9th annual Spring

value investing congress

April 3, 2014 Las Vegas, NV

A Shareholder Activists Perspective on Bank Stocks
Richard Lashley, PL Capital
www.ValueInvestingCongress.com
A Shareholder Activists Perspective on Bank Stocks
April 3, 2014
PL Capital, LLC, 47 E. Chicago Avenue, Suite 336, Naperville, IL 60540
John Palmer (630) 848-1340 Fax: (630) 848-1342 jpalmer@plcapitalllc.com
Richard Lashley (973) 539-5400 Fax: (973) 539-5404 rlashley@plcapitalllc.com
Curt Thompson (312) 560-2675 Fax: (630) 848-1342 cthompson@plcapitalllc.com
The 9
th
Annual Value Investing Congress
Las Vegas, NV
Richard Lashley, Principal
PL Capital Group
Disclaimers
2

Information in this document is provided by Richard Lashley, PL Capital, LLC and their affiliates.
It may not be based on sources considered to be reliable. In no case is any information contained
herein warranted or implied to be an accurate representation of facts or otherwise guaranteed to
be correct or complete.

This material is not an offer to sell or a solicitation to buy any securities discussed herein or any
interest in the Financial Edge Fund, L.P. or any other LP or Fund managed or advised by PL
Capital (the Funds).

PL Capitals Investment Niche
3

Over the Past 18+ years PL Capitals Brand of Shareholder Activism and Investing has
Generated Higher Returns with Lower Volatility
PL Capital
U.S. Bank/Thrift
Stocks
Willing to Work with
Realistic Management
Teams And Boards
Target Undervalued
and Underperforming
Banks/thrifts
Fix It or Sell It
18+ Years
Managing Bank Stock
Funds
($215 mil AUM)
Shareholder Activists
(rare in banking)
Small/Mid-cap Banks
($300 mil to $3.0 bil
In Assets)
$30 mil to $300 mil
Market Caps
.
PL Capitals
Richard Lashley and John Palmer
Have Unique Experience & Skill Sets
4

Over the Past 18+ years PL Capitals Brand of Shareholder Activism and Investing has
Generated Higher Returns with Lower Volatility
Lashley
and
Palmer
Often quoted in
national banking
publications
1980s and early 1990s:
CPAs focused
exclusively on the bank
and thrift industry
Early to Mid 1990s:
Bank/Thrift M&A
Financial Advisors
18+
years managing bank
stock investment
partnerships at
PL Capital
Significant Experience
as Bank Directors
Experts at shareholder
activism, proxy
contests, and
corporate governance
Reputations as
substantive and serious
professionals
.
Financial Edge Fund, LP
Consistently Ranked Among the Best Performing
Financial Sector Hedge Funds
5
Ranked among the Best Performing Hedge Funds in the Financial Services Sector:
(Year 2013) #7
(Year 2012) #3
(Year 2011) #4
(Year 2010) #3
Source: Hedge fund performance as ranked by the BarclayHedge's database.

Topics
6
The Post-Financial Crisis Recovery Period Will be Among the 3 Best Periods
to Invest in Bank Stocks in the Past 30 Years
There Will be a M&A Boom Which Will Last for Another 3-5 Years
A Simple but Elegant Formula to Estimate Small/Mid-cap Bank Stock M&A Values
(hint: Its all about the cost saves)
Actionable Ideas
The Post-Financial Crisis Period Will be One of the 3 Best Times
to Invest in Bank Stocks
7
DOWNTURN
S&L Crisis 1989-1990
(14 months)
-49%
LTCM Crisis 1998-2000
(21 months)
-27%
Financial
Crisis
2007-2009
(22 months)
-82%
RECOVERY
1990-1998
(7 years)
+1,023%
2000-2007
(7 years)
+153%
2009-Present
(5 years+)
+269%
(so far)
SNL U.S. Bank and Thrift Index Total Return

