<Page>
MERGER FAIRNESS REVIEW OF
REVERE, MHC
AND
RFS BANCORP, INC.
APRIL 27, 2001
BEN A. PLOTKIN
CHAIRMAN & CHIEF EXECUTIVE OFFICER
ROBIN P. SUSKIND
MANAGING DIRECTOR
RYAN, BECK & CO.
<Page>
PRIVATE AND CONFIDENTIAL
THE ATTACHED MATERIALS HAVE BEEN COMPILED AND PREPARED BY RYAN, BECK AND
CO., LLC SOLELY FOR THE USE AND INFORMATION OF THE BOARD OF DIRECTORS AND
MANAGEMENT OF REVERE, MHC AND RFS BANCORP, INC. SUCH MATERIALS ARE NOT
INTENDED FOR VIEWING BY ANY OTHER PERSON OR PARTY FOR ANY PURPOSE, AND
NO SUCH REVIEW SHOULD BE UNDERTAKEN WITHOUT THE PRIOR WRITTEN CONSENT OF
RYAN, BECK AND CO., LLC THROUGH ONE OR MORE OF ITS AUTHORIZED OFFICERS.
PORTIONS OF THE INFORMATION CONTAINED HEREIN ARE NOT MADE PUBLICLY AVAILABLE
AND ARE NOT INTENDED FOR PUBLIC DISSEMINATION. THE PUBLIC DISCLOSURE OR
PERSONAL USE OF SUCH INFORMATION MAY BE ACTIONABLE UNDER APPLICABLE
FEDERAL AND/OR STATE SECURITIES LAWS.
<Page>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
1. Term Sheet
2. Analysis of RFS Bancorp, Inc.
A. Price/Volume Chart
B. Pricing vs. Indices
C. Peer Group Comparison - Fully Converted Thrifts
D. MHC Peer Group Comparison
3. Background on Danvers Bancorp, Inc.
4. Valuation of RFS Bancorp, Inc.
A. Valuation Methodology
B. Methodology #1
* Current Second Step Valuation
* Discounted Dividend Analysis - Pro Forma Second Step
C. Methodology #2
* Projected Second Step Valuation
D. Methodology #3
* Analysis of Breakeven Returns
5. Valuation of Revere, MHC
A. Financial Modeling of Pro Forma Company
6. Marketing Process
7. Conclusion
8. Relationship with Ryan, Beck & Co.
<Page>
SUMMARY OF SIGNIFICANT TERMS OF PROPOSAL
BACKGROUND The proposed transaction contemplates the combination
of two complementary companies in contiguous markets.
RFS Bancorp, Inc.'s ("RFS") objective is to realize a
fair premium for its public shareholders. Revere,
MHC's ("MHC") objective is to preserve the rights of
its depositors and borrowers in a well recognized and
community oriented mutual entity. Danvers Bancorp,
Inc. and Danvers Savings Bank's ("Danvers") objective
is to expand through Revere Federal Savings Bank
("Revere") into an attractive market area in a
cost-effective fashion. This expansion will allow
Danvers the ability to cross-sell its products and
services to Revere's current customer base.
PROPOSED TRANSACTION Pursuant to the agreement, the following steps will
occur: (1) MHC is merged with and Danvers, Bancorp
with Danvers, Bancorp as the surviving entity; (2)
the common stock owned by the MHC will be cancelled;
(3) RFS effectuates a reverse stock split and thereby
cashes out its minority shareholders. Immediately
following the reverse stock split, RFS is liquidated;
(4) the public stockholders of RFS will exchange
their shares for $22.75 per share in cash; (5) Revere
is merged with and into Danvers Savings Bank with
Danvers Savings Bank as the surviving entity; and (6)
the depositors of Revere will become depositors of
Danvers Savings Bank and obtain liquidation rights
and stock subscription rights in Danvers on a
retroactive basis and retain the original deposit
opening dates in Revere.
The parties agree to modify the structure of the
transaction to meet regulatory requirements provided
the basic terms and business intent of the
transaction are preserved.
CONSIDERATION Danvers will pay $22.75 in cash for each share of RFS
not owned by the MHC, approximately 44% of RFS's
outstanding stock. Holders of all stock options to
acquire RFS common stock under RFS's 1999 Stock
Option Plan would receive cash for the "in the money"
value of the options.
ACCOUNTING TREATMENT To be accounted for as a purchase.
TREATMENT OF ESOP The cash merger consideration received by RFS's ESOP
will first be used to repay the ESOP loan. The
remaining cash held by the ESOP after repayment of
the loan shall be fully allocated to the ESOP
participants in proportion to their account
balances. The participants in the plan will become
fully vested and the ESOP shall be terminated as a
result of the acquisition.
POST-MERGER Danvers will operate Revere as a separate division
OPERATING STRATEGY for a period of one year. During that year, James J.
McCarthy will serve as President and CEO of Revere
division of Danvers.
1
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LOCK-UP PROVISION As a condition of Danvers' willingness and in order
to induce Danvers to enter into the transaction, RFS
will pay Danvers an aggregate termination fee of $1.0
million in the event of termination after another
party has made a superior offer OR if RFS does not
receive stockholder approval as a result of MHC owned
shares voting against the transaction.
EMPLOYMENT AGREEMENTS Danvers will honor all employment contracts including
change of control provisions. This transaction will
be treated as a change of control.
MANAGEMENT MATTERS James J. McCarthy will enter into an 18 month
employment agreement and a three year retention
agreement with Danvers. Mr. McCarthy's title with
Danvers will be Executive Vice President for a period
of approximately one year (while Revere remains a
division) and will then be named the Chief Operating
Officer of Danvers by December 31, 2002. During the
period Revere is run as a division of Danvers, Mr.
McCarthy will also serve as President and Chief
Executive Officer of Revere. Tony Patti and Judy
Tenaglia will be offered jobs at Danvers with
salaries of at least $85,000 and $60,000,
respectively, with an additional discretionary bonus
of 25% of their base salary.
Danvers will honor the terms of RFS's 1999
Recognition and Retention Plan ("RRP").
DIRECTOR MATTERS Danvers will form a Revere Advisory Board consisting
of the current directors of Revere (with the
exception of any Revere Board members which are put
on Danvers' Board, except James J. McCarthy) with
annual Advisory Board fees equal to $5,000. The
Advisory Board will meet on a quarterly basis. The
Advisory Board shall have a term of one year with the
expectation of a one year renewal. Two members of
Revere's current Board will be selected by Danvers to
serve on Danvers's Board immediately after the close
of the transaction. Revere Officers and Directors
will be indemnified for six years with "tail"
directors and officer insurance coverage to be
provided.
2
<Page>
EMPLOYEE MATTERS Employees of Revere will be granted credit for years
of service for eligibility and vesting purposes in
connection with Danvers' benefit plans, including the
vacation policy. Danvers will make every effort to
place displaced employees in comparable positions.
Any Revere employee who is terminated involuntarily
(other than for cause) within one year of the closing
of the transaction shall receive a lump sum severance
payment equal to the greater of the remainder of
their pay for the remainder of the 52 week period
following consummation of the transaction or two
weeks pay for each year of employment with Revere
(not to exceed 36 weeks).
At the option of Revere exercised by written notice
given to Danvers prior to the closing of the
transaction, Danvers' defined benefit pension plan
will be amended to provide that the benefits to be
provided to employees of Revere will be either (i)
the accrued benefit under Danvers' defined benefit
pension plan giving full credit to service and
compensation earned by Revere employees while
employed by Revere and giving full credit to service
and compensation earned while employed by Danvers or
(ii) the sum of (A) the benefit under the Revere
defined benefit pension plan accrued as of the close
of the transaction and (B) the benefit under the
Danvers defined benefit with no accruals for service
or compensation earned while an employee of Revere.
TERMINATION FEATURES The only termination features shall be: (a) mutual
consent; (b) breach; (c) failure to close by June 30,
2002; (d) failure to receive regulatory approval; or
(e) failure to receive shareholder or depositor
approval.
CONDITIONS RFS and MHC's obligations are subject to, among other
things, (i) receipt of a fairness opinion upon
execution of a definitive agreement and updated as of
the date of the shareholder proxy statement; and (ii)
receipt of necessary shareholder and depositor
approvals.
TERMINATION DATE June 30, 2002.
DIRECTOR LOCK-UP RFS Directors agree to vote in favor of transactions.
DUE DILIGENCE Due Diligence has been completed by both parties.
3
<Page>
EXPENSES Each party to bear their own expenses. However, in
the event that Danvers does not receive Corporator
approval and the transaction is terminated, RFS shall
receive reimbursement for $250,000 of expenses
incurred as a result of this transaction. Conversely,
if RFS does not receive stockholder approval with the
MHC owned shares voting and the transaction is
terminated, then RFS is liable to Danvers to
reimburse them for up to $100,000 of incurred costs
as a result of this transaction.
4
<Page>
RFS BANCORP, INC.
WEEKLY PRICE-VOLUME GRAPH - SINCE IPO
RFED
- ---------------------------------------------
DATE VOLUME PRICE
- ---------------------------------------------
12/21/1998 - 10.00 Min - 6.75
12/25/1998 16,600 9.00
1/1/1999 4,500 9.75 Max 40,600 11
1/8/1999 1,000 8.50
1/15/1999 5,800 8.25
1/22/1999 5,700 8.50
1/29/1999 2,500 8.25
2/5/1999 1,500 8.50
2/12/1999 - 8.50
2/19/1999 - 8.50
2/26/1999 - 8.50
3/5/1999 - 8.50
3/12/1999 3,800 9.00
3/19/1999 - 9.00
3/26/1999 - 9.00
4/2/1999 - 9.00
4/9/1999 - 9.00
4/16/1999 - 9.00
4/23/1999 - 9.00
4/30/1999 1,000 8.63
5/7/1999 1,000 8.50
5/14/1999 3,600 8.50
5/21/1999 - 8.50
5/28/1999 6,000 8.00
6/4/1999 - 8.00
6/11/1999 2,000 8.00
6/18/1999 - 8.00
6/25/1999 2,000 7.25
7/2/1999 - 7.25
7/9/1999 1,000 7.25
7/16/1999 1,000 7.25
7/23/1999 - 7.25
7/30/1999 7,600 8.00
8/6/1999 3,700 8.75
8/13/1999 - 8.75
8/20/1999 - 8.75
8/27/1999 - 8.75
9/3/1999 11,400 10.00
9/10/1999 40,600 10.50
9/17/1999 - 10.50
9/24/1999 - 10.50
10/1/1999 2,000 10.50
10/8/1999 - 10.50
10/15/1999 100 9.25
10/22/1999 1,400 9.25
10/29/1999 500 9.25
11/5/1999 1,200 9.00
11/12/1999 - 9.00
11/19/1999 2,500 8.75
11/26/1999 1,300 7.50
12/3/1999 - 7.50
12/10/1999 500 7.25
12/17/1999 - 7.25
12/24/1999 5,400 7.13
12/31/1999 2,500 7.00
1/7/2000 1,300 6.75
1/14/2000 1,800 7.19
1/21/2000 1,200 7.63
1/28/2000 100 7.50
2/4/2000 20,200 9.00
2/11/2000 17,600 9.13
2/18/2000 2,500 9.13
2/25/2000 5,400 9.13
3/3/2000 2,400 9.13
3/10/2000 10,200 8.25
3/17/2000 1,700 8.25
3/24/2000 - 8.25
3/31/2000 - 8.25
4/7/2000 3,000 8.63
4/14/2000 2,000 8.63
4/21/2000 3,500 8.38
4/28/2000 33,400 8.63
5/5/2000 16,700 9.00
5/12/2000 - 9.00
5/19/2000 200 9.00
5/26/2000 - 9.00
6/2/2000 3,000 8.50
6/9/2000 - 8.50
6/16/2000 2,200 8.38
6/23/2000 1,000 8.25
6/30/2000 - 8.25
7/7/2000 1,500 8.25
7/14/2000 1,000 9.00
7/21/2000 - 9.00
7/28/2000 - 9.00
8/4/2000 - 9.00
8/11/2000 - 9.00
8/18/2000 600 8.69
8/25/2000 - 8.69
9/1/2000 1,900 8.38
9/8/2000 4,300 8.25
9/15/2000 7,500 8.38
9/22/2000 1,000 8.25
9/29/2000 - 8.25
10/6/2000 - 8.25
10/13/2000 - 8.25
10/20/2000 26,000 9.50
10/27/2000 400 9.25
11/3/2000 8,500 9.25
11/10/2000 - 9.25
11/17/2000 2,400 8.63
11/24/2000 1,000 8.13
12/1/2000 100 9.25
12/8/2000 100 9.25
12/15/2000 100 9.25
12/22/2000 - 9.25
12/29/2000 4,100 7.75
1/5/2001 3,500 7.50
1/12/2001 - 7.50
1/19/2001 - 7.50
1/26/2001 - 7.50
2/2/2001 - 7.50
2/9/2001 100 8.50
2/16/2001 400 7.88
2/23/2001 - 7.88
3/2/2001 3,000 8.13
3/9/2001 1,900 8.25
3/16/2001 5,300 8.38
3/23/2001 1,600 8.69
3/30/2001 6,300 8.75
4/6/2001 4,200 8.88
4/13/2001 9,000 8.95
4/20/2001 3,000 9.40
4/25/2001 8,100 11.00
<Page>
RFS BANCORP, INC.
