KPMG Corporate Finance LLC WESTERN STATES FINANCIAL INSTITUTIONS OVERVIEW November 2014 Regional M&A Transaction Statistics Number of Regional Transactions 50 43 40 30 28 38 32 16 20 39 36 v 19 33 22 19 10 0 2004 2005 2006 Price / LTM Earnings (1) 20x 17.7x 17.6x 15x 2007 2008 15.1x 15.8x 15.8x 5% 4% 2011 2012 2013 YTD 2014 3.9% 2.6% 3% 3.0% v 2% 5x 2.1% 1.6% 1% 1.1% 0% 0x 2009 2010 2011 2012 2013 2009 YTD 2014 Price / Book 200% 133.5% 2010 2011 2012 2013 YTD 2014 132.2% 127.1% 122.3% 125.8% 114.2% 2010 2011 2012 2013 YTD 2014 Price / Tangible Book 200% 150% 2010 Premium / Deposits 19.6x v 10x 2009 131.4% 100% 126.8% v 117.4% 120.3% 109.9% 150% 145.4% 100% 50% v 50% 0% 0% 2009 2010 2011 2012 2013 YTD 2014 2009 Note: Includes all announced transactions in AZ, CO, KS, MT, NE, NM, OK, UT and WY, excluding failed banks Source: SNL Financial (1) Excludes multiples smaller than 8.0x and larger than 40.0x Regional M&A Transaction Overview On November 11th, Kalispell, Montana-based Glacier Bancorp Inc. ($8.1 billion in assets), agreed to acquire Ronan, Montana-based Montana Community Banks Inc., the parent company of Community Bank Inc. ($180 million in assets) for approximately $25 million (50% cash and 50% stock mix) representing 120% price to tangible book value. The acquisition will expand Glacier’s footprint in western Montana by eight branches. The transaction is expected to close by Q1 2015, and Community Bank will merge into Glacier Bank and First Security Bank banking divisions. On November 17th, Maywood, Nebraska-based UniBanc Corp., the parent company of Farmers State Bank ($100 million in assets), agreed to acquire Stapleton, Nebraska-based Bank of Stapleton ($28 million in assets). The acquisition results in UniBanc entering both Lincoln County, NE (one branch with 0.77% deposit market share) and Logan County, NE (one branch with 100% deposit market share). ©2014 KPMG Corporate Finance LLC, a Delaware limited liability company. Member FINRA and SIPC. KPMG Corporate Finance LLC is a subsidiary of KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Western States Regional Bank Index (“WBI”)(1) Regional bank stocks, as measured by the WBI, fell 3.7% for the month of November. The largest daily decline during the month took place on November 28th where the WBI fell 2.3%. Broader bank stocks, measured by the S&P Bank index, posted a slight gain of 0.9% compared to the 2.5% gain recorded by the S&P 500. Market Cap Stock Price Bank Name Symbol State ($ in mil) 11/28/14 Price / Price / Price / NPAs (2) / LTM YTD LTM EPS Book Tang. Book Assets ROAA Stock Price Change Monthly BancFirst Corporation BANF OK $991 $64.01 (1.5%) 14.2% 16.3x 165.9% 182.9% 0.41% 0.99% BOK Financial Corporation BOKF OK $4,469 $64.45 (6.0%) (2.8%) 14.8x 137.8% 157.9% 1.13% 1.11% Capitol Federal Financial Inc. CFFN KS $1,761 $12.52 (2.3%) 3.4% 22.4x 118.2% 118.2% 0.29% 0.82% CoBiz Financial, Inc. COBZ CO $467 $11.48 (4.5%) (4.0%) 16.2x 190.4% 192.5% 0.44% 1.02% Commerce Bancshares, Inc. CBSH MO $4,123 $42.82 (0.7%) 0.1% 16.2x 192.5% 206.6% 0.32% 1.18% First Interstate BancSystem, Inc. FIBK MT $1,284 $28.12 (4.2%) (0.9%) 15.3x 145.0% 192.5% 1.08% 1.07% Glacier Bancorp, Inc. GBCI MT $2,054 $27.38 (4.6%) (8.1%) 18.3x 197.4% 228.5% 1.21% 1.41% Guaranty Bancorp GBNK CO $322 $14.82 (6.0%) 5.5% 19.2x 156.7% 162.9% 0.81% 0.84% National Bank Holdings Corporation NBHC CO $787 $19.23 (1.8%) (10.1%) NM 97.5% 107.9% 2.26% 0.16% Southwest Bancorp, Inc. OKSB OK $329 $16.90 (6.3%) 6.2% 15.1x 121.6% 122.4% 0.97% 1.13% UMB Financial Corporation UMBF MO $2,524 $55.49 (6.9%) (13.7%) 19.6x 156.2% 187.8% 0.24% 0.81% Western Alliance Bancorporation WAL AZ $2,328 $26.43 (0.7%) 10.8% 16.8x 269.3% 277.8% 1.27% 1.45% Zions Bancorporation ZION UT $5,694 $28.06 (3.1%) (6.3%) 26.7x 90.1% 107.9% 0.66% 0.50% (3.7%) (0.5%) 18.1x 156.8% 172.8% 0.85% 0.96% S&P Bank 0.9% 10.5% S&P 500 2.5% 11.9% Average(1) $2,087 WBI Index is a equally weighted mean of stock price changes on a monthly and year-to-date basis derived from the 13 regional banks listed above (2) Non-performing assets include non-accrual loans, loans 90+ days past due and OREO Source: SNL Financial (1) As demonstrated in the table above, the WBI is down 0.5% for YTD 2014, significantly underperforming the S&P Bank index and the S&P 500 which are up 10.5% and 11.9%, respectively. This year’s underperformance is most likely attributed to the WBI pulling back from last year’s outperformance of national bank stocks and the S&P 500, which is illustrated in the chart below. In 2013, the WBI increased 50.1% compared to 32.3% and 29.6% for the S&P Bank index and S&P 500, respectively. The rest of the banks essentially caught up. 170% Bank Index Returns 12/31/2012 - 11/28/2014 (0.5%) 160% 170% 160% 150% 150% 140% 140% 130% 130% v 120% 120% 110% 110% 100% 90% 80% 100% WBI S&P Bank Index S&P 500 90% 80% ©2014 KPMG Corporate Finance LLC, a Delaware limited liability company. Member FINRA and SIPC. KPMG Corporate Finance LLC is a subsidiary of KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Regional Loan Growth Trends 2012 – YTD 2014 Median CAGR Loan Growth by State Following a prolonged period of stagnant loan growth as a result of the financial downturn, banks in the western region have begun to realize moderate growth in their loan portfolios. 