Bank Stocks are Cyclical--The Downturns are Sharp and Short
While the Recoveries/Upturns are Longer
Source: SNL Financial LC; Financial Crisis Recovery period defined as 3/6/09 to 2/28/14
The Banking Industry is in Much Better Shape Than Commonly Believed
IT WAS WORSE in the RTC Period of the Early 1990s
8
Source: FDIC (www.fdic.gov) and SNL Financial, LC
1,484
1,575
1,406
1,109
1,492
1,426
1,063
572
318
193
117
92
84 79
94
114
136
116
80
52 50
76
252
702
884
813
651
467
204
262
470
534
382
271
181
50
15
8 6 1 3 8 7 4
11
3 4 0 0 3
25
140
157
92
51
24
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
N
u
m
b
e
r

o
f

I
n
s
t
i
t
u
t
i
o
n
s

Year
Number of "Problem" Banks
Number of Failed Banks

Industry Fundamentals
Are Almost Back to Pre-Crisis Levels

9
Banking
Industry
Aggregate
Results
2013 2012

2011


2010

2009 2008 2007 2006
% Profitable 92% 90% 84% 78% 69% 75% 88% 92%
ROA 1.07% 1.00% 0.88% 0.65% (0.08)% 0.03% 0.81% 1.28%
ROE 9.56% 8.9% 7.8% 5.9% (0.8)% 0.4% 7.8% 12.3%
NPAs/Assets 1.63% 2.20% 2.60% 3.11% 3.37% 1.91% 0.95% 0.50%
Net Charge-
Offs/ Loans
0.69% 1.10% 1.55% 2.55% 2.52% 1.29% 0.59% 0.39%
Loan Loss
Provision/NCOs
60% 70% 68% 84% 133% 175% 155% 109%
Equity/Assets 11.2% 11.2% 11.2% 11.2% 11.0% 9.3% 10.4% 10.5%
Source: FDIC Quarterly Banking Profile (www.fdic.gov)
Despite the Rebound Since 2009
Small/Mid-Cap Bank and Thrift Stock
Valuations Are Still Historically Attractive
10
Source: SNL Financial LC
(1) Includes SNL U.S. Thrift $1B-$5B, SNL U.S. Thrift $500M-$1B, SNL U.S. Bank $1B-$5B, and SNL U.S. Bank $500M-$1B
Avg.
P/TBV
(1992-2014)
50%
100%
150%
200%
250%
300%
Average Price/TBV of SNL Thrift Indexes and SNL Bank Indexes ($500Mil -
$5Bil)
1

(12/31/92 - 2/28/14)
Bank Stock Valuation Curve
Small Caps and Large Caps Most Attractively Valued
11
Source: SNL Financial LC, as of 01/09/14
0%
50%
100%
150%
200%
250%
Market Capitalization Asset Size
Median Price/Tangible Book Value (TBV) % by:
M
e
d
i
a
n

P
r
i
c
e
/
T
B
V
%


0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
N
u
m
b
e
r

o
f

B
a
n
k
s

Year
Number of U.S. Banks
(1984-2013)
The Banking Industry Has Been in a Secular Consolidation Wave for 30+ Years
and Now There Will Be a Cyclical 3-5 Year M&A Boom
12
Source: FDIC Quarterly Banking Profile (www.fdic.gov)
0%
50%
100%
150%
200%
250%
300%
-
100
200
300
400
500
600
A
v
g
.

P
r
i
c
e
/
T
a
n
g
i
b
l
e

B
o
o
k

N
u
m
b
e
r

o
f

D
e
a
l
s

Number of Mergers
Average Price/Tangible Book %
0%
2%
4%
6%
There Will Be a Cyclical M&A Wave
That Lasts for Another 3-5 Years
13
Source: SNL Financial LC and FDIC Quarterly Banking Profile (thru 3/24/14, using Announcement Date)
*1/1/14 to 3/24/14 Annualized
Ratio of Mergers Per Year to Total U.S. Banks/Thrifts
Why Bank M&A Will Happen
14

