UNITED STATES DEPARTMENT OF THE TREASURY

OFFICE OF FINANCIAL STABILITY

Warrant Disposition Report

Troubled Asset Relief Program

Office of Financial Stability

Update December 31, 2010

Warrant Disposition Report - Update DECEMBER 31

The United States Department of the Treasury (Treasury) is pleased to present this supplement to the 

Warrant Disposition Report dated January 20, 2010 with information about the seven warrant repurchases and 

two warrant auctions that Treasury’s Office of Financial Stability (OFS) conducted under the Troubled Asset 

Relief Program (TARP) in the six months ending December 31, 2010.1

Executive Summary 

The Emergency Economic Stabilization Act of 2008 (EESA) requires that in most circumstances Treasury receive 

warrants in connection with the purchase of troubled assets. Treasury’s warrant sales provide additional returns 

beyond dividend payments from Treasury’s preferred stock investments. Treasury’s successful warrant dispositions 

have significantly benefited taxpayers. During the six months ending December 31, 2010, Treasury received 

more than $1.1 billion in gross proceeds from the disposition of nine warrant positions.2

 

Major parts of TARP were the Capital Purchase Program (CPP) and the Targeted Investment Program (TIP). Under 

these programs, Treasury invested $245 billion in 707 financial institutions. 

Since the program’s inception, Treasury has received more than $8.1 billion in gross proceeds from the disposition 

of warrants associated with 59 CPP investments and one TIP investment, consisting of (i) $3.1 billion from issuer 

repurchases at agreed upon fair market values and (ii) $5.0 billion from auctions. For the 59 fully repaid CPP 

investments representing $137.9 billion in capital, Treasury has received an absolute return of 4.6% from dividends 

and an added 5.2% return from the sale of the warrants for a total absolute return of 9.8%.3

 For the $20 billion 

TIP investment in Bank of America Corporation, Treasury received an absolute return of 7.2% from dividends and 

an added 6.3% return from the sale of the warrants for a total absolute return of 13.5%.3

 These returns are not 

predictive of the eventual returns on the entire CPP and TIP portfolios. 

Repurchases

Upon repaying its TARP preferred stock investment, a financial institution may repurchase its warrants at an 

agreed upon fair market value. In all such cases, Treasury follows a consistent evaluation process to ensure that 

taxpayers receive fair market values for the warrants. In the six months ending December 31, 2010, Treasury 

received $191.8 million from seven banks through warrant repurchases at agreed upon fair market values.

Auctions

If an institution decides not to repurchase its warrants, Treasury has determined to dispose of the warrants as soon 

as practicable. Treasury has been successful in effectively disposing of warrants at fair market values through public 

auctions. In the 16 warrant auctions held to date, investor demand above Treasury’s minimum price has exceeded 

the supply of warrant shares by an average of 6.0 times with oversubscription rates ranging from 2.0 to 18.3 times. 

Auctioned warrants are actively traded on national exchanges, providing a liquid secondary market and observable 

market pricing for long-dated warrants. In the six months ending December 31, 2010, Treasury auctioned two warrant 

positions, generating over $930.3 million in proceeds.

Remaining Positions

As of December 31, 2010, Treasury held warrants to purchase common stock in 22 financial institutions that 

have fully repaid their CPP investments and in 195 publicly traded companies in which the CPP investment is 

1) TARP’s Warrant Disposition Report is posted on the OFS website at the following link: www.treasury.gov/initiatives/financial-stability/briefing-room/

 reports/other/Pages/default.aspx 

2) The repurchases of warrant preferred shares associated primarily with private institutions that Treasury exercised at the time of purchase are 

excluded from these numbers. In the six months ending December 31, 2010, nine private banks repurchased their warrant preferred shares. 

Since the program’s inception, 20 private banks have repurchased their warrant preferred shares. See table on page 15. 

3) Returns are not annualized. 
2 Warrant Disposition Report - Update DECEMBER 3

still outstanding.4 Treasury intends to continue to execute a consistent and transparent disposition process 

which achieves fair market values and protects taxpayer interests. 

The table below sets forth proceeds from the seven warrant repurchases and two warrant auctions completed 

during the last six months of 2010.5

 

Summary of Gross Proceeds from Sale of Public Warrants since July 1, 2010

4) Treasury also holds warrants for common shares in public companies in connection with other TARP programs. For example, as of 

December 31, 2010, Treasury held warrants in Citigroup Inc. associated with CPP (210.1 million shares with an exercise price of $17.85), 

TIP (188.5 million shares with an exercise price of $10.61), and AGP (66.5 million shares with an exercise price of $10.61). In addition, 

Treasury held exercised warrant preferred shares in 369 CPP institutions as of December 31, 2010.

5) The repurchase of the warrants by Central Jersey Bancorp was completed as part of a cash acquisition of the bank.

Institution Name Ticker

Preferred

Redemption Date

Preferred Amount

Redeemed

($thousands)

Warrant

Repurchase/Auction 

Date

Gross Warrant 

Proceeds

($thousands)

QEO?

(i.e. warrants 

cut by 50%)

REPURCHASES

Discover Financial Services DFS 4/21/2010 1,224,558 7/7/2010 $172,000 - 

Fulton Financial Corporation FULT 7/14/2010 376,500 9/8/2010 10,800 - 

The Bancorp, Inc. TBBK 3/10/2010 45,220 9/8/2010 4,754 Yes 

Columbia Banking System COLB 8/11/2010 76,898 9/1/2010 3,302 Yes 

Citizens & Northern Corporation CZNC 8/4/2010 26,400 9/1/2010 400 - 

Central Jersey Bancorp CJBK 11/24/2010 11,300 12/1/2010 320 - 

Bar Harbor Bankshares BHB 2/24/2010 18,751 7/28/2010 250 Yes 

TOTAL 7 $1,779,627 $191,825 3

AUCTIONS

Hartford Financial Services Group, Inc. HIG 3/31/2010 3,400,000 9/21/2010 $713,687 - 

Lincoln National Corporation LNC 6/30/2010 950,000 9/16/2010 216,621 - 

TOTAL 2 $4,350,000 $930,308 -
Warrant Disposition Report - Update DECE

Background 

As required by EESA, Treasury received warrants from TARP banks to provide taxpayers with an additional 

potential return on the government’s investment.6

 

For each CPP and TIP investment in a publicly traded company, Treasury received warrants to purchase, at a 

fixed exercise price, shares of common stock equal to 15 percent of the aggregate liquidation preference of the 

senior preferred investment. The per share exercise price was set at the 20-trading day trailing average of the 

bank’s common stock price as of the time it was given preliminary approval for the TARP investment. The 

warrants may be exercised at any time over a ten year period. These public warrants include certain customary 

anti-dilution provisions for Treasury’s protection. 

For CPP investments in a privately-held company, an S-corporation, or certain mutual institutions, Treasury 

received warrants to purchase, at a nominal cost, additional preferred stock (warrant preferreds) or subordinated 

debentures (warrant sub debt) equivalent to five percent of the aggregate liquidation preference of the primary 

CPP investment. These warrant preferreds and warrant sub debt securities pay a higher dividend or interest rate 

than the primary CPP investment. Treasury exercised these kinds of warrants at the closings of the investments.

Institutions may repay Treasury for its CPP investment under the conditions established in the CPP purchase 

agreements as amended by the American Recovery and Reinvestment Act of 2009 (ARRA). The repayment 

price is equal to what Treasury invested, plus any unpaid dividends or interest. Originally, the CPP contracts 

provided that an institution could not redeem the investment within the first three years except with the proceeds 

of a “qualified equity offering” (QEO), which is an offering of securities that would qualify as Tier 1 capital. The 

repayment terms of the contracts were later effectively amended by the ARRA, which provides that an institution 

can repay from any source of funds and without regard to any waiting period. For TIP investments, an institution was required to first redeem its CPP investment before being able to redeem the TIP preferred stock.7

 

In addition, in order to encourage institutions to seek additional private capital, the CPP contracts provided that 

participants could halve the number of shares subject to their warrants by completing one or more QEOs before 

December 31, 2009 with aggregate gross proceeds equivalent to the value of Treasury’s CPP investment. Thirtyeight CPP participants completed a QEO in time to reduce their warrants. 

The CPP and TIP contracts further provide that once the preferred investment is redeemed or sold by Treasury, 

the institution has a right to repurchase its warrants at the fair market value. In addition, Treasury has the 

contractual right to sell the warrants. 

The ARRA affected Treasury’s authority to dispose of warrants, as it provided that when an institution repaid, 

“the Secretary shall liquidate warrants [of such institution]... at the current market price.” The ARRA was 

subsequently amended in May 2009 through the Helping Families Save Their Homes Act of 2009 (HFSTHA), 

which provides that the Secretary “may liquidate the warrants” following repayment. 

6) EESA provides that the Secretary may establish a “de minimus” exception to the requirement to issue warrants in the case of an 

institution that receives less than $100 million in TARP funds. Treasury has exercised that authority by not requiring warrants in 

the case of investments in Community Development Financial Institutions in order to encourage their participation in CPP.

7) Bank of America redeemed both its CPP and TIP at the same time on December 9, 2010. Citigroup was able to redeem the TIP preferred 

stock on December 23, 2009 and Treasury has sold its CPP investment in the bank which had been exchanged into common stock. 
4 Warrant Disposition Report - Update DECEMBER 31, 2010 W

Warrant Disposition Process

Upon redemption of the preferred stock issued to Treasury, an institution has a contractual right to repurchase 

its warrants at the fair market value.8

 The banks have 15 days from repayment of the preferred stock to submit 

a bid, and Treasury then has 10 days to respond. In June 2009, Treasury announced that, in the event that an 

issuer does not repurchase its warrants, Treasury would sell the warrants to third parties “as quickly as practicable” and, when possible, by public auction.

Issuer Repurchases

If a company wishes to repurchase its warrants, the issuer and Treasury must agree on the warrants’ fair market value. Accordingly, Treasury has established a methodology for evaluating a bank’s determination of fair 

market value. As described below, Treasury’s evaluation of an issuer’s bid is based on three categories of input: 

(i) market quotes, (ii) independent, third party valuations, and (iii) model valuations.

If the issuer and Treasury fail to agree on a price, an appraisal procedure may be invoked by either party within 

30 days following Treasury’s response to the issuer’s first bid. In the appraisal process, each party selects an 

independent appraiser. These independent appraisers conduct their own valuations and attempt to agree upon 

the fair market value. If they agree on a fair market value, that valuation becomes the basis for repurchase. If 

these appraisers fail to agree, a third appraiser is hired, and subject to some limitations, a composite valuation 

of the three appraisals is used to establish the fair market value. To date, no institution has invoked the appraisal procedure. 

Even if an agreement is not reached within the specified timeframe, a bank that has repaid its preferred stock 

may bid to repurchase its warrants at any time, and Treasury will determine whether to accept the bid. 

Sale to Third Party

Treasury retains the right to sell the warrants to a third party at a mutually agreed upon price. Following repayment of the preferred stock, if a bank notifies Treasury that it does not intend to repurchase its warrants or 

cannot agree with Treasury on the fair market value, Treasury intends to dispose of the warrants, when possible, 

through public auctions. 

Treasury held the first warrant auctions in December 2009 and has held 16 auctions to date. These auctions 

were conducted as public modified “Dutch” auctions which were registered under the Securities Act of 1933. 

Only one bank’s warrants were sold in each auction. In this format, bidders were able to submit one or more 

independent bids at different price-quantity combinations and the warrants were sold at a uniform price that 

cleared the auction.

8) Privately-held companies, S-corporations, and certain mutual institutions typically redeem their warrant preferreds or subordinated 

debentures at par when redeeming the primary CPP investment. (See Appendix I for table of warrant preferred repurchases as of 

December 31, 2010.)
Warrant Disposition Report - Update DECEMBER 31, 2010 5Treasury’s 

Treasury’s Evaluation of Issuer’s Bid

Treasury adheres to a consistent process for evaluating bids from institutions to repurchase their warrants. Upon 

receiving a bid for a warrant repurchase, Treasury utilizes (i) market quotes, (ii) independent, third party valuations, and (iii) model valuations to assess the bid. 

(i) Market Quotes

There is little comparable market data for long-dated options. In order to perform its valuation analysis, Treasury 

seeks indications of value from various market participants active in the options markets. The range of estimated 

valuations is included in Treasury’s analysis along with the average of the market indications collected. Treasury 

also utilizes the market information from the trading of auctioned TARP warrants as another indication how of 

the market values long-dated warrants.

(ii) Third Party Valuations

Treasury engages outside consultants or external asset managers to provide independent, third party valuations 

for the warrants. The third party provides Treasury with an estimated valuation along with a range of potential 

values given a reasonable variance in the assumptions underlying their models. 

(iii) Model Valuations

Treasury uses a number of financial models to estimate warrant valuations. Primarily, Treasury uses a binomial 

option model adjusted for American style options, which is a well-accepted method for valuing options by both 

academics and market participants. Valuation estimates generated from the binomial model are presented in the 

Treasury’s analysis along with a range of potential values given a reasonable variance in key model inputs, such as 

assumptions about the expected future volatility and dividend yield of the underlying stock. Treasury’s internal 

valuation modeling was reviewed by Dr. Robert Jarrow, an options expert and professor at Cornell University, 

who concluded that “the Treasury’s modeling methodology for valuing the warrants is consistent with industry 

best practice and the highest academic standards.” More information on Treasury’s internal valuation modeling 

and the report written by Dr. Jarrow can be found at www.treasury.gov/initiatives/financial-stability/investmentprograms/cpp/Pages/capitalpurchaseprogram.aspx. 

Treasury and its external asset managers use the 20-trading day trailing average stock price of a company in their 

valuations to minimize the effects of day-to-day market fluctuations. Market participants who provide Treasury 

with market indications utilize the stock price at the time that they provide the valuation. If the discussions with 

an institution continue over an extended period of time, Treasury and its external asset managers will update their 

estimates as necessary. Treasury may also collect new market quotes or adjust the market quotes based on changes 

in market conditions from when the quotes were collected. (See Appendix I for information on the timing of 

issuers’ bids.)

Determination by Warrant Committee

Based on the range of estimated warrant values provided by these sources, a committee of Treasury officials within 

the Office of Financial Stability (OFS), who comprise the OFS Warrant Committee, makes a recommendation to 

the Assistant Secretary for Financial Stability as to whether to agree with the bank’s determination of fair market 
6 Warrant Disposition Report - Update DECEMBER 31, 2010 Treasury’s 

value. Each member of the Warrant Committee and the Assistant Secretary weigh the three valuation metrics 

as they deem appropriate. 

