturity				(OM)								10
RRP amount		(M)			4.00	%			Option % taxable				(OT)								25.00	%
RRP term (yrs.)		(N)			5				Price per share				(P)							$	10.00
Tax rate		(TAX)			34.00	%
Investment rate of return, pretax					1.87	%
Investment rate of return, net		(RR)			1.23	%

 

Formulae to indicate value after conversion:

 

1.	P/CE method:	Value =	P/CE*CY	=	$ 50,000,000
((1-P/CE*(PCT)*((1-X-E-M)*(RR*(1-TAX))-((1-TAX)*E/T)-((1-TAX)*M/N)-((1-TAX)*OT)*(OP*OV)/OM)))

 

2.	P/B method:	Value =	P/B*(B)		=	$ 50,000,000
			(1-PB*(PCT)*(1-X-E-M))

 

3.	P/A method:	Value =	P/A*(A)		=	$ 50,000,000
			(1-PA*(PCT)*(1-X-E-M))

 

VALUATION CORRELATION AND CONCLUSIONS:

 

										Gross Proceeds
		Foundation				Public				of Public				MHC				Total				TOTAL
		Shares Issued				Shares Sold				Offering				Shares Issued				Shares Issued				VALUE
Midpoint			25,000				4,975,000			$	49,750,000				0				5,000,000			$	50,000,000
Minimum			25,000				4,225,000			$	42,250,000				0				4,250,000			$	42,500,000
Maximum			25,000				5,725,000			$	57,250,000				0				5,750,000			$	57,500,000
Maximum, as adjusted			25,000				6,587,500			$	65,875,000				0				6,612,500			$	66,125,000

 

 

EXHIBIT 50

 

KELLER & COMPANY

Columbus, Ohio

614-766-1426

 

PROJECTED EFFECT OF CONVERSION PROCEEDS

First Federal Bank of Wisconsin

At the MINIMUM

 

1.

Gross Offering Proceeds

Offering proceeds (1)		$	42,250,000
Less: Estimated offering expenses			1,100,000
Net offering proceeds		$	41,150,000

 

2.

Generation of Additional Income

Net offering proceeds		$	41,150,000
Less: Stock-based benefit plans (2)			5,100,000
Less: Cash contribution to foundation			250,000
Less: MHC capitalization			0
Net offering proceeds invested		$	35,800,000
Investment rate, after taxes			1.23	%
Earnings increase - return on proceeds invested		$	441,844
Less: Estimated cost of ESOP borrowings			0
Less: Amortization of ESOP borrowings, net of taxes			112,200
Less: Stock-based incentive plan expense, net of taxes			224,400
Less: Option expense, net of applicable taxes			109,663
Net earnings increase (decrease)		$	(4,419	)

 

3.

Comparative Pro Forma Earnings

 

		Net				Core
Before conversion - 12 months ended 12/31/16		$	(7,000	)		$	65,000
Net earnings increase			(4,419	)			(4,419	)
After conversion		$	(11,419	)		$	60,581

 

4.

Comparative Pro Forma Net Worth (3)

 

		Total				Tangible
Before conversion - 12/31/16		$	34,155,000			$	34,155,000
Net cash conversion proceeds			35,800,000				35,800,000
Tax benefit of foundation contribution			170,000				170,000
After conversion		$	70,125,000			$	70,125,000

 

5.

Comparative Pro Forma Assets

 

Before conversion - 12/31/16		$	236,230,000
Net cash conversion proceeds			35,800,000
Tax benefit of foundation contribution			170,000
After conversion		$	272,200,000

 

(1)	Represents gross proceeds of public offering.
(2)	Represents ESOP and stock-based incentive plans.
(3)	ESOP and RRP are omitted from net worth.

 

 

EXHIBIT 51

 

KELLER & COMPANY

Columbus, Ohio

614-766-1426

 

PROJECTED EFFECT OF CONVERSION PROCEEDS

First Federal Bank of Wisconsin

At the MIDPOINT

 

1.

Gross Offering Proceeds

Offering proceeds (1)		$	49,750,000
Less: Estimated offering expenses			1,100,000
Net offering proceeds		$	48,650,000

 

2.

Generation of Additional Income

Net offering proceeds		$	48,650,000
Less: Stock-based benefit plans (2)			6,000,000
Less: Cash contribution to foundation			250,000
Less: MHC capitalization			0
Net offering proceeds invested		$	42,400,000
Investment rate, after taxes			1.23	%
Earnings increase - return on proceeds invested		$	523,301
Less: Estimated cost of ESOP borrowings			0
Less: Amortization of ESOP borrowings, net of taxes			132,000
Less: Stock-based incentive plan expense, net of taxes			264,000
Less: Option expense, net of applicable taxes			129,015
Net earnings increase (decrease)		$	(1,714	)

 

3.