INDEX GRAPH
RELATIVE RELATIVE RELATIVE
CHANGE CHANGE CHANGE
- ------------------------------------------------------------------ -----------------------------------------------------
DATE R2FINL NASDAQ BANK INDEX RFED R2FINL NASDAQ BANK INDEX RFED
================================================================== =====================================================
12/21/1998 1.00 1.00 1.00 152.10 1784.57 10.00
12/25/1998 1.01 1.00 0.90 154.30 1791.33 9.00
1/1/1999 1.04 1.03 0.98 157.59 1838.00 9.75
1/8/1999 1.05 1.04 0.85 159.03 1847.95 8.50
1/15/1999 1.03 1.02 0.83 156.28 1816.89 8.25
1/22/1999 1.02 0.99 0.85 154.68 1771.71 8.50
1/29/1999 1.03 1.00 0.83 156.12 1792.27 8.25
2/5/1999 0.99 0.98 0.85 151.10 1754.24 8.50
2/12/1999 0.97 0.98 0.85 147.60 1749.45 8.50
2/19/1999 0.97 0.99 0.85 147.17 1763.44 8.50
2/26/1999 0.97 0.99 0.85 148.05 1771.76 8.50
3/5/1999 0.98 1.02 0.85 148.72 1812.41 8.50
3/12/1999 0.98 1.02 0.90 148.62 1825.87 9.00
3/19/1999 0.97 1.02 0.90 146.95 1813.58 9.00
3/26/1999 0.96 0.99 0.90 145.70 1771.34 9.00
4/2/1999 0.96 0.98 0.90 146.29 1741.69 9.00
4/9/1999 0.99 0.99 0.90 149.99 1769.58 9.00
4/16/1999 1.04 1.02 0.90 157.45 1824.10 9.00
4/23/1999 1.06 1.03 0.90 161.90 1846.34 9.00
4/30/1999 1.07 1.05 0.86 162.39 1873.79 8.63
5/7/1999 1.07 1.05 0.85 163.10 1877.85 8.50
5/14/1999 1.08 1.04 0.85 163.68 1860.81 8.50
5/21/1999 1.09 1.04 0.85 165.86 1856.65 8.50
5/28/1999 1.07 1.03 0.80 162.37 1842.10 8.00
6/4/1999 1.06 1.03 0.80 160.48 1838.12 8.00
6/11/1999 1.04 1.01 0.80 158.23 1801.43 8.00
6/18/1999 1.05 1.03 0.80 160.18 1835.43 8.00
6/25/1999 1.05 1.02 0.73 159.65 1828.10 7.25
7/2/1999 1.08 1.05 0.73 164.39 1868.68 7.25
7/9/1999 1.08 1.05 0.73 164.31 1865.75 7.25
7/16/1999 1.08 1.05 0.73 164.42 1867.84 7.25
7/23/1999 1.06 1.04 0.73 160.60 1848.89 7.25
7/30/1999 1.05 1.02 0.80 159.02 1811.93 8.00
8/6/1999 1.01 0.99 0.88 154.08 1764.87 8.75
8/13/1999 1.01 1.00 0.88 153.72 1783.72 8.75
8/20/1999 1.01 1.00 0.88 153.74 1787.27 8.75
8/27/1999 1.00 1.00 0.88 152.00 1777.34 8.75
9/3/1999 1.00 0.98 1.00 151.34 1750.83 10.00
9/10/1999 0.99 0.96 1.05 150.15 1721.96 10.50
9/17/1999 0.97 0.94 1.05 147.57 1680.85 10.50
9/24/1999 0.95 0.93 1.05 144.40 1661.53 10.50
10/1/1999 0.96 0.94 1.05 146.50 1676.34 10.50
10/8/1999 0.97 0.98 1.05 147.65 1739.97 10.50
10/15/1999 0.94 0.93 0.93 143.54 1662.58 9.25
10/22/1999 0.95 0.96 0.93 144.89 1716.53 9.25
10/29/1999 0.98 1.01 0.93 149.23 1801.03 9.25
11/5/1999 1.00 1.03 0.90 151.56 1836.28 9.00
11/12/1999 0.99 1.02 0.90 149.94 1821.01 9.00
11/19/1999 0.98 1.02 0.88 149.66 1823.44 8.75
11/26/1999 0.97 0.99 0.75 146.83 1765.70 7.50
12/3/1999 0.96 1.00 0.75 146.42 1782.55 7.50
12/10/1999 0.94 0.95 0.73 143.52 1694.90 7.25
12/17/1999 0.93 0.92 0.73 141.89 1648.69 7.25
12/24/1999 0.94 0.94 0.71 142.31 1683.64 7.13
12/31/1999 0.95 0.95 0.70 144.26 1691.29 7.00
1/7/2000 0.92 0.90 0.68 140.58 1602.52 6.75
1/14/2000 0.93 0.90 0.72 141.24 1599.37 7.19
1/21/2000 0.93 0.87 0.76 140.88 1543.67 7.63
1/28/2000 0.90 0.87 0.75 137.61 1544.35 7.50
2/4/2000 0.92 0.88 0.90 140.12 1566.85 9.00
2/11/2000 0.90 0.86 0.91 137.65 1526.06 9.13
2/18/2000 0.88 0.83 0.91 134.57 1473.63 9.13
2/25/2000 0.87 0.80 0.91 132.72 1430.76 9.13
3/3/2000 0.89 0.79 0.91 136.05 1406.44 9.13
3/10/2000 0.88 0.75 0.83 133.54 1344.46 8.25
3/17/2000 0.92 0.84 0.83 139.70 1490.13 8.25
3/24/2000 0.93 0.85 0.83 140.88 1514.91 8.25
3/31/2000 0.92 0.86 0.83 139.51 1530.54 8.25
4/7/2000 0.92 0.85 0.86 139.34 1515.02 8.63
4/14/2000 0.87 0.81 0.86 132.65 1447.44 8.63
4/21/2000 0.89 0.84 0.84 135.17 1497.26 8.38
4/28/2000 0.92 0.84 0.86 140.20 1493.63 8.63
5/5/2000 0.92 0.82 0.90 139.34 1468.43 9.00
5/12/2000 0.91 0.85 0.90 138.01 1510.40 9.00
5/19/2000 0.90 0.84 0.90 136.73 1496.46 9.00
5/26/2000 0.90 0.86 0.90 136.45 1535.28 9.00
6/2/2000 0.94 0.91 0.85 143.30 1631.86 8.50
6/9/2000 0.94 0.88 0.85 142.55 1569.34 8.50
6/16/2000 0.92 0.84 0.84 140.50 1496.27 8.38
6/23/2000 0.91 0.84 0.83 138.49 1504.52 8.25
6/30/2000 0.93 0.84 0.83 141.01 1497.35 8.25
7/7/2000 0.94 0.88 0.83 143.33 1572.42 8.25
7/14/2000 0.95 0.89 0.90 145.13 1596.97 9.00
7/21/2000 0.94 0.88 0.90 143.73 1568.19 9.00
7/28/2000 0.94 0.87 0.90 143.27 1549.11 9.00
8/4/2000 0.97 0.91 0.90 147.53 1625.87 9.00
8/11/2000 0.98 0.93 0.90 148.58 1652.88 9.00
8/18/2000 0.97 0.91 0.87 148.02 1630.01 8.69
8/25/2000 0.97 0.92 0.87 148.22 1643.48 8.69
9/1/2000 0.99 0.93 0.84 150.28 1668.57 8.38
9/8/2000 1.00 0.97 0.83 152.66 1728.39 8.25
9/15/2000 1.01 0.97 0.84 153.25 1730.99 8.38
9/22/2000 1.00 0.95 0.83 152.06 1699.80 8.25
9/29/2000 1.03 1.00 0.83 155.97 1779.01 8.25
10/6/2000 0.99 0.98 0.83 150.60 1749.09 8.25
10/13/2000 0.98 0.94 0.83 148.73 1677.14 8.25
10/20/2000 0.98 0.94 0.95 148.75 1670.22 9.50
10/27/2000 0.98 0.96 0.93 149.08 1708.97 9.25
11/3/2000 1.01 0.99 0.93 154.12 1763.63 9.25
11/10/2000 0.99 0.97 0.93 150.47 1735.23 9.25
11/17/2000 0.99 0.95 0.86 150.73 1695.24 8.63
11/24/2000 0.98 0.95 0.81 149.66 1693.16 8.13
12/1/2000 0.99 0.99 0.93 150.05 1767.62 9.25
12/8/2000 1.03 1.04 0.93 157.04 1853.09 9.25
12/15/2000 1.02 1.00 0.93 154.57 1791.12 9.25
12/22/2000 1.06 1.07 0.93 161.38 1908.81 9.25
12/29/2000 1.09 1.09 0.78 165.51 1939.45 7.75
1/5/2001 1.06 1.07 0.75 161.77 1905.82 7.50
1/12/2001 1.07 1.05 0.75 162.69 1868.13 7.50
1/19/2001 1.07 1.04 0.75 162.73 1858.39 7.50
1/26/2001 1.09 1.09 0.75 166.52 1937.15 7.50
2/2/2001 1.10 1.09 0.75 167.05 1947.14 7.50
2/9/2001 1.10 1.10 0.85 167.85 1962.30 8.50
2/16/2001 1.11 1.11 0.79 168.39 1980.82 7.88
2/23/2001 1.07 1.07 0.79 163.36 1910.73 7.88
3/2/2001 1.10 1.09 0.81 166.84 1944.74 8.13
3/9/2001 1.09 1.08 0.83 165.80 1920.41 8.25
3/16/2001 1.05 1.04 0.84 159.74 1850.12 8.38
3/23/2001 1.04 1.01 0.87 158.25 1800.29 8.69
3/30/2001 1.07 1.06 0.88 162.53 1883.23 8.75
4/6/2001 1.04 1.02 0.89 158.26 1827.32 8.88
4/13/2001 1.06 1.05 0.90 161.85 1873.38 8.95
4/20/2001 1.07 1.06 0.94 162.95 1895.45 9.40
4/25/2001 1.08 1.06 1.10 164.31 1897.46 11.00
<Page>
FULLY CONVERTED THRIFTS IN THE NEW ENGLAND AND MID-ATLANTIC REGIONS WITH
ASSETS BETWEEN $150 MILLION AND $400 MILLION
RFS BANCORP INC. (MHC)
Peer Group Comparison
<Table>
<Caption>
- -------------------------------------------------------------------------------
RFS BANCORP PEER PEER # IN
INC. (MHC)(1) AVERAGE(1) MEDIAN(1) RANK(2) SAMPLE
---------- ----------- ------------- ----------- ----------
CAPITALIZATION
- ------------------------------------------
Total Assets (000s) $153,533 (3) $278,404 $274,975 15 15
Total Deposits (000s) 104,154 (3) 200,855 198,917 15 15
Total Shareholders' Equity (000s) 10,821 (3) 21,539 20,604 14 15
Total Equity / Assets 7.05 %(3) 7.90 % 8.64 % 9 15
Tangible Equity / Tangible Assets 7.05 (3) 7.83 8.46 9 15
Tier 1 Capital / Risk-Adj Assets 13.01 15.29 16.55 7 12
Total Capital / Risk-Adj Assets 14.81 16.31 16.57 7 12
Total Borrowings / Total Assets 24.92 (3) 17.66 14.28 3 15
ASSET QUALITY
- ------------------------------------------
Non-Performing Loans / Loans 0.55 (3) 0.89 0.39 1 11
Loan Loss Reserves / NPLs 159.96 (3) 260.80 251.83 7 8
Loan Loss Reserves / Loans 0.88 (3) 1.08 0.97 9 14
Non-Performing Assets / Assets 0.34 (3) 0.57 0.30 1 11
Non-Performing Assets / Equity 4.82 (3) 9.94 3.98 1 11
LOAN & DEPOSIT COMPOSITION
- ------------------------------------------
Total Loans / Total Assets 61.71 (3) 62.40 65.58 8 14
Total Loans / Deposits 90.97 (3) 87.80 85.04 5 14
1-4 Family Loans / Total Loans 61.24 60.23 61.24 8 15
5+ Family Loans / Total Loans 0.00 3.28 1.62 13 15
Construction & Developmental Loans
/ Total Loans 6.13 5.61 3.01 4 15
Other Real Estate Loans / Total Loans 23.52 18.42 12.37 4 15
Real Estate Loans/Total Loans 90.89 87.54 93.15 10 15
Consumer Loans / Total Loans 1.85 7.47 2.21 9 15
Commercial Loans / Total Loans 7.26 4.95 1.82 5 15
Non-Interest Bearing Deposits/Total
Deposits 13.75 6.80 7.21 15 15
Time Deposits GREATER THAN $100,000
/ Total Deposits 35.49 12.97 9.73 8 9
Core Deposits / Total Deposits 64.51 87.03 90.27 2 9
1
<Page>
PERFORMANCE
- ------------------------------------------
Return on Average Assets 0.40 (3) 0.44 0.82 12 15
Return on Average Equity 5.57 (3) 3.79 12.44 10 15
Net Interest Margin 3.59 3.24 3.22 6 15
Yield / Cost Spread 3.11 2.87 2.78 7 15
Yield on Interest Earning Assets 7.76 7.74 7.67 6 15
Cost of Interest Bearing Liabilities 4.65 4.88 4.70 8 15
Non Interest Income / Average Assets 0.33 0.46 0.39 11 15
Non Interest Expense/Avg Assets 2.94 2.61 2.56 12 15
Occupancy & Equipment Expense/Avg Assets 0.37 0.37 0.36 7 12
Efficiency Ratio 79.77 (3) 73.14 69.09 12 15
GROWTH RATES
- ------------------------------------------
Asset Growth 24.51 (4) 5.96 4.05 1 15
Loan Growth Rate 24.56 (4) 7.25 7.19 1 14
Deposit Growth Rate 27.57 (4) 5.63 6.85 1 15
EPS Growth Rate 6.67 (4) 25.06 10.57 6 12
MARKET STATISTICS
- ------------------------------------------
Stock Price at April 25, 2001 11.00
Price / LTM EPS 10.57 x 9.12 x 12
Price / Book Value 97.97 % 91.94 % 15
Price / Tangible Book Value 98.79 94.43 15
Market Capitalization ($M) $21.52 $19.32 15
Dividend Yield 3.20 % 3.13 % 14
</Table>
(1) AS OF OR FOR THE LATEST 12 MONTH PERIOD.