Pent up supply of both sellers and acquirers due to lack of deals during the Financial
Crisis
Acquirers cant grow organically
Smaller banks cannot cost justify remaining independent there is real economics in
M&A due to large cost savings
$3 billion in assets is the new $300 million Regulators want smaller banks to merge
to establish appropriate risk management and compliance processes
The FDIC is not granting new bank charters so the only entry to banking is to buy
Mid-cap acquirers have stronger stock price currency to do deals (see page 11)
Recent merger announcements have been at 30% to 150%+ market premiums which
shows how undervalued these stocks are (see page 17)
Both buyers and sellers stocks are going up on deal announcements
Mergers of Equals (MOEs) are hot right now
We expect double dips as the acquirers also sell after rolling up several acquisitions

Cost Save Adjusted M&A Multiples are Historically Attractive
This Will Drive More Good M&A
(Good for both buyer and sellers)
Source: RBC Capital Markets presentation dated March 6, 2014 (using SNL Financial LC data)
9.8x
9.0x
13.3x
11.7x
13.5x 13.5x
12.6x
9.8x
8.0x
16.6x
14.8x
17.9x
17.6x
18.6x
19.2x
17.0x
13.1x
12.4x
12.2x
11.1x
14.7x
15.3x 15.4x
16.0x 15.9x
12.1x
10.1x
0x
2x
4x
6x
8x
10x
12x
14x
16x
18x
20x
22x
24x
26x
0x
2x
4x
6x
8x
10x
12x
14x
16x
18x
20x
22x
24x
26x
Pre-2000 2000-2002 2003 2004 2005 2006 2007 2008-2010 Post 2011
Median
79 14 32 35 24 41 37 12 52
Sample Size
Includes transactions with deal values > $50 million and excludes targets with LTM ROAA < 0.25%.
Cost Savings: Based on announced cost savings, assuming LTM noninterest expense base and tax-effected at 35%.
Capital Adjustment: Purchase price adjusted for excess tangible capital above 8.0%, in which excess capital is removed
from purchase price at 1.0x book value and earnings are adjusted assuming pre-tax opportunity cost of 2.00%.

15
A Simple but Elegant Way to Estimate a Banks M&A Value
(the Cost Saves Drive M&A Value Even for Banks
that Lose Money or Make Low Returns)
16
Can be obtained from
Street estimates; if no
Street estimates, use the
run rate of net income
to project the next 12
months
Next Years Net
Income Est.
Tax Effected
Cost Saves
10-11x PE
Deal Multiple
M&A Value
Range
+ x =
Most banks trade in the
market well below this
value!!
Typically 25% for out of
market deals and 35%
for in-market deals; tax
effect the cost saves
before adding to the
estimated net income
Put a 10x to 11x PE ratio
on those cost save adjusted
earnings to get a range of
M&A value (recent deals
average 10xthis will
increase over time)
Caveats:
This does not take into account extraordinary balance sheet adjustments (e.g. credit marks, interest rate marks) that might be necessary for banks with issues.
Banks with significant excess capital and low earnings often sell for tangible book value (adjusted for extraordinary marks) plus a deposit premium rather than the
above formula
(in $millions)
Year 1
Estimated
Net Income
M & A
Cost
Saves
(35%)
Year 1 Post
Cost Saves
Net Income
Net Interest Income + 27.0 + 27.0
Credit Losses - 1.0 - 1.0
Noninterest Income + 13.0 + 13.0
Noninterest Expense - 33.0 11.6 - 21.4
Pretax Net Income + 6.0 + 17.6
Tax - 2.0 4.0 - 6.0
After Tax Net Income
4.0 7.6 11.6
x 10 = $116 mil
x 11 = $128 mil
E
X
A
M
P
L
E

Large Cost Saves Drive Attractive Merger Premiums
As Shown by PL Capital Owned Positions
Acquired in Mergers Since 2010
17


Date
Announced
Selling Bank ST
Total
Assets
($)
Deal
Price/Share
($)
Fin. Edge
Funds
Average
Cost ($)