Comparative Pro Forma Earnings

 

		Regular				Core
Before conversion - 12 months ended 12/31/16		$	(7,000	)		$	65,000
Net earnings increase			(1,714	)			(1,714	)
After conversion		$	(8,714	)		$	63,286

 

4.

Comparative Pro Forma Net Worth (3)

 

		Total				Tangible
Before conversion - 12/31/16		$	34,155,000			$	34,155,000
Net cash conversion proceeds			42,400,000				42,400,000
Tax benefit of foundation contribution			170,000				170,000
After conversion		$	76,725,000			$	76,725,000

 

5.

Comparative Pro Forma Assets

 

Before conversion - 12/31/16		$	236,230,000
Net cash conversion proceeds			42,400,000
Tax benefit of foundation contribution			170,000
Other adjustments		$	278,800,000

 

(1)	Represents gross proceeds of public offering.
(2)	Represents ESOP and stock-based incentive plans.
(3)	ESOP and RRP are omitted from net worth.

 

 

EXHIBIT 52

 

KELLER & COMPANY

Columbus, Ohio

614-766-1426

 

PROJECTED EFFECT OF CONVERSION PROCEEDS

First Federal Bank of Wisconsin

At the MAXIMUM

 

1.

Gross Offering Proceeds

Offering proceeds (1)		$	57,250,000
Less: Estimated offering expenses			1,100,000
Net offering proceeds		$	56,150,000

 

2.

Generation of Additional Income

Net offering proceeds		$	56,150,000
Less: Stock-based benefit plans (2)			6,900,000
Less: Cash contribution to foundation			250,000
Less: MHC capitalization			0
Net offering proceeds invested		$	49,000,000
Investment rate, after taxes			1.23	%
Earnings increase - return on proceeds invested		$	604,758
Less: Estimated cost of ESOP borrowings			0
Less: Amortization of ESOP borrowings, net of taxes			151,800
Less: Stock-based incentive plan expense, net of taxes			303,600
Less: Option expense, net of applicable taxes			148,367
Net earnings increase (decrease)		$	991

 

3.

Comparative Pro Forma Earnings

 

		Regular				Core
Before conversion - 12 months ended 12/31/16		$	(7,000	)		$	65,000
Net earnings increase			991				991
After conversion		$	(6,009	)		$	65,991

 

4.

Comparative Pro Forma Net Worth (3)

 

		Total				Tangible
Before conversion - 12/31/16		$	34,155,000			$	34,155,000
Net cash conversion proceeds			49,000,000				49,000,000
Tax benefit of foundation contribution			170,000				170,000
After conversion		$	83,325,000			$	83,325,000

 

5.

Comparative Pro Forma Assets

 

Before conversion - 12/31/16		$	236,230,000
Net cash conversion proceeds			49,000,000
Tax benefit of foundation contribution			170,000
After conversion		$	285,230,000

 

(1)	Represents gross proceeds of public offering.
(2)	Represents ESOP and stock-based incentive plans.
(3)	ESOP and RRP are omitted from net worth.

 

  

EXHIBIT 53

 

KELLER & COMPANY

Columbus, Ohio

614-766-1426

 

PROJECTED EFFECT OF CONVERSION PROCEEDS

First Federal Bank of Wisconsin

At the Maximum, as adjusted

 

1.

Gross Offering Proceeds

Offering proceeds (1)		$	65,875,000
Less: Estimated offering expenses			1,100,000
Net offering proceeds		$	64,775,000

 

2.

Generation of Additional Income

Net offering proceeds		$	64,775,000
Less: Stock-based benefit plans (2)			7,935,000
Less: Cash contribution to foundation			250,000
Less: MHC capitalization			0
Net offering proceeds invested		$	56,590,000
Investment rate, after taxes			1.23	%
Earnings increase - return on proceeds invested		$	698,434
Less: Estimated cost of ESOP borrowings			0
Less: Amortization of ESOP borrowings, net of taxes			174,570
Less: Stock-based incentive plan expense, net of taxes			349,140
Less: Option expense, net of applicable taxes			170,622
Net earnings increase (decrease)		$	4,101

 

3.

Comparative Pro Forma Earnings

 

		Regular				Core
Before conversion - 12 months ended 12/31/16		$	(7,000	)		$	65,000
Net earnings increase			4,101				4,101
After conversion		$	(2,899	)		$	69,101

 

4.

Comparative Pro Forma Net Worth (3)

 

		Total				Tangible
Before conversion - 12/31/16		$	34,155,000			$	34,155,000
Net cash conversion proceeds			56,590,000				56,590,000
Tax benefit of foundation contribution			170,000				170,000
After conversion		$	90,915,000			$	90,915,000

 

5.