(2) THE HIGHEST RANK IS 1 (FROM BEST PERFORMER IN CATEGORY TO WORST)
(3) AS OF OR FOR THE SIX MONTHS ENDED 3/31/2001.
(4) AS OF OR FOR THE TWELVE MONTHS ENDED 3/31/01.
2
<Page>
THRIFT TRADING PEER GROUP
FULLY CONVERTED THRIFTS IN THE NEW ENGLAND AND MID-ATLANTIC REGIONS WITH
ASSETS BETWEEN $150 MILLION AND $400 MILLION
<Table>
<Caption>
Financial
Number States Data
of of Herein
Short Name Ticker State Offices Operation as of:
- -------------------------------------------------------------------------------------------------------
Alliance Bncp of New England ANE CT 9 CT(9) 12/31/2000
Elmira Savings Bank ESBK NY 6 NY(5),PA(1) 12/31/2000
Finger Lakes Bancorp Inc. FLBC NY 7 NY(7) 12/31/2000
Hingham Instit. for Savings HIFS MA 6 MA(6) 03/31/2001
Independence Federal Svgs Bank IFSB DC 5 DC(4),MD(1) 12/31/2000
Ipswich Bancshares Inc. IPSW MA 8 MA(8) 03/31/2001
Laurel Capital Group Inc. LARL PA 6 PA(6) 03/31/2001
Mayflower Co-operative Bank MFLR MA 5 MA(5) 01/31/2001
Mystic Financial Inc. MYST MA 5 MA(5) 12/31/2000
Prestige Bancorp Inc. PRBC PA 5 PA(5) 12/31/2000
USABancShares.com Inc. USAB PA 4 PA(4) 12/31/2000
Washington Savings Bank, FSB WSB MD 5 MD(5) 01/31/2001
WHG Bancshares Corp. WHGB MD 5 MD(5) 12/31/2000
WVS Financial Corp. WVFC PA 6 PA(6) 03/31/2001
Average 6
Median 6
RFS Bancorp Inc. (MHC) RFED MA 2 MA(2) 12/31/2000
</Table>
3
<Page>
THRIFT TRADING PEER GROUP
FULLY CONVERTED THRIFTS IN THE NEW ENGLAND AND MID-ATLANTIC REGIONS WITH
ASSETS BETWEEN $150 MILLION AND $400 MILLION
<Table>
<Caption>
Asset Deposit Loans Loan
Total Growth Total Growth Held for Growth Total Common Total Tangible
Assets Rate Deposits Rate Invest. Rate Borrowings Equity Equity Equity
Short Name ($000) (%) ($000) (%) ($000) (%) ($000) ($000) ($000) ($000)
- ------------------------------------------------------------------------------------------------------------------------------------
Alliance Bncp of New England 348,178 13.44 280,516 11.59 228,324 19.15 39,700 18,115 18,115 18,022
Elmira Savings Bank 280,099 8.00 220,508 0.51 215,641 7.19 39,775 17,809 17,809 16,924
Finger Lakes Bancorp Inc. 329,196 9.28 228,462 9.77 172,104 7.73 60,243 36,571 36,571 36,571
Hingham Instit. for Savings 348,293 14.87 229,206 14.19 277,213 13.73 83,213 30,740 30,740 30,740
Independence Federal Svgs Bank 256,527 -1.14 198,263 -2.48 88,616 1.63 32,233 23,092 23,092 21,833
Ipswich Bancshares Inc. 291,773 3.85 237,642 9.89 202,096 2.96 31,500 15,296 15,296 15,296
Laurel Capital Group Inc. 253,032 4.04 199,570 4.89 175,523 9.31 22,627 25,665 25,665 25,665
Mayflower Co-operative Bank 157,566 1.63 127,334 7.23 86,163 3.06 16,000 13,314 13,314 13,174
Mystic Financial Inc. 267,514 17.60 190,614 19.28 207,557 17.32 45,634 29,209 29,209 29,209
Prestige Bancorp Inc. 201,775 0.60 121,793 1.08 156,805 3.20 66,300 11,550 11,550 11,550
USABancShares.com Inc. 336,451 4.06 281,932 10.55 181,255 -9.25 32,600 8,650 8,650 8,604
Washington Savings Bank, FSB 269,851 1.34 195,542 -15.95 139,720 14.75 45,000 27,587 27,587 27,587
WHG Bancshares Corp. 167,106 8.14 126,117 6.47 NA NA 24,000 16,105 16,105 16,105
WVS Financial Corp. 390,291 -2.33 174,464 1.85 187,059 3.45 180,879 27,844 27,844 27,844
Average 278,404 5.96 200,855 5.63 178,314 7.25 51,407 21,539 21,539 21,366
Median 274,975 4.05 198,917 6.85 181,255 7.19 39,738 20,604 20,604 19,928
RFS BANCORP INC. (MHC) 144,791 21.12 92,292 16.78 91,440 23.53 41,248 10,700 10,700 10,700
</Table>
4
<Page>
<Table>
<Caption>
Net Yield on Cost of Interest
Interest Int Earning Int Bearing Yield
Net Income ROAA ROAE Margin Assets Liabilities Spread
Short Name ($000) (%) (%) (%) (%) (%) (%)
- -----------------------------------------------------------------------------------------------------------------------
Alliance Bncp of New England 3,220 0.97 20.66 3.84 7.95 4.55 3.40
Elmira Savings Bank 2,017 0.75 12.58 3.83 7.88 4.58 3.30
Finger Lakes Bancorp Inc. 802 0.26 3.76 2.91 7.51 4.86 2.65
Hingham Instit. for Savings 4,486 1.39 15.59 3.83 7.83 4.56 3.27
Independence Federal Svgs Bank 1,174 0.45 5.10 2.56 7.67 5.38 2.29
Ipswich Bancshares Inc. 2,556 0.88 15.79 3.21 7.24 4.42 2.82
Laurel Capital Group Inc. 3,677 1.44 15.26 3.30 7.37 4.63 2.74
Mayflower Co-operative Bank 1,379 0.88 12.30 3.95 7.68 3.91 3.77
Mystic Financial Inc. 1,721 0.69 5.81 3.89 7.66 4.38 3.28
Prestige Bancorp Inc. -2,964 -1.44 -20.76 2.89 7.37 4.77 2.60
USABancShares.com Inc. -9,665 -2.79 -65.93 3.22 9.41 6.19 3.22
Washington Savings Bank, FSB 3,047 1.13 12.66 2.83 8.17 5.66 2.51
WHG Bancshares Corp. 685 0.43 4.49 2.58 7.29 5.11 2.18
WVS Financial Corp. 4,276 1.05 15.74 2.58 7.36 5.28 2.08
Average 1,172 0.44 3.79 3.24 7.74 4.88 2.87
Median 1,869 0.82 12.44 3.22 7.67 4.70 2.78
RFS BANCORP INC. (MHC) 551 0.42 5.43 3.59 7.76 4.65 3.11
</Table>
5
<Page>
<Table>
<Caption>
NonInterest Net Interest Revenue Gain on NonInterest Amount Salary
Income/ Income/ Growth Sale/ Expense/ of Exp/
Avg Assets Avg Assets Rate Avg Assets Avg Assets Intangibles Tot Rev
Short Name (%) (%) (%) (%) (%) ($000) (%)
- ----------------------------------------------------------------------------------------------------------------------------------
Alliance Bncp of New England 0.43 3.59 11.30 0.000 2.58 76 34.77
Elmira Savings Bank 0.44 3.64 2.37 0.030 2.84 108 35.36
Finger Lakes Bancorp Inc. 0.35 2.81 2.51 0.030 2.68 0 38.83
Hingham Instit. for Savings 0.29 3.76 14.04 0.000 1.91 0 25.95
Independence Federal Svgs Bank 1.12 2.42 0.21 0.210 3.07 229 38.49
Ipswich Bancshares Inc. 0.64 3.10 -2.01 0.000 2.28 0 29.49
Laurel Capital Group Inc. 0.34 3.21 4.84 0.000 1.59 0 NA
Mayflower Co-operative Bank 0.50 3.82 8.27 0.040 2.72 18 35.51
Mystic Financial Inc. 0.35 3.70 12.72 0.000 2.95 0 42.72
Prestige Bancorp Inc. 0.45 2.83 4.49 0.000 2.54 0 37.82
USABancShares.com Inc. 0.28 3.00 9.31 0.000 5.98 24 45.69
Washington Savings Bank, FSB 0.95 2.71 41.56 0.270 2.47 0 31.14
WHG Bancshares Corp. 0.09 2.52 -0.10 0.000 1.83 0 42.73
WVS Financial Corp. 0.18 2.55 -5.05 0.000 1.04 0 NA
Average 0.46 3.12 7.46 0.041 2.61 33 36.54
Median 0.39 3.05 4.67 0.000 2.56 0 36.67
RFS BANCORP INC. (MHC) 0.33 3.37 15.47 -0.010 2.94 0 40.88
<Caption>
Salary Occup & Occup & Net Oper
Exp/ Equip Equip Exp/ Expenses/ Efficiency
Employees Expense Avg Assts Avg Assets Ratio
Short Name (Actual) ($000) (%) (%) (%)
- -----------------------------------------------------------------------------------------------------
Alliance Bncp of New England 43,390 NA NA 2.13 63.70
Elmira Savings Bank 35,960 1,284 0.48 2.35 68.45
Finger Lakes Bancorp Inc. 41,617 1,576 0.51 2.26 82.37
Hingham Instit. for Savings NA 702 0.22 1.62 47.26
Independence Federal Svgs Bank NA 1,313 0.50 1.86 84.12
Ipswich Bancshares Inc. NA 960 0.33 1.64 60.99
Laurel Capital Group Inc. NA NA NA 1.26 44.96
Mayflower Co-operative Bank 44,627 669 0.43 2.20 62.61
Mystic Financial Inc. 67,086 886 0.36 2.60 72.79
Prestige Bancorp Inc. 50,113 593 0.29 2.08 77.14
USABancShares.com Inc. NA 1,052 0.30 5.69 181.81
Washington Savings Bank, FSB NA 1,180 0.44 1.60 69.72
WHG Bancshares Corp. 57,455 290 0.18 1.74 69.85
WVS Financial Corp. NA NA NA 0.86 38.14
Average 48,607 955 0.37 2.14 73.14
Median 44,627 960 0.36 1.97 69.09
RFS BANCORP INC. (MHC) 55,351 475 0.37 2.61 79.41
</Table>
6
<Page>
<Table>
<Caption>
Loans Total NPAS
Total Total 90+ Days NPAs NPAs/ +90/ NPAs/
NPLs OREO NPAs Delinq. +90 Assets Assets Equity
Short Name ($000) ($000) ($000) ($000) ($000) (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------------
Alliance Bncp of New England 1,130 0 1,130 0 1,130 0.32 0.32 6.24
Elmira Savings Bank 861 87 948 0 948 0.34 0.34 5.32
Finger Lakes Bancorp Inc. 515 82 597 0 597 0.18 0.18 1.63
Hingham Instit. for Savings NA 0 NA 0 NA NA NA NA
Independence Federal Svgs Bank 2,402 84 2,486 138 2,624 0.97 1.02 10.77
Ipswich Bancshares Inc. 228 0 228 NA NA 0.08 NA 1.49
Laurel Capital Group Inc. 674 0 674 0 674 0.27 0.27 2.63
Mayflower Co-operative Bank 0 125 125 0 125 0.08 0.08 0.94
Mystic Financial Inc. 17 0 17 0 17 0.01 0.01 0.06
Prestige Bancorp Inc. 5,691 176 5,867 0 5,867 2.91 2.91 50.80
USABancShares.com Inc. 1,645 40 1,685 0 1,685 0.50 0.50 19.48
Washington Savings Bank, FSB NA 14 NA NA NA NA NA NA
WHG Bancshares Corp. NA 0 NA 14 NA NA NA NA
WVS Financial Corp. NA 0 NA 0 NA NA NA NA
Average 1,316 43 1,376 13 1,519 0.57 0.63 9.94
Median 768 7 811 0 948 0.30 0.32 3.98
RFS BANCORP INC. (MHC) 0 0 0 0 0 0.00 0.00 0.00
<Caption>
NPLs Loan
NPLs/ +90/ Loss LLR/ LLR/ LLR/ LLR/ LLR/
Loans Loans Reserves Loans NPAs NPAs +90 NPLs NPLs +90
Short Name (%) (%) ($000) (%) (%) (%) (%) (%)
- -----------------------------------------------------------------------------------------------------------------------
Alliance Bncp of New England 0.49 0.49 3,400 1.49 300.88 300.88 300.88 300.88
Elmira Savings Bank 0.40 0.40 2,083 0.97 219.73 219.73 241.93 241.93
Finger Lakes Bancorp Inc. 0.30 0.30 1,468 0.85 245.90 245.90 285.05 285.05
