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Chart 29: What is the single biggest factor that would prevent you from buying or increasing exposure to FHB? 45% 40% 35% 30% 29% 20% 15% 10% 5% 0% FHB's premium valuation Exposure to the auto sector —_ Liquidity overhang tied to a single large shareholder (BNP owns 82% of shares o/s) Source: BofA Merrill Lynch Global Research Chart 30: What would you like management to prioritize in 2017? 40% 38% 35% 30% 25% 20% 15% 10% 5% 0% Managing core Increase its dividend Initiate a stock buyback Pursue M&A expense growth to —_ payout to over 50% of program opportunities under 2.5% earnings Source: BofA Merrill Lynch Global Research Great Western Bancorp (GWB), B-1-7, Buy GWB sees three potential benefits following the US presidential election results. Chief Financial Officer Peter Chapman sounded optimistic that clarity around the corporate tax policy could act as a much needed impetus to spur lending activity. Secondly, current prospects for Head of Ag under the new administration are viewed as a net positive for the industry. Lastly, while GWB has already begun to see regulatory costs increase now that they’ve exceeded $10bn in assets, management could see a potential for compliance costs to rationalize should the new administration reform the regulatory framework. = Management’s revised growth rate outlook was meant to level set expectations. During its 3Q16 earnings call, management tempered loan growth expectations slightly to “mid-single” digits for FY16 vs. “mid-to-high” single digits. Interestingly, this was the number one reason among investors polled as to why they were hesitant to increase their exposure to GWB. That said, management sounded optimistic about the growth opportunities within its AZ and CO markets. While growth in C&I should see continued momentum, management noted increased competition around pricing as banks tapped out of the CRE markets look to make C&I loans. On CRE, GWB sees itself as a potential beneficiary from pullback by some of its competitors. While management was generally constructive of the Bankof America iar Merrill Lynch 2016 Future of Financials Conference | 17 November 2016 19 HOUSE_OVERSIGHT_014333