Additional factors presented to the Warrant Committee, along with the three valuation metrics discussed 

above include: 

• how quickly Treasury would have to monetize the warrants if the issuer does not repurchase based on 

legislation in place at the time as discussed in the “Background” section of this report,

• the expertise and experience of the outside consultant providing the third party valuation,

• the quality and number of market indications received, 

• any significant movements in the stock price of the issuer since market indications were collected, 

• deviations of the current stock price from the 20-trading day trailing average of the company’s stock price,

• the size of the warrant position and potential investor interest in the warrants, 

• the liquidity of the underlying common stock, and

• fixed transaction costs associated with selling the warrants to a third party.
Warrant Disposition Report - Update DECEMBER 31, 201

Repurchases of Warrants

Treasury began selling warrants back to banks that had repaid the TARP investment in May 2009. In 

aggregate, as of December 31, 2010, Treasury has realized $3.1 billion in gross proceeds from 44 warrant repurchases. This compares favorably to initial bids of $1.9 billion and estimates of aggregate value of $2.4 billion 

based on market indications, $3.0 billion based on third party estimates, and $2.8 billion based on Treasury’s 

internal financial model. Warrants repurchased by the issuer have yielded an extra absolute return of 7.1% on 

Treasury’s investment. 

When selling warrants back to the issuer, Treasury has achieved fair market values and protected the taxpayer. 

Dr. Jarrow noted that “[Treasury’s] valuation process results in a warrant valuation that is fair to both the 

participating banks and the U.S. taxpayers.” Further, the Special Inspector General for the Troubled Asset 

Relief Program (SIGTARP) audit released on May 15, 2010 entitled Assessing Treasury’s Process to Sell Warrants 

Received from TARP Recipients concluded that Treasury successfully negotiated prices from institutions that 

wished to repurchase their warrants that were at or above Treasury’s estimated range of fair market value for 

such warrants.9

 The report also described the valuation methodology to estimate fair market value and offered 

no suggestions for modifying that methodology.10

9) SIGTARP report, Assessing Treasury’s Process to Sell Warrants Received from TARP Recipients, dated May 15, 2010.

10) SIGTARP offered some suggestions regarding documentation of the negotiation process, and regarding insuring consistency in the 

 information provided to issuers seeking to repurchase their warrants. Treasury reviewed these suggestions carefully and has made 

 appropriate changes to its procedures for recording Warrant Committee meeting minutes and conversations with banks regarding the 

 repurchases of their warrants. 
8 Warrant Disposition Report - Update DECEMBER 31,

Auctions of Warrants

Following repayment of its preferred stock, if a bank notifies Treasury that it does not intend to repurchase its 

warrants or cannot agree with Treasury on the fair market price, Treasury disposes of the warrants, when possible, 

through public auctions. Since December 2009, Treasury has auctioned 16 warrant positions in 15 financial 

institutions, generating aggregate proceeds of approximately $5.0 billion.11 Demand in the warrant auctions has 

exceeded the number of warrant shares being auctioned by an average of 6.0 times with an oversubscription range 

of 2.0 to 18.3 times. Warrants sold through auctions have yielded an extra absolute return of 4.4% on Treasury’s 

investment. 

The auctions have also provided valuable insights into how the market values long-dated warrants, as scores of 

different bidders have placed hundreds of unique bids in each auction. The auctions have resulted in estimated 

placements of approximately 43% to fundamental institutional investors, 28% to convertible-focused investors, 

19% to derivative-focused investors, and 10% to individual investors.12 Typically, many of the fundamental 

institutional investors who buy warrants in an given auction are also holders of the bank’s common stock.

Active secondary trading in the warrants has further validated the auction prices and provides ongoing 

observable market prices for long-dated warrants. Each of the warrants sold through public auction has been 

listed on the New York Stock Exchange or the NASDAQ. Trading volumes tend to be very high during the first 

few days following an auction and then to fall into a lower range. Excluding the first five trading days after each 

auction, the daily trading volume of the warrants has averaged 0.6% of the outstanding securities. Across the 16 

TARP warrant positions currently outstanding with public investors, several million warrants change hands on a 

typical trading day. 

In a Treasury report entitled Treasury Analysis of Warrant Auction Results, the OFS and the Office of Economic 

Policy have also examined three CPP warrant auctions and one TIP warrant auction, each of which generated 

proceeds in excess of $100 million.13  This report concluded that no single bidder had a large impact on the 

final clearing price in these four auctions.  Further, the report showed that increasing the amount of smaller 

bidders participating in the auctions would not have had a material impact on the final clearing price.  These 

two conclusions suggest that the auctions were robust and achieved a fair market price. 

Treasury has successfully disposed of warrants through the auction process. Clearing prices have been set 

through robust competition between a large number of bidders, and fair market value has been achieved for 

taxpayers. Additionally, an active and liquid secondary market for the warrants has been established, providing 

greater confidence in the market value of the total Treasury warrant portfolio and thereby supporting future 

auctions. 

11) Treasury held two separate auctions for different Bank of America Corporation CPP and TIP warrants. See footnote 5.

12) The estimated placements to different investor types are calculated exluding any allocations to the issuing institution.

13) The report Treasury Analysis of Warrant Auction Results can be found on the Treasury website: 

www.treasury.gov/resource-center/economic-policy/Documents/Auction-Analysis-3-18-2010.pdf
Warrant Disposition Report - Update DECEMBER 31, 2010 

Modified “Dutch” Auctions For the first sixteen warrant auctions, 

Treasury utilized modified “Dutch” 

auctions to dispose of the warrants. 

The public auctions were registered 

under the Securities Act of 1933. 

Only one bank’s warrants were sold 

in each auction. With advice from 

its external asset managers and the 

auction agent, Treasury publicly 

disclosed a minimum bid and 

privately set a reserve price for each 

auction. Bidders were able to submit 

one or more independent bids at 

different price-quantity combinations 

at or above the set minimum price. 

The auction agent did not provide 

bidders with any information about 

the bids of other bidders or auction 

trends, or with advice regarding 

bidding strategies, in connection 

with the auction. The issuers of the 

warrants were able to bid for their 

warrants in the auctions. Bids were 

accepted by the auction agent from 

8:00 a.m. to 6:30 p.m. on the day of 

the auction. The warrants were sold 

to all winning bids at the uniform 

price that cleared the auction. 

Deutsche Bank Securities Inc. was 

Treasury’s auction agent for the first 

sixteen auctions. Deutsche Bank 

received fees equal to approximately 

1.3% of the gross proceeds ($66.6 

million) which is significantly below 

typical secondary equity offering 

fees that run around 3.5% to 4.5% 

depending on the size of the offering. 

For illustrative purposes only, Figures 

1 and 2 are example charts of the 

demand in a theoretical auction of an 

8 million share position with a minimum price of $3.00 per share and a 

clearing price of $5.75 per share.

Modifie

Figure 1: Illustrative Cumulative Auction 

Demand by Price 

Figure 2: Illustrative Auction Demand by Price

0	
  

5	
  

10	
  

15	
  

20	
  

25	
  

30	
  

$3.00	
   $3.25	
   $3.50	
   $3.75	
   $4.00	
   $4.25	
   $4.50	
   $4.75	
   $5.00	
   $5.25	
   $5.50	
   $5.75	
   $6.00	
   $6.25	
   $6.50	
   $6.75	
   $7.00	
   $7.25	
   $7.50	
   $7.75	
   $8.00	
  

Example	
  of	
  Cumula-ve	
  Demand	
  by	
  Price	
  

Example	
  Auc7on	
  Clearing	
  Price	
  $5.75	
  	
  
10 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix I – Detailed Tables of Warrant

Appendix I – Detailed Tables of Warrant Repurchases and Auctions 

Issuer Bids and Warrant Sales Ordered by Sale Date

Note: The first bid date is the date that an issuer submitted its bid. Subsequent bid dates are the dates the Warrant Committee met to consider those bids.

Issuer Bids Date of Issuer Bids

Company Ticker

CPP 

Preferred 

($thousands)

Redemption 

Date Bid #1 Bid #2 Bid #3 Bid #4

Final Price

($thousands) Bid #1 Bid #2 Bid #3 Bid #4

Warrant 

Repurchase 

Date

Old National Bancorp ONB $100,000 3/31/2009 $559 $1,200 $1,200 4/15/2009 5/6/2009 5/8/2009

IBERIABANK Corporation IBKC 90,000 3/31/2009 620 1,200 1,200 4/14/2009 5/12/2009 5/20/2009Sun Bancorp SNBC 89,310 4/8/2009 1,049 2,100 2,100 4/21/2009 5/19/2009 5/27/2009FirstMerit Corp FMER 125,000 4/22/2009 3,186 5,025 5,025 5/15/2009 5/21/2009 5/27/2009Independent Bank Corp INDB 78,158 4/22/2009 880 2,200 2,200 5/2/2009 5/21/2009 5/27/2009Alliance Financial Corporation ALNC 26,918 5/13/2009 320 900 900 5/26/2009 6/12/2009 6/17/2009SCBT Financial Corporation SCBT 64,779 5/20/2009 694 1,400 1,400 6/3/2009 6/16/2009 6/24/2009Berkshire Hills Bancorp BHLB 40,000 5/27/2009 875 1,040 1,040 6/8/2009 6/17/2009 6/24/2009Somerset Hills Bancorp SOMH 7,414 5/20/2009 193 275 275 6/4/2009 6/17/2009 6/24/2009First Niagra Financial Group FNFG 184,011 5/27/2009 1,500 2,700 2,700 6/4/2009 6/19/2009 6/24/2009HF Financial Corp. HFFC 25,000 6/3/2009 465 600 650 650 6/9/2009 6/29/2009 6/29/2009 6/30/2009State Street Corporation STT 2,000,000 6/17/2009 60,000 60,000 6/22/2009 7/8/2009

U.S. Bancorp USB 6,599,000 6/17/2009 115,000 131,000 139,000 139,000 6/18/2009 7/1/2009 7/8/2009 7/15/2009

BB&T Corporation BBT 3,133,640 6/17/2009 20,854 41,707 64,925 67,010 67,010 6/24/2009 7/8/2009 7/14/2009 7/14/2009 7/22/2009

Goldman Sachs Group, Inc. GS 10,000,000 6/17/2009 600,000 900,000 1,100,000 1,100,000 6/17/2009 7/20/2009 7/21/2009 7/22/2009

American Express Company AXP 3,388,890 6/17/2009 230,000 260,000 340,000 340,000 7/1/2009 7/20/2009 7/27/2009 7/29/2009

Bank of New York Mellon BK 3,000,000 6/17/2009 79,000 118,000 130,000 136,000 136,000 6/30/2009 7/29/2009 7/30/2009 7/31/2009 8/5/2009

Morgan Stanley MS 10,000,000 6/17/2009 500,000 800,000 900,000 950,000 950,000 6/30/2009 8/3/2009 8/4/2009 8/5/2009 8/12/2009

Northern Trust Corporation NTRS 1,576,000 6/17/2009 37,000 75,000 87,000 87,000 6/18/2009 8/17/2009 8/19/2009 8/26/2009Old Line Bancshares OLBK 7,000 7/15/2009 175 205 225 225 7/29/2009 8/19/2009 8/20/2009 9/2/2009Bancorp Rhode Island, Inc. BARI 30,000 8/5/2009 857 1,125 1,400 1,400 8/19/2009 9/16/2009 9/21/2009 9/30/2009Manhattan Bancorp MNHN 1,700 9/16/2009 63 63 9/29/2009 10/14/2009

CenterState Banks, Inc. CSFL 27,875 9/30/2009 168 212 212 10/9/2009 10/20/2009 10/28/2009

CVB Financial Corp. CVBF 130,000 9/2/2009 1,002 1,307 1,307 9/17/2009 10/21/2009 10/28/2009Bank of the Ozarks, Inc. OZRK 75,000 11/4/2009 2,161 2,650 2,650 11/5/2009 11/18/2009 11/24/2009Wainwright Bank and Trust WAIN 22,000 11/24/2009 569 569 12/3/2009 12/16/2009

LSB Corporation LSBX 15,000 11/18/2009 500 560 560 12/4/2009 12/8/2009 12/16/2009

Wesbanco, Inc. WSBC 75,000 9/2/2009 825 950 950 950 9/22/2009 10/20/2009 12/11/2009 12/23/2009Union Bankshares Corporation UBSH 59,000 11/18/2009 400 450 450 11/24/2009 12/16/2009 12/23/2009Flushing Financial Corporation FFIC 70,000 10/28/2009 597 700 860 900 900 11/10/2009 12/14/2009 12/23/2009 12/28/2009 12/30/2009

Trustmark Corporation TRMK 215,000 12/3/2009 8,167 9,200 9,600 10,000 10,000 12/23/2009 12/28/2009 12/28/2009 12/29/2009 12/30/2009

OceanFirst Financial Corp. OCFC 38,263 12/30/2009 431 431 1/21/2010 2/3/2010

Monarch Financial Holdings, Inc. MNRK 14,700 12/23/2009 209 250 260 260 1/6/2010 1/22/2010 2/1/2010 2/10/2010Umpqua Holdings Corp. UMPQ 214,181 2/17/2010 2,055 3,610 4,250 4,500 4,500 3/2/2010 3/19/2010 3/22/2010 3/22/2010 3/31/2010

City National Corporation CYN 400,000 3/3/2010 11,900 17,500 18,500 18,500 3/17/2010 4/5/2010 4/6/2010 4/7/2010

First Litchfield Financial Corporation FLFL 10,000 4/7/2010 1,488 1,488 4/7/2010 4/7/2010

SVB Financial Group SIVB 235,000 12/23/2009 3,800 6,200 6,820 6,820 2/18/2010 6/4/2010 6/8/2010 6/16/2010

Discover Financial Services DFS 1,224,558 4/21/2010 165,000 180,000 165,000 172,000 172,000 4/23/2010 5/4/2010 6/9/2010 6/29/2010 7/7/2010Bar Harbor Bankshares BHB 18,751 2/24/2010 67 175 225 250 250 3/10/2010 4/23/2010 7/20/2010 7/22/2010 7/28/2010