Hingham Instit. for Savings NA NA 2,332 0.84 NA NA NA NA
Independence Federal Svgs Bank 2.71 2.87 488 0.55 19.63 18.60 20.32 19.21
Ipswich Bancshares Inc. 0.11 NA 1,801 0.89 789.91 NA 789.91 NA
Laurel Capital Group Inc. 0.38 0.38 1,764 1.00 261.72 261.72 261.72 261.72
Mayflower Co-operative Bank 0.00 0.00 1,179 1.37 943.20 943.20 NM NA
Mystic Financial Inc. 0.01 0.01 1,632 0.79 NM 9,600.00 NM 9,600.00
Prestige Bancorp Inc. 3.63 3.63 3,388 2.16 57.75 57.75 59.53 59.53
USABancShares.com Inc. 0.91 0.91 2,090 1.15 124.04 124.04 127.05 127.05
Washington Savings Bank, FSB NA NA 1,120 0.80 NA NA NA NA
WHG Bancshares Corp. NA NA NA NA NA NA NA NA
WVS Financial Corp. NA NA 2,125 1.14 NA NA NA NA
Average 0.89 1.00 1,913 1.08 329.20 1,307.98 260.80 1,361.92
Median 0.39 0.40 1,801 0.97 245.90 245.90 251.83 251.82
RFS BANCORP INC. (MHC) 0.00 0.00 794 0.87 NM NA NM NM
</Table>
7
<Page>
<Table>
<Caption>
Loan Gross Net Loan Loan Loss Loan Loss
Loss Loan Loan Chargeoffs/ Provision/ Provision/ Loans/
Provision Recoveries Chargeoffs Avg Loans NCOs Avg Loans Deposits
Short Name ($000) ($000) ($000) (%) (%) (%) (%)
- -----------------------------------------------------------------------------------------------------------------------------------
Alliance Bncp of New England 335 79 214 0.06 248.15 0.16 81.39
Elmira Savings Bank 180 316 425 0.05 165.14 0.09 97.79
Finger Lakes Bancorp Inc. 260 47 189 0.09 183.10 0.16 75.33
Hingham Instit. for Savings 290 0 0 0.00 NM 0.11 120.94
Independence Federal Svgs Bank -37 15 0 -0.02 NM -0.04 44.70
Ipswich Bancshares Inc. 70 NA NA NA NA 0.03 85.04
Laurel Capital Group Inc. 18 9 72 0.04 28.57 0.01 87.95
Mayflower Co-operative Bank 27 6 61 0.07 49.09 0.03 67.67
Mystic Financial Inc. 185 11 18 0.00 NM 0.10 108.89
Prestige Bancorp Inc. 6,383 4 3,983 2.49 160.42 4.00 128.75
USABancShares.com Inc. 0 1 26 0.01 0.00 0.00 64.29
Washington Savings Bank, FSB 71 NA NA 0.01 473.33 0.05 71.45
WHG Bancshares Corp. 120 NA NA NA NA NA NA
WVS Financial Corp. 300 NA NA NA NA 0.16 107.22
Average 586 49 499 0.25 163.48 0.37 87.80
Median 150 10 67 0.04 162.78 0.09 85.04
RFS BANCORP INC. (MHC) 156 0 22 0.03 709.09 0.19 99.08
</Table>
8
<Page>
<Table>
<Caption>
Total Tangible Intangible Tier 1/ Total Cap/
Loans/ Deposits/ Borrowings/ Equity/ Equity/ Assets/ Risk-Adj Risk-Adj
Assets Assets Assets Assets Tang Assets Equity Assets Assets
Short Name (%) (%) (%) (%) (%) (%) (%) (%)
- -----------------------------------------------------------------------------------------------------------------------------------
Alliance Bncp of New England 65.58 80.57 11.40 5.20 5.18 0.51 10.50 11.70
Elmira Savings Bank 76.99 78.73 14.20 6.36 6.06 4.97 9.30 10.44
Finger Lakes Bancorp Inc. 52.28 69.40 18.30 11.11 11.11 0.00 20.41 20.68
Hingham Instit. for Savings 79.59 65.81 23.89 8.83 8.83 0.00 NA NA
Independence Federal Svgs Bank 34.54 77.29 12.57 9.00 8.55 5.45 23.30 23.90
Ipswich Bancshares Inc. 69.26 81.45 10.80 5.24 5.24 0.00 NA NA
Laurel Capital Group Inc. 69.37 78.87 8.94 10.14 10.14 0.00 16.96 18.39
Mayflower Co-operative Bank 54.68 80.81 10.15 8.45 8.37 1.05 12.71 13.80
Mystic Financial Inc. 77.59 71.25 17.06 10.92 10.92 0.00 16.55 16.57
Prestige Bancorp Inc. 77.71 60.36 32.86 5.72 5.72 0.00 9.61 10.86
USABancShares.com Inc. 53.87 83.80 9.69 2.57 2.56 0.53 5.00 8.30
Washington Savings Bank, FSB 51.78 72.46 16.68 10.22 10.22 0.00 23.36 23.91
WHG Bancshares Corp. NA 75.47 14.36 9.64 9.64 0.00 20.45 20.88
WVS Financial Corp. 47.93 44.70 46.34 7.13 7.13 0.00 NA NA
Average 62.40 72.93 17.66 7.90 7.83 0.89 15.29 16.31
Median 65.58 76.38 14.28 8.64 8.46 0.00 16.55 16.57
RFS BANCORP INC. (MHC) 63.15 63.74 28.49 7.39 7.39 0.00 13.01 14.81
</Table>
9
<Page>
<Table>
<Caption>
04/25/01 Fiscal EPS Current
Stock EPS Year EPS Growth PEG Price/
Price Bef Extra Estimate Rate Ratio LTM EPS
Short Name ($) ($) ($) (%) (%) (x)
- ---------------------------------------------------------------------------------------------------------------------
Alliance Bncp of New England 9.10 1.36 NA 10.57 0.66 6.59
Elmira Savings Bank 21.10 2.52 NA 23.53 0.84 8.37
Finger Lakes Bancorp Inc. 8.25 NA NA NA NA NA
Hingham Instit. for Savings 19.15 2.18 NA 26.74 0.88 8.78
Independence Federal Svgs Bank 13.18 0.91 NA (7.14) 1.45 14.48
Ipswich Bancshares Inc. 10.30 1.13 1.290 (14.39) 0.91 9.12
Laurel Capital Group Inc. 16.50 1.79 NA 22.60 0.92 9.22
Mayflower Co-operative Bank 11.00 0.96 NA (15.79) 1.15 11.46
Mystic Financial Inc. 15.10 0.95 1.180 35.71 1.51 15.10
Prestige Bancorp Inc. 9.85 -3.37 NA NM NA NM
USABancShares.com Inc. 1.13 -1.70 NA NM NA NM
Washington Savings Bank, FSB 3.86 0.67 NA 204.55 0.58 5.76
WHG Bancshares Corp. 11.00 0.58 NA (12.12) 1.90 18.97
WVS Financial Corp. 12.55 1.50 NA 1.35 0.84 8.37
Average 11.58 0.73 1.235 25.06 1.06 10.57
Median 11.00 0.96 1.235 10.57 0.91 9.12
RFS BANCORP INC. (MHC) 11.00 0.63 NA 14.55 1.75 17.46
Price/ Current Current Current LTM Current
Current Price/ Price/ Tang Dividend Dividend Market
Earn. Est. Book Value Book Value Yield Payout Ratio Value
Short Name (x) (%) (%) (%) (%) ($M)
- --------------------------------------------------------------------------------------------------------------------------
Alliance Bncp of New England NA 117.12 117.72 3.30 20.22 21.21
Elmira Savings Bank NA 94.79 99.76 3.03 24.79 16.88
Finger Lakes Bancorp Inc. NA 77.68 77.68 2.91 NA 28.42
Hingham Instit. for Savings NA 127.41 127.41 3.13 32.11 39.17
Independence Federal Svgs Bank NA 73.22 77.44 2.28 74.73 16.91
Ipswich Bancshares Inc. 7.98 137.33 137.33 4.27 37.17 21.00
Laurel Capital Group Inc. NA 125.76 125.76 4.12 37.43 32.28
Mayflower Co-operative Bank NA 111.68 112.82 5.45 62.50 14.87
Mystic Financial Inc. 12.80 89.09 89.09 2.12 30.53 29.02
Prestige Bancorp Inc. NA 70.91 70.91 NA NM 9.32
USABancShares.com Inc. NA 70.19 70.63 0.00 NM 5.71
Washington Savings Bank, FSB NA 63.91 63.91 2.59 14.93 17.64
WHG Bancshares Corp. NA 87.79 87.79 3.27 62.07 14.14
WVS Financial Corp. NA 124.75 124.75 5.10 42.67 34.73
Average 10.39 97.97 98.79 3.20 39.92 21.52
Median 10.39 91.94 94.43 3.13 37.17 19.32
RFS BANCORP INC. (MHC) NA 90.98 90.98 0.00 0.00 9.73
</Table>
10
<Page>
<Table>
<Caption>
1-4 Multi- Const & Other Total
Family family Dev RE RE
Loans Loans Loans Loans Loans
Short Name ($000) ($000) ($000) ($000) ($000)
- ------------------------------------------------------------------------------------------------------
Alliance Bncp of New England 95,695 7,816 7,708 75,869 187,088
Elmira Savings Bank 96,516 3,541 1,260 25,877 127,194
Finger Lakes Bancorp Inc. 99,833 11,292 2,755 21,900 135,780
Hingham Instit. for Savings 145,473 44,108 11,401 65,641 266,623
Independence Federal Svgs Bank 71,783 2,283 485 12,619 87,170
Ipswich Bancshares Inc. 199,784 137 1,391 5,303 206,615
Laurel Capital Group Inc. 159,560 2,869 4,712 5,098 172,239
Mayflower Co-operative Bank 55,067 898 6,908 18,332 81,205
Mystic Financial Inc. 137,890 0 5,503 47,795 191,188
Prestige Bancorp Inc. 116,298 0 1,902 14,586 132,786
USABancShares.com Inc. 12,900 9,952 8,821 135,152 166,825
Washington Savings Bank, FSB 85,925 721 49,934 8,796 145,376
WHG Bancshares Corp. 75,054 3,849 5,946 10,121 94,970
WVS Financial Corp. 126,345 7,169 15,498 33,286 182,298
Average 105,580 6,760 8,873 34,313 155,526
Median 98,175 3,205 5,725 20,116 156,101
RFS BANCORP INC. (MHC) 55,988 0 5,606 21,501 83,095
</Table>
11
<Page>
<Table>
<Caption>
Total Unearned
Comm Cons Other Gross Income Total Net
Loans Loans Loans Loans on Loans Loans LLR Loans
Short Name ($000) ($000) ($000) ($000) ($000) ($000) ($000) ($000)
- -----------------------------------------------------------------------------------------------------------------------------------
Alliance Bncp of New England 36,235 4,544 457 228,324 0 228,324 3,400 224,924
Elmira Savings Bank 28,425 59,513 0 215,132 0 215,132 2,020 213,112
Finger Lakes Bancorp Inc. 13,987 22,608 0 172,375 0 172,375 1,468 170,907
Hingham Instit. for Savings 374 1,837 8 268,842 0 268,842 2,272 266,570
Independence Federal Svgs Bank 600 67,292 0 155,062 0 155,062 576 154,486
Ipswich Bancshares Inc. 229 1,269 27 208,140 0 208,140 1,803 206,337
Laurel Capital Group Inc. 806 6,485 0 179,530 0 179,530 1,759 177,771
Mayflower Co-operative Bank 2,228 2,737 24 86,194 0 86,194 1,176 85,018
Mystic Financial Inc. 14,758 1,670 0 207,616 9 207,607 1,632 205,975
Prestige Bancorp Inc. 19,438 6,816 0 159,040 0 159,040 2,900 156,140
USABancShares.com Inc. 12,645 2,025 0 181,495 240 181,255 2,090 179,165
Washington Savings Bank, FSB 578 670 0 146,624 0 146,624 1,113 145,511
WHG Bancshares Corp. 609 2,384 0 97,963 0 97,963 309 97,654
WVS Financial Corp. 1,981 2,349 692 187,320 732 186,588 1,985 184,603
Average 9,492 13,014 86 178,118 70 178,048 1,750 176,298
Median 2,105 2,561 0 180,513 0 180,393 1,781 178,468
RFS BANCORP INC. (MHC) 6,641 1,691 0 91,427 0 91,427 787 90,640
</Table>
12
<Page>
