1. Financials David Kaplan, Nikhil Ketkar, Jonathan Khoury, Steve Kuljko

2. Agenda Sector Recap Recommendations Business/Financial Analysis & Valuation: Hudson City Bank Business/Financial Analysis & Valuation: JP Morgan Chase and Co. Review of Recommendations

3. Recap: SIM v. S&P 500 Weightings SectorS&P 500 WeightSIM Weight +/- Consumer Discretionary10.11%9.53%-0.58% Consumer Staples11.2611.770.51 Energy10.8810.10-0.78 Financials16.5011.93-4.57 Health Care12.1515.273.11 Industrials10.5013.032.53 Information Technology18.8719.871.00 Materials3.481.80-1.67 Telecommunications2.813.620.82 Utilities3.441.88-1.57

4. Previous Recommendations Overweight in Financials: sell Financials and move investment to more reliable sectors – Technical analysis suggested we were overvalued – Worries prevalent about interest rate increases – Political Reform and its negative impact on the financial sector Class Consensus: Remain at current underweight level

5. Company Recommendations Position Alterations: J.P. Morgan: Sell all (172 basis points) Progressive: Hold (299 basis points) Goldman Sachs: Hold (441 basis points) HCBK: Buy (increase by 172 basis points)

6. Recommendation 1 JP Morgan Chase (Sell) Stock Price: $39.84 Market Cap: $154.7B Outstanding diluted shares: 3.98B Beta: 1.16 Lines of Business: – Investment Banking: 26% of sales – Retail Financial Services: 30% – Card Services: 19% – Commercial Banking: 5% – Treasury and Security Services: 7% – Asset Management: 7% – Corporate/Private Equity: 6%

7. JPM v. S&P 500 (1 year)

8. JPM v. S&P 500 (6 months)

9. JPM return vs. FS returns TimeJPMFinancial Sector 1 month-12.59%-7.29% 3 months-0.56%4.62% 1 year14.03%31.19%

10. Background Information EarningsRevenues

11. JPM DCF

12. JPM Valuation

13. Risks to JPM Headline risk – SEC currently conducting criminal investigation against JPM, C, GS and others Interest Rate risk – Rates currently at all time lows, will increase – Increased interest rates will hurt investment banking business and margins in the market Regulation – Volcker Rule – No longer too big to fail – Moody’s will downgrade debt ratings if the regulation passes

14. Recommendation 2 HCBK (Buy) – Strong Buy  28% Upside – Target Price: $16.50 – Buy 170 Basis Points, currently 2.4% of SIM – Increase Holding to 4.1% – Use HCBK as a hedge against regulation

15. Background Information: 1 Current Price: $13.00 Dividend Yield: 4.6% Dividend Growth 5 Yr: 19.79% Market Cap: 6.8 Billion Shares Outstanding: 470 M Beta Vs. S&P: 0.95 Industry: Thrift & Savings

16. Background Information: 2 EarningsRevenues

17. Income Statement: Graph

18. Discounted Cash Flow Model Year2010E2011E2012E2013E2014E2015E2016E2017E2018E2019E2020E Net Interest Income 1,271,185 1,420,361 1,467,610 1,526,314 1,587,367 1,650,861 1,716,896 1,785,571 1,856,994 1,912,704 1,970,085 % Growth 11.7%3.3%4.0% 3.0% Subtractions676,196753,495779,872811,067843,509877,250912,340948,833986,7871,016,3901,046,882 % of Revenues46.8% 47.0%46.9% Free Cash Flow 594,989666,866687,738715,247743,857773,611804,556836,738870,208896,314923,203 % Growth12.1%3.1%4.0% 3.0% Terminal Discount Rate11.3% Terminal FCF Growth3.0% NPV of Cash Flows 4,467,40053% NPV of terminal value 3,968,99447% Projected Equity Value 8,436,394100% Free Cash Flow Yield9.07% Terminal Value 11,526,054 Free Cash Yield8.01% Terminal P/E 5.9 Current P/E 5.2 4.6 4.5 Projected P/E 6.6 5.9 5.7 Shares Outstanding 492,751 Current Price $ 13.31 Implied equity value/share $ 17.12 Upside/(Downside) to DCF 28.6% Strong Buy