Comparative Pro Forma Assets

 

Before conversion - 12/31/16		$	236,230,000
Net cash conversion proceeds			56,590,000
Tax benefit of foundation contribution			170,000
After conversion		$	292,990,000

 

(1)	Represents gross proceeds of public offering.
(2)	Represents ESOP and stock-based incentive plans.
(3)	ESOP and RRP are omitted from net worth.

 

 

EXHIBIT 54

 

KELLER & COMPANY

Columbus, Ohio

614-766-1426

 

SUMMARY OF VALUATION PREMIUM OR DISCOUNT

 

						Premium or (discount) from comparable group.
		First Federal Bank
		of Wisconsin				Average				Median
Midpoint:
Price/earnings			NM x				NM				NM
Price/book value			65.17	% *			(35.11	)%			(34.17	)%
Price/assets			17.93	%			57.42	%			65.71	%
Price/tangible book value			65.17	%			(39.36	)%			(37.26	)%
Price/core earnings			NM x				NM				NM
Minimum of range:
Price/earnings			NM x				NM				NM
Price/book value			60.61	% *			(39.65	)%			(38.77	)%
Price/assets			15.61	%			37.05	%			44.27	%
Price/tangible book value			60.61	%			(43.60	)%			(41.65	)%
Price/core earnings			NM x				NM				NM
Maximum of range:
Price/earnings			NM x				NM				NM
Price/book value			69.01	% *			(31.29	)%			(30.29	)%
Price/assets			20.16	%			77.00	%			86.32	%
Price/tangible book value			69.01	%			(35.79	)%			(33.57	)%
Price/core earnings			NM x				NM				NM
Super maximum of range:
Price/earnings			NM x				NM				NM
Price/book value			72.73	% *			(27.58	)%			(26.53	)%
Price/assets			22.57	%			98.16	%			108.60	%
Price/tangible book value			72.73	%			(32.33	)%			(29.99	)%
Price/core earnings			NM x				NM				NM

 

*         Represents pricing ratio associated with primary valuation method.

 

  

EXHIBIT 55

 

KELLER & COMPANY

Dublin, Ohio

614-766-1426

 

COMPARABLE GROUP MARKET, PRICING AND FINANCIAL RATIOS
STOCK PRICES AS OF MAY 19, 2017
FINANCIAL DATA/ALL RATIOS MOST RECENT FOUR QUARTERS

 

				Market Data																Pricing Ratios																				Dividends												Financial Ratios
				Market Value ($M)				Price/ Share ($)				12 Mo. EPS ($)				Bk. Value /Share ($)				Price/ Earnings (X)				Price/ Book Value (%)				Price/ Assets (%)				Price/ Tang. Bk. Val. (%)				Price/ Core Earnings (X)				12 Mo. Div./ Share ($)				Dividend Yield (%)				Payout Ratio (%)				Equity/ Assets (%)				Core ROAA (%)				Core ROAE (%)
FIRST FEDERAL BANK OF WISCONSIN
		Midpoint			50,000				10.00				0.04				15.35				NM				65.17				17.93				65.17				NM				0.00				0.00				0.00				27.52				0.06				0.22
		Minimum			42,500				10.00				0.04				16.50				NM				60.61				15.61				60.61				NM				0.00				0.00				0.00				25.76				0.06				0.24
		Maximum			57,500				10.00				0.03				14.49				NM				69.01				20.15				69.01				NM				0.00				0.00				0.00				29.20				0.06				0.21
		Maximum, as adjusted			66,125				10.00				0.03				13.75				NM				72.73				22.57				72.73				NM				0.00				0.00				0.00				31.03				0.06				0.19
ALL THRIFTS (136)
		Average			302,836				20.37				1.37				19.62				24.03				121.70				14.13				131.12				25.28				0.73				3.26				54.43				11.72				0.75				6.33
		Median			65,775				17.94				0.78				14.54				19.67				120.15				13.55				126.58				20.48				0.26				1.42				30.19				11.03				0.86				5.84
WISCONSIN THRIFTS (4)
		Average			265,636				21.25				0.57				12.64				35.89				124.15				16.38				125.56				25.18				0.21				1.38				32.62				12.87				0.86				5.84
		Median			257,147				24.12				0.62				13.30				24.81				124.29				13.89				125.39				25.41				0.26				1.61				36.25				10.32				0.53				4.95
COMPARABLE GROUP (10)
		Average			62,292				14.17				0.82				13.87				18.77				100.43				11.39				107.47				20.58				0.17				0.93				16.95				11.27				0.55				4.99
		Median			64,760				15.12				0.71				15.39				17.37				98.99				10.82				103.88				19.19				0.06				0.40				7.02				10.88				0.58				4.98
COMPARABLE GROUP
CFBK		CENTRAL FEDERAL CORP			34,871				2.18				0.13				2.54				16.77				85.83				8.17				85.72				16.92				0.00				0.00				0.00				9.53				0.54				5.31
ESBK		ELMIRA SAVINGS BANK			57,103				20.23				1.64				21.08				12.34				95.97				9.32				128.46				12.94				0.92				4.26				56.10				9.71				0.73				7.46
EQFN		EQUITABLE FINANCIAL CORP			28,324				10.35				0.38				10.44				27.24				99.14				14.72				102.26				27.22				0.00				0.00				0.00				14.85				0.57				4.78
FSBC		FSB COMMUNITY BANKSHARES			52,399				14.93				0.52				14.73				28.71				101.36				10.70				104.26				30.10				0.00				0.00				0.00				10.56				0.36				3.94
HBK		HAMILTON BANCORP			81,025				14.99				0.14				15.34				NM				97.72				10.34				119.10				NM				0.00				0.00				0.00				10.58				0.01				0.05
HMNF		HMN FINANCIAL			78,613				17.35				1.59				17.40				10.91				99.71				11.43				103.50				11.87				0.16				0.80				14.04				11.47				0.99				8.46
IROQ		IF BANCORP			100,846				19.80				1.14				17.22				17.37				114.98				13.48				116.01				19.19				0.12				1.45				30.00				11.73				0.69				6.01
PBSK		POAGE BANKSHARES			72,417				19.50				0.65				17.28				30.00				112.85				15.77				117.65				27.85				0.28				1.44				43.08				13.97				0.58				3.92
SVBI		SEVERN BANCORP			87,300				7.10				1.28				7.25				5.55				97.93				10.93				98.89				18.96				0.00				0.00				0.00				11.17				0.58				5.03
WVFC		WVS FINANCIAL CORP			30,022				15.25				0.76				15.43				20.07				98.83				9.01				98.82				20.13				0.20				1.34				26.32				9.11				0.45				4.93