<Table>
<Caption>
Time
Deps Time
GREATER Deps
NOW & Total MMDA & THAN OR LESS Total Non-int
Demand Other Trans Trans Other EQUAL TO THAN Non-Trans Bearing Total
Deposits Accounts Accounts Sav Acct $100k $100k Accounts Deposits Deposits
Short Name ($000) ($000) ($000) ($000) ($000) ($000) ($000) ($000) ($000)
- -----------------------------------------------------------------------------------------------------------------------------------
Alliance Bncp of New England 30,293 32,033 62,326 85,565 22,509 110,116 218,190 30,293 280,516
Elmira Savings Bank 26,595 NA NA NA NA NA NA 26,595 220,508
Finger Lakes Bancorp Inc. 16,220 NA NA NA NA NA NA 16,220 233,868
Hingham Instit. for Savings 24,778 15,751 40,529 61,753 35,054 89,344 186,151 24,778 226,680
Independence Federal Svgs Bank 4,857 NA NA NA NA NA NA 4,857 198,613
Ipswich Bancshares Inc. 23,570 34,871 58,441 106,647 16,885 57,012 180,544 23,570 238,985
Laurel Capital Group Inc. 11,638 19,980 31,618 44,522 10,692 108,404 163,618 11,638 195,236
Mayflower Co-operative Bank 9,486 21,576 31,062 29,695 14,523 51,787 96,005 9,514 127,067
Mystic Financial Inc. 18,776 31,232 50,008 52,940 26,127 62,486 141,553 18,776 191,561
Prestige Bancorp Inc. 8,070 NA NA NA NA NA NA 8,070 122,765
USABancShares.com Inc. 5,893 39,202 45,095 23,212 101,502 112,123 236,837 5,893 281,932
Washington Savings Bank, FSB 5,093 NA NA NA NA NA NA 5,093 199,598
WHG Bancshares Corp. 0 NA NA NA NA NA NA 0 126,752
WVS Financial Corp. 13,312 17,849 31,161 49,296 11,536 81,691 142,523 13,312 173,684
Average 14,184 26,562 43,780 56,704 29,854 84,120 170,678 14,186 201,269
Median 12,475 26,404 42,812 51,118 19,697 85,518 172,081 12,475 199,106
RFS BANCORP INC. (MHC) 12,743 NA NA NA 32,880 NA NA 12,743 92,657
</Table>
13
<Page>
<Table>
<Caption>
1-4 Fam Multifam. Const & Dev Other RE
Loans/ Loans/ Loans/ RE Loans/ Loans/
G. Loans G. Loans G. Loans G. Loans G. Loans
Short Name (%) (%) (%) (%) (%)
- ----------------------------------------------------------------------------------------------------------------
Alliance Bncp of New England 41.91 3.42 3.38 33.23 81.94
Elmira Savings Bank 44.86 1.65 0.59 12.03 59.12
Finger Lakes Bancorp Inc. 57.92 6.55 1.60 12.70 78.77
Hingham Instit. for Savings 54.11 16.41 4.24 24.42 99.17
Independence Federal Svgs Bank 46.29 1.47 0.31 8.14 56.22
Ipswich Bancshares Inc. 95.99 0.07 0.67 2.55 99.27
Laurel Capital Group Inc. 88.88 1.60 2.62 2.84 95.94
Mayflower Co-operative Bank 63.89 1.04 8.01 21.27 94.21
Mystic Financial Inc. 66.42 0.00 2.65 23.02 92.09
Prestige Bancorp Inc. 73.13 0.00 1.20 9.17 83.49
USABancShares.com Inc. 7.11 5.48 4.86 74.47 91.92
Washington Savings Bank, FSB 58.60 0.49 34.06 6.00 99.15
WHG Bancshares Corp. 76.61 3.93 6.07 10.33 96.94
WVS Financial Corp. 67.45 3.83 8.27 17.77 97.32
Average 60.23 3.28 5.61 18.42 87.54
Median 61.24 1.62 3.01 12.37 93.15
RFS Bancorp Inc. (MHC) 61.24 0.00 6.13 23.52 90.89
<Caption>
Comm Cons Other Unearned Total Net
Loans/ Loans/ Loans/ Income/ Loans/ LLR/ Loans/
G. Loans G. Loans G. Loans G. Loans G. Loans G. Loans G. Loans
Short Name (%) (%) (%) (%) (%) (%) (%)
- -----------------------------------------------------------------------------------------------------------------------
Alliance Bncp of New England 15.87 1.99 0.20 0.00 100.00 1.49 98.51
Elmira Savings Bank 13.21 27.66 0.00 0.00 100.00 0.94 99.06
Finger Lakes Bancorp Inc. 8.11 13.12 0.00 0.00 100.00 0.85 99.15
Hingham Instit. for Savings 0.14 0.68 0.00 0.00 100.00 0.85 99.15
Independence Federal Svgs Bank 0.39 43.40 0.00 0.00 100.00 0.37 99.63
Ipswich Bancshares Inc. 0.11 0.61 0.01 0.00 100.00 0.87 99.13
Laurel Capital Group Inc. 0.45 3.61 0.00 0.00 100.00 0.98 99.02
Mayflower Co-operative Bank 2.58 3.18 0.03 0.00 100.00 1.36 98.64
Mystic Financial Inc. 7.11 0.80 0.00 0.00 100.00 0.79 99.21
Prestige Bancorp Inc. 12.22 4.29 0.00 0.00 100.00 1.82 98.18
USABancShares.com Inc. 6.97 1.12 0.00 0.13 99.87 1.15 98.72
Washington Savings Bank, FSB 0.39 0.46 0.00 0.00 100.00 0.76 99.24
WHG Bancshares Corp. 0.62 2.43 0.00 0.00 100.00 0.32 99.68
WVS Financial Corp. 1.06 1.25 0.37 0.39 99.61 1.06 98.55
Average 4.95 7.47 0.04 0.04 99.96 0.97 98.99
Median 1.82 2.21 0.00 0.00 100.00 0.90 99.10
RFS Bancorp Inc. (MHC) 7.26 1.85 0.00 0.00 100.00 0.86 99.14
</Table>
14
<Page>
<Table>
<Caption>
Demand NOW & Trans MMDA & Time
Deposits/ Other Trans/ Accounts/ Other Sav./ >=$100k/
Deposits/ Deposits Deposits Deposits Deposits
Short Name (%) (%) (%) (%) (%)
- ------------------------------------------------------------------------------------------------------------
Alliance Bncp of New England 10.80 11.42 22.22 30.50 8.02
Elmira Savings Bank 12.06 NA NA NA NA
Finger Lakes Bancorp Inc. 6.94 NA NA NA NA
Hingham Instit. for Savings 10.93 6.95 17.88 27.24 15.46
Independence Federal Svgs Bank 2.45 NA NA NA NA
Ipswich Bancshares Inc. 9.86 14.59 24.45 44.62 7.07
Laurel Capital Group Inc. 5.96 10.23 16.19 22.80 5.48
Mayflower Co-operative Bank 7.47 16.98 24.45 23.37 11.43
Mystic Financial Inc. 9.80 16.30 26.11 27.64 13.64
Prestige Bancorp Inc. 6.57 NA NA NA NA
USABancShares.com Inc. 2.09 13.90 15.99 8.23 36.00
Washington Savings Bank, FSB 2.55 NA NA NA NA
WHG Bancshares Corp. 0.00 NA NA NA NA
WVS Financial Corp. 7.66 10.28 17.94 28.38 6.64
Average 6.80 12.58 20.65 26.60 12.97
Median 7.20 12.66 20.08 27.44 9.73
RFS Bancorp Inc. (MHC) 13.75 NA NA NA 35.49
<Caption>
Time Non-Trans Int Non-Int Core
< $100k/ Accounts/ Bearing/ Bearing/ Deposits/
Deposits Deposits Deposits Deposits Deposits
Short Name (%) (%) (%) (%) (%)
- --------------------------------------------------------------------------------------------------
Alliance Bncp of New England 39.25 77.78 89.20 10.80 91.98
Elmira Savings Bank NA NA 87.94 12.06 NA
Finger Lakes Bancorp Inc. NA NA 93.06 6.94 NA
Hingham Instit. for Savings 39.41 82.12 89.07 10.93 84.54
Independence Federal Svgs Bank NA NA 97.55 2.45 NA
Ipswich Bancshares Inc. 23.86 75.55 90.14 9.86 92.93
Laurel Capital Group Inc. 55.52 83.81 94.04 5.96 94.52
Mayflower Co-operative Bank 40.76 75.55 92.51 7.49 88.57
Mystic Financial Inc. 32.62 73.89 90.20 9.80 86.36
Prestige Bancorp Inc. NA NA 93.43 6.57 NA
USABancShares.com Inc. 39.77 84.01 97.91 2.09 64.00
Washington Savings Bank, FSB NA NA 97.45 2.55 NA
WHG Bancshares Corp. NA NA 100.00 0.00 NA
WVS Financial Corp. 47.03 82.06 92.34 7.66 93.36
Average 39.78 79.35 93.20 6.80 87.03
Median 39.59 79.92 92.79 7.21 90.27
RFS Bancorp Inc. (MHC) NA NA 86.25 13.75 64.51
</Table>
15
<Page>
MUTUAL HOLDING COMPANY STATISTICS
FOR STOCK MHC'S WITH ASSETS BETWEEN $50 MILLION AND $250 MILLION
FINANCIAL CONDITION
<Table>
<Caption>
Adj. Minority Total
IPO Price Ownership Assets
Ticker Name State IPO Date ($) (%) ($000)
- -------------------------------------------------------------------------------------------------------------------------
ROEB Roebling Bank NJ 10/02/97 10.00 46.05 59,463
EKAB Eureka Bank PA 01/07/99 10.00 42.13 67,390
MSVB Mid-Southern Savings Bank IN 04/09/98 10.00 28.27 73,993
GOV Gouverneur Bancorp NY 03/31/99 5.00 42.41 75,220
WAKE Wake Forest FS&LA NC 04/03/96 10.00 45.73 89,019
WCFB Webster City Federal SB IA 08/15/94 10.00 38.93 95,430
OCSB Oswego County Bancorp, Inc. NY 07/14/99 10.00 42.57 136,460
ALMG Alamogordo Financial Corp. NM 05/16/00 10.00 28.00 145,707
SKBO Skibo Financial Corp. PA 04/04/97 6.67 39.71 148,693
ASFE AF Bankshares NC 10/07/96 10.00 48.71 150,079
EBMT Eagle Bancorp MT 04/05/00 8.00 46.12 164,895
GCBC Greene County Bncp Inc. NY 12/30/98 9.09 43.66 171,231
LBTME Liberty Savings Bank MO 08/23/93 10.00 40.13 197,299
WFSM Westborough Financial Services MA 02/16/00 10.00 35.00 213,959
SERC Service Bancorp, Inc. MA 10/08/98 10.00 44.79 226,232
JXSB Jacksonville Savings Bank IL 04/21/95 6.67 45.60 227,915
PBHC Pathfinder Bancorp Inc. NY 11/16/95 5.00 40.32 231,847
JFSZ Jefferson FS&LA TN 05/13/94 10.00 16.83 241,879
PLSK Pulaski Savings Bank NJ 04/03/97 10.00 41.96 244,529
ROME Rome Bancorp, Inc. NY 10/06/99 7.00 43.16 244,831
Average 160,304
Median 157,487
Median Top Ten by Mkt Cap (1) 2,730,940
RFED RFS Bancorp Inc. MA 12/21/98 10.00 44.09 153,533
<Caption>
Equity/ Minority
Tang. LTM LTM Market
Assets ROAA ROAE Capitalization Financials
Ticker Name (%) (%) (%) ($ Mil.) as of
- ----------------------------------------------------------------------------------------------------------------------
ROEB Roebling Bank 9.42 0.88 9.84 2.7 12/31/00
EKAB Eureka Bank 27.21 1.16 4.21 5.5 12/31/00
MSVB Mid-Southern Savings Bank 17.17 0.89 5.10 2.7 12/31/00
GOV Gouverneur Bancorp 21.55 0.99 4.61 5.6 12/31/00
WAKE Wake Forest FS&LA 16.31 1.67 9.65 7.2 12/31/00
WCFB Webster City Federal SB 21.91 1.39 6.17 10.8 12/31/00
OCSB Oswego County Bancorp, Inc. 10.80 0.47 4.29 4.0 12/31/00
ALMG Alamogordo Financial Corp. 18.11 0.50 3.00 6.1 12/31/00
SKBO Skibo Financial Corp. 16.77 0.78 4.73 9.0 12/31/00
ASFE AF Bankshares 7.63 0.39 4.21 5.6 12/31/00