Citizens & Northern Corporation CZNC 26,400 8/4/2010 400 400 8/19/2010 9/1/2010Columbia Banking System COLB 76,898 8/11/2010 3,302 3,302 8/19/2010 9/1/2010The Bancorp, Inc. TBBK 45,220 3/10/2010 3,546 4,852 4,754 4,754 3/15/2010 3/29/2010 9/2/2010 9/8/2010Fulton Financial Corporation FULT 376,500 7/14/2010 8,000 9,500 10,800 10,800 8/6/2010 9/2/2010 9/3/2010 9/8/2010Central Jersey Bancorp CJBK 11,300 11/24/2010 320 320 12/1/2010 12/1/2010

Total 44 $43,947,466 $1,868,195 $3,140,811 
Warrant Disposition Report - Update DECEMBER 31, 2010 11Appendix I – Detailed Tables of Warrant Repurchases and Auctions Issuer Bids and Warrant Auctions Ordered by Auction Date Issuer Bids Date of Issuer Bids Company Ticker CPP/TIP Preferred ($thousands) Redemption Date Bid #1 Bid #2 Bid #3 Bid #4 Auction Proceeds ($thousands) Bid #1 Bid #2 Bid #3 Bid #4 Auction Date Capital One Financial Corp. COF 3555,199 6/17/2009 46,500  148,731 6/30/2009 12/3/2009 JPMorgan Chase & Co. JPM 25,00,000 6/17/2009 825,539  950,318 6/17/2009 12/10/2009 TCF Financial Corporation TC 361,172 4/22/2009 3,200  9,600 5/5/2009 12/15/2009 Bank of America Corporation BAC25,000,000 12/9/2009 N/A  310,572 N/A 3/3/2010 Bank of America Corporation BAC20,000,000 12/9/2009 N/A  1,255,639 N/A 3/3/2010 Washington Federal, Inc. WSL 200,000 5/27/2009 N/A  15,623 N/A 3/9/2010 Signature Bank SNY 120,000 3/31/2009 N/A  11,321 N/A 3/10/2010 Texas Capital Bancshares CBI 75,000 5/13/2009 N/A  6,709 N/A 3/11/2010 PNC Financial Services Group, Inc. PN 7,579,200 2/10/2010 N/A  324,196 N/A 4/29/2010 Comerica Incorporated CM 2,250,000 3/17/2010 N/A  183,673 N/A 5/6/2010 Valley National Bancorp VLY300,000 12/23/2009 2,291  5,572 1/7/2010 5/18/2010 Wells Fargo & Company WFC 25,00,000 1223/2009 93,600  700,000  750,000  849,015 1/7/2010 2/12/2010 2/22/2010 5/20/2010 First Financial Bancorp FBC 80,000 2/24/2010 N/A  3,116 N/A 6/2/2010 Sterling Bancshares, Inc. SBB 125,198 5/5/2009 4,000  3,008 6/5/2009 6/9/2010 Lincoln National Corporation NC 950,000 6/30/2010 N/A  216,621 N/A 9/16/2010 Hartford Financial Services Group, Inc. HI 3,400,000 3/31/2010 N/A  713,687 N/A 9/21/010Total 16 11
12

Warrant Disposition Report 

Appendix I – Detailed Tables of Warrant Repurchases and Auctions 

Warrant Sales Ordered By Amount of Proceeds

Decision Date

Institution Name Ticker Decision Date Payment Date Expiration Date Strike Price QEO? (i.e. warrants cut by 50%) Final Warrant Shares Warrant Repurchase Price/Share Warrant Repurchase Proceeds Estimated Implied Volatility* Stock Price 20-day Avg Stock Price Warrant Price / Stock Price Underlying / Strike

Goldman Sachs Group, Inc. GS 7/21/2009 7/22/2009 10/28/2018 $122.90 - 12,205,045 $90.13 $1,100,000,000 40.6% - 44.5% $159.80 $148.16 0.56 1.30 xMorgan Stanley MS 8/5/2009 8/12/2009 10/28/2018 22.99 - 65,245,759 14.56 950,000,000 33.3% - 38.7% 31.05 28.16 0.47 1.35 xAmerican Express Company AXP 7/27/2009 7/29/2009 1/9/2019 20.95 - 24,264,129 14.01 340,000,000 37.6% - 40.7% 28.38 25.71 0.49 1.35 xDiscover Financial Services DFS 6/29/2010 7/7/2010 3/13/2019 8.96 - 20,500,413 8.39 172,000,000 45.6% - 52.7% 13.80 13.66 0.61 1.54 x

U.S. Bancorp USB 7/8/2009 7/15/2009 11/14/2018 30.29 - 32,679,102 4.25 139,000,000 39.3% - 42.6% 16.59 17.69 0.26 0.55 xBank of New York Mellon BK 7/31/2009 8/5/2009 10/28/2018 31.00 - 14,516,129 9.37 136,000,000 35.7% - 39.6% 27.34 27.98 0.34 0.88 xNorthern Trust Corporation NTRS 8/19/2009 8/26/2009 11/14/2018 61.81 - 3,824,624 22.75 87,000,000 31.1% - 35.9% 60.38 60.00 0.38 0.98 x

BB&T Corporation BBT 7/14/2009 7/22/2009 11/14/2018 33.81 - 13,902,573 4.82 67,010,402 32.0% - 35.1% 21.65 21.64 0.22 0.64 xState Street Corporation STT 7/1/2009 7/8/2009 10/28/2018 53.80 Yes 2,788,104 21.52 60,000,000 37.9% - 43.8% 47.35 46.98 0.45 0.88 xCity National Corporation CYN 4/6/2010 4/7/2010 11/21/2018 53.16 - 1,128,668 16.39 18,500,000 23.5% - 27.9% 55.70 53.90 0.29 1.05 xFulton Financial Corporation FULT 9/3/2010 9/8/2010 12/23/2018 10.25 - 5,509,756 1.96 10,800,000 27.9% - 30.8% 8.72 8.52 0.22 0.85 xTrustmark Corporation TRMK 12/29/2009 12/30/2009 11/21/2018 19.57 - 1,647,931 6.07 10,000,000 19.0% - 22.9% 22.80 20.84 0.27 1.17 xSVB Financial Group SIVB 6/8/2010 6/16/2010 12/12/2018 49.78 Yes 354,058 19.26 6,820,000 39.2% - 44.7% 42.24 45.32 0.46 0.85 x

FirstMerit Corp FMER 5/21/2009 5/27/2009 1/9/2019 19.69 - 952,260 5.28 5,025,000 34.9% - 38.3% 17.54 19.27 0.30 0.89 x

The Bancorp, Inc. TBBK 9/2/2010 9/8/2010 12/12/2018 3.46 Yes 980,203 4.85 4,753,985 46.7% - 55.6% 6.89 6.60 0.70 1.99 xUmpqua Holdings Corp. UMPQ 3/22/2010 3/31/2010 11/14/2018 14.46 Yes 1,110,897 4.05 4,500,000 25.1% - 29.4% 13.60 12.87 0.30 0.94 xColumbia Banking System, Inc. COLB 8/25/2010 9/1/2010 11/21/2018 14.49 Yes 398,023 8.30 3,301,647 40.3% - 46.0% 17.00 17.21 0.49 1.17 xFirst Niagra Financial Group FNFG 6/19/2009 6/24/2009 11/21/2018 14.48 Yes 953,096 2.83 2,700,000 28.5% - 31.7% 11.93 12.05 0.24 0.82 xBank of the Ozarks, Inc. OZRK 11/18/2009 11/24/2009 12/12/2018 29.62 - 379,811 6.98 2,650,000 20.9% - 25.1% 27.48 24.46 0.25 0.93 xIndpendent Bank Corp INDB 5/21/2009 5/27/2009 1/9/2019 24.34 - 481,664 4.57 2,200,000 28.5% - 31.6% 19.60 19.92 0.23 0.81 xSun Bancorp SNBC 5/19/2009 5/27/2009 1/9/2019 8.27 - 1,620,545 1.30 2,100,000 16.0% - 19.9% 6.25 6.36 0.21 0.76 x

First Litchfield Financial Corporation FLFL 4/7/2010 4/7/2010 12/12/2018 7.53 - 199,203 7.47 1,488,046 N/A 14.95 14.65 0.50 1.99 x

Bancorp Rhode Island, Inc. BARI 9/21/2009 9/30/2009 12/19/2018 23.32 - 192,967 7.26 1,400,000 21.9% - 26.6% 24.66 25.57 0.29 1.06 x

SCBT Financial Corporation SCBT 6/16/2009 6/24/2009 1/16/2019 32.06 - 303,083 4.62 1,400,000 24.1% - 27.4% 23.16 23.45 0.20 0.72 xCVB Financial Corp. CVBF 10/21/2009 10/28/2009 12/5/2018 11.68 Yes 834,761 1.57 1,307,000 26.4% - 29.2% 8.81 7.73 0.18 0.75 x

IBERIABANK Corporation IBKC 5/12/2009 5/20/2009 12/5/2018 48.74 Yes 138,490 8.66 1,200,000 17.5% - 20.8% 47.22 48.23 0.18 0.97 xOld National Bancorp ONB 5/6/2009 5/8/2009 12/12/2018 18.45 - 813,008 1.48 1,200,000 20.3% - 23.6% 14.33 14.18 0.10 0.78 xBerkshire Hills Bancorp BHLB 6/17/2009 6/24/2009 12/19/2018 26.51 - 226,330 4.60 1,040,000 24.0% - 28.0% 20.17 21.38 0.23 0.76 xWesbanco, Inc. WSBC 12/11/2009 12/23/2009 12/5/2018 25.61 - 439,282 2.16 950,000 38.1% - 40.7% 12.41 12.71 0.17 0.48 xAlliance Financial Corporation ALNC 6/12/2009 6/17/2009 12/19/2018 23.33 - 173,069 5.20 900,000 13.8% - 17.0% 26.61 25.50 0.20 1.14 xFlushing Financial Corporation FFIC 12/28/2009 12/30/2009 12/19/2018 13.97 Yes 375,806 2.39 900,000 22.4% - 25.9% 11.73 10.92 0.20 0.84 xHF Financial Corp. HFFC 6/29/2009 6/30/2009 11/21/2018 12.40 - 302,419 2.15 650,000 18.3% - 21.5% 11.95 12.08 0.18 0.96 xWainwright Bank and Trust WAIN 12/11/2009 12/16/2009 12/19/2018 8.46 - 390,071 1.46 568,700 27.8% - 30.7% 7.00 6.75 0.21 0.83 x

Central Jersey Bancorp CJBK 12/1/2010 12/1/2010 12/23/2018 6.31 - 268,621 1.19 319,659 N/A 7.49 7.45 0.16 1.19 x

LSB Corporation LSBX 12/8/2009 12/16/2009 12/12/2018 10.74 - 209,497 2.67 560,000 22.1% - 25.3% 11.28 11.00 0.24 1.05 xUnion Bankshares Corporation UBSH 12/16/2009 12/23/2009 12/19/2018 20.94 Yes 211,318 2.13 450,000 30.3% - 33.0% 11.93 11.93 0.18 0.57 xOceanFirst Financial Corp OCFC 1/28/2010 2/3/2010 1/16/2019 15.07 Yes 190,427 2.26 430,797 31.2% - 34.2% 10.45 10.97 0.22 0.69 xCitizens & Northern Corporation CZNC 8/25/2010 9/1/2010 1/16/2019 20.36 - 194,794 2.05 400,000 41.9% - 44.4% 10.73 11.12 0.19 0.53 xSomerset Hills Bancorp SOMH 6/17/2009 6/24/2009 1/16/2019 6.82 - 163,065 1.69 275,000 14.8% - 18.4% 7.80 7.73 0.22 1.14 x

Monarch Financial Holdings MNRK 2/1/2010 2/10/2010 12/19/2018 8.33 Yes 132,353 1.96 260,000 27.8% - 32.4% 6.40 6.48 0.31 0.77 xBar Harbor Bankshares BHB 7/22/2010 7/28/2010 1/16/2019 26.81 Yes 52,455 4.77 250,000 18.2% - 20.9% 27.00 25.61 0.18 1.01 xOld Line Bancshares OLBK 8/20/2009 9/2/2009 12/5/2018 7.40 - 141,892 1.59 225,000 26.3% - 30.1% 6.10 6.21 0.26 0.82 x

CenterState Banks, Inc. CSFL 10/21/2009 10/28/2009 11/21/2018 16.67 Yes 125,413 1.69 212,000 34.9% - 38.2% 7.47 7.64 0.23 0.45 x

Manhattan Bancorp MNHN 10/9/2009 10/14/2009 12/5/2018 8.65 - 29,480 2.15 63,364 29.7% - 34.8% 6.60 6.53 0.33 0.76 x