 

 

EXHIBIT 56

 

KELLER & COMPANY

Columbus, Ohio

614-766-1426

 

VALUATION ANALYSIS AND CALCULATION - MUTUAL HOLDING COMPANY

 

First Federal Bank of Wisconsin

Stock Prices as of May 19, 2017

 

Pricing ratios and parameters:

 

				Midpoint				Comparable Group								All Thrifts
Pro Forma		Symbol		Ratios				Average				Median				Average				Median
Price to earnings		P/E			NM				18.77				17.37				24.03				19.67
Price to core earnings		P/CE			NM				20.58				19.19				25.28				20.48
Price to book value		P/B			95.81	%			100.43	%			98.99	%			121.70	%			120.15	%
Price to tangible book value		P/TB			95.81	%			107.47	%			103.88	%			131.12	%			126.58	%
Price to assets		P/A			19.66	%			11.39	%			10.82	%			14.13	%			13.55	%

 

Pre conversion earnings		(Y)		$	(7,000	)		For the twelve months ended March 31, 2017
Pre conversion core earnings		(CY)		$	65,000			For the twelve months ended March 31, 2017
Pre conversion book value		(B)		$	34,155,000			At March 31, 2017
Pre conversion tang. book value		(TB)		$	34,155,000			At March 31, 2017
Pre conversion assets		(A)		$	236,230,000			At March 31, 2017

 

Conversion expense		(X)			2.20	%		Percent sold									(PCT)				45.00	%
ESOP stock purchase		(E)			3.92	%		Option % granted									(OP)				4.90	%
ESOP cost of borrowings, net		(S)			0.00	%		Est. option value									(OV)				28.28	%
ESOP term (yrs.)		(T)			20			Option maturity									(OM)				10
RRP amount		(M)			1.96	%		Option % taxable									(OT)				25.00	%
RRP term (yrs.)		(N)			5			Price per share									(P)			$	10.00
Tax rate		(TAX)			34.00	%
Investment rate of return, pretax					1.87	%
Investment rate of return, net		(RR)			1.23	%

 

Formulae to indicate value after conversion:

 

1.	P/CE method:	Value =	P/CE*CY	=	$ 50,000,000
((1-P/CE*(PCT)*((1-X-E-M)*(RR*(1-TAX))-((1-TAX)*E/T)-((1-TAX)*M/N)-((1-TAX)*OT)*(OP*OV)/OM)))

 

2.	P/B method:	Value =	P/B*(B)		=	$ 50,000,000
(1-PB*(PCT)*(1-X-E-M))

 

3.	P/A method:	Value =	P/A*(A)		=	$ 50,000,000
(1-PA*(PCT)*(1-X-E-M))

 