EBMT Eagle Bancorp 11.71 0.73 6.10 6.1 03/31/01
GCBC Greene County Bncp Inc. 14.31 0.57 4.00 8.4 12/31/00
LBTME Liberty Savings Bank 9.63 0.37 3.84 6.4 12/31/00
WFSM Westborough Financial Services 11.92 0.58 4.84 7.1 12/31/00
SERC Service Bancorp, Inc. 7.71 0.38 5.21 5.9 12/31/00
JXSB Jacksonville Savings Bank 7.65 0.82 8.11 8.7 12/31/00
PBHC Pathfinder Bancorp Inc. 7.99 0.16 1.79 9.4 12/31/00
JFSZ Jefferson FS&LA 11.92 1.00 8.61 4.5 12/31/00
PLSK Pulaski Savings Bank 9.98 0.79 7.95 9.3 12/31/00
ROME Rome Bancorp, Inc. 15.54 0.76 4.62 19.0 12/31/00
Average 13.76 0.76 5.54 7.2
Median 11.92 0.77 4.79 6.3
Median Top Ten by Mkt Cap (1) 8.61 0.83 7.97 115.9
RFED RFS Bancorp Inc. 7.05 0.40 5.57 4.3 03/31/01
</Table>
(1) BKMU, BRKL, CFFN, FFFL, FNFG, HCBK, NWSB, PBCP, PBCT, RSBI
16
<Page>
MUTUAL HOLDING COMPANY STATISTICS
FOR STOCK MHC'S WITH ASSETS BETWEEN $50 MILLION AND $250 MILLION
MARKET STATISTICS
<Table>
<Caption>
4/25/2001 Price/ Last Price/
Stock Book Book Quarter Quarter
Price Value Value D. EPS D. EPS
Ticker Name ($) ($) (%) ($) (X)
- -------------------------------------------------------------------------------------------------------------------
ROEB Roebling Bank 14.00 13.16 106.38 0.25 14.00
EKAB Eureka Bank 10.40 14.53 71.58 0.13 20.00
MSVB Mid-Southern Savings Bank 6.70 8.75 76.57 0.13 12.88
GOV Gouverneur Bancorp 5.80 7.12 81.46 0.07 20.71
WAKE Wake Forest FS&LA 13.50 12.41 108.78 0.29 11.64
WCFB Webster City Federal SB 14.75 11.10 132.88 0.15 24.58
OCSB Oswego County Bancorp, Inc. 11.00 18.03 61.01 0.25 11.00
ALMG Alamogordo Financial Corp. 17.00 20.69 82.17 0.13 32.69
SKBO Skibo Financial Corp. 7.20 7.89 91.25 0.08 22.50
ASFE AF Bankshares 11.00 12.37 88.92 0.11 25.00
EBMT Eagle Bancorp 11.00 16.05 68.54 0.23 11.96
GCBC Greene County Bncp Inc. 9.38 12.39 75.71 0.13 18.04
LBTME Liberty Savings Bank 12.00 14.22 84.39 0.24 12.50
WFSM Westborough Financial Services 12.75 16.13 79.05 NA NM
SERC Service Bancorp, Inc. 8.00 11.10 72.07 0.14 14.29
JXSB Jacksonville Savings Bank 10.00 10.81 92.51 0.24 10.42
PBHC Pathfinder Bancorp Inc. 9.00 8.06 111.66 0.17 13.24
JFSZ Jefferson FS&LA 14.19 15.47 91.71 0.29 12.23
PLSK Pulaski Savings Bank 11.50 12.67 90.77 0.24 11.98
ROME Rome Bancorp, Inc. 13.90 12.00 115.83 0.10 34.75
Average 89.16 17.60
Median 86.66 14.00
Median Top Ten by Mkt Cap 149.21 17.52
RFED RFS Bancorp Inc. 11.00 12.23 89.96 0.14 19.53
<Caption>
Current One Month IPO One Year
Dividend Price Price Total Payout
Yield Change Change Return Ratio
Ticker Name (%) (%) (%) (%) (%)
- ----------------------------------------------------------------------------------------------------------------------
ROEB Roebling Bank 0.00 0.00 40.00 27.27 0.00%
EKAB Eureka Bank 5.19 1.46 4.00 24.65 42.72%
MSVB Mid-Southern Savings Bank 7.46 1.13 (33.00) 11.66 27.86%
GOV Gouverneur Bancorp 2.41 0.87 16.00 44.12 22.09%
WAKE Wake Forest FS&LA 3.56 5.88 35.00 40.40 19.28%
WCFB Webster City Federal SB 5.42 2.61 47.50 41.25 53.51%
OCSB Oswego County Bancorp, Inc. 1.82 0.00 10.00 48.72 20.61%
ALMG Alamogordo Financial Corp. 4.00 0.00 70.00 NA 38.17%
SKBO Skibo Financial Corp. 6.67 (14.03) 7.99 37.35 59.52%
ASFE AF Bankshares 1.82 8.64 10.00 50.23 22.03%
EBMT Eagle Bancorp 2.55 (16.98) 37.50 8.24 14.29%
GCBC Greene County Bncp Inc. 2.56 (7.36) 3.18 6.94 49.09%
LBTME Liberty Savings Bank 6.67 2.13 20.00 21.80 34.49%
WFSM Westborough Financial Services 1.57 15.91 27.50 47.12 31.25%
SERC Service Bancorp, Inc. 0.00 6.67 (20.00) 16.36 0.00%
JXSB Jacksonville Savings Bank 3.00 3.90 49.99 29.14 35.10%
PBHC Pathfinder Bancorp Inc. 2.67 33.33 80.00 26.64 36.22%
JFSZ Jefferson FS&LA 3.52 0.00 41.88 NA 7.34%
PLSK Pulaski Savings Bank 3.13 (7.07) 15.00 53.83 15.74%
ROME Rome Bancorp, Inc. 2.01 1.09 98.57 113.26 72.54%
Average 3.30 1.91 28.06 36.05 30.09%
Median 2.83 1.11 23.75 33.25 29.56%
Median Top Ten by Mkt Cap 2.38 1.25 86.00 51.09 31.35%
RFED RFS Bancorp Inc. 0.00 26.62 10.00 29.41 0.00%
</Table>
17
<Page>
DANVERS AND REVERE
BRANCH MAP
<Page>
DANVERS SAVINGS BANK
(Dollars in Thousands)
<Table>
<Caption>
1996 Y 1997 Y 1998 Y 1999 Y 2000 Y
------ ------ ------ ------ ------
BALANCE SHEET HIGHLIGHTS
Total Assets 246,516 279,628 333,860 401,242 453,966
Asset Growth Rate (%) 6.22 13.43 19.39 20.18 13.14
Total Deposits 215,662 245,265 285,215 307,430 352,344
Total Loans 215,208 246,066 296,471 349,241 399,071
Loans/Deposits (%) 99.79 100.33 103.95 113.60 113.26
Loans Serviced for Others 18,124 15,604 17,860 17,567 24,027
Full-time Equivalent Employees 83 90 110 136 157
PERFORMANCE MEASURES
Net Income 3,605 4,020 4,466 4,920 5,204
ROAA (%) 1.51 1.54 1.48 1.23 1.19
ROAE (%) 18.41 17.21 16.16 15.72 14.62
Net Interest Income/AA (%) 5.66 5.37 5.31 4.56 4.90
Non Interest Income/AA (%) 0.89 0.90 0.94 0.72 0.76
Non Interest Expense/AA (%) 3.70 3.51 3.49 3.23 3.75
Net Interest Margin (%) 6.09 5.78 5.75 5.31 5.43
Yield/Cost Spread (%) 5.63 5.26 5.24 4.79 4.77
Oper Exp / Oper Rev (%) 56.45 55.99 55.88 61.00 66.14
CAPITALIZATION
Equity Capital 21,415 25,435 29,901 33,266 38,869
Tier1 Capital 21,415 25,435 29,901 33,314 38,176
Equity Cap/Total Assets (%) 8.69 9.10 8.96 8.29 8.56
Tier 1 Risk Based Ratio (%) 12.14 12.55 11.77 10.60 9.98
Risk Based Capital Ratio (%) 13.39 13.81 13.03 11.86 11.24
Leverage Ratio (%) 8.83 9.28 9.19 7.49 8.56
</Table>
2
<Page>
DANVERS SAVINGS BANK
(Dollars in Thousands)
<Table>
<Caption>
1996 Y 1997 Y 1998 Y 1999 Y 2000 Y
------ ------ ------ ------ ------
DEPOSIT COMPOSITION
Total Deposits 215,662 245,265 285,215 307,430 352,344
Deposit Growth Rate (%) 3.89 13.73 16.29 7.79 14.61
Non Int Bear Deps/Total Deposits (%) 12.89 12.76 11.81 11.79 13.45
Trans Accts/Total Deposits (%) 25.55 26.50 23.45 22.91 24.64
MMDA & Savings/ Total Deposits (%) 44.42 37.54 35.39 32.55 28.83
Jumbo Deps/ Total Deposits (%) 5.35 8.58 10.47 12.39 15.39
Retail Dep/Total Deposits (%) 24.68 27.39 30.69 32.15 31.14
LOAN COMPOSITION
Total Loans & Leases 215,208 246,066 296,471 349,241 399,071
Loan Growth Rate (%) 9.10 14.34 20.48 17.80 14.27
C&D Loans/ Tot Lns (%) 6.03 11.72 8.96 22.93 22.65
1-4 Fam Loans/ Tot Lns (%) 57.57 52.95 46.34 43.03 37.99
Multi-Fam Loans/ Tot Lns (%) 2.23 2.14 1.65 1.46 2.20
Farmland/ Tot Lns (%) 0.00 0.00 0.00 0.00 0.00
Cmrcl RE Loans/ Tot Lns (%) 22.57 20.45 30.93 19.11 23.59
Tot Oth RE Loans/ Tot Lns (%) 22.57 20.45 30.93 19.11 23.59
----- ----- ----- ----- -----
Foreign RE Loans/Tot Lns (%) 0.00 0.00 0.00 0.00 0.00
Total Real Est Loans/ Tot Lns (%) 88.40 87.27 87.88 86.53 86.42
----- ----- ----- ----- -----
Agricultural Loans / Tot Lns (%) 0.00 0.00 0.00 0.00 0.00
C&I Loans/Tot Lns (%) 8.30 9.53 10.00 11.91 12.51
Consumer Loans/Tot Lns (%) 2.58 2.17 1.53 1.44 1.37
Other Non-RE Loans/ Tot Lns (%) 0.72 1.03 0.59 0.59 0.15
Unearned Inc Lns/ Tot Lns (%) 0.00 0.00 0.00 0.46 0.45
</Table>
3
<Page>
DANVERS SAVINGS BANK
(Dollars in Thousands)
<Table>
<Caption>
1996 Y 1997 Y 1998 Y 1999 Y 2000 Y
------ ------ ------ ------ ------
ASSET QUALITY
90+PastDue/Total Loans (%) 0.00 0.22 0.00 0.00 0.00
Nonaccrl Loans/Total Loans (%) 1.09 1.45 2.27 0.96 0.37
NPLs/Total Loans (%) 1.09 1.45 2.27 0.96 0.37
NPAs/Total Loans (%) 1.90 1.67 2.67 1.00 0.41
Frclsd RE/Total Assets (%) 0.70 0.20 0.36 0.03 0.03
NPAs/Total Assets (%) 1.66 1.47 2.37 0.87 0.36
NPAs/Lns+OREO (%) 1.88 1.67 2.66 1.00 0.41
NPAs/Equity+Reserves (%) 16.73 14.36 23.59 9.32 3.68
NPAs+90s/Total Assets (%) 1.66 1.66 2.37 0.87 0.36
Reserves/Loans (%) 1.40 1.32 1.25 1.22 1.33
Reserves/NPAs (%) 73.62 79.02 46.76 121.78 326.35
Dom High Rsk RE/Total Dom Lns (%) 30.83 34.31 41.54 43.50 48.43
NCOs/Avg Loans (%) 0.32 0.15 0.34 0.20 0.03
Loan Loss Provision/NCOs (%) 100.76 169.49 150.62 185.76 900.00
LIQUIDITY
Earning Assets/IBL (%) 118.80 118.54 116.54 114.95 116.59
Fair Value Secs/Amt Cost Sec (%) 99.84 100.05 100.61 98.11 92.81
Pledged Secs/Total Secs (%) 3.82 18.05 15.36 13.65 10.49
CD>$100K/Total Dom Deps (%) 5.35 8.58 10.47 12.39 15.39
TRUST ASSETS UNDER MANAGEMENT
Total Assets 18,565 18,101 34,646 61,546 NA
Total Accounts 202 290 567 639 NA
Total Discretionary Assets 18,368 17,935 34,500 61,408 NA
Total Non-Discretionary Assets 197 166 146 138 NA
</Table>
4
<Page>
VALUATION METHODOLOGY
>> IN VALUING REVERE THE BOARD MUST BALANCE THE INTERESTS OF ITS TWO SEPARATE
CONSTITUENCIES:
>> Members of the MHC - depositors
(Revere, MHC)
>> Minority Shareholders
(RFS Bancorp, Inc.)
<Page>
METHODOLOGY #1
- -------------------------------------------------------------------------------
OBJECTIVE: TO ASSESS VALUE TO REVERE MINORITY SHAREHOLDERS IN A CONVENTIONAL
SALE OF CONTROL CONTEXT.
>> Assume a second step conversion utilizing current second step
valuation;
>> Assume an acquisition 2 years after completion of a second step
conversion. Acquisition price is based upon projected discounted cash
flows at that date;
>> Apply the second step minority exchange ratio to the projected
acquisition value.