TOTAL 44 - - - - 14 - - $3,140,810,600 - - - - -

* Volatility implied by the repurchase price using stock price on decision date and UST estimates for dividend yield and borrow cost; reflects discounts to a modeled valuation for illiquidity, risk of cash takeout, etc.
Warrant Disposition Report - Update DECEMBER 31, 2010 13Appendix I – Detailed Tables of Warrant Repurchases and Auctions Warrant Auctions Ordered by Amount of Proceeds Auction Date Institution Name Ticker Announce Date Auction Date Expiration Date Price Strike QEO? (i.e. warrants cut by 50%) Warrant Shares Auction Warrant Price Per Share Auction Warrant Gross Proceeds Estimated Implied Volatilty* Price Stock 20-day Avg Price Stock Warrant Price / Price Stock Underlying / Strike Bank of America Corporation BAC 3/1/20103/3/2010 1/16/019 1.30  - 150,375,940  8.35  1,255,63,099 32.1% - 36.8% 16.37  15.59 0.51 1.23 x JPMorgan Chase & Co. JPM 12/8/2009 12102009 10/28/018 4242  -  88,401,697  10.75  950,31,243 23.8% - 27.5% 41.27  42.24 0.26 0.97 x Wells Fargo & Company WFC 5/18/2010 520/2010 10/28/018 3.01  - 110,262,688  7.70  849,01,998 30.6% - 34.0% 28.69  32.21 0.27 0.84 x The Hartford Financial Services Group, Inc. HIG 9/20/20109/1/2010 6/292019 979  -  52,093,973  13.70  713,68,430 10.0% - 15.0% 23.16  21.68 0.59 2.37 x PNC Financial Services PNC 4/27/2010 4292010 12/13/018 6733  -  16,885,192  19.20  324,19,686 27.6% - 31.3% 66.06  64.68 0.29 0.98 x Bank of America Corporation BAC 3/1/2010 /3/2010 10/28/018 3.79  - 121,792,790  2.55  310,57,615 30.9% - 33.5% 16.37  15.59 0.16 0.53 x Lincoln National Corporation LNC 9/15/2010 /1/2010 7/10/019 1092  -  13,049,451  16.60  216,62,887 29.9% - 44.7% 24.72  23.84 0.67 2.26 x Comerica Inc. CMA 5/4/2010 /62010 11/14/018 2940  -  11,479,592  16.00  183,67,472 28.6% - 32.3% 41.43  42.21 0.39 1.41 x Capital One Financial Corp. COF 12/1/2009 1/32009 11/14/018 4213  -  12,657,960  11.75  148,73,030 34.6% - 38.2% 36.92  38.66 0.32 0.88 x Washington Federal, Inc WFSL 3/8/2010 /92010 11/142018 7.57  -  1,707,456  9.15  15,62,222 48.6% - 53.5% 19.38  19.41 0.47 1.10 x Signature Bank SBNY 3/8/2010 3102010 12/2/201830.21  -  595,829  19.00  11,32,751 23.1% - 29.0% 38.75  36.83 0.49 1.28 x TCF Financial Corporation TCB 12/14/2009 12152009 11/142018 6.93  -  3,199,988  3.00  9,59,964 28.8% - 32.1% 13.22  12.78 0.23 0.78 x Texas Capital Bancshares, Inc. TCBI 3/8/2010 /1/2010 1/6/201 14.84  -  758,086  8.85  6,70,061 24.4% - 29.9% 18.41  17.06 0.48 1.24 x Valley National Bancorp VLY 5/17/2010 5182010 11/142018 7.77  -  2,532,542  2.20  5,57,592 25.1% - 27.5% 14.80  15.49 0.15 0.83 x First Financial Bancorp FFBC 6/1/2010 /2/210 12/232010 2.90  Yes  465,117  6.70  3,11,283 39.9% - 43.8% 15.87  16.81 0.42 1.23 x Sterling Bancshares, Inc. SBIB 6/7/20106//2010 12/1/20187.18  -  2,615,557  1.15  3,07,891 30.1% - 34.2% 5.00  5.41 0.23 0.0 x TOTAL 16 - - - - 1 -  - $,007,401,224 - - - - - *  Volatility implied by the repurchase price using stock price on auction date and UST estimates for dividend yield and borrow cost; reflects discounts to a modeled valuation for illiquidity, 
14 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix I – Detailed Tables of Warrant Repurchases and Auctions Warrant Auction Statistics Institution Ticker Auction Date Warrant Shares Gross Proceeds ($millions) Underwriting Fees ($millions) Minimum Bid Clearing Bid Number of Bids Number of Bidders Coverage Ratio 1 Market Orders Share of Demand 2 Warrants Repurchased by Bank in Auction Daily Liquidity Turnover 3 Capital One Financial Corp. COF 12/3/2009 12,657,960 $148.7 $2.231 $7.50 $11.75 604 174 13.3x 0.2% - 0.27% JPMorgan Chase & Co. JPM 12/10/2009 88,401,697 950.3 14.255 8.00 10.75 754 381 6.5x 0.3% - 0.51% TCF Financial Corporation TCB 12/15/2009 3,199,988 9.6 0.150 1.50 3.00 470 135 18.3x 1.8% - 0.62% Bank of America Corporation (TIP) BAC 3/3/2010 150,375,940 1,255.6 18.835 7.00 8.35 1,489 535 4.4x 1.0% - 0.73% Bank of America Corporation (CPP) BAC 3/3/2010 121,792,790 310.6 4.659 1.50 2.55 1,246 570 10.7x 1.7% - 0.76% Washington Federal, Inc WFSL 3/9/2010 1,707,456 15.6 0.234 5.00 9.15 708 413 14.5x 8.3% - 0.57% Signature Bank SBNY 3/10/2010 595,829 11.3 0.170 16.00 19.00 409 68 8.2x 0.7% - 0.66% Texas Capital Bancshares, Inc. TCBI 3/11/2010 758,086 6.7 0.150 6.50 8.85 326 61 7.0x 0.9% - 0.30% PNC Financial Services PNC 4/29/2010 16,885,192 324.2 3.918 15.00 19.20 1,450 181 5.5x 2.5% - 0.65% Comerica Inc. CMA 5/6/2010 11,479,592 183.7 2.571 15.00 16.00 518 120 2.7x 1.9% - 0.39% Valley National Bancorp VLY 5/18/2010 2,532,542 5.6 0.150 1.70 2.20 183 34 6.6x 1.2% - 0.35% Wells Fargo & Company WFC 5/20/2010 110,261,688 849.0 8.640 6.50 7.70 859 297 3.9x 2.3% 70,165,963 0.45% First Financial Bancorp FFBC 6/2/2010 465,117 3.1 0.150 4.00 6.70 142 66 10.3x 2.0% - 1.46% Sterling Bancshares, Inc. SBIB 6/9/2010 2,615,557 3.0 0.150 0.85 1.15 211 67 6.9x 3.6% - 0.58% Lincoln National Corporation LNC 9/16/2010 13,049,451 216.6 2.950 13.50 16.60 795 204 5.1x 2.1% 2,899,159 0.31% Hartford Financial Services Group, Inc. HIG 9/21/2010 52,093,973 713.7 7.423 10.50 13.70 1,000 263 2.0x 4.2% - 0.34% Total 16 $5,007.4 $66.635 11,164 223 6.0x 1.5% 0.61% 1) Coverage Ratio = Gross Demand / Warrant Shares 2) Market Orders Share of Auction = Total Market Orders / Gross Demand A market order is a bid that specifies the number of warrants the bidder is willing to purchase without specifying the price it is willing to pay and is treated as a bid at the highest price received from any other bidder in the auction. 3) Daily Liquidity Turnover = Average Daily Trading Volume / Warrants Outstanding The liquidity calculation excludes the first five trading days after the auction which typically have higher than normal volume and uses data through June 30, 2010. The data source is Bloomberg. Note: Totals for Coverage Ratio, Market Orders and Daily Liquidity are weighted averages. Total for Number of Bid
Warrant Disposition Report - Update DECEMBER 31, 2010 15Appendix I – Detailed Tables of Warrant

Issuer Repurchases of Warrant Preferreds or Warrant Sub Debt

Institution Name Repurchase 

Date

CPP Investment

($thousands)

Warrant Repurchase 

Date

Gross Warrant 

Proceeds

($thousands)

Centra Financial Holdings, Inc. 3/31/2009 $15,000 4/15/2009 $750 

First Manitowoc Bancorp, Inc. 5/27/2009 12,000 5/27/2009 600 

First Southern Bancorp, Inc. 6/16/2010 10,900 6/16/2010 545 

Midland States Bancorp, Inc. 12/23/2009 10,189 12/23/2009 509 

1st United Bancorp, Inc. 11/18/2009 10,000 11/18/2009 500 

Leader Bancorp, Inc. 11/24/2010 5,830 11/24/2010 292 

First ULB Corp. 4/22/2009 4,900 4/22/2009 245 

Capital Bancorp, Inc. 12/30/2010 4,700 12/30/2010 235 

Hilltop Community Bancorp, Inc. 4/21/2010 4,000 4/21/2010 200 

Texas National Bancorporation, Inc. 5/19/2010 3,981 5/19/2010 199 

California Oaks State Bank 12/8/2010 3,300 12/8/2010 165 

FPB Financial Corp. 6/16/2010 3,240 6/16/2010 162 

Frontier Bancshares, Inc. 10/6/2010 3,000 10/6/2010 150 

Surrey Bancorp 12/29/2010 2,000 12/29/2010 100 

Nationwide Bankshares, Inc. 12/29/2010 2,000 12/29/2010 100 

Signature Bancshares, Inc. 12/15/2010 1,700 12/15/2010 85 

The First State Bank of Mobeetie 4/14/2010 731 4/14/2010 37 

Midwest Regional Bancorp 11/10/2009 700 11/10/2009 35 

Green City Bancshares, Inc. 7/14/2010 651 7/14/2010 33 

Haviland Bancshares, Inc. 12/29/2010 425 12/29/2010 21 

TOTAL 20 $99,247 $4,963 
16 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix II – Wa

Appendix II – Warrant Disposition Details 

The chart below demonstrates the three elements of Treasury’s warrant valuation analysis together with an 

institution’s bid for the warrants, using Northern Trust Corporation as an example. The market quotes are 

presented as a range from the low to the high estimate of value provided by market participants (black bar) 

as well as the average of all the market indications collected (red point). The third party estimate of value 

(red point) is presented along with a reasonable range (black bar) that is also prepared by the third party. 

Treasury’s estimate of value (red point) based on its internal model is presented along with a reasonable 

range (black bar). The ranges of estimates presented below show the final estimates utilized by Treasury 

officials to analyze the bank’s final bid. 

Appendix II presents charts for all of the CPP warrant sales, in which the bank submitted a bid to 

repurchase its warrants, as of December 31, 2010. As with the example below, all of the valuation estimates 

presented in Appendix II represent the final estimates used by Treasury officials when analyzing a repurchase 

request. Appendix II also notes additional relevant factors that were presented to the Warrant Committee.

Graphical Representation of Treasury’s Warrant Valuation Analy

Example of Treasury’s Warrant Valuation Analysis

$30,000 

$40,000 

$50,000 

$60,000 

$70,000 

$80,000 

$90,000 

$100,000 

$110,000 

$120,000 

Northern Trust (NTRS) 

Fair Market Value Estimates of Treasury's Warrant Position 

First Bid - $37,000,000 

Final Bid - $87,000,000

Second Bid - $75,000,000

Market Quotes Third Party Model Valuation 

$ Millions
Warrant Disposition Report - Update DECEMBER 31, 2010 17Appendix II – Wa

Old National Bancorp (ONB)

Repurchase of ONB Warrant

On May 6, 2009, Old National Bancorp (ONB) agreed to pay $1.2 million for the warrant held by Treasury 

which entitled the holder of the warrant to purchase 813,008 shares of ONB at a strike price of $18.45 per 

share. The warrant had an expiration date of December 12, 2018. 

NOTE: 1) At the time of the decision, the external asset managers had not been hired. Treasury relied on 

financial modeling consultants to provide third party input. The modeling consultants may not have had 

market expertise necessary to make reasonable assumptions for key inputs such as volatility and dividend yield. 

2) At that time, legislation may have required that Treasury dispose of the warrants immediately. The fixed cost 

of disposing of the warrants was taken into consideration when analyzing the company’s determination of fair 

market value. 

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

Old National Bancorp (ONB) 

Fair Market Value Estimates of Treasury's Warrant Position 

First Bid - $559,000

Final Bid - $1,200,000

Market Quotes Third Party Model Valuation 

$ Thousands

ONB

Valuation Estimates

for Warrant ($thousands) Low High Estimate First Bid Final Bid Details

Market Quotes $1,220 $1,490 $1,353 $559 $1,200 Three market indications 

Third Party $1,969 $3,054 $3,054 $559 $1,200 External asset manager’s valuation estimates

Model Valuation $1,056 $1,697 $1,393 $559 $1,200 Binomial option model adjusted for American style options

 
18 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix II – Wa

IBERIABANK Corporation (IBKC) 

Repurchase of IBKC Warrant

On May 12, 2009, IBERIABANK Corporation (IBKC) agreed to pay $1.2 million for the warrant held by 

Treasury which entitled the holder of the warrant to purchase 138,490 shares of IBKC at a strike price of 

$48.74 per share. The warrant had an expiration date of December 5, 2018.

NOTE: 1) At the time of the decision, the external asset managers had not been hired. Treasury relied on 

financial modeling consultants to provide third party input. The modeling consultants may not have had 

market expertise necessary to make reasonable assumptions for key inputs such as volatility and dividend yield. 

2) At that time, legislation may have required that Treasury dispose of the warrants immediately. The fixed cost 

of disposing of the warrants was taken into consideration when analyzing the company’s determination of fair 

market value.

$500

$700

$900

$1,100

$1,300

$1,500

$1,700

$1,900

$2,100

$2,300

$2,500

IBERIABANK Corporation (IBKC) 

Fair Market Value Estimates of Treasury's Warrant Position 

Market Quotes Third Party Model Valuation 

Final Bid - $1,200,000

First Bid - $620,000

$ Thousands

IBKC

Valuation Estimates

for Warrant ($thousands) Low High Estimate First Bid Final Bid Details

Market Quotes $1,350 $1,662 $1,566 $620 $1,200 Four market indications 

Third Party $1,370 $2,334 $2,334 $620 $1,200 External asset manager’s valuation estimates

Model Valuation $1,156 $1,682 $1,421 $620 $1,200 Binomial option model adjusted for American style options

 
Warrant Disposition Report - Update DECEMBER 31, 2010 19Appendix II – Wa

Sun Bancorp, Inc. (SNBC)

Repurchase of SNBC Warrant

On May 19, 2009, Sun Bancorp, Inc. (SNBC) agreed to pay $2.1 million for the warrant held by Treasury 

which entitled the holder of the warrant to purchase 1,620,545 shares of SNBC at a strike price of $8.27 per 

share. The warrant had an expiration date of January 9, 2019. 

$800

$1,300

$1,800

$2,300

$2,800

$3,300

$3,800

$4,300

Sun Bancorp (SNBC) 

Fair Market Value Estimates of Treasury's Warrant Position 

First Bid - $1,049,000 

Market Quotes Third Party Model Valuation 

Final Bid - $2,100,000

$ Thousands

SNBC

Valuation Estimates

for Warrant ($thousands) Low High Estimate First Bid Final Bid Details

Market Quotes $1,080 $2,778 $2,096 $1,049 $2,100 Three market indications 

Third Party $2,000 $4,028 $4,028 $1,049 $2,100 External asset manager’s valuation estimates

Model Valuation $1,974 $2,771 $2,252 $1,049 $2,100 Binomial option model adjusted for American style options

 
20 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix II – Wa

FirstMerit Corp (FMER)

Repurchase of FMER Warrant

On May 21, 2009, FirstMerit Corp (FMER) agreed to pay $5.025 million for the warrant held by Treasury 

which entitled the holder of the warrant to purchase 952,260 shares of FMER at a strike price of $19.69 per 

share. The warrant had an expiration date of January 9, 2019. 