VALUATION CORRELATION AND CONCLUSIONS:

 

		Foundation Shares Issued				Public Shares Sold				Gross Proceeds of Public Offering				MHC Shares Issued				Total Shares Issued				TOTAL VALUE
Midpoint			25,000				2,225,000			$	22,250,000				2,750,000				5,000,000			$	50,000,000
Minimum			25,000				1,887,500			$	18,875,000				2,337,500				4,250,000			$	42,500,000
Maximum			25,000				2,562,500			$	25,625,000				3,162,500				5,750,000			$	57,500,000
Maximum, as adjusted			25,000				2,950,625			$	29,506,250				3,636,875				6,612,500			$	66,125,000

 

 

EXHIBIT 57

 

KELLER & COMPANY

Columbus, Ohio

614-766-1426

 

PROJECTED EFFECT OF CONVERSION PROCEEDS

First Federal Bank of Wisconsin

At the MINIMUM

 

1.

Gross Offering Proceeds

Offering proceeds (1)		$	18,875,000
Less: Estimated offering expenses			1,100,000
Net offering proceeds		$	17,775,000

 

2.

Generation of Additional Income

Net offering proceeds		$	17,775,000
Less: Stock-based benefit plans (2)			2,499,000
Less: Cash contribution to foundation			250,000
Less: MHC capitalization			100,000
Net offering proceeds invested		$	14,926,000
Investment rate, after taxes			1.23	%
Earnings increase - return on proceeds invested		$	184,217
Less: Estimated cost of ESOP borrowings			0
Less: Amortization of ESOP borrowings, net of taxes			54,978
Less: Stock-based incentive plan expense, net of taxes			109,956
Less: Option expense, net of applicable taxes			53,925
Net earnings increase (decrease)			$ (34,643)

 

3.

Comparative Pro Forma Earnings

 

		Net				Core
Before conversion - 12 months ended 3/31/17		$	(7,000	)		$	65,000
Net earnings increase			(34,643	)			(34,643	)
After conversion		$	(41,643	)		$	30,357

 

4.

Comparative Pro Forma Net Worth (3)

 

		Total				Tangible
Before conversion - 3/31/17		$	34,155,000			$	34,155,000
Net cash conversion proceeds			14,926,000				14,926,000
Tax benefit of foundation contribution			170,000				170,000
Tax benefit of foundation contribution		$	49,251,000			$	49,251,000

 

5.

Comparative Pro Forma Assets

 

Before conversion - 3/31/17		$	236,230,000
Net cash conversion proceeds			14,926,000
Tax benefit of foundation contribution			170,000
After conversion		$	251,326,000

 

(1)

Represents gross proceeds of public offering.

(2)

Represents ESOP and stock-based incentive plans.

(3)

ESOP and RRP are omitted from net worth.

 

 

EXHIBIT 58

 

KELLER & COMPANY

Columbus, Ohio

614-766-1426

 

PROJECTED EFFECT OF CONVERSION PROCEEDS

First Federal Bank of Wisconsin

At the MIDPOINT

 

1.

Gross Offering Proceeds

Offering proceeds (1)		$	22,250,000
Less: Estimated offering expenses			1,100,000
Net offering proceeds		$	21,150,000

 

2.

Generation of Additional Income

Net offering proceeds		$	21,150,000
Less: Stock-based benefit plans (2)			2,940,000
Less: Cash contribution to foundation			250,000
Less: MHC capitalization			100,000
Net offering proceeds invested		$	17,860,000
Investment rate, after taxes			1.23	%
Earnings increase - return on proceeds invested		$	220,428
Less: Estimated cost of ESOP borrowings			0
Less: Amortization of ESOP borrowings, net of taxes			64,680
Less: Stock-based incentive plan expense, net of taxes			129,360
Less: Option expense, net of applicable taxes			63,442
Net earnings increase (decrease)		$	(37,053	)

 

3.

Comparative Pro Forma Earnings

 

		Regular				Core
Before conversion - 12 months ended 3/31/17		$	(7,000	)		$	65,000
Net earnings increase			(37,053	)			(37,053	)
After conversion		$	(44,053	)		$	27,947

 

4.

Comparative Pro Forma Net Worth (3)

 

		Total				Tangible
Before conversion - 3/31/17		$	34,155,000			$	34,155,000
Net cash conversion proceeds			17,860,000				17,860,000
Tax benefit of foundation contribution			170,000				170,000
After conversion		$	52,185,000			$	52,185,000

 

5.

Comparative Pro Forma Assets

 

Before conversion - 3/31/17		$	236,230,000
Net cash conversion proceeds			17,860,000
Tax benefit of foundation contribution			170,000
Tax benefit of foundation contribution		$	254,260,000

 

(1)

Represents gross proceeds of public offering.