- -------------------------------------------------------------------------------
1
<Page>
CURRENT SECOND STEP VALUATION
<Table>
<Caption>
CURRENT VALUATION
- -----------------------------------------------------------
2nd Step Appraisal ($000) $10,902
Shares Outstanding 1,090,200
Shares Offered 613,948
Shares with SOP 93-6 1,026,349
Exchange Ratio 1.221
Adjusted Minority % 43.68%
Adjusted Majority % 56.32%
Gross Proceeds $6,139
Less: Estimated Expenses 750
------------
Estimated Net Proceeds 5,389
Less ESOP & MRP 737
------------
Net Proceeds for Reinvestment 4,653
CONSOLIDATED NET INCOME:
Pro Forma Net Income 772
CONSOLIDATED NET INCOME PER SHARE:
Historical Net Income $0.63
Pro Forma Adjustments $0.12
------------
Pro Forma Net Income $0.75
STOCKHOLDERS' EQUITY:
Pro Forma Stockholders' Equity 15,574
STOCKHOLDERS' EQUITY PER SHARE:
Historical Equity $9.93
Pro Forma Adjustments $4.36
------------
Pro Forma Stockholders' Equity $14.29
PRO FORMA RATIOS:
PRICE / PRO FORMA EARNINGS 13.3 X
PRICE / PRO FORMA BOOK VALUE 70.00%
<Caption>
PRO FORMA YEAR 2 PROJECTIONS
- ----------------------------------------------------------
ASSUMPTIONS:
Pre-Adj. Earnings Growth Rate 15.00%
Asset Growth Rate 10.00%
Repurchases:
Year 1 5.00%
Year 2 10.00%
Dividend $0.20
After-tax cost of cash 3.90%
<Caption>
PRO FORMA YEAR 2 PROJECTED FINANCIALS:
- --------------------------------------
Total Assets $187,978
Total Equity 14,736
Book Value per Share $15.81
Net Income 867
Earnings per Share $0.99
</Table>
DOLLARS IN THOUSANDS
3
<Page>
EXECUTIVE SUMMARY
DISCOUNTED DIVIDEND ANALYSIS
- ------------------------------------------------------------------------
AGGREGATE NET PRESENT VALUE - PER SHARE
- ------------------------------------------------------------------------
<Table>
<Caption>
DISCOUNT RATE
--------------------------------------------
13.00% 14.00% 15.00%
--------------------------------------------
Terminal Year 12.0x $18.95 $17.93 $16.99
Multiple of
Earnings 13.0x $20.09 $19.00 $17.99
14.0x $21.23 $20.07 $18.99
--------------------------------------------
</Table>
- ------------------------------------------------------------------------
NPV ADJUSTED FOR MINORITY EXCHANGE RATIO
- ------------------------------------------------------------------------
<Table>
<Caption>
DISCOUNT RATE
--------------------------------------------
13.00% 14.00% 15.00%
--------------------------------------------
Terminal Year 12.0x $23.13 $21.89 $20.74
Multiple of
Earnings 13.0x $24.52 $23.19 $21.96
14.0x $25.92 $24.50 $23.19
--------------------------------------------
2ND STEP EXCHANGE RATIO 1.221
</Table>
5
<Page>
DISCOUNTED DIVIDEND ANALYSIS FOR RFS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
- ------------------------------------------------------------------------------
WITH 100% OF EST. SYNERGIES REALIZED
40.00% SYNERGIES IN YEAR 2
MAINTAIN TANGIBLE EQUITY RATIO OF 6.00%.
RYAN, BECK & CO. EARNINGS AS ESTIMATES
YEAR 1 AFTER TAX RESTRUCTURING CHARGE OF $1,750
INITIAL DIVIDEND ADJUSTMENT TO ACQUIROR OF $4,112
- ------------------------------------------------------------------------------
<Table>
<Caption>
FIVE YEAR PROJECTIONS
--------------------------------------------------------------------------------------
2003 2004 2005 2006 2007
------------- -------------- --------------- ------------ ------------
Beginning Equity (a) $11,058 $12,756 $14,031 $15,434 $16,978
Unadjusted Net Income (a,b) 920 986 1,134 1,304 1,500
After Tax Income Impact (c) (160) (109) (154) (201) (251)
Synergies/Restructuring Charge (d) (385) 1,560 1,638 1,720 1,806
------------- -------------- --------------- ------------ ------------
Adjusted Net Income (e) $374 $2,438 $2,618 $2,823 $3,055
Dividends (f) 1,323 (1,162) (1,215) (1,279) (1,357)
Ending Equity 12,756 14,031 15,434 16,978 18,675
Intangibles (g) 0 0 0 0 0
------------- -------------- --------------- ------------ ------------
Ending Tangible Equity $12,756 $14,031 $15,434 $16,978 $18,675
Net Change in Equity (h) 1,323 (1,162) (1,215) (1,279) (1,357)
Cumulative Change in Equity (2,788) (3,950) (5,165) (6,445) (7,801)
Total Assets (a,b) $212,592 $233,851 $257,236 $282,960 $311,256
Asset Growth Rate 13.09% 10.00% 10.00% 10.00% 10.00%
Net Income Growth Rate (i) NM 551.41% 7.41% 7.82% 8.21%
Return on Average Assets 0.43% 0.44% 0.46% 0.48% 0.50%
Adjusted ROAA 0.18% 1.09% 1.07% 1.05% 1.03%
Adjusted ROAE 3.14% 18.20% 17.77% 17.42% 17.13%
Equity / Assets 6.00% 6.00% 6.00% 6.00% 6.00%
Tangible Equity/ Tangible Assets 6.00% 6.00% 6.00% 6.00% 6.00%
</Table>
- -------------------------------------------------------------------------------
<Table>
<Caption>
------------------------------------------------------------------------ ------------------------------------------------
AGGREGATE NET PRESENT VALUE AGGREGATE NET PRESENT VALUE - PER SHARE (j)
------------------------------------------------------------------------ ------------------------------------------------
DISCOUNT RATE: 13.00% 14.00% 15.00% DISCOUNT RATE: 13.00% 14.00% 15.00%
-------------- --------------
Terminal Year 12.00 $18,783 $17,721 $16,737 Terminal Year 12.00 $18.95 $17.93 $16.99
Multiple of Multiple of
Earnings 13.00 $19,976 $18,839 $17,784 Earnings 13.00 $20.09 $19.00 $17.99
Adj. for Goodwill Adj. for Goodwill
Amortization 14.00 $21,168 $19,956 $18,831 Amortization (k) 14.00 $21.23 $20.07 $18.99
</Table>
6
<Page>
FOOTNOTES
- ------------------------------------------------------------------------------
METHODOLOGY: The Discounted Dividend Analysis produces values given earnings
estimates and projections of achievable synergies, over a range of
discount rates and terminal year earnings multiples. An initial
dividend for tangible capital in excess of a specified target is
assumed; earnings in subsequent years are adjusted to reflect the
opportunity cost of this distribution. Earnings in excess of those
required to maintain RFS's tangible equity ratio at the specified
targets are dividendable. It should be noted that "Synergies" is
defined as cost savings and revenue enhancements which are assumed to
approximate 40.00% of RFS's non-interest expenses in 2004.
* Present value = NPV of dividend stream plus terminal year multiple
applied to net income less intangible amortization.
#VALUE!
RFS's tangible equity to assets to specified target tangible capital
levels.
(b) Earnings assumption based on Ryan, Beck projections for 2003, and are
assumed to grow at 15.00% per annum thereafter. Asset projections are
assumed to grow at an annual rate of 10.00%.
(c) Assumes a pre-tax rate of 6.00% is earned/(lost) on any capital
retained/(dividended) in excess of assumed regular dividend payout.
Assumes a tax rate of 35.00%.
(d) Synergies/Revenue enhancements are estimated to equal 35.00% in 2003 and
40.00% in 2004 of RFS's LTM operating expenses, grown at 5.00% annually
thereafter. Assumes 100.0% credit is given for synergies. Synergies in
2003 are net of restructuring charge, if any.
(e) Adjusted for income impact of paying dividends in excess of assumed
regular dividend payout ratio.
(f) Assumed to pay the maximum dividend possible while maintaining a
tangible equity/asset ratio of 6.00%.
(g) Intangibles assumed to be amortized at a rate of $000 per year.
(h) Represents dividends paid in excess of estimated payout ratio of 0.00%.
(i) Includes income impact of cumulative increase (decrease) in equity.
(j) Per share data is based on 991,409 diluted shares outstanding, assuming
options are cashed out at $19.00 per share.
(k) The terminal year multiple, when applied to terminal year adjusted
earnings produces a value which approximates the net present value of
the earnings in perpetuity, given certain assumptions regarding growth
rates and discount rates.
7
<Page>
Company Name RFS
Ticker RFS
Date 1/0/1900
First Year of Earnings Forecast 2003
<Table>
<Caption>
- -------------------------------------------------------------------------------
Beginning Assets.................................................. $187,978
Beginning Equity.................................................. $14,736
Beginning Intangibles............................................. $0
2003 Tangible Equity/Tangible Asset Ratio......................... 6.0%
2004 Tangible Equity/Tangible Asset Ratio......................... 6.0%
2005 Tangible Equity/Tangible Asset Ratio......................... 6.0%
2006 Tangible Equity/Tangible Asset Ratio......................... 6.0%
2007 Tangible Equity/Tangible Asset Ratio......................... 6.0%
Basic Shares Outstanding (w/ SOP 93-6)............................ 877,777
Options Outstanding............................................... 113,090
Options Strike Price.............................................. $9.04
Options Cash Out Price............................................ $19.00
Current Stock Price............................................... $13.83
Common Stock Equivalents (treasury method of options)............. 39,159
Convertible Shares................................................ 0
Diluted Shares Outstanding........................................ 916,936
Unallocated ESOP Shares (due to SOP 93-6)......................... 54,344
Merger Shares (includes all ESOP shares).......................... 991,409
Net Income Current Year........................................... 867
Quarters of Income to Close....................................... 2
Retained Earnings to Close........................................ $434
2003 Earnings per Share........................................... 1.00
2004 Earnings per Share........................................... 1.08
Net Income Growth Rate............................................ 15.00% -------------------------
Company (C), RBCO (R), ZACHS (Z) or IBES (I)...................... R Company
Are The Earnings Estimates Basic or Diluted (B or D).............. D Estimates
Asset Growth Rate................................................. $0.00% ---------
Dividend Payout Ratio............................................. 0.00% 2003 997
LTM Operating Expenses (Excluding Goodwill Amortization).......... 6,000 2004 1,147
Synergies (Y or N)................................................ y 2005 1,319
2003 Synergies estimate........................................... 35.0000% 2006 1,517
2004 Synergies estimate........................................... 40.0000% 2007 1,744
2005 Synergies estimate........................................... 42.0000% -------------------------
Synergies Growth Rate............................................. 5.00%
Credit for synergies.............................................. 100.00%
Bad Debt Recapture? (Y or N)...................................... n
Bad Debt Recapture ($)............................................ 0
2003 Restructuring Charge (after tax)............................. 1,750
Initial Dividend (Y or N)......................................... y
Intangible Amortization........................................... 10
Tax Rate.......................................................... 35.00%
Pre-Tax Earnings Yield............................................ 6.08%
After Tax Earnings Yield.......................................... 3.90%
How many extra months discounted do you want?..................... 36
- -------------------------------------------------------------------------------
</Table>
<Page>
METHODOLOGY #2
OBJECTIVE: FOR COMPARATIVE PURPOSES, TO ASSESS POTENTIAL VALUE TO REVERE
MINORITY SHAREHOLDERS IN A SCENARIO WHERE REVERE REMAINS
INDEPENDENT AND SECOND STEP VALUATIONS IMPROVE.
> > Project RFS Bancorp out 5 years and assume the second step conversion
market returns to a level of 95% pro forma price/book;
> > Discount the pro forma market value per minority share to its present
value (using a 14% discount rate).