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

FirstMerit Corp (FMER) 

Fair Market Value Estimates of Treasury's Warrant Position 

First Bid - $3,186,000 

Final Bid - $5,025,000

Market Quotes Third Party Model Valuation 

$ Thousands

FMER

Valuation Estimates

for Warrant ($thousands) Low High Estimate First Bid Final Bid Details

Market Quotes $4,082 $6,543 $4,918 $3,186 $5,025 Four market indications 

Third Party $5,428 $7,532 $6,485 $3,186 $5,025 External asset manager’s valuation estimates

Model Valuation $4,871 $5,930 $5,400 $3,186 $5,025 Binomial option model adjusted for American style options

 

NOTE: At the time of the decision, the common share price of FMER was $17.54 compared to the 20 day 

average price of $19.27. This difference was taken under consideration in Treasury’s analysis of the company’s 

determination of fair market value.
Warrant Disposition Report - Update DECEMBER 31, 2010 21Appendix II – Wa

Independent Bank Corp (INDB)

Repurchase of INDB Warrant

On May 21, 2009, Independent Bank Corp (INDB) agreed to pay $2.2 million for the warrant held by 

Treasury which entitled the holder of the warrant to purchase 481,664 shares of INDB at a strike price of 

$24.34 per share. The warrant had an expiration date of January 9, 2019. 

$800

$1,300

$1,800

$2,300

$2,800

$3,300

$3,800

Independent Bank (INDB) 

Fair Market Value Estimates of Treasury's Warrant Position 

First Bid - $880,000 

Final Bid - $2,200,000

Market Quotes Third Party Model Valuation 

$ Thousands

INDB

Valuation Estimates

for Warrant ($thousands) Low High Estimate First Bid Final Bid Details

Market Quotes $1,444 $2,432 $2,104 $888 $2,200 Three market indications 

Third Party $2,293 $3,482 $2,885 $888 $2,200 External asset manager’s valuation estimates

Model Valuation $1,754 $2,965 $2,345 $888 $2,200 Binomial option model adjusted for American style options

 
22 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix II – Wa

Alliance Financial Corporation (ALNC)

Repurchase of ALNC Warrant

On June 12, 2009, Alliance Financial Corporation (ALNC) agreed to pay $900,000 for the warrant held by 

Treasury which entitled the holder of the warrant to purchase 173,069 shares of ALNC at a strike price of 

$23.33 per share. The warrant had an expiration day of December 19, 2018. 

$300

$400

$500

$600

$700

$800

$900

$1,000

$1,100

$1,200

$1,300

Alliance Financial (ALNC) 

Fair Market Value Estimates of Treasury's Warrant Position 

Market Quotes Third Party Model Valuation 

Final Bid - $900,000

 First Bid - $320,000 

$ Thousands

ALNC

Valuation Estimates

for Warrant ($thousands) Low High Estimate First Bid Final Bid Details

Market Quotes $554 $952 $762 $320 $900 Three market indications 

Third Party $899 $1,244 $990 $320 $900 External asset manager’s valuation estimates

Model Valuation $741 $895 $818 $320 $900 Binomial option model adjusted for American style options

 
Warrant Disposition Report - Update DECEMBER 31, 2010 23Appendix II – Wa

SCBT

Valuation Estimates

for Warrant ($thousands) Low High Estimate First Bid Final Bid Details

Market Quotes $555 $1,789 $1,159 $694 $1,400 Five market indications 

Third Party $2,322 $3,261 $2,888 $694 $1,400 External asset manager’s valuation estimates

Model Valuation $1,137 $1,436 $1,281 $694 $1,400 Binomial option model adjusted for American style options

 

SCBT Financial Corporation (SCBT) 

Repurchase of SCBT Warrant

On June 16, 2009, SCBT Financial Corporation (SCBT) agreed to pay $1.4 million for the warrant held by 

Treasury which entitled the holder of the warrant to purchase 303,083 shares of SCBT at a strike price of 

$32.06 per share. The warrant had an expiration date of January 16, 2019. 

NOTE: The third party modeled valuation assumed volatility of 46%. Treasury’s model assumed a significantly 

lower volatility closer to the historic volatility of the company and observable market prices. 

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

SCBT Financial Corporation (SCBT) 

Fair Market Value Estimates of Treasury's Warrant Position 

First Bid - $694,060 

Final Bid - $1,400,000

Market Quotes Third Party Model Valuation 

$ Thousands
24 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix II – Wa

Berkshire Hills Bancorp (BHLB) 

Repurchase of BHLB Warrant

On June 17, 2009, Berkshire Hills Bancorp (BHLB) agreed to pay $1.04 million for the warrant held by 

Treasury which entitled the holder of the warrant to purchase 226,330 shares of BHLB at a strike price of 

$26.51 per share. The warrant had an expiration date of December 19, 2018. 

$500

$700

$900

$1,100

$1,300

$1,500

$1,700

$1,900

$2,100

Berkshire Hills (BHLB) 

Fair Market Value Estimates of Treasury's Warrant Position 

First Bid - $875,000

Final Bid - $1,040,000

Market Quotes Third Party Model Valuation 

$ Thousands

BHLB

Valuation Estimates

for Warrant ($thousands) Low High Estimate First Bid Final Bid Details

Market Quotes $509 $758 $611 $875 $1,040 Three market indications 

Third Party $1,071 $1,974 $1,494 $875 $1,040 External asset manager’s valuation estimates

Model Valuation $827 $1,116 $971 $875 $1,040 Binomial option model adjusted for American style options

 
Warrant Disposition Report - Update DECEMBER 31, 2010 25Appendix II – Wa

Somerset Hills Bancorp (SOMH) 

Repurchase of SOMH Warrant

On June 17, 2009, Somerset Hills Bancorp (SOMH) agreed to pay $275,000 for the warrant held by Treasury 

which entitled the holder of the warrant to purchase 163,065 shares of SOMH at a strike price of $6.82 per 

share. The warrant had an expiration date of January 16, 2019. 

$100

$150

$200

$250

$300

$350

$400

$450

$500

$550

$600

Somerset Hills (SOMH) 

Fair Market Value Estimates of Treasury's Warrant Position 

First Bid - $193,000 

Market Quotes Third Party Model Valuation 

Final Bid - $275,000

$ Thousands

SOMH

Valuation Estimates

for Warrant ($thousands) Low High Estimate First Bid Final Bid Details

Market Quotes $122 $406 $266 $193 $275 Five market indications 

Third Party $374 $521 $447 $193 $275 External asset manager’s valuation estimates

Model Valuation $253 $299 $276 $193 $275 Binomial option model adjusted for American style options

 
26 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix II – Wa

First Niagara Financial Group (FNFG) 

Repurchase of FNFG Warrant

On June 19, 2009, First Niagara Financial Group (FNFG) agreed to pay $2.7 million for the warrant held 

by Treasury which entitled the holder of the warrant to purchase 953,096 shares of FNFG at a strike price of 

$14.48 per share. The warrant had an expiration date of November 21, 2018. 

$900

$1,400

$1,900

$2,400

$2,900

$3,400

$3,900

$4,400

$4,900

$5,400

First Niagara (FNFG) 

Fair Market Value Estimates of Treasury's Warrant Position 

First Bid - $1,500,000 

Final Bid - $2,700,000

Market Quotes Third Party Model Valuation 

$ Thousands

FNFG

Valuation Estimates

for Warrant ($thousands) Low High Estimate First Bid Final Bid Details

Market Quotes $953 $2,383 $1,646 $1,500 $2,700 Five market indications 

Third Party $3,455 $4,995 $4,221 $1,500 $2,700 External asset manager’s valuation estimates

Model Valuation $2,444 $3,175 $2,807 $1,500 $2,700 Binomial option model adjusted for American style options

 
Warrant Disposition Report - Update DECEMBER 31, 2010 27Appendix II – Wa

HF Financial Corp (HFFC) 

Repurchase of HFFC Warrant

On June 29, 2009, HF Financial Corp (HFFC) agreed to pay $650,000 for the warrant held by Treasury 

which entitled the holder of the warrant to purchase 302,419 shares of HFFC at a strike price of $12.40 per 

share. The warrant had an expiration date of November 21, 2018. 

$200 

$300 

$400 

$500 

$600 

$700 

$800 

$900 

HF Financial (HFFC) 

Fair Market Value Estimates of Treasury's Warrant Position 

First Bid - $464,987 

Final Bid - $650,000 

Market Quotes Third Party Model Valuation 

Second Bid - $600,000 

$ Thousands

HFFC

Valuation Estimates

for Warrant ($thousands) Low High Estimate

First

Bid

Second 

Bid

Final

 Bid Details

Market Quotes $251 $720 $424 $464 $600 $650 Three market indications 

Third Party $686 $822 $753 $464 $600 $650 External asset manager’s valuation estimates

Model Valuation $505 $622 $563 $464 $600 $650 Binomial option model adjusted for American style 

options

 
28 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix II – Wa

State Street Corporation (STT) 

Repurchase of STT Warrant

On July 1, 2009, State Street Corporation (STT) agreed to pay $60 million for the warrant held by Treasury 

which entitled the holder of the warrant to purchase 2,788,104 shares of STT at a strike price of $53.80 per 

share. The warrant had an expiration date of October 28, 2018. 

$10,000 

$20,000 

$30,000 

$40,000 

$50,000 

$60,000 

$70,000 

$80,000 

Market Quotes Third Party Model Valuation 

State Street (STT)

Fair Market Value Estimates of Treasury's Warrant Position

Final Bid - $60,000,000

$ Thousands

STT

Valuation Estimates

for Warrant ($millions) Low High Estimate Final Bid Details

Market Quotes $16 $48 $33 $60 Seven market indications 

Third Party $46 $65 $55 $60 External asset manager’s valuation estimates

Model Valuation $52 $62 $57 $60 Binomial option model adjusted for American style options
Warrant Disposition Report - Update DECEMBER 31, 2010 29Appendix II – Wa

U.S. Bancorp (USB) 

Repurchase of USB Warrant

On July 8, 2009, U.S. Bancorp (USB) agreed to pay $139 million for the warrant held by Treasury which 

entitled the holder of the warrant to purchase 32,679,102 shares of USB at a strike price of $30.29 per share. 

The warrant had an expiration date of November 14, 2018. 

$11,000

$31,000

$51,000

$71,000

$91,000

$111,000

$131,000

$151,000

$171,000

$191,000

US Bancorp (USB) 

Fair Market Value Estimates of Treasury's Warrant Position 

First Bid - $115,000,000

Final Bid - $139,000,000

Second Bid - $131,000,000

Market Quotes Third Party Model Valuation 

$ Millions

USB

Valuation Estimates

for Warrant ($millions) Low High Estimate

First

Bid

Second 

Bid

Final

 Bid Details

Market Quotes $12 $175 $127 $115 $131 $139 Six market indications 

Third Party $108 $183 $144 $115 $131 $139 External asset manager’s valuation estimates

Model Valuation $117 $164 $140 $115 $131 $139 Binomial option model adjusted for American style 

options

 
30 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix II – Wa

BB&T Corporation (BBT) 

Repurchase of BBT Warrant

On July 14, 2009, BB&T Corporation (BBT) agreed to pay $67 million for the warrant held by Treasury 

which entitled the holder of the warrant to purchase 13,902,573 shares of BBT at a strike price of $33.81 per 

share. The warrant had an expiration date of November 14, 2018. 

$18,000 

$28,000 

$38,000 

$48,000 

$58,000 

$68,000 

$78,000 

$88,000 

Market Quotes Third Party Model Valuation 

Final Bid - $67,010,402

Third Bid - $64,925,016

BB&T Corporation (BBT) 

Fair Market Value Estimates of Treasury's Warrant Position 

Second Bid - $41,707,719

First Bid - $20,853,860 

$ Millions

BBT

Valuation Estimates

for Warrant ($millions) Low High Estimate

First 

Bid

Second 

Bid

Third 

Bid

Final 

Bid Details

Market Quotes $23 $58 $36 $20 $41 $65 $67 Five market indications 

Third Party $43 $82 $62 $20 $41 $65 $67 External asset manager’s valuation 

estimates

Model Valuation $55 $78 $67 $20 $41 $65 $67 Binomial option model adjusted for 

American style options
Warrant Disposition Report - Update DECEMBER 31, 2010 31Appendix II – Wa

Goldman Sachs Group, Inc. (GS) 

Repurchase of GS Warrant

On July 21, 2009, Goldman Sachs Group, Inc. (GS) agreed to pay $1.1 billion for the warrant held by 

Treasury which entitled the holder of the warrant to purchase 12,205,045 shares of GS at a strike price of 

$122.90 per share. The warrant had an expiration date of October 28, 2018. 

NOTE: At the time of the decision, the common share price of GS was $159.80 compared to the 20-day 

average price of $148.16. This difference was taken under consideration in Treasury’s analysis of the company’s 

determination of fair market value.

$550,000

$650,000

$750,000

$850,000

$950,000

$1,050,000

$1,150,000

Goldman Sachs (GS) 

Fair Market Value Estimates of Treasury's Warrant Position

First Bid - $600,000,000

$ Millions

!T,T##,###,###"

Second Bid - $900,000,000

Market Quotes Third Party Model Valuation 

Final Bid - $1,100,000,000

GS

Valuation Estimates

for Warrant ($millions) Low High Estimate

First

Bid

Second 

Bid

Final

 Bid Details

Market Quotes $732 $917 $826 $600 $900 $1,100 Seven market indications 

Third Party $899 $1,058 $993 $600 $900 $1,100 External asset manager’s valuation estimates

Model Valuation $808 $995 $902 $600 $900 $1,100 Binomial option model adjusted for American style 

options
32 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix II – Wa

American Express Company (AXP)

Repurchase of AXP Warrant

On July 27, 2009, American Express Company (AXP) agreed to pay $340 million for the warrant held by 

Treasury which entitled the holder of the warrant to purchase 24,264,129 shares of AXP at a strike price of 

$20.95 per share. The warrant had an expiration date of January 9, 2019. 

Market Quotes Third Party Model Valuation 

American Express (AXP)

Fair Market Value Estimates of Treasury's Warrant Position

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

Final Bid - $340,000,000

 First Bid - $230,000,000 

Second Bid - $260,000,000 

$ Millions

NOTE: At the time of the decision, the common share price of GS was $159.80 compared to the 20-day 

average price of $148.16. This difference was taken under consideration in Treasury’s analysis of the company’s 

determination of fair market value.