19. Sensitivity Analysis Implied equity value per share Discount rate $ 17.12 8%9%10%11%12%13%14%15% Growth rate 0% 21.37954118.8382538316.81437815.16617413.79919812.64810711.6662649 10.819499 1% 23.05320320.0363688717.6972415.83201414.31103713.04790411.9828237 11.073111 2% 25.28475221.576802518.80081816.64581914.92524413.52039112.3521424 11.36574 3% 28.4089223.63071420.21970317.66307515.67594114.08737512.7886099 11.707141 4% 33.09517326.506190122.1115518.97097516.61431214.78035513.312370912.110614 5% 40.90559430.8194042624.76013620.71484217.8207915.64658113.952523212.594782

20. Valuation: Relative Multiples Relative to IndustryHighLowMedianCurrent P/Trailing E3.40.652.10.68 P/Forward E3.30.262.20.67 P/B19.50.31.1 P/S33.40.93.41.0 P/CF6.60.14.20.7 Relative to S&P 500HighLowMedianCurrent P/Trailing E2.00.531.40.73 P/Forward E1.70.491.20.79 P/B1.80.20.70.6 P/S14.03.18.94.7 P/CF2.90.72.31.1

21. Valuation: Absolute Multiples Absolute Valuation HighLowMedianCurrent#Your Target Multiple *Your Target E, S, B, etc/Sha re Your Target Price (F x G) A.B.C.D.E.F.G.H. P/Forward E31.69.819.412.2151.3520.25 P/S19.44.312.96.072.9720.8 P/B5.71.11.81.41.610.3216.51 P/EBITDA15.462.8610.133.285.44.4023.6 P/CF33.510.923.612.1181.2021.6 The Price-to-Book 1.6x

22. Risks Interest rates Negatively correlated with interest rates Interest rates will increase soon Economic risks 10% Unemployment High national debt

23. Questions? Sell: JPM Buy: HCBK

24. Recommendation 1: GS Market Cap: $77.14 B Outstanding diluted shares: 538.6 M Stock Price: $143.23 Beta: 1.40 Lines of Businesses: Investment Banking (10.62% of total sales) Trading and Principal Investments (76.1% of total sales) Asset Management and Securities Services (13.30% of total sales) Competitors: JP Morgan Chase Co. Morgan Stanley Citigroup

25. Price Movement: GS

26. Sales of GS This quarter was a PERFECT trading quarter. Not one day did GS sustain a loss 0% increase for principal and trading reflects the rest of the year being tough in light of the SEC and regulation

27. DCF for GS Higher terminal Discount rate for headline risk still doesn’t take the upside away… 20% upside from the current price with 18% discount rate

28. Valuation of GS Relative to IndustryHighLowMedianCurrent P/Trailing E1.2.13.96.44 P/Forward E1.1.13.93.86 P/B1.5.81.0 P/S1.2.3.6.9 P/CF1.8.21.1.7 Relative to S&P 500HighLowMedianCurrent P/Trailing E2.1.33.70.34 P/Forward E1.4.51.72.52 P/B1.1.4.7.5 P/S2.1.51.11.3 P/CF1.7.51.0.6 Absolute Valuation HighLowMedianCurrent#Your Target Multiple *Your Target E, S, B, etc/Share Your Target Price (F x G) A.B.C.D.E.F.G.H. P/Forward E21.57.512.27.58.018.36146.88 P/S3.6.41.71.61.781.00138.00 P/B5.7.72.11.1 150.00165.00 P/EBITDA4.01.522.382.86 50.08143.23 P/CF21.33.911.95.35.027.02135.12

29. Risks to recommendation Headline risk – Damaged reputation from S.E.C charges – Material fines and business reduction Interest Rate risk – currently low, will increase… – Increased interest rates will hurt margins for trading, lower volume, less activity Regulation – Material effects of financial reform on GS business

30. Analysis: PGR

32. Qualitative Assessment: PGR Price target: $22 (8.10%) Limited volatility in relation to other financial stocks (product offering…) Acquisition of market share promising April EPS consistent with April ‘09, revenues up to $1.47bn vs $1.41bn