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EXHIBIT 99.5
XXXXXX & COMPANY, INC.
000 XXXXX XXXXX XXXXX
XXXXX 000
XXXXXX, XXXX 00000
(000) 000-0000
(000) 000-0000 FAX
July 16, 1997
The Board of Directors
Columbia Federal Savings Bank
0000 Xxxxx Xxxxxxx
Xxxx Xxxxxxxx, XX 00000-0000
Re: Conversion Valuation Agreement
Attn: Xxxxxx X. Xxxxx, President
Xxxxxx & Company, Inc. (hereinafter referred to as XXXXXX) hereby proposes
to prepare an independent conversion appraisal of Columbia Federal Savings
Bank, Fort Xxxxxxxx, Kentucky (hereinafter referred to as COLUMBIA), relating
to the conversion of COLUMBIA from a mutual to a stock institution. XXXXXX
will provide a pro forma valuation of the market value of the shares to be sold
in the proposed conversion of COLUMBIA.
XXXXXX is a financial consulting firm that primarily serves the financial
institution industry. XXXXXX is experienced in evaluating and appraising
thrift institutions and thrift institution holding companies. XXXXXX is an
experienced conversion appraiser for filings with the Office of Thrift
Supervision ("OTS") and the Federal Deposit Insurance Corporation ("FDIC") and
is also approved by the Internal Revenue Service as an expert in thrift stock
valuations.
XXXXXX agrees to prepare the conversion appraisal in the format required
by OTS in a timely manner for prompt filing with OTS and the Securities and
Exchange Commission. XXXXXX will provide any additional information as
requested and will complete appraisal updates in accordance with regulatory
requirements. XXXXXX will also be available to meet with any regulatory agency
to review the appraisal.
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The appraisal report will provide a detailed description of COLUMBIA,
including its financial condition, operating performance, asset quality, rate
sensitivity position, liquidity level and management qualifications. The
appraisal will include a description of COLUMBIA's market area, including both
economic and demographic characteristics and trends. An analysis of other
publicly-traded thrift institutions will be performed to determine a comparable
group and adjustments to the appraised value will be made based on a comparison
of COLUMBIA with the comparable group.
In making its appraisal, XXXXXX will rely upon the information in the
Subscription and Community Offering Circular (Prospectus), including the
financial statements. Among other factors, XXXXXX will also consider the
following: the present and projected operating results and financial condition
of COLUMBIA; the economic and demographic conditions in COLUMBIA's existing
marketing area; pertinent historical financial and other information relating
to COLUMBIA; a comparative evaluation of the operating and financial statistics
of COLUMBIA with those of other thrift institutions; the proposed price per
share; the aggregate size of the offering of Common Stock; the impact of the
Conversion on COLUMBIA's capital position and earnings potential; COLUMBIA's
proposed dividend policy; and the trading market for securities of comparable
institutions and general conditions in the market for such securities. In
preparing the appraisal, XXXXXX will rely solely upon, and assume the accuracy
and completeness of, financial and statistical information provided by
COLUMBIA, and will not independently value the assets or liabilities of
COLUMBIA in order to prepare the appraisal.
Upon completion of the conversion appraisal, XXXXXX will provide a written
presentation to the Board of Directors of COLUMBIA to review the content of the
appraisal, the format and the assumptions. A written presentation will be
provided to each board member.
For its services in making this appraisal, XXXXXX'x fee will be $17,000.
The appraisal fee will include the preparation of one valuation update. All
additional valuation updates will be subject to an additional fee of $1,000
each. Upon the acceptance of this proposal, XXXXXX shall be paid a retainer of
$3,000 to be applied to the total appraisal fee of $17,000, the balance of
which will be payable at the time of the completion of the appraisal.
COLUMBIA agrees, by the acceptance of this proposal, to indemnify XXXXXX
and its employees and affiliates for certain costs and expenses, including
reasonable legal fees, in connection with claims or litigation relating to the
appraisal and arising out of any misstatement or untrue statement of a material
fact in information supplied to XXXXXX by COLUMBIA or by an intentional
omission by COLUMBIA to state a material fact in the information so provided,
except where XXXXXX has been negligent or at fault.
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This proposal will be considered accepted upon the execution of the two
enclosed copies of this agreement and the return of one executed copy and the
retainer fee to XXXXXX.
XXXXXX & COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
_______________________________________
Xxxxxxx X. Xxxxxx
President
Columbia Federal Savings Bank
By: /s/ Xxxxxx X. Xxxxx
_______________________________________
Xxxxxx X. Xxxxx
President
Date: August 18, 1997
