DEBIT SWIPE FEE REFORM A YEAR LATER June 8 Marks 1-year Anniversary of the Defeat of the Tester Amendment

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1 DEBIT SWIPE FEE REFORM A YEAR LATER June 8 Marks 1-year Anniversary of the Defeat of the Tester Amendment A year ago, while debit swipe fee reform supporters argued that the increased competition and transparency would benefit consumers and merchants while protecting exempted banks, reform opponents predicted the worst; higher fees for everyone and misery for community banks and credit unions. This week, one year after the defeat of the Tester Amendment, the facts are in and the outcome is clear; despite a flawed Federal Reserve rule, the reforms are working, consumers and merchants are feeling relief from Visa and MasterCard s price fixing and community banks and credit unions across America are thriving. CONSUMERS AND MAIN STREET BUSINESSES WIN: The evidence to date shows consumers win from debit reform. Retail profit margins are actually down since debit reform took effect demonstrating that retailers aren t keeping savings from reform. And merchants are experimenting with a variety of customer incentives to get consumers to use debit cards. These are all positive developments for consumers budgets and choices. CHECKING FEES DECREASE: In the second half of 2011, though, 39% of banks offered checking accounts with no monthly maintenance fee, up from 35% for the first part of the year, according to a survey of the 50 largest banks and 50 midsize and small banks by MoneyRates.com. Of those banks that charged a fee at the end of 2011, the average cost fell to $11.28 from $11.75, the survey found. The average minimum balance required to avoid a monthly fee also fell, to $ from $ in mid (Sandra Block and Hadley Malcolm, Battle over debit card swipe fees goes on, USA Today, 5/10/12) COMMUNITY BANKS AND CREDIT UNIONS THRIVE: National: Fed: Swipe fees down at big banks, remain same at community banks (Business Journals) Legislation Drives Consumers Toward Credit Union Debit Card Rewards Programs (Credit Unions Online)

2 Credit union membership spikes in first quarter (CNN) Arkansas: Simmons First National Corporation Credit card fees increased $136,000 due to a higher volume of credit and debit card transactions. (Press Release, Simmons First Announces First Quarter Earnings, 4/19/12) Florida: Suncoast Schools Federal Credit Union Suncoast Schools Federal Credit Union ($5 billion, Tampa, FL) reports an 11% increase in both sales and transactions with debit cards since fourth-quarter 2011 versus We believe bank customers have shopped our competitive pricings and attractive products, and we believe consumers are moving their accounts to Suncoast because we offer totally free checking, no strings attached, plus rewards, says Jon Rasmussen, VP/Card Services. (Ragusa, Gina, Legislation Drive Customers Toward Credit Union Debit Rewards Programs, Credit Unions Online, 5/18/12) Georgia: United Community Bank Fee revenue was $15.4 million in the first quarter of 2012, compared to $12.7 million in the fourth quarter and $11.8 million a year ago. Service charges and fees were $7.8 million, up $535,000 from the fourth quarter and $1.1 million from a year ago. The increase in service charges and fees from both periods reflects new charges on deposit accounts that became effective in the first quarter of 2012, and higher debit card revenue. Combined, these revenue increases more than offset lower overdraft fees. (Press Release, United Community Banks, Inc. Reports Earnings of $11.5 Million for First Quarter 2012, 4/26/12) Illinois: MB Financial Card fees increased due to restrictions of the Durbin Amendment to the Dodd-Frank Act on debit card interchange fees currently not applying to us as a result of total assets decreasing under $10 billion as of December 31, (Press Release, MB Financial, Inc. Reports First Quarter 2012 Net Income of $21.1 Million, Strong Pre-Tax, Pre-Provision Operating Earnings and Improving Credit Costs, 4/19/12)

3 Kentucky: Republic Bank Reported debit card interchange fee income growth of $72,000 in the first quarter of 2012 over the same period in (Press Release, Republic Bancorp, Inc. Reports Record First Quarter 2012 Net Income of $82.5 Million, a 15% Increase Over First Quarter 2011, 4/19/12) Reported debit card interchange fee income growth of $77,000 in the fourth quarter of 2011 over the same period in (Press Release, Republic Bancorp, Inc. Reports Record 2011 Net Income of $94.1 Million, a 45% Increase Over Fourth Quarter 2011 Net Income Increases 40% over Fourth Quarter /19/12) Massachusetts: Hanscom Federal Credit Union: Credit unions are noticing the consumer migration away from big banks and have positioned their products to entice the disillusioned consumer. Hanscom Federal Credit Union ($956 million, Hanscom AFB, MA) uses its free checking, along with flexible debit rewards program to reel in new members. (Ragusa, Gina, Legislation Drive Customers Toward Credit Union Debit Rewards Programs, Credit Unions Online, 5/18/12) Rockland Trust: Interchange and ATM fees increased by $316,000, or 15.4%, due to strong debit card growth related to successful sales and marketing programs. income (Press Release, Independent Bank Corp. Reports First Quarter net Income of $12.2 Million, 4/12/12) Maine: Bar Harbor Bank & Trust: For the year ended December 31, 2011, credit and debit card service charges and fees amounted to $1.3 million, up $117 thousand or 10.1% compared with This increase was principally attributed to continued growth of the Bank s retail deposit base, higher levels of merchant credit card processing volumes, and continued success with a program that offers rewards for certain debit card transactions. (Press Release, Bar Harbor Bankshares Announces Record 2011 Earnings Up 10.3% Versus /12/12)