Deal
Price/TBV

1 Month
Deal
Premium
1

Deal
Premium vs.
Financial
Crisis Low
2

6-14-13 BCSB Bancorp (BCSB)* MD 642 mil 23.77 12.79 138% +43% +260%
5-13-13 CFS Bancorp (CITZ)* IN 1.2 bil 10.49 3.25 102% +28% +500%
12-20-12 Roma Financial (ROMA) NJ 1.9 bil 15.00 9.03 212% +81% +55%
7-19-12 Fidelity Bancorp (FSBI)* PA 665 mil 22.85 6.21 147% +110% +353%
5-31-12 Beacon Federal (BFED) NY 1.0 bil 20.50 14.00 117% +55% +305%
5-1-12 Central Bancorp (CEBK) MA 523 mil 32.00 10.76 152% +77% +941%
3-12-12 North Central (FFFD)* IA 433 mil 30.58 12.51 100% +59% +217%
2-9-12 Heartland (HRTB)* IN 235 mil 9.72 6.88 96% +152% +224%
1-25-12 VIST Financial (VIST) PA 1.4 bil 12.50 8.76 117% +98% +150%
1-24-12 Indiana Comm. (INCB)* IN 1.0 bil 24.06 19.21 120% +63% +245%
12-5-11 SE Financial (SEFL) PA 307 mil 14.50 5.89 122% +245% +245%
6-20-11 Tower Bancorp (TOBC) PA 2.6 bil 28.00 21.38 142% +36% +53%
4-28-11 State Bancorp (STBC)* NY 1.6 bil 13.51 15.91 188% +30% +216%
4-19-11 BancorpRI (BARI)* RI 1.6 bil 48.25 34.76 193% +57% +211%
Source: SNL Financial LC and PL Capital
(1) % increase in stock price from one month prior to the deal announcement
(2) % increase in stock price from the lowest price the stock traded for during the financial crisis
Past performance and merger pricing/premiums do not guarantee future results or merger pricing/premiums.
* PL CAPITAL 13D POSITIONS IN BOLD
Banking Sector Activism is Robust
Despite Only a Handful of Activists Such as PL Capital
This Also Accelerates M&A
18
Source: J.P. Morgans Eye on the Market published February 18, 2014.
Activist Events Spread Across Industries
Percent of activist events, 1994-2013


Large Cap Bank Stock Investment Idea:
TARP Warrants
19

TARP Warrants are an Attractive Way
to Invest in Some of the Larger Banks

The 2008 TARP preferred issuances included warrants
The Treasury has auctioned off several bank warrants which are now publicly traded
(e.g. Capital One, Bank of America, PNC, Citigroup, Zions, Comerica, et. al.)
Most of these warrants expire at the end of 2018
The warrants contain attractive anti-dilution protection for any dividends paid out in
excess of dividend level paid when the TARP was issued
The out of the money time premiums are very low, particularly compared to the
likely growth in tangible book value and earnings through 2018

PL Capital Likes the JPM, COF and PNC Tarp Warrants the Most.

BAC, ZION and C Tarp Warrants are Less Attractive.

