Leading Edge solution for Restructuring Banks and enabling growth.

1. Executive Partners,, Inc.
Bank Enablement: New Capital to Empower Your Bank
February 21, 2011

2. Ready…
Community bank balance sheets are under severe stress caused by credit impairment and
depleted capital levels. The regulators are bringing enforcement actions against distressed
levels
banks, demanding they raise capital and reduce classified assets over short time horizons.
Capital is a scarce commodity and community banks continue to fail at an alarming rate because
they cannot raise the capital necessary to satisfy regulatory directives.
This unprecedented market distress creates enormous strategic opportunities for well-positioned
banks, those with access to capital and strong balance sheets and clear strategic growth
objectives.
Executive Partners brings strategic ideas and a committed capital partner to solve banks' balance
sheet problems and seize strategic growth opportunities.
Executive Partners will help your bank:
• remain independent,
• recapitalize the balance sheet without a sale of control
• remove impaired assets at carrying value without loss
• repay TARP, and
• stockpile capital for bank acquisitions.
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3. Ready?…
Time is of the essence in the current environment.
Strategic opportunities can be lost through delay and a distressed bank’s
balance sheet will likely deteriorate further without prompt capital
intervention.
Executive Partners moves quickly to prepare viable financial models
presenting success opportunities for your bank and through its captive
capital partner, Executive Partners can solicit a substantial capital
commitment in days not months.
Would a capital commitment representing a non-controlling interest
in your bank combined with capital to clean up problem assets be
valuable to your bank?
Enable your bank to survive and thrive now and as the banking industry
remakes itself.
Executive Partners brings capital and strategic ideas through its
Bank Enablement program.
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4. Set… Executive Transaction Summary
• Transaction brings together a captive Capital Partner (Investor) who will acquire Bank non-performing assets at the Bank’s
current carrying value and also invests in the Bank Holding Company (BHC) through an issuance of nonvoting, convertible
preferred stock and warrants It seeks its return in alignment with the Bank management and shareholders.
warrants. Bank, management, shareholders
• The Capital Partner will establish a separate Investor LLC fund to acquire the non-performing assets.
• The Capital Partner has a long-term perspective (5-10 years)
• The Capital Partner is only interested in passive, non-controlling, minority equity interest in the BHC to avoid regulatory filings.
• Provides the Bank Holding Company with:
(1) access to additional equity capital at an attractive cost;
(2) ability t sell non-performing assets at carrying value
bilit to ll f i t t i l
(3) improved key financial metrics and balance sheet management.
• Provides the BHC the opportunity to enhance overall stock valuation
• The captive Capital Partner will consider over capitalizing the BHC, giving the Bank growth capital to be used for future
acquisitions as well as the remediation of problem assets of target banks.
Non-Performing Asset Sale New Capital Issuance
• Bank would select and sell performing/non-performing /REO • Non-voting convertible preferred stock with warrants
assets to a separate Investor LLC Fund established and attached
controlled by the Investor thereby removing the troubled assets • Additional convertible preferred stock may be issued
from the bank balance sheet.
f th b k b l h t concurrent with additional f t
t ith dditi l future NPA sales t I
l to Investor LLC
t
• Assets would be sold at the Bank’s carrying value. Fund
• Consideration paid to the Bank in the asset sale would be cash • Securities Purchase Agreement will also provide for
and a note payable. issuance of a warrant for Investor to purchase common
• 2-3 years Interest and Principal reserves from Investor stock, exercisable only after all convertible preferred stock
• All assets will be managed and controlled by Investor LLC Fund. noted above has been issued.
• Additional Bank NPAs may be sold later to Investor LLC Fund • Additional BHC capital for future acquisitions available
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5. Go!
Your Bank can be Independent, Healthy, and Powerful !
Contact Robert Harnach to move quickly and gain the advantage of Bank Enablement.
Robert Harnach
Chief Operating Officer
Managing Partner–Strategic Capital &
Financial Services
14 Hidden Brook Drive
N. Barrington, Illinois 60010
847-713-2600 x213 Office
708.906.3057 M bil
708 906 3057 Mobile
www.linkedin.com/in/bobharnach
Executive Partners:
20+ year consulting firm with senior and C-level executives that create and implement
results-focused strategies and outcomes. The partners bring objective, expert perspective to client
firms. Focused on creating growth through solutions that provide integration, alignment, reinvention,
and innovation. Empowering banks and management for 20 years with expert strategy to go beyond.
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