4 Michigan: Independent Bank Corporation Reported debit card interchange fee income growth of $154,000 in the first quarter of 2012 over the same period in (Press Release, Independent Bank Corporation Reports 2012 First Quarter Results. 4/23/12 Montana: Glacier Bancorp Service charge fee income increased $253 thousand from the prior year first quarter primarily due to the gain in debit card income as a result of the larger number of deposit accounts and greater volume of transactions. (Press Release, Glacier Bancorp, Inc. Announces Results for the Quarter Ended March 31, 2012, 4/19/12) First Interstate BancSystem Other service charges, commissions and fees increased during the three and twelve months ended December 31, 2011, as compared to the same periods in 2010, primarily due to increases in debit and credit card interchange income and ATM service charges resulting from higher transaction volumes. Although regulations became effective on October 1, 2011 that reduced the maximum allowable debit card interchange fee per transaction for large issuers with over $10 billion in assets, the Company qualifies for the small-issuer exemption. Under this exemption the Company did not experience any immediate, significant impact to interchange revenues. (Press Release, First Interstate Bancsystem, Inc. Reports Preliminary Results for Fourth Quarter 2011, 1/30/12) New York: Community Banksystem, Inc. Deposit service fees of $10.4 million were up $0.7 million from the first quarter of 2011, as the addition of the Wilber branches and solid growth in debit card-related revenue more than offset generally lower utilization of overdraft protection programs. (Press Release, Community Bank System Reports Strong First Quarter Results, 4/24/12) Deposit service fees of $11.0 million were up $0.7 million from the fourth quarter of 2010, as the addition of the Wilber branches and solid growth in debit card-related revenue more than offset generally lower utilization of overdraft protection programs. (Press Release, Community Bank System Reports Fourth Quarter and Full Year Results, 1/22/12)

5 NBT Bancorp, Inc. ATM and debit card fees increased approximately $0.3 million for the three months ended March 31, 2012, as compared to the three months ended March 31, 2011, due primarily to an increase in card usage. (Press Release, NBT Bancorp Inc. Announces First Quarter Diluted Earnings Per Share of $0.41, Net Income of $13.7 Million; Organic Loan Growth of 4.2%, 4/23/12) ATM and debit card fees increased approximately $1.6 million, or 16.0%, for the year ended December 31, 2011 as compared to the same period in 2010 due to an increase in card usage as well as a change in the fee structure on foreign ATM transactions. (Press Release, NBT Bancorp Inc. Announces Second Highest Annual Earnings in Company's History of $1.71 and Net Income of $57.9 Million; Declares Cash Dividend, 1/23/12) Texas: First Financial Bancshares ATM, interchange and credit card fees increased percent to $3.68 million compared with $3.08 million in the same quarter last year. (Press Release, First Financial Bankshares Announces First Quarter Earnings Results, 4/23/12) ATM and credit card fees increased to $3.55 million during the fourth quarter of 2011 from $3.02 million in the same quarter last year. (Press Release, First Financial Bankshares Announces Fourth Quarter Results and 25th Year of Consecutive Earnings Growth, 4/23/12) Prosperity Bancshares, Inc. Non-interest income increased $78,000 or 0.6% to $ million for the three months ended March 31, 2012 compared with $ million for the same period in The increase was mainly attributable to an increase in debit card and ATM card income and a gain on sale of ORE, partially offset by a decrease in NSF fees. (Press Release, Prosperity Bancshares, Inc. First Quarter Earnings up 7.7%, 4/27/12) Non-interest income increased $160 thousand or 1.2% to $ million for the three months ended December 31, 2012 compared with $ million for the same period in The increase was mainly attributable to an increase in debit card and ATM card income and a gain on sale of ORE, partially offset by a decrease in NSF fees. (Press Release, Prosperity Bancshares, Inc. Reports Strong 2011 Earnings, 1/20/12)

6 Virginia: Union First Market Bank Service charges on deposit accounts and other account fees increased $558,000, related to higher VISA interchange fee income, overdraft and return check charges, letter of credit fees, and ATM charges. (Press Release, Union First Market Bankshares Reports First Quarter Results 4/24/12) Account service charges and other fees increased $1.2 million. Other charges and fees increased $1.4 million, primarily related to an increase in debit card fees of $763,000, ATM fees of $463,000, and brokerage commissions of $273,000, offset by a decline in account service charges of $279,000, largely related to overdraft fee volume. (Press Release, Union First Market Bankshares Reports Fourth Quarter Results 1/26/12) West Virginia: WesBanco This increase was principally due to a $0.5 million increase in electronic banking fees due to increased transaction volume and a $0.6 million improvement in the net gain / (loss) on other real estate owned, partially offset by a $0.3 million decrease in net gains on sale of mortgage loans. The quarterly increase was primarily due to a $0.8 million increase in net securities gains, a $0.5 million increase in electronic banking fees and a decrease in losses on other real estate owned of $0.3 million. (Press Release, WesBanco Announces Increased Earnings 1/24/12) Wisconsin: Dane County Credit Union Instead of experiencing any rapid spikes, Dane County Credit Union ($120 million, Madison, WI) is also experiencing steady program growth. So far we are on target to have an increased interchange income compared to 2011, says Angela Mayfield, accounting manager. We continue to grow our program but haven't noticed any spikes or rapid increases. (Ragusa, Gina, Legislation Drive Customers Toward Credit Union Debit Rewards Programs, Credit Unions Online, 5/18/12)