ICBA Bank Services_Colorado Springs_BPA draft

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DRAFT

Independent Community Bankers of America Bank Services Committee Meeting

An Update from Bank Property Advisors, LLC

Presented By: Joe NeverilPresident

Colorado Springs, CO

October 2008



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I. Overview of BPA

II. What·s New in 2008?

III. What Will Be New in 2009?

IV. ICBA Member Benefits

V. Sales Progress Report

VI. 2008 / 2009 Marketing Activities

Table of Contents



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DRAFTOverview of BPA

A. What does BPA do?

1. We serve as sale/leaseback advisor to community banks across the

country

2. We intermediate (broker) the sale of bank facilities to the investmentcommunity

BPA Sale/Leaseback Deal Lifecycle

Real Estate

Marketing

Execution &

Closing

Financial

ModelingEngagement

Definition &

Execution

Marketing &

DataGathering



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B. What is a Sale/Leaseback Transaction?

Overview of BPA

FinancialInstitution

Transfers

ownership of

property

Transfers

right to use

property

Seller

Lessee

Buyer

Lessor

Investor

A sale-leaseback is a transaction in which an investor purchases a property currently ownedand occupied by a user. Simultaneously with the sale, the parties execute a lease whereby the

user leases the property, in whole or in part, back from the investor. If the properties are

sold in excess of book value the gain is typically deferred and recognized over the

lease term.



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C. How do we generate sale/leaseback clients?

1. Direct contacts (relationships, internet, advertising, speaking

engagements, etc.)

2. Advisory referral network:

Overview of BPA



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D. How does BPA get compensated?

Overview of BPA

$0 ² 1 Million 5.00%

$1 ² 5 Million 3.00%

$5 ² 10 Million 2.00%

$10 + Million 1.00%

FM 5 000 000

$0 ² 1 M illion 50 000

$1 ² 5 Million 120 000

$5 ² 10 M illion -

$10 + M illion -

otal Fee 170 000

As % 3.40%

FM 10 000 000

$0 ² 1 M illion 50 000

$1 ² 5 Million 120 000

$5 ² 10 Million 100 000

$10 + M illion -

otal Fee 270 000

As % 2.70%

FM 20 000 000

$0 ² 1 M illion 50 000

$1 ² 5 Million 120 000

$5 ² 10 Million 100 000

$10 + Million 100 000

otal Fee 370 000

As % 1. 5%



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DRAFTWhat·s New in 2008?

A. Sub Prime Meltdown and Collapse of CMBS/Conduit Business

B. Government Takeover of GSEs

C. Other Than Temporary Impairment (´OTTIµ) Write downs

D. Community Bank Interest in Sale/Leaseback!

1. S/L deals 2006

2. S/L deals 2008



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DRAFTWhat Will Be New in 2009?

A. Macro ² National Level

1. Government bail out

a. Write downs on GSE preferred : capital or ordinary for tax?

b. Return of the CMBS market?

2. Deferred tax assets relating to goodwill to count toward Tier 1

B. Micro ² BPA Level

1. Community Bank interest in sale/leaseback will continue to

increase (e.g., OTTI (maybe), IRC Sec. 1031 and M&A, etc.)

2. Increased interest in Bank sale/leasebacks from investor perspective

3. Expanded and enhanced placement capabilities



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DRAFTICBA Member Benefits

A. ICBA Members receive:

1. No Cost Analytics ² Using a handful of data points combined with

the member bank·s public information, BPA performs acomplementary ´Continue to Own versus Sell and Lease Backµ

analysis for the institution.

2. 50% Credit on Appraisal Costs ² BPA provides ICBA Members witha 50% credit on their real property appraisal costs incurred in

connection with transactions closed under the program.



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DRAFTSales Progress Report

A. Ten (10) new ICBA member banks have gone through our analytical

modeling package in 2008. Of those, 80% asked for a draft of ourengagement letter for review.

B. 66% of signed engagements in 2008 are ICBA members.

C. To date, forty six ( 6) ICBA member banks have submitted data to BPA

and gone through our Own vs. Sale/leaseback Analysis. Of those, six (6)have resulted in live engagements.



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DRAFTSales Progress Report ² BPA Live Engagements in the Past 12 Months

Bank # Branch Locations No. of Locations

in Sale/Leaseback

Approx.

Market Value

of Real

Estate

Est. of ICBA

Member Rebate

(= 50% of

Appraisal Costs)

Status

1 Waukegan, IL 3 $5 M N/A 2008

Engagement

2 Powell, WY 3 $10 13M $ .125K 2008

Engagement

3 LaGrange, IL 1 $6.0M $2.3 5K 2008Engagement

Tampa, L 1 $2. M $2.3 5K Closed Sept.

2008

5 Upstate NY 6 $5.8M $1 .25K Closed June

2008

6 Madison, WI 1 $ .25M $2.3 5K Closed April

2008

Kansas and New Mexico 5 $11. M N/A Closed Sept.

200

8 Central & Eastern, TX 26 $3 .25M N/A On hold

Totals 6 Bldgs. > $ 9. M $21.3 5K



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DRAFT2008 / 2009 Marketing Activities

A. Sale/Leaseback Webinars ² A Rotating Series

1. Introductory ² ́ Sale/Leaseback Basicsµ

2. C O Track ² ´Bank Sale/Leasebacks: The Analytical Challengeµ

3. ´Bank Sale/Leasebacks: Optimizing Results with 1031 Tax Deferred

Exchangesµ

. S Corp Track ² ´Tax Advantages for Pass Through inancial

Institutionsµ

5. BRAND NEW: ´Sale/Leasebacks: Solutions for a Challenging

Banking Environmentµ

B. Total Website Re design

C. Continued Support of the ICBA Channels (Independent Banker, SYCT,Direct Mail, Calling Officer letters to ICBA Members, etc.)



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2008 / 2009 Marketing Activities ² Use of ´ ax Blastµ



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2008 / 2009 Marketing Activities Independent Banker Ad ² August 2008



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October: Webinar on OTTI (NWT promotion/ ax Blast)

November: Direct Mail

December: Webinar on New Sale Leaseback opportunities as a

result of recent change in Tier 1 treatment of goodwill

January: SYCT

ebruary: Calling Officer Letter to Members

March: Independent Banker Ad

2008 2009 ICBA Marketing Calendar ² Next 6 Months

ICBA Bank Services_Colorado Springs_BPA draft

Documents

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