(2)

Represents ESOP and stock-based incentive plans.

(3)

ESOP and RRP are omitted from net worth.

 

  

EXHIBIT 59

 

KELLER & COMPANY

Columbus, Ohio

614-766-1426

 

PROJECTED EFFECT OF CONVERSION PROCEEDS

First Federal Bank of Wisconsin

At the MAXIMUM

 

1.

Gross Offering Proceeds

Offering proceeds (1)		$	25,625,000
Less: Estimated offering expenses			1,100,000
Net offering proceeds		$	24,525,000

 

2.

Generation of Additional Income

Net offering proceeds		$	24,525,000
Less: Stock-based benefit plans (2)			3,381,000
Less: Cash contribution to foundation			250,000
Less: MHC capitalization			100,000
Net offering proceeds invested		$	20,794,000
Investment rate, after taxes			1.23	%
Earnings increase - return on proceeds invested		$	256,640
Less: Estimated cost of ESOP borrowings			0
Less: Amortization of ESOP borrowings, net of taxes			74,382
Less: Stock-based incentive plan expense, net of taxes			148,764
Less: Option expense, net of applicable taxes			72,958
Net earnings increase (decrease)		$	(39,464	)

 

3.

Comparative Pro Forma Earnings

		Regular				Core
Before conversion - 12 months ended 3/31/17		$	(7,000	)		$	65,000
Net earnings increase			(39,464	)			(39,464	)
After conversion		$	(46,464	)		$	25,536

 

4.

Comparative Pro Forma Net Worth (3)

 

		Total				Tangible
Before conversion - 3/31/17		$	34,155,000			$	34,155,000
Net cash conversion proceeds			20,794,000				20,794,000
Tax benefit of foundation contribution			170,000				170,000
After conversion		$	55,119,000			$	54,949,000

 

5.

Comparative Pro Forma Assets

 

Before conversion - 3/31/17		$	236,230,000
Net cash conversion proceeds			20,794,000
Tax benefit of foundation contribution			170,000
After conversion		$	257,024,000

 

(1)

Represents gross proceeds of public offering.

(2)

Represents ESOP and stock-based incentive plans.

(3)

ESOP and RRP are omitted from net worth.

 

 

EXHIBIT 60

 

KELLER & COMPANY

Columbus, Ohio

614-766-1426

 

PROJECTED EFFECT OF CONVERSION PROCEEDS

First Federal Bank of Wisconsin

At the Maximum, as adjusted

 

1.

Gross Offering Proceeds

Offering proceeds (1)		$	29,506,250
Less: Estimated offering expenses			1,100,000
Net offering proceeds		$	28,406,250

 

2.

Generation of Additional Income

Net offering proceeds		$	28,406,250
Less: Stock-based benefit plans (2)			3,888,150
Less: Cash contribution to foundation			250,000
Less: MHC capitalization			100,000
Net offering proceeds invested		$	24,168,100
Investment rate, after taxes			1.23	%
Earnings increase - return on proceeds invested		$	298,283
Less: Estimated cost of ESOP borrowings			0
Less: Amortization of ESOP borrowings, net of taxes			85,539
Less: Stock-based incentive plan expense, net of taxes			171,079
Less: Option expense, net of applicable taxes			83,901
Net earnings increase (decrease)		$	(42,237	)

 

3.

Comparative Pro Forma Earnings

 

		Regular				Core
Before conversion - 12 months ended 3/31/17		$	(7,000	)		$	65,000
Net earnings increase			(42,237	)			(42,237	)
After conversion		$	(49,237	)		$	22,763

 

4.

Comparative Pro Forma Net Worth (3)

 

		Total				Tangible
Before conversion - 3/31/17		$	34,155,000			$	34,155,000
Net cash conversion proceeds			24,168,100				24,168,100
Tax benefit of foundation contribution			170,000				170,000
After conversion		$	58,493,100			$	58,493,100

 

5.

Comparative Pro Forma Assets

 

Before conversion - 3/31/17		$	236,230,000
Net cash conversion proceeds			24,168,100
Tax benefit of foundation contribution			170,000
After conversion		$	260,568,100

 

(1)

Represents gross proceeds of public offering.

(2)

Represents ESOP and stock-based incentive plans.

(3)

ESOP and RRP are omitted from net worth.