20
We Prefer the TARP Warrants of the Banks Noted
Name Ticker Mkt. Cap (bils) Recent Price Price/TBV % Price/2014 EPS Price/2015 EPS Div. Yld. %
M&T Bank MTB 16 $121.17 232 15.7 13.6 2.31
U.S. Bancorp USB 79 $43.42 301 13.7 12.6 2.12
KeyCorp KEY 13 $14.40 143 13.9 12.6 1.53
SunTrust STI 22 $40.38 153 13.3 12.3 0.99
Fifth Third FITB 20 $23.34 180 13.2 12.2 2.06
Regions RF 16 $11.11 148 13.0 12.1 1.08
BB&T BBT 29 $40.77 226 13.2 12.0 2.26
PNC PNC 46 $86.42 160 12.4 11.6 2.04
Wells Fargo WFC 258 $48.96 208 12.1 11.5 2.45
Bank of
America
BAC 182 $17.21 126 13.0 10.6 0.23
Capital One COF 43 $75.32 163 11.0 10.3 1.59
JPMorgan JPM 231 $60.93 152 10.3 9.6 2.49
Citigroup C 153 $50.30 90 10.3 8.7 0.08
21
TARP Warrants
We Like
X
X
X
The JP Morgan (JPM) TARP Warrants (JPM.WS)
Are Attractive
22
The current time premium in the warrant is only $2.50, which is extremely low for a 4 year warrant considering that JPMs
tangible book value per share is projected to grow $24.00 (net of dividends) by October 2018.
JPM
Price (3-20-14) $60.11
Total Assets (trils) $2.4
Market Cap. (bils) $228
Shares o/s (bils) 3.8
2014 EPS Est. $5.92
Dividend Yield 2.5%
JPM.WS
Price (3-20-14) $20.15
Expiration Date 10-28-18
Strike Price $42.42
LTM Avg. Daily Volume 146,891
Projection Assumptions
Stock and warrant price as of 3-20-14
2013 Operating EPS of $5.65 used as a baseline for EPS growth rate and Current Price/LTM EPS
2014-2018 EPS Growth Rate: 6%
2014-2018 Dividend Payout Ratio: 30%
2018 Price/Tangible Book Value (131%) shrinks vs. current Price/TBV (150%)
2018 Price/LTM EPS of 11.0x remains consistent with 10 year median (11.0x) and current (10.6x)
No stock buybacks incorporated in TBV/share
IRR noted above does not include any benefit from the anti-dilution excess dividend adjustment
which for JPM would add approximately 2% to the IRR
ROTEs remain fairly steady from 2013 (actual = 14%) and 2018 projected = 12%)
JPM Tarp Warrant IRR Sensitivity Matrix
(using a range of EPS growth rates and terminal 2018 PE ratios)
23
Note: Using PE rations to project the stock price in 2018 may understate the potential stock price and warrant value (IRR) in the no growth or
negative growth scenarios because there will still be substantial TBV growth, which over time should increase the stock price and warrant value (IRR).
The Capital One (COF) TARP Warrants (COF.WS)
Are Attractive
24
The current time premium in the warrant is only $0.50, which is extremely low for a 4 year warrant considering that COFs
tangible book value per share is projected to grow $30.00 (net of dividends) by November 2018.
COF
Price (3-20-14) $74.28
Total Assets (bils) $297
Market Cap. (bils) $43
Shares o/s (mils) 573
2014 EPS Est. $6.81
Dividend Yield 1.6%
COF.WS
Price (3-20-14) $32.64
Expiration Date 11-14-18
Strike Price $42.13
LTM Avg. Daily Volume 11,153
Projection Assumptions
Stock and warrant price as of 3-20-14
2014-2018 EPS Growth Rate: 7%
2014-2018 Dividend Payout Ratio: 30%
2018 Price/Tangible Book Value (148%) shrinks vs. current Price/TBV (161%)
2018 Price/LTM EPS (11.0x) remains consistent with 10 year median (11.0x) and current (10.7x)
No stock buybacks incorporated in TBV/share
IRR noted above does not include any benefit from the anti-dilution excess dividend adjustment
which for COF would add approximately 3% to the IRR
ROTEs shrink from 2013 (actual = 15%) to 2018 (projected = 13%)
COF Tarp Warrant IRR Sensitivity Matrix
(using a range of EPS growth rates and terminal 2018 PE ratios)
25
Note: Using PE rations to project the stock price in 2018 may understate the potential stock price and warrant value (IRR) in the no growth or
negative growth scenarios because there will still be substantial TBV growth, which over time should increase the stock price and warrant value (IRR).
The PNC Financial (PNC) TARP Warrants (PNC.WS)
Are Attractive
26
The current time premium in the warrant is only $4.00, which is extremely low for a 4 year warrant considering that PNCs
tangible book value per share is projected to grow $31.00 (net of dividends) by December 2018.
PNC
Price (3-20-14) $86.63
Total Assets (bils) $320
Market Cap. (bils) $46
Shares o/s (mils) 533
2014 EPS Est. $7.03
Dividend Yield 2.0%
PNC.WS
Price (3-20-14) $23.40
Expiration Date 12-31-18
Strike Price $67.33
LTM Avg. Daily Volume 35,668
Projection Assumptions
Stock and warrant price as of 3-20-14
2014-2018 EPS Growth Rate: 7%
2014-2018 Dividend Payout Ratio: 30%
2018 Price/Tangible Book Value (157%) consistent with current Price/TBV (160%)
2018 Price/LTM EPS increases to 13x (10 year median) from 11.7x currently
No stock buybacks incorporated in TBV/share
ROTEs remain fairly steady between 2013 (actual = 14%) and 2018 (projected = 12%)
PNC Tarp Warrant IRR Sensitivity Matrix
(using a range of EPS growth rates and terminal 2018 PE ratios)
27
Note: Using PE rations to project the stock price in 2018 may understate the potential stock price and warrant value (IRR) in the no growth or
negative growth scenarios because there will still be substantial TBV growth, which over time should increase the stock price and warrant value (IRR).


