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Exhibit 99.5
March 11, 1998
The Board of Directors
The Home Savings and Loan Company
000 Xxxxxxx Xxxxx X.
Xxx 0000
Xxxxxxxxxx, Xxxx 00000-0000
Re: Conversion Valuation Agreement
Attn.: Xxxxxxx X. XxXxx, President
Xxxxxx & Company, Inc. (hereinafter referred to as XXXXXX) hereby
proposes to prepare an independent conversion appraisal of The Home Savings and
Loan Company, Youngstown, Ohio (hereinafter referred to as HOME), relating to
the conversion of HOME 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 HOME.
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 bank and thrift
stock valuations.
XXXXXX agrees to prepare the conversion appraisal in the format
required by the OTS in a timely manner for prompt filing with the OTS and the
Securities and Exchange Commission and also agrees to prepare an analysis of the
effect of the establishment of a charitable foundation in connection with the
conversion in the conversion appraisal. XXXXXX will provide any additional
information as requested and will complete appraisal updates in accordance with
regulatory requirements.
The appraisal report will provide a detailed description of HOME,
including its financial condition, operating performance, asset quality, rate
sensitivity position,
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liquidity level and management qualifications. The appraisal will include a
description of HOME'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 HOME with the
comparable group.
In making its appraisal, XXXXXX will rely upon 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 HOME; the economic and demographic conditions in Home's existing marketing
area; pertinent historical financial and other information relating to HOME; a
comparative evaluation of the operating and financial statistics of HOME 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 HOME's
capital position and earnings potential; HOME'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 HOME, and will not independently value
the assets or liabilities of HOME in order to prepare the appraisal.
Upon completion of the conversion, XXXXXX will make a presentation to
the board of directors of HOME 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
$27,000, including our-of-pocket expenses. The appraisal fee will include the
preparation of one valuation update and any requested analysis regarding the
financial impact of a charitable foundation in the conversion appraisal. 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 $27,000, the balance of which
will be payable at the time of the completion of the appraisal.
HOME 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 our of any misstatement or untrue statement of a material
fact in information supplied to XXXXXX by HOME or by an intentional omission by
HOME 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 HOME and its employees and affiliates for
certain cost and expenses, including reasonable legal fees, in connection with
claims or litigation
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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 specified retainer.
XXXXXX & COMPANY, INC.
By:
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Xxxxxxx X. Xxxxxx
President
THE HOME SAVINGS AND LOAN
COMPANY
By:
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Xxxxxxx X. XxXxx
President
Date:
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