 

 

EXHIBIT 61

 

KELLER & COMPANY

Columbus, Ohio

614-766-1426

 

SUMMARY OF VALUATION PREMIUM OR DISCOUNT

 

						Premium or (discount) from comparable group.
		First Federal				Average				Median
Midpoint:
Price/earnings			NM x				NM				NM
Price/book value			95.81	% *			(4.60	)%			(3.21	)%
Price/assets			19.66	%			72.65	%			81.75	%
Price/tangible book value			95.81	%			(10.85	)%			(7.77	)%
Price/core earnings			NM x				NM				NM
Minimum of range:
Price/earnings			NM x				NM				NM
Price/book value			86.29	% *			(14.08	)%			(12.83	)%
Price/assets			16.91	%			48.47	%			56.29	%
Price/tangible book value			86.29	%			(19.71	)%			(16.93	)%
Price/core earnings			NM x				NM				NM
Maximum of range:
Price/earnings			NM x				NM				NM
Price/book value			104.32	% *			3.87	%			5.38	%
Price/assets			22.37	%			96.41	%			106.76	%
Price/tangible book value			104.64	%			(2.63	)%			0.73	%
Price/core earnings			NM x				NM				NM
Super maximum of range:
Price/earnings			NM x				NM				NM
Price/book value			113.05	% *			12.56	%			14.20	%
Price/assets			25.38	%			122.80	%			134.54	%
Price/tangible book value			113.05	%			5.19	%			8.83	%
Price/core earnings			NM x				NM				NM

 

*  Represents pricing ratio associated with primary valuation method.

 

 

ALPHABETICAL

 

EXHIBITS

 

 

EXHIBIT A

 

KELLER & COMPANY, INC.

Financial Institution Consultants

 

555 Metro Place North	614-766-1426
Dublin, Ohio 43017	(fax) 614-766-1459

 

PROFILE OF THE FIRM

 

KELLER & COMPANY, INC. is a national consulting firm to financial institutions, serving clients throughout the United States from its office in Dublin, Ohio. Since our inception in 1985, we have provided a wide range of consulting services to over 250 financial institutions including banks, thrifts, mortgage companies, insurance companies and holding companies from Alaska to Maine.

 

Services offered by Keller & Company include the preparation of stock and ESOP valuations, fairness opinions, business and strategic plans, capital plans, financial models and projections, market studies, de novo charter and deposit insurance applications, incentive compensation plans, compliance policies, lending, underwriting and investment criteria, and responses to regulatory comments. Keller & Company also serves as advisor in merger/acquisition, deregistration, going private, secondary offering and branch purchase/sale transactions. Keller & Company is additionally active in loan review, director and management review, product analysis and development, performance analysis, compensation review, policy development, charter conversion, data processing, information technology systems, and conference planning and facilitation.

 

Keller & Company is one of the leading thrift conversion appraisal firms in the United States. We have on-line access to current and historical financial, organizational and demographic data for every financial institution and financial institution holding company in the United States and daily pricing data and ratios for all publicly traded financial institutions.

 

Keller & Company is an approved appraiser for filing with the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and numerous state government agencies, and is also approved by the Internal Revenue Service as an expert in financial institution stock valuations. We are an affiliate member of numerous trade organizations including the American Bankers Association and America’s Community Bankers.

 

Each of the firm's senior consultants has over thirty years of front line experience and accomplishment in various areas of the financial institution, regulatory and real estate sectors, offering clients distinct and diverse areas of expertise. It is the goal of Keller & Company to provide specific and ongoing relationship-based services that are pertinent, focused and responsive to the needs of the individual client institution within the changing industry environment, and to offer those services at reasonable fees on a timely basis. In recent years, Keller & Company has become one of the leading and most recognized financial institution consulting firms in the nation.

 

 

CONSULTANTS IN THE FIRM

 

MICHAEL R. KELLER has over thirty years experience as a consultant to the financial institution industry. Immediately following his graduation from college, Mr. Keller took a position as an examiner of financial institutions in northeastern Ohio with a focus on Cleveland area institutions. After working two years as an examiner, Mr. Keller entered Ohio State University full time to obtain his M.B.A. in Finance.

 

Mr. Keller then worked as an associate for a management consulting firm specializing in services to financial institutions immediately after receiving his M.B.A. During his eight years with the firm, he specialized in mergers and acquisitions, branch acquisitions and sales, branch feasibility studies, stock valuations, charter applications, and site selection analyses. By the time of his departure, he had attained the position of vice president, with experience in almost all facets of banking operations.

 

Prior to forming Keller & Company, Mr. Keller also worked as a senior consultant in a larger consulting firm. In that position, he broadened his activities and experience, becoming more involved with institutional operations, business and strategic planning, regulatory policies and procedures, performance analysis, conversion appraisals, and fairness opinions. Mr. Keller established Keller & Company in November 1985 to better serve the needs of the financial institution industry.

 

Mr. Keller graduated from the College of Wooster with a B.A. in Economics in 1972, and later received an M.B.A. in Finance in 1976 from the Ohio State University where he took numerous courses in corporate stock valuations.