Small-cap Bank Stock Investment Ideas:

28
1. Metro Bancorp, Inc. (METR)
1

2. Horizon Bancorp, Inc. (HBNC)
2

3. Intervest Bancshares (IBCA)
3


(1) PL capital owns 5.2% of METR as of March 21, 2014 per schedule 13D.
(2) PL capital owns 6.1% of HBNC as of March 24, 2014 (Schedule 13G position).
(3) PL capital owns 7.4% of IBCA as of March 24, 2014 (Schedule 13G position).
Metro Bancorp (METR) Investment Value Proposition Summary
This former affiliate of Commerce Bank has a valuable deposit
franchise in Central PA
METR uses the Commerce Bank retail banking model (open 7
days a week; late hours; focus on checking accounts; high touch
and high cost)
Low interest rates have hurt EPS because they are geared for
higher interest rates
Numerous other banks want to buy METR, but have been
rebuffed by METR; METR is instead pursuing new branches in
the Philly suburbs
METRs 70 year-old CEO owns 300,000 shares
PL Capital believes the burden of proof is on METR to prove that
growing rather than selling now would produce more shareholder
value
Est. Current M&A Value: $27-$30 (+ 32% to +47%) or greater
29
Key Facts Metro Bancorp, Inc.
(METR)
Total Assets $2.8 Billion
Location
Harrisburg, PA
(Central PA)
Common Shares
Outstanding
14.2 million
Market Cap $291 million
Recent Stock Price $20.41
% Institutional
Ownership
72%
% Insider
Ownership
8%
Tangible Book
Value/ Share
$16.19
2014 EPS Est. $1.25
2015 EPS Est. $1.30
Div. Yield (%) 0.0%
NPAs/Assets (%) 2.03%
Source: SNL Financial, LC and PL Capital, LLC
Metro Bancorp (METR) Central PA Footprint expanding into
Suburban Philly
30
Source: SNL Financial, LC
Metro Lags its Peers in Profitability
31
METR
Peers
1

($1-$5 Bil in Assets)
Return on Average Assets (%) 0.64% 0.88%
Noninterest Expense/ Avg Asset (%) 3.3% 3.0%
Loans/ Deposits (%) 78% 83%
Avg. Earning Assets/ FTE $2.9 mil $4.4 mil
Net Interest Income/ FTE $105,000 $162,000
Noninterest Income/ FTE $30,000 $37,000
Total Revenue/ FTE $135,000 $199,000
Efficiency Ratio (%) 73% 67%
Source: SNL Financial, LC and Sterne Agee
(1) Includes all publicly traded banks/thrifts in the U.S. between $1-$5 billion in assets (as of the last 12 months)
Despite Lagging its Peers Metro Has a Valuable Franchise