AXP

Valuation Estimates

for Warrant ($millions) Low High Estimate

First

Bid

Second 

Bid

Final

 Bid Details

Market Quotes $175 $298 $219 $230 $260 $340 Six market indications 

Third Party $269 $349 $309 $230 $260 $340 External asset manager’s valuation estimates

Model Valuation $248 $322 $285 $230 $260 $340 Binomial option model adjusted for American style options
Warrant Disposition Report - Update DECEMBER 31, 2010 33Appendix II – Wa

Bank of New York Mellon Corporation (BK)

Repurchase of BK Warrant

On July 31, 2009, Bank of New York Mellon Corporation (BK) agreed to pay $136 million for the warrant 

held by Treasury which entitled the holder of the warrant to purchase 14,516,129 shares of BK at a strike price 

of $31.00 per share. The warrant had an expiration date of October 28, 2018. 

$45,000 

$85,000 

$105,000 

$125,000 

$145,000 

$165,000 

Market Quotes Third Party Model Valuation 

First Bid - $79,000,000

Final Bid - $136,000,000

Bank of New York Mellon (BK) 

Fair Market Value Estimates of Treasury's Warrant Position 

Third Bid - $130,000,000

$65,000 

$ Millions

Second Bid - $118,000,000

BK

Valuation Estimates

for Warrant ($millions) Low High Estimate

First 

Bid

Second 

Bid

Third 

Bid

Final 

Bid Details

Market Quotes $55 $137 $94 $79 $118 $130 $136 Seven market indications 

Third Party $108 $164 $136 $79 $118 $130 $136 External asset manager’s valuation 

estimates

Model Valuation $110 $162 $135 $79 $118 $130 $136 Binomial option model adjusted for 

American style options
34 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix II – Wa

Morgan Stanley (MS)

Repurchase of MS Warrant

On August 5, 2009, Morgan Stanley (MS) agreed to pay $950 million for the warrant held by Treasury which 

entitled the holder of the warrant to purchase 65,245,759 shares of MS at a strike price of $22.99 per share. 

The warrant had an expiration date of October 28, 2018. 

NOTE: At the time of the decision, the common share price of MS was $31.05 compared to the 20-day 

average price of $28.16. This difference was taken under consideration in Treasury’s analysis of the company’s 

determination of fair market value.

$400,000 

$500,000 

$600,000 

$700,000 

$800,000 

$900,000 

$1,000,000 

$1,100,000 

Market Quotes Third Party Model Valuation 

Morgan Stanley (MS) 

Fair Market Value Estimates of Treasury's Warrant Position 

Third Bid - $900,000,000

Final Bid - $950,000,000

First Bid - $500,000,000 

Second Bid - $800,000,000

$ Millions

MS

Valuation Estimates

for Warrant ($millions) Low High Estimate

First 

Bid

Second 

Bid

Third 

Bid

Final 

Bid Details

Market Quotes $495 $944 $731 $500 $800 $900 $950 Seven market indications 

Third Party $806 $1,002 $900 $500 $800 $900 $950 External asset manager’s valuation 

estimates

Model Valuation $750 $962 $855 $500 $800 $900 $950 Binomial option model adjusted for 

American style options
Warrant Disposition Report - Update DECEMBER 31, 2010 35Appendix II – Wa

Northern Trust Corporation (NTRS) 

Repurchase of NTRS Warrant

On August 19, 2009, Northern Trust Corporation (NTRS) agreed to pay $87 million for the warrant held by 

Treasury which entitled the holder of the warrant to purchase 3,824,624 shares of NTRS at a strike price of 

$61.81 per share. The warrant had an expiration date of November 14, 2018. 

$30,000 

$40,000 

$50,000 

$60,000 

$70,000 

$80,000 

$90,000 

$100,000 

$110,000 

$120,000 

Northern Trust (NTRS) 

Fair Market Value Estimates of Treasury's Warrant Position 

First Bid - $37,000,000 

Final Bid - $87,000,000

Second Bid - $75,000,000

Market Quotes Third Party Model Valuation 

$ Millions

NTRS

Valuation Estimates

for Warrant ($millions) Low High Estimate

First 

Bid

Second 

Bid

Final 

Bid Details

Market Quotes $54 $80 $69 $37 $75 $87 Six market indications 

Third Party $71 $101 $86 $37 $75 $87 External asset manager’s valuation estimates

Model Valuation $72 $97 $84 $37 $75 $87 Binomial option model adjusted for American style options
36 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix II – Wa

Old Line Bancshares, Inc. (OLBK)

Repurchase of OLBK Warrant

On August 20, 2009, Old Line Bancshares, Inc. (OLBK) agreed to pay $225,000 for the warrants held by 

Treasury which entitled the holder of the warrant to purchase 141,892 shares of OLBK at a strike price of 

$7.40 per share. The warrant had an expiration date of December 5, 2018. 

$10 

$60 

$110 

$160 

$210 

$260 

$310 

$360 

Old Line Bancshares (OLBK) 

Second Bid - $205,000

Market Quotes Third Party Model Valuation 

Fair Market Value Estimates of Treasury's Warrant Position 

Final Bid - $225,000

First Bid - $175,000 

$ Thousands

OLBK

Valuation Estimates

for Warrant ($thousands) Low High Estimate

First 

Bid

Second 

Bid

Final 

Bid Details

Market Quotes $28 $167 $102 $175 $205 $225 Four market indications 

Third Party $201 $308 $254 $175 $205 $225 External asset manager’s valuation estimates

Model Valuation $172 $257 $214 $175 $205 $225 Binomial option model adjusted for American style options
Warrant Disposition Report - Update DECEMBER 31, 2010 37Appendix II – Wa

Bancorp Rhode Island, Inc. (BARI) 

Repurchase of BARI Warrant

On September 21, 2009, Bancorp Rhode Island, Inc. (BARI) agreed to pay $1.4 million for the warrant held 

by Treasury which entitled the holder of the warrant to purchase 192,967 shares of BARI at a strike price of 

$23.32 per share. The warrant had an expiration date of December 19, 2018. 

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

Market Quotes Third Party Model Valuation 

Bancorp Rhode Island (BARI)

Fair Market Value Estimates of Treasury's Warrant Position

Final Bid - $1,400,000

Second - $1,125,000

First Bid - $856,773

$ Thousands

BARI

Valuation Estimates

for Warrant ($thousands) Low High Estimate

First 

Bid

Second 

Bid

Final 

Bid Details

Market Quotes $703 $1,427 $1,166 $857 $1,125 $1,400 Three market indications 

Third Party $1,196 $1,760 $1,476 $857 $1,125 $1,400 External asset manager’s valuation estimates

Model Valuation $1,200 $1,643 $1,423 $857 $1,125 $1,400 Binomial option model adjusted for American style options
38 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix II – Wa

Manhattan Bancorp (MNHN) 

Repurchase of MNHN Warrant

On October 9, 2009, Manhattan Bancorp (MNHN) agreed to pay $63,363.90 for the warrant held by 

Treasury which entitled the holder of the warrant to purchase 29,480 shares of MNHN at a strike price of 

$8.65 per share. The warrant had an expiration date of December 5, 2018. 

$8 

$18 

$28 

$38 

$48 

$58 

$68 

$78 

Market Quotes Third Party Model Valuation 

Manhattan Bancorp (MNHN) 

Fair Market Value Estimates of Treasury's Warrant Position 

Final Bid - $63,363.90

$ Thousands

MNHN

Valuation Estimates

for Warrant ($thousands) Low High Estimate Final Bid Details

Market Quotes $10 $57 $34 $63 Two market indications 

Third Party $45 $54 $50 $63 External asset manager’s valuation estimates

Model Valuation $48 $64 $56 $63 Binomial option model adjusted for American style options
Warrant Disposition Report - Update DECEMBER 31, 2010 39Appendix II – Wa

CenterState Banks, Inc. (CSFL) 

Repurchase of CSFL Warrant

On October 20, 2009, CenterState Banks, Inc. (CSFL) agreed to pay $212,000 for the warrants held by 

Treasury which entitled the holder of the warrant to purchase 125,413 shares of CSFL at a strike price of 

$16.67 per share. The warrant had an expiration date of November 21, 2018. 

$90

$140

$190

$240

$290

CenterState Banks, Inc. (CSFL) 

Fair Market Value Estimates of Treasury's Warrant Position 

First Bidnts - $168,053 

Final Bid - $212,000 

Market Quotes Third Party Model Valuation 

$ Thousands

CSFL

Valuation Estimates

for Warrant ($thousands) Low High Estimate First Bid Final Bid Details

Market Quotes $94 $143 $125 $168 $212 Three market indications 

Third Party $159 $268 $236 $168 $212 External asset manager’s valuation estimates

Model Valuation $153 $269 $206 $168 $212 Binomial option model adjusted for American style options
40 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix II – Wa

CVB Financial Corp. (CVBF) 

Repurchase of CVBF Warrant

On October 21, 2009, CVB Financial Corp. (CVBF) agreed to pay $1.307 million for the warrant held by 

Treasury which entitled the holder of the warrant to purchase 834,761 shares of CVBF at a strike price of 

$11.68 per share. The warrant had an expiration date of December 5, 2018. 

$400 

$600 

$800 

$1,000 

$1,200 

$1,400 

$1,600 

$1,800 

CVB Financial (CVBF) 

Fair Market Value Estimates of Treasury's Warrant Position 

Market Quotes Third Party Model Valuation 

First Bid - $1,002,000 

Final Bid - $1,307,000 

$ Thousands

CVBF

Valuation Estimates

for Warrant ($thousands) Low High Estimate First Bid Final Bid Details

Market Quotes $551 $1,135 $917 $1,002 $1,307 Three market indications 

Third Party $785 $1,436 $1,110 $1,002 $1,307 External asset manager’s valuation estimates

Model Valuation $993 $1,711 $1,349 $1,002 $1,307 Binomial option model adjusted for American style options
Warrant Disposition Report - Update DECEMBER 31, 2010 41Appendix II – Wa

Bank of the Ozarks, Inc. (OZRK) 

Repurchase of OZRK Warrant

On November 18, 2009, Bank of the Ozarks, Inc. (OZRK) agreed to pay $2.65 million for the warrant held 

by Treasury which entitled the holder of the warrant to purchase 379,811 shares of OZRK at a strike price of 

$29.62 per share. The warrant had an expiration date of December 12, 2018. 

$1,000 

$1,500 

$2,000 

$2,500 

$3,000 

$3,500 

Bank of the Ozarks (OZRK) 

Fair Market Value Estimates of US Treasury's Warrant Position 

Market Quotes Third Party Model Valuation 

First Bid - $2,160,743 

Final Bid - $2,650,000 

$ Thousands

OZRK

Valuation Estimates

for Warrant ($thousands) Low High Estimate First Bid Final Bid Details

Market Quotes $1,230 $3,240 $2,210 $2,161 $2,650 Three market indications 

Third Party $1,880 $3,110 $2,480 $2,161 $2,650 External asset manager’s valuation estimates

Model Valuation $1,917 $3,095 $2,509 $2,161 $2,650 Binomial option model adjusted for American style options
42 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix II – Wa

LSB Corporation (LSBX) 

Repurchase of LSBX Warrant

On December 8, 2009, LSB Corporation (LSBX) agreed to pay $560,000 for the warrant held by Treasury 

which entitled the holder of the warrant to purchase 209,497 shares of LSBX at a strike price of $10.74 per 

share. The warrant had an expiration date of December 12, 2018. 

$100 

$200 

$300 

$400 

$500 

$600 

$700 

$800 

$900 

$1,000 

Market Quotes Third Party Model Valuation 

LSB Corporation (LSBX) 

Fair Market Value Estimates of Treasury's Warrant Position 

Final Bid - $560,000

First Bid - $500,000 

$ Thousands

LSBX

Valuation Estimates

for Warrant ($thousands) Low High Estimate First Bid Final Bid Details

Market Quotes $157 $883 $446 $500 $560 Four market indications 

Third Party $486 $773 $605 $500 $560 External asset manager’s valuation estimates

Model Valuation $459 $681 $569 $500 $560 Binomial option model adjusted for American style options
Warrant Disposition Report - Update DECEMBER 31, 2010 43Appendix II – Wa

Wainwright Bank and Trust Company (WAIN) 

Repurchase of WAIN Warrant

On December 11, 2009, Wainwright Bank and Trust Company (WAIN) agreed to pay $568,700 for the warrants held by Treasury, which entitled the holder of the warrant to purchase 390,071 shares of WAIN at a strike 

price of $8.46 per share. The warrant had an expiration date of December 19, 2018. 

$200 

$300 

$400 

$500 

$600 

$700 

$800 

Market Quotes Third Party Model Valuation 

Wainwright Bank and Trust (WAIN) 

Fair Market Value Estimates of Treasury's Warrant Position 

Final Bid - $568,700

$ Thousands

WAIN

Valuation Estimates

for Warrant ($thousands) Low High Estimate Final Bid Details

Market Quotes $289 $780 $532 $569 Four market indications 

Third Party $491 $776 $632 $569 External asset manager’s valuation estimates

Model Valuation $449 $632 $541 $569 Binomial option model adjusted for American style options
44 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix II – Wa

WesBanco, Inc. (WSBC) 

Repurchase of WSBC Warrant

On December 11, 2009, WesBanco, Inc. (WSBC) agreed to pay $950,000 for the warrant held by Treasury 

which entitled the holder of the warrant to purchase 439,282 shares of WSBC at a strike price of $25.61 per 

share. The warrant had an expiration date of December 5, 2018. 

$0 

$200 

$400 

$600 

$800 

$1,000 

$1,200 

$1,400 

Market Quotes Third Party Model Valuation 

WesBanco, Inc. (WSBC)

Fair Market Value Estimates of Treasury's Warrant Position

Final Bid - $950,000

First Bid - $825,000 

$ Thousands

WSBC

Valuation Estimates

for Warrant ($thousands) Low High Estimate First Bid Final Bid Details

Market Quotes $132 $1,204 $577 $825 $950 Four market indications 

Third Party $371 $955 $643 $825 $950 External asset manager’s valuation estimates

Model Valuation $585 $1,119 $851 $825 $950 Binomial option model adjusted for American style options
Warrant Disposition Report - Update DECEMBER 31, 2010 45Appendix II – Wa

Union Bankshares Corporation (UBSH) 

Repurchase of UBSH Warrant

On December 16, 2009, Union Bankshares Corporation (UBSH) agreed to pay $450,000 for the warrant held 

by Treasury which entitled the holder of the warrant to purchase 211,318 shares of UBSH at a strike price of 

$20.94 per share. The warrant had an expiration date of December 19, 2018. 

