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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
October 15, 1997
The Board of Directors
The Home Loan Savings Bank
000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Re: Conversion Valuation Agreement
Attn: Xxxxxx X. Xxxxxxxx, President
Xxxxxx & Company, Inc. (hereinafter referred to as XXXXXX) hereby
proposes to prepare an independent conversion appraisal of The Home Loan Savings
Bank, Coshocton, 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.
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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 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, 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 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 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 appraisal, 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.
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For its services in making this appraisal, XXXXXX'x fee will be
$17,000. The appraisal fee will include the preparation of two valuation updates
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 $17,000, 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 out 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 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: Xxxxxxx X. Xxxxxx
President
THE HOME LOAN SAVINGS BANK
By: Xxxxxx X. Xxxxxxxx
President