Potential Acquirer
(Ticker)

Cost
Save
%
Deal Price
to Cost Save
Adj. 2014 EPS
Acquirers
Marginal
EPS
Accretion
DEAL
PRICE BUYER
CAN PAY
FNB Corp. (FNB) 30% 11x-12x 30%-40% $28.60 - $30.80
Fulton Financial (FULT) 35% 10x-11x 40%-50% $27.84 - $29.83
National Penn (NPBC) 35% 10x-11x 40%-50% $27.01 - $28.94
Susquehanna (SUSQ) 35% 10x-11x 20%-30% $27.98 - $30.32
Tompkins (TMP) 30% 10x-11x 30%-40% $26.53 - $28.57
Community Bank (CBU) 30% 11x-12x 60%-70% $27.35 - $29.06
Northwest (NWBI) 30% 10x-11x 100%-120% $26.10 - $28.70
WesBanco (WSBC) 30% 11x-12x 20%-30% $27.55 - $29.84
Likely Deal Price: $27 - $30
32
Source: PL Capital, LLC
PL Capital Believes that One or More of These Buyers Would Pay More than
These Projected Amounts
Potential Acquirers Ability to Pay
Even if Metro (METR) Delays a Sale the Projected M&A Values and
IRRs are Attractive
The upside potential and IRR
1
is attractive even if METR waits to pursue a sale
(particularly if interest rates rise)
METR believes they will grow loans >10% per year (without the need for a capital raise)
If interest rates rise METRs EPS and TBV should exceed the amounts projected below
33
(1) IRR based upon a buy price of $20.41 (recent price) and a 6 month period between announcement and closing

(2) 2013 (Actual); 2014-2015 (street estimate); 2016-2017 (PL capital estimates); assumes no dividend paid or capital actions
Deal
Announce
ment
Date
Projected
TBV/Sh
EPS
Est.
2

PL Capitals
Estimated
METR
M&A Value
Upside
Potential IRR
1

3/31/14 $16.49 $1.20 $28 +37% +74%
3/31/15 $17.70 $1.21 $30 +47% +29%
3/31/16 $18.99 $1.29 $32 +57% +20%
3/31/17 $20.39 $1.40 $34 +67% +16%
3/31/18 $22.04 $1.65 $36 +76% +13%
Small-cap Bank Stock Investment Idea:
Horizon Bancorp (HBNC)
Potential R2000 Delete Worth Owning Whether They Get Deleted or Not
Valuable, high performing bank in Indiana and Michigan
Consistently ranked as one of the top performing community banks in the US
One of only 6 Nasdaq or exchange listed banks between $1-$5 billion in assets that earned over 15%
ROTCE in both 2012 and 2013, yet it trades at only 148% of tangible book value vs. 318% for the other
5 high performers (see page 36)
Not widely followed by analysts or owned by institutional investors (excluding PL Capital, instl
ownership is only 25%)
HBNC has been a disciplined M&A acquirer which could become a M&A seller if they cannot continue
to find growth
Worth $30+ in a deal if they decide to sell
PL Capital is supportive of HBNCs management and business model (13G positionPL Capital owns
6%)
Buy HBNC regardless of whether it gets deleted from R2000 and add more if it gets deleted (at current
prices HBNC is not likely to be deleted but that could change)
34
Recent
Price
Shares
o/s
Mkt.
Cap.
Total
Assets Location
2013
EPS
2014
EPS Est.
2015
EPS Est.
12/31/13
TBV/
share
Price/
TBV
Div.
Yield
NPA
%
Avg.
Daily
Volume
$21.83 8.6 mil $188 mil $1.8 Bil IN, MI $2.17 $1.94 $2.09 $14.94 146% 2.0% 1.2% 20,739
Source: SNL Financial, LC and PL Capital LLC
From a Recent Horizon (HBNC) Presentation
35
Horizon (HBNC) is the
Lowest Valued High Performing $1-$5 Bil Asset Bank in the U.S.
1