$100 

$200 

$300 

$400 

$500 

$600 

$700 

$800 

Market Quotes Third Party Model Valuation 

Union Bankshares (UBSH) 

Fair Market Value Estimates of Treasury's Warrant Position 

First Bid - $400,000 

Final Bid - $450,000

$ Thousands

UBSH

Valuation Estimates

for Warrant ($thousands) Low High Estimate First Bid

Final 

Bid Details

Market Quotes $188 $687 $448 $400 $450 Four market indications 

Third Party $267 $595 $424 $400 $450 External asset manager’s valuation estimates

Model Valuation $279 $564 $410 $400 $450 Binomial option model adjusted for American style options
46 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix II – Wa

Flushing Financial Corporation (FFIC) 

Repurchase of FFIC Warrant

On December 28, 2009, Flushing Financial Corporation (FFIC) agreed to pay $900,000 for the warrant held 

by Treasury which entitled the holder of the warrant to purchase 375,806 shares of FFIC at a strike price of 

$13.97 per share. The warrant had an expiration date of December 19, 2018. 

$400 

$600 

$800 

$1,000 

$1,200 

$1,400 

Market Quotes Third Party Model Valuation 

Flushing Financial (FFIC) 

Fair Market Value Estimates of Treasury's Warrant Position 

Second Bid - $700,000

Third Bid - $860,000

Final Bid - $900,000 

$ Thousands

First Bid - $597,000 

FFIC

Valuation Estimates

for Warrant 

($thousands) Low High Estimate First Bid

Second 

Bid

Third 

Bid

Final 

Bid Details

Market Quotes $459 $1,240 $742 $597 $700 $860 $900 Four market indications

Third Party $883 $1,131 $1,007 $597 $700 $860 $900 External asset manager’s valuation 

estimates

Model Valuation $623 $1,090 $850 $597 $700 $860 $900 Binomial option model adjusted for 

American style options
Warrant Disposition Report - Update DECEMBER 31, 2010 47Appendix II – Wa

$4,000 

$5,000 

$6,000 

$7,000 

$8,000 

$9,000 

$10,000 

$11,000 

$12,000 

Market Quotes Third Party Model Valuation 

Trustmark Corporation (TRMK) 

Fair Market Value Estimates of Treasury's Warrant Position 

First Bid - $8,167,000 

Second Bid - $9,200,000 

Third Bid - $9,600,000 

Final Bid - $10,000,000 

$ Thousands

TRMK

Valuation Estimates

for Warrant 

($thousands) Low High Estimate First Bid

Second 

Bid

Third 

Bid

Final 

Bid Details

Market Quotes $4,120 $10,547 $7,601 $8,167 $9,200 $9,600 $10,000 Four market indications

Third Party $7,103 $10,942 $9,014 $8,167 $9,200 $9,600 $10,000 External asset manager’s valuation 

estimates

Model Valuation $7,876 $11,551 $9,704 $8,167 $9,200 $9,600 $10,000 Binomial option model adjusted for 

American style options

Trustmark Corporation (TRMK)

Repurchase of TRMK Warrant

On December 29, 2009, Trustmark Corporation (TRMK) agreed to pay $10,000,000 for the warrant held by 

Treasury which entitled the holder of the warrant to purchase 1,647,931 shares of TRMK at a strike price of 

$19.57 per share. The warrant had an expiration date of November 21, 2018.
48 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix II – Wa

$50 

$150 

$250 

$350 

$450 

$550 

Market Quotes Third Party Model Valuation 

OceanFirst Financial Corp. (OCFC) 

 Fair Market Value Estimates of US Treasury's Warrant Position 

$ Thousands

Final Bid - $430,797 

OCFC

Valuation Estimates

for Warrant ($thousands) Low High Estimate Final Bid Details

Market Quotes $152 $392 $281 $431 Three market indications

Third Party $308 $468 $388 $431 External asset manager’s valuation estimates

Model Valuation $269 $508 $381 $431 Binomial option model adjusted for American style options

OceanFirst Financial Corp. (OCFC) 

Repurchase of OCFC Warrant

On January 21, 2010, OceanFirst Financial Corp. (OCFC) agreed to pay $430,797 for the warrant held by 

Treasury which entitled the holder of the warrant to purchase 190,427 shares of OCFC at an exercise price of 

$15.07 per share. The warrant had an expiration date January 16, 2019. 
Warrant Disposition Report - Update DECEMBER 31, 2010 49Appendix II – Wa

$0 

$50 

$100 

$150 

$200 

$250 

$300 

$350 

$400 

$450 

$ Thousands

Market Quotes Third Party Model Valuation 

Monarch Financial Holdings, Inc. (MNRK) 

Fair Market Value Estimates of US Treasury's Warrant Position 

First Bid - $209,117.74 

Second Bid - $250,000 

Final Bid - $260,000 

MNRK

Valuation Estimates

for Warrant ($thousands) Low High Estimate First Bid

Second 

Bid

Final 

Bid Details

Market Quotes $132 $394 $263 $209 $250 $260 Two market indications 

Third Party $201 $297 $260 $209 $250 $260 External asset manager’s valuation estimates

Model Valuation $230 $321 $275 $209 $250 $260 Binomial option model adjusted for American style options

Monarch Financial Holdings, Inc. (MNRK) 

Repurchase of MNRK Warrant

On February 1, 2010, Monarch Financial Holdings, Inc. (MNRK) agreed to pay $260,000 for the warrant 

held by Treasury which entitled the holder of the warrant to purchase 132,353 shares of MNRK at an exercise 

price of $8.33 per share. The warrant had an expiration date December 19, 2018. 
50 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix II – Wa

$1,000 

$1,500 

$2,000 

$2,500 

$3,000 

$3,500 

$4,000 

$4,500 

$5,000 

$5,500 

$6,000 

Market Quotes Third Party Model Valuation 

$ Thousands Umpqua Holdings Corporation (UMPQ) 

Fair Market Value Estimates of US Treasury's Warrant Position 

First Bid - $2,055,161.30 

Second Bid - $3,610,419 

Third Bid - $4,250,000 

Final Bid - $4,500,000 

UMPQ

Valuation Estimates

for Warrant 

($thousands) Low High Estimate First Bid

Second 

Bid

Third 

Bid

Final 

Bid Details

Market Quotes $3,210 $3,444 $3,327 $2,055 $3,610 $4,250 $4,500 Two market indications

Third Party $3,255 $5,088 $4,155 $2,055 $3,610 $4,250 $4,500 External asset manager’s valuation 

estimates

Model Valuation $3,361 $5,103 $4,265 $2,055 $3,610 $4,250 $4,500 Binomial option model adjusted for 

American style options

Umpqua Holdings Corporation (UMPQ)

Repurchase of UMPQ Warrant

On March 22, 2010, Umpqua Holdings Corporation (UMPQ) agreed to pay $4.5 million for the warrant held by 

Treasury which entitled the holder of the warrant to purchase 1,110,898 shares of UMPQ at an exercise price of $14.46 

per share. The warrant had an expiration date November 14, 2018.
Warrant Disposition Report - Update DECEMBER 31, 2010 51Appendix II – Wa

$9,000 

$1 1,000 

$13,000 

$15,000 

$17,000 

$19,000 

$21,000 

$23,000 

$25,000 

$ Thousands

Market Quotes Third Party Model Valuation 

City National Corporation (CYN) 

Fair Market Value Estimates of US Treasury's Warrant Position

First Bid - $11,900,000 

Second Bid - $17,500,000 

Final Bid - $18,500,000 

CYN

Valuation Estimates

for Warrant ($thousands) Low High Estimate First Bid Second Bid Final Bid Details

Market Quotes $12,585 $15,338 $14,278 $11,900 $17,500 $18,500 Three market indications

Third Party $14,298 $21,800 $18,016 $11,900 $17,500 $18,500 External asset manager’s valuation 

estimates

Model Valuation $14,816 $21,947 $18,365 $11,900 $17,500 $18,500 Binomial option model adjusted for 

American style options

City National Corporation (CYN) 

Repurchase of CYN Warrant

On April 6, 2010, City National Corporation (CYN) agreed to pay $18.5 million for the warrant held by 

Treasury which entitled the holder of the warrant to purchase 1,128,668 shares of CYN at an exercise price of 

$53.16 per share. The warrant had an expiration date November 21, 2018. 
52 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix II – Wa

$2,000 

$3,000 

$4,000 

$5,000 

$6,000 

$7,000 

$8,000 

$9,000 

$10,000 

Market Quotes Third Party Model Valuation 

$ Thousands SVB Financial Group (SIVB) 

Fair Market Value Estimates of US reasury's Warrant Position 

First Bid - $3,800,000 

Second Bid - $6,200,000 

Final Bid - $6,820,000 

SIVB

Valuation Estimates

for Warrant ($thousands) Low High Estimate First Bid Second Bid Final Bid Details

Market Quotes $4,483 $6,289 $5,524 $3,800 $6,200 $6,820 Three market indications

Third Party $7,690 $9,040 $8,364 $3,800 $6,200 $6,820 External asset manager’s valuation 

estimates

Model Valuation $5,704 $7,897 $6,782 $3,800 $6,200 $6,820 Binomial option model adjusted for 

American style options

SVB Financial Group (SIVB) 

Repurchase of SIVB Warrant

On June 8, 2010, SVB Financial Group (SIVB) agreed to pay $6.8 million for the warrant held by Treasury 

which entitled the holder of the warrant to purchase 354,058 shares of SIVB at an exercise price of $49.78 per 

share. The warrant had an expiration date December 12, 2018. 
Warrant Disposition Report - Update DECEMBER 31, 2010 53Appendix II – Wa

Market Quotes Third Party Model Valuation 

$120,000

$130,000

$140,000

$150,000

$160,000

$170,000

$180,000

$190,000

$200,000

$210,000

$220,000

Discover Financial Services (DFS)

Fair Market Value Estimates of US Treasury's Warrant Position

Third Bid - $165,000,000

$ Millions

Final Bid - $172,000,000

Note: The chart above shows Treasury’s warrant valuation analysis at the time of DFS’s last bid in late June 2010. 

Two months earlier, DFS had placed bids of $165 million and $180 million on 4/23/10 and 5/4/10, respectively. At 

that time, DFS’s stock price was approximately 10% higher than it was in late June 2010. Accordingly, the bids were 

below the mid points of Treasury’s various valuation metrics and were not accepted. When considering the $180 

million bid in early May 2010, the mid point valuation estimates were as follows: market indications $189 million, 

third party $198 million, and Treasury’s model $186 million. 

DFS

Valuation Estimates

for Warrant ($millions) Low High Estimate Third Bid Final Bid Details

Market Quotes $164 $168 $166 $165 $172 Three market indications

Third Party $151 $188 $169 $165 $172 External asset manager’s valuation estimates

Model Valuation $137 $168 $152 $165 $172 Binomial option model adjusted for American style options

Discover Financial Services (DFS) 

Repurchase of DFS Warrant

On June 29, 2010, Discover Financial Services (DFS) agreed to pay $172 million for the warrant held by 

Treasury which entitled the holder of the warrant to purchase 20,500,413 shares of DFS at an exercise price of 

$8.96 per share. The warrant had an expiration date of March 13, 2019. 
54 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix II – Wa

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

$500

Bar Harbor Bankshares (BHB)

Fair Market Value Estimates of US Treasury's Warrant Position

Third Bid - $225,000

Final Bid - $250,000

Market Quotes Third Party Model Valuation 

$ Thousands

BHB

Valuation Estimates

for Warrant ($thousands) Low High Estimate Third Bid Final Bid Details

Market Quotes $189 $196 $193 $225 $250 Two market indications

Third Party $239 $393 $315 $225 $250 External asset manager’s valuation estimates

Model Valuation $182 $329 $255 $225 $250 Binomial option model adjusted for American style options

NOTE: The chart above shows Treasury’s warrant valuation analysis at the time of BHB’s last bid in July 2010. 

Months earlier, BHB had placed bids of $67,000 and $175,000 on 3/10/10 and 4/23/10, respectively. The bids 

were below Treasury’s various valuation metrics at that time and were not accepted. 

Bar Harbor Bankshares (BHB) 

Repurchase of BHB Warrant

On July 22, 2010, Bar Harbor Bankshares (BHB) agreed to pay $250,000 for the warrant held by Treasury which 

entitled the holder of the warrant to purchase 52,455 shares of BHB at an exercise price of $26.81 per share. The 

warrant had an expiration date of January 16, 2019. 
Warrant Disposition Report - Update DECEMBER 31, 2010 55Appendix II – Wa

Market Quotes Third Party Model Valuation 

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

Citizens and Northern Corporation (CZNC)

Fair Market Value Estimates of US Treasury's Warrant Position

Final Bid - $400,000

$ Thousands

CZNC

Valuation Estimates

for Warrant ($thousands) Low High Estimate Final Bid Details

Market Quotes $127 $378 $245 $400 Three market indications

Third Party $620 $890 $753 $400 External asset manager’s valuation estimates

Model Valuation $217 $415 $316 $400 Binomial option model adjusted for American style options

Citizens & Northern Corporation (CZNC)

Repurchase of CZNC Warrant

On August 25, 2010, Citizens & Northern Corporation (CZNC) agreed to pay $400,000 for the warrant held by 

Treasury which entitled the holder of the warrant to purchase 194,794 shares of CZNC at an exercise price of $20.36 

per share. The warrant had an expiration date of January 16, 2019.
56 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix II – Wa

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

Columbia Banking System, Inc. (COLB)

Fair Market Value Estimates of US Treasury's Warrant Position

Final Bid - $3,301,647

Market Quotes Third Party Model Valuation 

$ Thousands

COLB

Valuation Estimates

for Warrant ($thousands) Low High Estimate Final Bid Details

Market Quotes $1,950 $3,383 $2,632 $3,302 Four market indications

Third Party $2,639 $3,454 $3,042 $3,302 External asset manager’s valuation estimates

Model Valuation $2,497 $3,299 $2,893 $3,302 Binomial option model adjusted for American style options

Columbia Banking System (COLB) 

Repurchase of COLB Warrant

On August 25, 2010, Columbia Banking System (COLB) agreed to pay $3.3 million for the warrant held by 

Treasury which entitled the holder of the warrant to purchase 398,023 shares of COLB at an exercise price of 

$14.49 per share. The warrant had an expiration date of November 21, 2018.
Warrant Disposition Report - Update DECEMBER 31, 2010 57Appendix II – Wa

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$5,000

$5,500

$6,000

The Bancorp, Inc. (TBBK)

Fair Market Value Estimates of US Treasury's Warrant Position

Final Bid for Warrants - $4,753,984.55

Market Quotes Third Party Model Valuation 

$ Thousands

Note: The chart above shows Treasury’s warrant valuation analysis at the time of TBBK’s last bid in early 

September 2010. Months earlier, TBBK had placed bids of $3.55 million and $4.85 million on 3/15/10 and 

3/29/10, respectively. At that time, TBBK’s stock price was more than 20% higher than it was in September 

2010. Accordingly, the bids were below some of the mid points of Treasury’s various valuation metrics and were 

not accepted. When considering the $4.85 million bid in late March 2010, the mid point valuation estimates 

were as follows: market indications $6.0 million, third party $4.6 million, and Treasury’s model $4.8 million.