 

 

Consultants in the Firm (cont.)

 

SUSAN H. O’DONNELL has twenty years of experience in the finance and accounting areas of the banking industry.

 

At the start of her career, Ms. O’Donnell worked in public accounting for Coopers & Lybrand in Cincinnati and earned her CPA. Her clients consisted primarily of financial institutions and health care companies.

 

Ms. O’Donnell then joined Empire Bank of America in Buffalo, New York. During her five years with Empire, Ms. O’Donnell progressed to the level of Vice President and was responsible for SEC, FHLB and internal financial reporting. She also coordinated the offering circular for its initial offering of common stock.

 

Ms. O’Donnell later joined Banc One Corporation where she worked for eleven years. She began her career at Banc One in the Corporate Accounting Department where she was responsible for SEC, Federal Reserve and investor relations reporting and coordinated the offering documents for stock and debt offerings. She also performed acquisition work including regulatory applications and due diligence and established accounting policies and procedures for all affiliates. Ms. O’Donnell later moved within Banc One to the position of chief financial officer of the Personal Trust business responsible for $225 million in revenue. She then provided leadership as the Director of Personal Trust Integration responsible for various savings and revenue enhancements related to the Bank One/First Chicago merger.

 

Ms. O’Donnell graduated from Miami University with a B.S. in Business. She also completed the Leading Strategic Change Program at The Darden School of Business and the Banc One Leadership Development Program.

 

 

Consultants in the Firm (cont.)

 

JOHN A. SHAFFER has over thirty years experience in banking, finance, real estate lending, and development.

 

Following his university studies, Mr. Shaffer served as a lending officer for a large real estate investment trust, specializing in construction and development loans. Having gained experience in loan underwriting, management and workout, he later joined Chemical Bank of New York and was appointed Vice President for Loan Administration of Chemical Mortgage Company in Columbus, Ohio. At Chemical, he managed all commercial and residential loan servicing, administering a portfolio in excess of $2 billion. His responsibilities also included the analysis, management and workout of problem commercial real estate loans and equity holdings, and the structuring, negotiation, acquisition and sale of loan servicing, mortgage and equity securities and real estate projects. Mr. Shaffer later formed and managed an independent real estate and financial consulting firm, serving corporate and institutional clients, and also investing in and developing real estate.

 

Mr. Shaffer's primary activities and responsibilities have included financial analysis, projection and modeling, asset and liability management, real estate finance and development, loan management and workout, organizational and financial administration, budgeting, cash flow management and project design.

 

Mr. Shaffer graduated from Syracuse University with a B.S. in Business Administration, later receiving an M.B.A. in Finance and a Ph.D. in Economics from New York University.

 

 

EXHIBIT B

 

RB 20

CERTIFICATION

 

I hereby certify that I have not been the subject of any criminal, civil or administrative judgments, consents, undertakings or orders, or any past administrative proceedings (excluding routine or customary audits, inspections and investigation) issued by any federal or state court, any department, agency, or commission of the U.S. Government, any state or municipality, any self-regulatory trade or professional organization, or any foreign government or governmental entity, which involve:

 

(i)

commission of a felony, fraud, moral turpitude, dishonesty or breach of trust;

 

(ii)

violation of securities or commodities laws or regulations;

 

(iii)

violation of depository institution laws or regulations;

 

(iv)

violation of housing authority laws or regulations;

 

(v)

violation of the rules, regulations, codes or conduct or ethics of a self-regulatory trade or professional organization;

 

(vi)

adjudication of bankruptcy or insolvency or appointment of a receiver, conservator, trustee, referee, or guardian.

 

I hereby certify that the statements I have made herein are true, complete and correct to the best of my knowledge and belief.

 

		Conversion Appraiser
June 5, 2017		/s/ Michael R. Keller
Date		Michael R. Keller

 

 

EXHIBIT C

 

AFFIDAVIT OF INDEPENDENCE

 

STATE OF OHIO,

 

COUNTY OF FRANKLIN, ss:

 

I, Michael R. Keller, being first duly sworn hereby depose and say that:

 

The fee which I received directly from the applicant, First Federal Bank of Wisconsin, in the amount of $38,000 for the performance of my appraisal was not related to the value determined in the appraisal and that the undersigned appraiser is independent and has fully disclosed any relationships which may have a material bearing upon the question of my independence; and that any indemnity agreement with the applicant has been fully disclosed.

 

Further, affiant sayeth naught.
	/s/ Michael R. Keller
	MICHAEL R. KELLER

 

Sworn to before me and subscribed in my presence this 31^st day of May 2017.

 

 

	/s/ Janet M. Mohr
	NOTARY PUBLIC