36
100
150
200
250
300
350
400
450
15 16 17 18 19 20 21
P
r
i
c
e
/
T
B
V

%

2012 and 2013 Average ROTCE %
HBNC Price/TBV = 148% vs. 318% (average) for the Other High Performers
Source: SNL Financial, LC and PL Capital LLC
(1) Includes NASDAQ and exchange listed banks/thrifts between $1-$5 billion in assets with over 15% ROTCE in both 2012 and 2013
Horizon will likely not
trade at the same levels as
its high performing peers
(average 318% TBV), but
it should trade in line with
other banks with similar
ROTCEs.
Horizons 2014 estimated
ROTCE is 13%. Banks
with 13% ROTCEs
currently trade at
approximately 180-200%
TBV (or $27-$30 HBNC),
a 24% to 37% increase
from HBNCs recent
price.
Small-cap Bank Stock Investment Idea:
Intervest Bancshares (IBCA)
Potential R2000 Delete Worth Owning Whether They Get Deleted or Not
Wholesale deposit gatherer and CRE lender with branches in NY and FL (lends in numerous states)
One of only 6 Nasdaq or exchange listed banks that trade below 100% of tangible book value (IBCA=85%) out
of all banks/thrifts with over $1.0 billion in assets and over 5% ROTCEs (n = 99)
IBCAs net interest margin and EPS should continue to improve as higher cost deposits roll over, legacy credit
costs subside and low yielding excess liquidity is invested in higher yielding loans
Most of the NPAs are TDRs which will not have significant losses
Equity capital is more than sufficient and TARP was repaid in 2013
No research analysts follow the company
IBCA is a franchise that will likely not be sold nor will IBCA be an acquirer
Family run/partially owned by Dansker family
PL Capital is supportive of IBCAs management and business model (13G positionPL Capital owns 7.4%)
Buy IBCA regardless of whether it gets deleted from R2000 and add more if it gets deleted
The projected R2000 cutoff is approximately $165 million (IBCA market cap is approximately $163 million)
37
Recent
Price Shares o/s
Mkt.
Cap.
Total
Assets Locations
2013
EPS
2014
EPS Est.
(PL Capital)
12/31/13
TBV/
share
Price/
TBV
Div.
Yield
NPA
%
Avg. Daily
Volume
$7.42 21.9 mil $163 mil $1.6 Bil NY, FL $0.61 $0.65 $8.99 83% 0.0% 3.8% 54,295
Source: SNL Financial, LC and PL Capital LLC
PL Capital Group
1

Contact Information and Description
38



John Palmer, Principal Rich Lashley, Principal Curt Thompson, Managing Director
The PL Capital Group The PL Capital Group The PL Capital Group
47 E. Chicago Avenue 67 Park Place East 47 E. Chicago Avenue
Suite 336 Suite 675 Suite 336
Naperville, IL 60540 Morristown, NJ 07960 Naperville, IL 60540
630-848-1340 973-539-5400 312-560-2675
630-848-1342 (fax) 973-539-5404 (fax) 630-848-1340
jpalmer@plcapitalllc.com rlashley@plcapitalllc.com cthompson@plcapitalllc.com



www.plcapitalllc.com
(1) The PL Capital Group includes PL Capital, LLC; Goodbody/PL Capital, LLC; PL Capital Advisors, LLC; Financial Edge Fund, LP; Financial Edge-Strategic
Fund, LP; Goodbody/PL Capital, LP; PL Capital/Focused Fund, LP; Richard Lashley and John Palmer; Lashley and Palmer are managing members of PL Capital LLC and
Goodbody/PL Capital, LLC; PL Capital, LLC is the general partner of Financial Edge Fund, LP, Financial Edge-Strategic Fund, LP and PL Capital/Focused Fund, LP;
Goodbody/PL Capital, LLC is the general partner of Goodbody/PL Capital, LP; PL Capital Advisors, LLC is the investment advisor to all four LPs