TBBK

Valuation Estimates

for Warrant ($thousands) Low High Estimate Final Bid Details

Market Quotes $3,666 $4,578 $4,122 $4,754 Two market indications

Third Party $4,558 $5,048 $4,960 $4,754 External asset manager’s valuation estimates

Model Valuation $3,323 $3,881 $3,742 $4,754 Binomial option model adjusted for American style options

The Bancorp, Inc. (TBBK) 

Repurchase of TBBK Warrant

On September 2, 2010, The Bancorp, Inc. (TBBK) agreed to pay $4.75 million for the warrant held by 

Treasury which entitled the holder of the warrant to purchase 980,203 shares of TBBK at an exercise price of 

$3.46 per share. The warrant had an expiration date of December 12, 2018.
58 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix II – Wa

Market Quotes Third Party Model Valuation 

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

$20,000

Fulton Financial Corporation (FULT)

Fair Market Value Estimates of US Treasury's Warrant Position

First Bid - $8,000,000

Second Bid - $9,500,000

Final Bid - $10,800,000

$ Thousands

FULT

Valuation Estimates

for Warrant ($thousands) Low High Estimate

First 

Bid

Second 

Bid

Final 

Bid Details

Market Quotes $8,525 $11,648 $10,288 $8,000 $9,500 $10,800 Four market indications

Third Party $6,832 $13,168 $9,918 $8,000 $9,500 $10,800 External asset manager’s valuation estimates

Model Valuation $7,976 $13,155 $10,537 $8,000 $9,500 $10,800 Binomial option model adjusted for American style options

Fulton Financial Corporation (FULT)

Repurchase of FULT Warrant

On September 3, 2010, Fulton Financial Corporation (FULT) agreed to pay $10.8 million for the warrant held 

by Treasury which entitled the holder of the warrant to purchase 5,509,756 shares of FULT at an exercise price 

of $10.25 per share. The warrant had an expiration date of December 23, 2018.
Warrant Disposition Report - Update DECEMBER 31, 2010 59Appendix II – Wa

Capital One Financial Corp. (COF) 

Sale of COF Warrant

On December 3, 2009, Treasury auctioned the Capital One Financial Corp. (COF) warrant for $149 million 

in gross proceeds. The warrant entitled the holder to purchase 12,657,960 shares of COF at a strike price of 

$42.13 per share and expired on November 14, 2018. 

NOTE: Above analysis was done to evaluate COF’s bid on 6/30/09 and is not directly comparable to the auction results on 12/3/09 as market conditions changed over the intervening five months. In particular, COF’s 

stock price appreciated 69% while short-term implied volatility in the stock declined slightly.

$0 

$20,000 

$40,000 

$60,000 

$80,000 

$100,000 

$120,000 

$140,000 

$160,000 

Market Quotes Third Party Model Valuation 

Final Bid - $46,500,000 

 Capital One Financial (COF) 

Fair Market Value Estimates of Treasury's Warrant Position 

$ Millions

COF

Valuation Estimates

for Warrant ($millions) Low High Estimate Final Bid Details

Market Quotes $2 $70 $30 $46.5 Seven market indications

Third Party $107 $148 $124 $46.5 External asset manager’s valuation estimates

Model Valuation $86 $131 $108 $46.5 Binomial option model adjusted for American style options
60 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix II – Wa

JP Morgan Chase & Co. (JPM) 

Sale of JPM Warrant

On December 10, 2009, Treasury auctioned the JPMorgan Chase & Co. (JPM) warrant for $950 million 

in gross proceeds. The warrant entitled the holder to purchase 88,401,697 shares of JPM at a strike price of 

$42.42 per share and expired on October 28, 2018. 

$400,000 

$500,000 

$600,000 

$700,000 

$800,000 

$900,000 

$1,000,000 

$1,100,000 

$1,200,000 

$1,300,000 

$1,400,000 

Market Quotes Third Party Model Valuation 

JPMorgan (JPM) 

Fair Market Value Estimates of Treasury's Warrant Position 

Final Bid - $825,539,247 

$ Millions

JPM

Valuation Estimates

for Warrant ($millions) Low High Estimate Final Bid Details

Market Quotes $488 $1,137 $658 $825.5 Seven market indications

Third Party $875 $1,252 $1,063 $825.5 External asset manager’s valuation estimates

Model Valuation $900 $1,097 $998 $825.5 Binomial option model adjusted for American style options

NOTE: Above analysis was done to evaluate JPM’s bid on 6/17/09 and is not directly comparable to the 

auction results on 12/10/09 as market conditions changed over the intervening six months. In particular, JPM’s 

stock price appreciated 26% while short-term implied volatility in the stock declined more than 25%.
Warrant Disposition Report - Update DECEMBER 31, 2010 61Appendix II – Wa

TCF Financial Corporation (TCB) 

Sale of TCB Warrant

On December 15, 2009, Treasury auctioned the TCF Financial Corporation (TCB) warrant for $9.6 million in 

gross proceeds. The warrant entitled the holder to purchase 3,199,988 shares of TCB at a strike price of $16.93 

per share and expired on November 14, 2018. 

$0 

$5,000 

$10,000 

$15,000 

$20,000 

$25,000 

Market Quotes Third Party Model Valuation 

TCF Financial (TCB) 

Fair Market Value Estimates of Treasury's Warrant Position 

Final Bid - $3,200,000 

$ Millions

TCB

Valuation Estimates

for Warrant ($millions) Low High Estimate Final Bid Details

Market Quotes $12.1 $20.5 $15.9 $3.2 Three market indications

Third Party $13.4 $19.1 $16.2 $3.2 External asset manager’s valuation estimates

Model Valuation $11.3 $17.2 $14.3 $3.2 Binomial option model adjusted for American style options

NOTE: Above analysis was done to evaluate TCB’s bid on 5/5/09 and is not directly comparable to the auction 

results on 12/15/09 as market conditions changed over the intervening seven months. In particular, TCB’s 

stock price declined 16% while short-term implied volatility in the stock declined more than 40%.
62 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix II – Wa

$500 

$1,500 

$2,500 

$3,500 

$4,500 

$5,500 

$6,500 

$7,500 

$8,500 

Final Bid - $2,291,348 

Market Quotes Third Party Model Valuation 

$ Thousands Valley National Bancorp (VLY) 

Fair Market Value Estimates of US Treasury's Warrant Position 

NOTE: The above analysis was done to evaluate VLY’s bid on 1/7/10 and is not directly comparable to the 

auction results on 5/18/10 as market conditions changed over the intervening five months. 

VLY

Valuation Estimates

for Warrant ($thousands) Low High Estimate Final Bid Details

Market Quotes $723 $3,714 $1,801 $2,291 Three market indications

Third Party $4,607 $7,791 $6,160 $2,291 External asset manager’s valuation estimates

Model Valuation $2,723 $6,564 $4,616 $2,291 Binomial option model adjusted for American style options

Valley National Bancorp (VLY)

Sale of VLY Warrant

On May 18, 2010, Treasury auctioned the Valley National Bancorp (VLY) warrant for $5.6 million in gross 

proceeds. The warrant entitled the holder to purchase 2,532,542 shares of VLY at an exercise price of $17.77 per 

share and expired on November 14, 2018. 
Warrant Disposition Report - Update DECEMBER 31, 2010 63Appendix II – Wa

NOTE: The above analysis was done to evaluate WFC’s bid on 2/22/10 and is not directly comparable to the auction 

results on 5/20/10 as market conditions changed over the intervening three months. When considering Wells Fargo’s 

offer to repurchase its warrant, Treasury concluded the market value realized through an auction would likely be in 

the high end of the valuation range. The results of past auctions have indicated that warrants associated with large well 

know companies, such as Wells Fargo, attract high levels of investor interest and competitive bidding. 

$300 

$400 

$500 

$600 

$700 

$800 

$900 

$1,000 

$1,100 

$1,200 

Market Quotes Third Party Model Valuation 

Wells Fargo & Company (WFC) 

Fair Market Value Estimates of US Treasury's Warrant Position 

First Bid - $593,600,000 

Second Bid - $700,000,000 

Final Bid - $750,000,000 

$ Millions

WFC

Valuation Estimates

for Warrant ($millions) Low High Estimate First Bid Second Bid Final Bid Details

Market Quotes $496 $871 $686 $593.6 $700 $750 Seven market indications

Third Party $690 $1,071 $879 $593.6 $700 $750 External asset manager’s valuation estimates

Model Valuation $5,551 $946 $739 $593.6 $700 $750 Binomial option model adjusted for American style options

Wells Fargo & Company (WFC)

Sale of WFC Warrant

On May 20, 2010, Treasury auctioned the Wells Fargo & Company (WFC) warrant for $849 million in gross 

proceeds. The warrant entitled the holder to purchase 110,261,688 shares of WFC at an exercise price of $34.01 

per share and expired on October 28, 2018. Wells Fargo repurchased 70,165,963 

warrant shares in the auction. 
64 Warrant Disposition Report - Update DECEMBER 31, 2010 Appendix II – Wa

$2,000 

$3,000 

$4,000 

$5,000 

$6,000 

$7,000 

$8,000 

$9,000 

$10,000 

Market Quotes Third Party 

$ Thousands Sterling Bancshares, Inc. (SBIB) 

Fair Market Value Estimates of US Treasury's Warrant Position 

Model Valuation 

Final Bid - $4,000,000 

NOTE: The above analysis was done to evaluate SBIB’s bid on 6/5/09 and is not directly comparable to the 

auction results on 6/9/10 as market conditions changed over the intervening twelve months. Specifically, SBIB’s 

stock price declined 28% from $7.02 on 6/5/09 to $5.00 on 6/9/10. 

SBIB

Valuation Estimates

for Warrant ($thousands) Low High Estimate Final Bid Details

Market Quotes $2,877 $6,120 $4,467 $4,000 Five market indications

Third Party $6,828 $9,092 $7,9455 $4,000 External asset manager’s valuation estimates

Model Valuation $5,491 $6,458 $5,988 $4,000 Binomial option model adjusted for American style options

Sterling Bancshares, Inc. (SBIB)

Sale of SBIB Warrant

On June 9, 2010, Treasury auctioned the Sterling Bancshares, Inc. (SBIB) warrant for $3 million in gross 

proceeds. The warrant entitled the holder to purchase 2,615,557 shares of SBIB at an exercise price of $7.18 per 

share and expired on December 12, 2018. 
Warrant Disposition Report - Update DECEMBER 31, 2010 65Append

Appendix III – Warrant Portfolio

Warrants Held in Institutions That Have Fully Redeemed CPP Investment

as of December 31, 2010

Institution Name Ticker Preferred 

Repurchase Date

Preferred Investment

($thousands) Warrant Shares Strike Price

QEO? (i.e. 

warrants cut by 

50%)

Citigroup Inc. C 12/10/2010 $25,000,000 210,084,034 $17.85 - 

Huntington Bancshares HBAN 12/22/2010 $1,398,071 23,562,994 $8.90 - 

First Horizon National Corporation FHN 12/22/2010 $866,540 14,578,136 $8.92 - 

Webster Financial Corporation WBS 12/29/2010 $400,000 3,282,276 $18.28 - 

East West Bancorp EWBC 12/29/2010 $306,546 1,517,555 $15.15 Yes 

Susquehanna Bancshares, Inc. SUSQ 12/22/2010 $300,000 3,028,264 $14.86 - 

Wintrust Financial Corporation WTFC 12/22/2010 $250,000 1,643,295 $22.82 - 

Boston Private Financial Holdings Inc BPFH 6/16/2010 $154,000 2,887,500 $8.00 - 

1st Source Corporation SRCE 12/29/2010 $111,000 837,947 $19.87 - 

F.N.B. Corporation FNB 9/9/2009 $100,000 651,042 $11.52 Yes 

Westamerica Bancorporation WABC 11/18/2009 $83,726 246,640 $50.92 - 

Sandy Spring Bancorp, Inc. SASR 12/15/2010 $83,094 651,547 $19.13 - 

Lakeland Financial Corp LKFN 6/9/2010 $56,044 198,269 $21.20 Yes 

First Community Bancshares, Inc. FCBC 7/8/2009 $41,500 88,273 $35.26 Yes 

Bank of Marin Bancorp BMRC 3/31/2009 $28,000 154,242 $27.23 - 

Shore Bancshares, Inc. SHBI 4/15/2009 $25,000 172,970 $21.68 - 

Heritage Fianancial Corporation HFWA 12/22/2010 $24,000 138,037 $13.04 Yes 

Middleburg Financial Corporation MBRG 12/23/2009 $22,000 104,101 $15.85 Yes 

First PacTrust Bancorp, Inc. FPTB 12/15/2010 $19,300 280,795 $10.31 - 

LCNB Corporation LCNB 10/21/2009 $13,400 217,063 $9.26 - 

1st Constitution Bancorp FCCY 10/27/2010 $12,000 220,745 $8.15 - 

Commerce National Bank CNBF 10/7/2009 $5,000 87,209 $8.60 - 

TOTAL 22 $29,299,221 6