1. RMA SAN DIEGO CHAPTER COMMUNITY BANKING IN 2015 JANUARY 14, 2015 THE FINDLEY GROUP Gary Steven Findley, Esq. 3808 E. La Palma Ave. Anaheim, California 92807 (714)630-7136

2. INTRODUCTION & THOUGHTS COMMUNITY BANKING IS CHANGING  Where Are We Now?  Regulatory Hot Topics  2015 Predictions  Landscape Next Five Years  What Does It Take To Be Exceptional?  Local Bank Thoughts

3. WHERE ARE WE NOW? -2014 / 2015 GENERAL COMMENTS  Performance Improving But Still Illusionary For Some - - Core Profitability Questionable  Dodd-Frank and Compliance a Burden - - Burden Index  Loan Growth Improving But Is Still a Challenge For Some - - Where Do You Find?  ALLL Earnings Driver in 2014 - - 2015?  Strategic Direction For Some Still a Mystery  Bank Number to Reduce Further  Question of Viability Remains - - Who Is Last Bank Standing?  Further Separation Between Banks Continues!

4. WHAT ARE REGULATORY HOT TOPICS?  Rising Interest Rates  Cyber Security  Compliance & Operations / BSA & AML  Further Economic Shock  Strategic & Succession Planning  Credit Losses in Areas of Rapid Growth  CRE Concentration Levels (Repeat?)

5. Hot Topic Radar

18. 2015 PREDICTIONS  GDP 2% To 2.5%  Interest Rates - Flat to 0.25  Enforcement Actions 20%  Mergers - 14  Recapitalizations - 7  Branch / Subsidiary Sales - 8  Failures - 0  New Bank - 0 ?

19. WHAT WILL LANDSCAPE LOOK LIKE IN FIVE YEARS?  Further Reduction In Numbers  Focus Remains On Efficiency Ratio and NII  Return Will Improve But Still Marginal Due to Cost & NIM Compression  Market Value Will Continue to Improve  Regulatory Burden to Remain  Still Capital Focused / But Some Loosening

20. PERFORMANCE FOCUS NEXT 3+ YEARS (AFTER TAX) - 2015 ROAA0.70 to 1.10 ROAE6.00% to 12.00% MV/BV1.00 to 1.40 Numbers Depend Upon Size and Focus!

21. Merger Prices Will Improve Slightly No Big Payday For Smaller Banks! Price Improves With Size Most Deals Will Be Among Smaller Size Entities – Building Mass

22. Regulatory Burden Will Remain - Impact On ROAA / ROAE Significant (.30+ ROAA) - While They Say It Doesn’t Apply - - Often It Does

23. CHALLENGES TO BUILDING VALUE OVER NEXT FIVE YEARS  Succession - - Board & Management  Economic  Changing Clientele  Regulatory  Other

24. WHAT ARE BOARDS TALKING ABOUT  Capital Plan  Shareholder Value  Human Capital Banking  Succession Planning  Technology  Customer Needs  Mergers & Acquisitions

25. WHAT DOES IT TAKE TO BE EXCEPTIONAL? Starts With People - - Aligning to a Common Vision Who Always Looks to Get Better - - Don’t Settle! Investing in Human Capital

27. DIRECTORS CommunityShareholder Other Directors ManagementStaffRegulatorsBorrowersDepositors UNDERSTANDING EXPECTATIONS WHAT IS EXPECTED FROM PARTNERS?

28. LOCAL THOUGHTS SAN DIEGO / IMPERIAL / SOUTH ORGANGE COUNTIES 9 BANKS

38. Question & Answer Period Thank you – Open to comments, thoughts, suggestions and questions.