EXHIBIT 99.1
XXXXXX & COMPANY, INC.
FINANCIAL INSTITUTION CONSULTANTS
000 XXXXX XXXXX XXXXX
XXXXX 000
XXXXXX, XXXX 00000
(000) 000-0000
(000) 000-0000 FAX
July 2, 2001
Xx. Xxxxxx X. Xxxxx
President
Clover Leaf Bank, Savings Bank
000 X. Xxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
Re: Conversion Valuation Agreement
Xxxxxx and Company, Inc. (hereinafter referred to as XXXXXX) hereby
proposes to prepare an independent conversion appraisal of Clover Leaf Bank,
Savings Bank (hereinafter referred to as "CLOVER LEAF" ), relating to the
conversion of CLOVER LEAF 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 CLOVER LEAF.
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 Federal Deposit Insurance Corporation
("FDIC") and the Office of Thrift Supervision ("OTS"), and is also approved by
the Internal Revenue Service as an expert in bank and thrift stock valuations.
XXXXXX agrees to prepare the conversion appraisal in the format required by
the FDIC in a timely manner for prompt filing with the FDIC, the appropriate
state division of banks, and the Securities and Exchange Commission. XXXXXX will
provide any additional information as requested and will complete appraisal
updates in accordance with regulatory requirements.
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The appraisal report will provide a detailed description of CLOVER LEAF,
including its financial condition, operating performance, asset quality, rate
sensitivity position, liquidity level and management qualifications. The
appraisal will include a description of CLOVER LEAF'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 CLOVER LEAF 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 CLOVER LEAF; the economic and demographic conditions in CLOVER LEAF's
existing marketing area; pertinent historical financial and other information
relating to CLOVER LEAF; a comparative evaluation of the operating and financial
statistics of CLOVER LEAF 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 CLOVER LEAF's capital position and earnings potential;
CLOVER LEAF'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 CLOVER LEAF, and will not independently value the assets or liabilities of
CLOVER LEAF in order to prepare the appraisal.
Upon completion of the conversion appraisal, XXXXXX will make a
presentation to the board of directors of CLOVER LEAF to review the content of
the appraisal, the format and the assumptions. A written presentation will be
provided to each board member as a part of the overall presentation.
For its services in making this appraisal, XXXXXX'x fee will be a flat fee
of $16,000, plus out-of-pocket expenses not to exceed $500. The appraisal fee
will include the preparation of all valuation updates. Upon the acceptance of
this proposal, XXXXXX shall be paid a retainer of $3,000 to be applied to the
total appraisal fee of $16,000, the balance of which will be payable at the time
of the completion of the appraisal.
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CLOVER LEAF 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 CLOVER LEAF or by an intentional
omission by CLOVER LEAF to state a material fact in the information so provided,
except where XXXXXX or its employees and affiliates have been negligent or at
fault.
XXXXXX agrees to indemnify CLOVER LEAF and its employees and affiliates for
certain costs and expenses, including reasonable legal fees, in connection with
claims or litigation relating to or based upon the negligence or willful
misconduct of XXXXXX or its employees or affiliates.
This proposal will be considered accepted upon the execution of the two
enclosed copies of this agreement and the return of one executed copy to XXXXXX,
accompanied by the $3,000 retainer.
XXXXXX and COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
President
CLOVER LEAF BANK, SAVINGS BANK.
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
President
Date: August 1, 2001
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