6.8% The table on the right displays median compound annual growth rates (“CAGR”) for bank loan totals in the Western Region states for the period of 2012 to year-to-date (“YTD”) 2014. Overall, the Western Region has experienced a CAGR in loans of 5.6% from 2012 to YTD 2014. This is compared to the national growth rate of 4.8% during the same time period. 6.0% 8.6% Banks headquartered in the states of Colorado, Montana, Nebraska, Wyoming, and Utah have experienced higher loan growth rates than the overall region by producing a median CAGR of 6.7% compared to 5.6% for the Western Region. Banks headquartered in the states of Arizona, Kansas, New Mexico, and Oklahoma have produced a lower CAGR in loans by increasing 4.5% since 2010 compared to 5.6% for the Western Region. Western Region CAGR Loan Growth: 5.6% 2.8% v 6.9% 6.6% 5.2% 4.0% 4.6% Source: SNL Financial Note: Includes banks with assets between $10 million and $30 billion; excludes industrial banks The table below shows loan CAGRs for the period of 2012 to YTD 2014 broken out by state and bank asset size. For the Western Region, banks less than $100 million in assets experienced a CAGR in loans of 3.4% compared to loan growth for larger banks of 6.2% ($100M to $250M in assets), 7.1% ($250M to $500M), and 7.8% (greater than $500M). These numbers reveal smaller banks, which tend to operate in lower growth markets, are experiencing less loan growth. For Utah, the highest CAGR in loans came from banks between $100 million and $250 million in assets. Banks between $250 million and $500 million in assets had the highest CAGR in loans in the states of Kansas, New Mexico, Oklahoma, and Wyoming. Banks greater than $500 million in assets had the highest CAGR in loans in Arizona, Colorado, Montana, and Nebraska. 2012 – YTD 2014 Median CAGR Loan Growth by State Arizona Colorado Kansas Montana Nebraska New Mexico Oklahoma Wyoming Utah Western Region 9/30/2014 Bank Asset Size $100M to $250M to <$100M $250M $500M 1.4% 4.9% 0.5% 7.0% 5.5% 6.5% 2.4% 6.9% 7.3% 7.9% 3.0% 5.4% 6.8% 7.4% 5.9% 1.0% 0.9% 9.8% 1.8% 5.9% 9.5% 2.7% 6.8% 7.1% 5.5% 15.3% 3.7% 3.4% 6.2% 7.1% >$500M 8.4% 13.0% 6.8% 15.3% 8.2% 4.7% 6.7% 1.6% 11.0% 2012 to YTD 2014 Median Loan CAGR by Asset Size and State 7.8% ©2014 KPMG Corporate Finance LLC, a Delaware limited liability company. Member FINRA and SIPC. KPMG Corporate Finance LLC is a subsidiary of KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Financial Institutions Investment Banking Group Recent Regional Transactions(1) has been acquired by (pending) has been acquired by (pending) has been acquired by a has been acquired by an (pending) Private Investor Investor Group has been acquired by has been acquired by November 2013 has acquired a branch of Assisted in the sale of bank subsidiary has been acquired by has been acquired by has acquired a branch of has been acquired by has been acquired by has acquired has acquired a branch of has been acquired by has been acquired by has merged with Strategic Growth Bancorp, Inc. (1) Includes transactions completed by KPMG CF professionals while employed at another firm, substantially all of whose assets were acquired by KPMG CF Wesley A. Brown Managing Director [email protected] 303.339.9099 Adam C. Fiedor Director [email protected] 303.339.9083 Michael D. Richter Director [email protected] 720.204.4313 Global coverage. Industry knowledge. Middle-Market focus. The Corporate Finance practices of KPMG International's network of independent member firms (KPMG) have been ranked collectively a leading global M&A advisor according to Thomson Reuters SDC's 2013 global transaction volume league tables. KPMG firms operate in 155 countries with over 2,600 investment banking professionals who are able to meet the needs of clients across the globe. KPMG Corporate Finance LLC KPMG Corporate Finance LLC provides a broad range of investment banking and advisory services to its domestic and international clients. Our professionals have the experience and depth of knowledge to advise clients on global mergers and acquisitions, sales and divestitures, buyouts, financings, debt restructurings, equity recapitalizations, infrastructure project finance, capital advisory, real estate, portfolio solutions, fairness opinions, and other advisory needs. Trust KPMG Corporate Finance LLC with your next transaction www.kpmgcorporatefinance.com ©2014 KPMG Corporate Finance LLC, a Delaware limited liability company. Member FINRA and SIPC. KPMG Corporate Finance LLC is a subsidiary of KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.