1
<Page>
ASSUMPTIONS
-----------
<Table>
<Caption>
FINANCIAL INFORMATION:
Data as of 3/31/2001
Assets $153,533 After-tax cost of cash 3.90%
Equity $10,821 Tax Rate 35.00%
Intangibles $0
Amortization of Intangibles $0 ARBITRAGE:
----------
ESOP Purchased $0 After-tax spread 0.75%
2001 Est. Net Income $650 Asset growth from arbitrage 0.00%
PRE-ADJUSTMENT GROWTH RATES: INITIAL TRADING INDICATORS:
- ---------------------------- ---------------------------
Asset Growth 10.0% Price to Tang. Book (%) 90%
Earnings Growth 15.0% Price to Earnings (x) 15.00 x
TRADING INDICATORS:
-------------------
SHARE INFORMATION: Price to Tang. Book (%) 120%
- ------------------
Minority Shares 390,156 Price to Earnings (x) 14.00 x
Majority Shares 494,767 Years to Achieve: 5
--------
Total Shares 884,923
Diluted Shares Outstanding 905,136
</Table>
<Table>
<Caption>
TOTAL SHARES AMORTIZED YEARS PERCENTAGE
------------ --------- ----- ----------
ESOP Shares 35,100 3,510 10 8.0%
MRP Shares 17,550 3,510 5 4.0%
Option Shares 43,876 10 10.0%
2nd Step IPO Price $10.00
</Table>
<Table>
<Caption>
REPURCHASES (% OF TOTAL SHARES OUTSTANDING):
- --------------------------------------------
Year 1 5.00%
Year 2 4.00%
Year 3 3.00%
Year 4 2.00%
Year 5 1.00%
</Table>
3
<Page>
5 YEAR PROJECTION
-----------------
<Table>
<Caption>
03/31/01 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
------------- -------------- -------------- --------------- --------------- ---------------
Total Assets $153,533 $168,332 $184,738 $202,916 $223,055 $245,368
Intangibles 0 0 0 0 0 0
Total Equity 10,821 10,997 11,337 11,874 12,651 13,722
Tangible Equity 10,821 10,997 11,337 11,874 12,651 13,722
Net Income 650 730 823 936 1,073 1,237
Dividend per share (Ann.) $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Dividend Payout Ratio 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Assets at the MHC $100 $100 $100 $100 $100 $100
Minority Shares 390,156 345,910 312,283 288,071 272,415 264,743
Majority Shares 494,767 494,767 494,767 494,767 494,767 494,767
------------- -------------- -------------- --------------- --------------- ---------------
Total Shares 884,923 840,677 807,050 782,838 767,182 759,510
Shares with SOP 93-6 905,136 864,400 834,283 813,581 801,435 797,273
Repurchases 0.00% 5.00% 4.00% 3.00% 2.00% 1.00%
Shares Repurchased 0 44,246 33,627 24,211 15,657 7,672
Cost of Repurchase $0 $554 $483 $399 $296 $167
% of Capital 5.04% 4.26% 3.36% 2.34% 1.21%
Minority % 44.09% 41.15% 38.69% 36.80% 35.51% 34.86%
Majority % 55.91% 58.85% 61.31% 63.20% 64.49% 65.14%
Book Value per Share $12.23 $13.08 $14.05 $15.17 $16.49 $18.07
Tang. Book Value per Share $12.23 $13.08 $14.05 $15.17 $16.49 $18.07
Earnings per Share $0.72 $0.84 $0.99 $1.15 $1.34 $1.55
PROJECTED STOCK PRICE:
Based on Tang. Book $11.74 $12.56 $14.33 $16.38 $18.80 $21.68
Based on Earnings $10.63 $12.50 $14.40 $16.57 $19.02 $21.73
------------- -------------- -------------- --------------- --------------- ---------------
Stock Price $11.18 $12.53 $14.37 $16.48 $18.91 $21.70
Price / Tang. Book 91.46% 95.76% 102.27% 108.64% 114.65% 120.13%
Price / EPS (x) 15.57 x 14.84 x 14.56 x 14.32 x 14.12 x 13.99 x
Tangible Equity / Assets 7.05% 6.53% 6.14% 5.85% 5.67% 5.59%
Return on Assets 0.42% 0.43% 0.45% 0.46% 0.48% 0.50%
Return on Equity 6.01% 6.64% 7.26% 7.89% 8.48% 9.02%
</Table>
4
<Page>
<Table>
<Caption>
SECOND STEP SUMMARY
-------------------
03/31/01 YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
------------- ------------ ------------ ------------ ------------ -------------
2nd Step Appraisal ($000) $10,902 $12,732 $15,090 $18,110 $22,020 $27,090
Shares Outstanding 1,090,200 1,273,200 1,509,000 1,811,000 2,202,000 2,709,000
Shares Offered 613,948 753,436 928,971 1,148,262 1,423,654 1,768,208
Shares with SOP 93-6 1,026,349 1,194,843 1,412,387 1,691,581 2,053,940 2,525,106
EXCHANGE RATIO 1.221 1.503 1.857 2.301 2.857 3.554
Adjusted Minority % 43.68% 40.82% 38.44% 36.60% 35.35% 34.73%
Adjusted Majority % 56.32% 59.18% 61.56% 63.40% 64.65% 65.27%
Gross Proceeds $6,139 $7,534 $9,290 $11,483 $14,237 $17,682
Less: Estimated Expenses 750 750 750 772 814 865
------------- ------------ ------------ ------------ ------------ -------------
Estimated Net Proceeds 5,389 6,784 8,540 10,710 13,423 16,817
Less ESOP & MRP 737 904 1,115 1,378 1,708 2,122
------------- ------------ ------------ ------------ ------------ -------------
Net Proceeds for Reinvestment 4,653 5,880 7,425 9,332 11,715 14,695
CONSOLIDATED NET INCOME:
Pro Forma Net Income 772 885 1,020 1,185 1,386 1,630
CONSOLIDATED NET INCOME PER SHARE:
Historical Net Income $0.63 $0.61 $0.58 $0.55 $0.52 $0.49
Pro Forma Adjustments $0.12 $0.13 $0.14 $0.15 $0.15 $0.16
------------- ------------ ------------ ------------ ------------ -------------
Pro Forma Net Income $0.75 $0.74 $0.72 $0.70 $0.67 $0.65
STOCKHOLDERS' EQUITY:
Pro Forma Stockholders' Equity 15,574 16,977 18,861 21,307 24,466 28,517
STOCKHOLDERS' EQUITY PER SHARE:
Historical Equity $9.93 $8.64 $7.51 $6.56 $5.75 $5.07
Pro Forma Adjustments $4.36 $4.70 $4.99 $5.21 $5.37 $5.46
------------- ------------ ------------ ------------ ------------ -------------
Pro Forma Stockholders' Equity $14.29 $13.33 $12.50 $11.77 $11.11 $10.53
PRO FORMA RATIOS:
PRICE / PRO FORMA EARNINGS 13.3 X 13.5 X 13.8 X 14.3 X 14.8 X 15.5 X
PRICE / PRO FORMA BOOK VALUE 70.00% 75.00% 80.00% 85.00% 90.00% 95.00%
IMPACT TO MINORITY SHAREHOLDER:
Exchange Ratio 1.221 1.503 1.857 2.301 2.857 3.554
Pro Forma Book Value per Minority Share $17.44 $20.04 $23.22 $27.07 $31.75 $37.41
Pro Forma EPS per Minority Share $0.92 $1.11 $1.34 $1.61 $1.93 $2.29
PRO FORMA RATIOS:
Equity / Assets 9.85% 9.74% 9.82% 10.04% 10.42% 10.97%
ROA 0.49% 0.51% 0.53% 0.56% 0.59% 0.63%
ROE 4.95% 5.21% 5.41% 5.56% 5.66% 5.72%
- ---------------------------------------------------------------------------------------------------------------------------------
BOOK VALUE PER MINORITY SHARE NET PRESENT VALUE* $17.86 $18.27 $18.80 $19.43
EARNINGS PER MINORITY SHARE NET PRESENT VALUE* $1.03 $1.09 $1.14 $1.19
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
5
<Page>
SECOND STEP PRICING SUMMARY
---------------------------
<Table>
<Caption>
IPO IPO IPO 04/25/01 04/25/01
Name Ticker Gross Proceeds ($Mil.) Date P/B P/E P/B (1) P/E (1)
- --------------------------------------------------------------------------------------------------------- ------------------------
Fidelity Bankshares, Inc. (2) FFFL $71.7 Pending 87.18% 13.3 x
FloridaFirst Bancorp FFBK $31.5 12/22/2000 64.56% 11.5 x 86.46% NA
Finger Lakes Bancorp, Inc. FLBC $16.2 11/14/2000 72.86% 19.4 x 77.68% 18.8 x
Waypoint Financial Corp. WYPT $195.5 10/12/2000 92.98% 11.9 x 85.86% 11.1 x
Community Savings Bankshares, Inc. CMSV $54.7 12/16/1999 80.00% 16.0 x 101.48% 24.1 x
First Federal Bankshares, Inc. FFSX $26.4 4/14/1999 71.53% 10.9 x 68.53% 9.3 x
Pulaski Financial Corp. PULB $29.1 12/3/1998 79.49% 14.7 x 104.24% 11.0 x
Homestead Bancorp, Inc. HSTD $11.2 7/20/1998 96.80% 29.4 x 73.36% 18.9 x
PSB Bancorp, Inc. PSBI $16.1 7/17/1998 107.18% 27.0 x 50.06% 15.7 x
Thistle Group Holdings, Co. THTL $78.6 7/14/1998 93.37% 17.0 x 81.92% 15.9 x
SouthBanc Shares, Inc. SBAN $45.6 4/15/1998 118.55% 28.2 x 109.68% 11.3 x
First Source Bancorp, Inc. FSLA $165.5 4/9/1998 131.06% 32.3 x 152.55% 14.2 x
Peoples Bancorp, Inc. TSBS $238.1 4/9/1998 111.36% 25.9 x
Pochahontas Bancorp, Inc. PFSL $35.7 4/1/1998 120.48% 20.8 x 73.07% 11.7 x
Harbor Florida Bancorp, Inc. HARB $166.6 3/19/1998 127.06% 17.9 x 172.97% 16.2 x
Heritage Financial Corp. HFWA $66.2 1/9/1998 107.60% 19.6 x 99.11% 13.9 x
First Capital, Inc. FCAP $7.7 1/4/1998 77.54% 11.6 x 89.72% 9.5 x
Guaranty Federal Bancshares GFED $43.6 12/30/1997 93.60% 25.6 x 90.73% 14.0 x
Community National Corporation CNBT $4.9 12/11/1997 86.10% 17.9 x
Equality Bancorp EBI $13.2 12/2/1997 105.60% 32.3 x
MEDIAN 93.49% 18.7 x 88.09% 14.0 x
</Table>
(1) THE COMPANIES (EXCLUDING FFFL) LEFT BLANK HAVE BEEN ACQUIRED SINCE THEIR
SECOND STEP OFFERING.
(2) FIDELITY BANKSHARES IS IN THE PROCESS OF COMPLETING ITS SECOND STEP. THE IPO
P/B AND P/E SHOWN ARE THE MIDPOINT OF THEIR OFFERING RANGE.
6
<Page>
IMPUTED VALUE OF RFS AFTER SECOND STEP IN YEAR FIVE
BASED ON CURRENT TRADING MULTIPLES OF RECENTLY COMPLETED SECOND STEP
TRANSACTIONS
4/25/01 Price / Book of Second Step Peer Group 88.09%
4/25/01 Price / Earnings of Second Step Peer Group 14.0x
RFS Year 5 Book Value per Minority Share $19.43
RFS Year 5 Earnings per Minority Share $1.19
Imputed Stock Price Based on Book Value $17.12
Imputed Stock Price Based on Earnings $16.66
-------
IMPUTED AVERAGE STOCK PRICE $16.89
-------
7
<Page>
METHODOLOGY #3
OBJECTIVE: TO DETERMINE AT WHAT RATE REVERE'S EARNINGS WOULD NEED TO GROW SUCH
THAT THE FUTURE STOCK PRICE WOULD EQUAL TODAY'S ACQUISITION VALUE.
o Determines the growth rate necessary to meet a certain price target
while maintaining the company's current price / earnings ratio;
o Assumes that Revere continues in its current MHC structure.
1
<Page>
RFS BANCORP, INC.
ANALYSIS OF BREAKEVEN RETURNS
- -------------------------------------------------------------------------------
REQUIRED FIVE YEAR COMPOUND ANNUAL GROWTH RATE OVER 2001 ESTIMATED EARNINGS
Offer Value of $22.75 per share
107% Premium to Market
186% Tangible Book Value
13.6x 2001E EPS (based on minority shares)
<Table>
<Caption>
TERMINAL YEAR DISCOUNT RATE
MULTIPLE OF -----------------------------------------------------------------------------------
EARNINGS 12.0% 14.0% 16.0% 18.0%
--------------- -------------- -------------- --------------- ---------------
8.0 x 31.6 % 34.6 % 37.5 % 40.5 %
MARKET
MULTIPLES
10.0 x 24.5 % 27.3 % 30.1 % 32.8 %
-------------------------------------
--------------------------------------
12.0 x 18.9 % 21.6 % 24.2 % 27.0 %
ACQUISITION
MULTIPLES
14.0 x 14.4 % 17.0 % 19.5 % 22.2 %
--------------------------------------
</Table>
- -------------------------------------------------------------------------------
3
<Page>
RFS BANCORP, INC.
ANALYSIS OF BREAKEVEN RETURNS
<Table>
<Caption>
- ----------------------------------------------------------------------------------------------------------------------
ASSUMPTIONS:
DIVIDEND PAYOUT RATIO:
2001E EPS: $1.67 [1] YEAR 1 0.00% YEAR 6 0.00%
----------
DISCOUNT RATE: 14% YEAR 2 0.00% YEAR 7 0.00%
ASSET GROWTH: 10% [2] YEAR 3 0.00% YEAR 8 0.00%
P/E: 11.0 x YEAR 4 0.00% YEAR 9 0.00%
STOCK PRICE: $11.00 8/1/01 YEAR 5 0.00% YEAR 10 0.00%
- ----------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
OFFER VALUE = $22.75
---------------------------------------------------------------------------------------
107% PREMIUM TO MARKET
186% TANGIBLE BOOK VALUE [3]
---------------------------------------------------------------------------------------
<Caption>
Required
YEAR Market Necessary
ENDED Shares Total Value / Implied Implied Earnings
09/30 OWNED[4] ASSETS[2,3] SHARE[5] LTM EPS[6] ROA GROWTH [7]
----- -------- ----------- -------- ---------- --- ----------
2001 1.00 153.5 11.00 $1.67 0.42% n/a
2002 1.00 168.9 29.57 4.22 0.97% 152.69%
2003 1.00 185.8 33.71 4.82 1.01% 69.89%
2004 1.00 204.4 38.42 5.49 1.05% 48.69%
2005 1.00 224.8 43.80 6.26 1.09% 39.14%
2006 1.00 247.3 49.94 7.13 1.13% 33.68%
2007 1.00 272.0 56.93 8.13 1.17% 30.19%
2008 1.00 299.2 64.90 9.27 1.21% 27.74%
2009 1.00 329.1 73.98 10.57 1.25% 25.94%
2010 1.00 362.0 84.34 12.05 1.30% 24.56%
2011 1.00 398.2 96.15 13.74 1.35% 23.46%
2012 1.00 438.0 109.61 15.66 1.39% 22.57%
---------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------
OFFER VALUE = $22.75
--------------------------------------------------------------------------------------
107% PREMIUM TO MARKET
186% TANGIBLE BOOK VALUE [3]
--------------------------------------------------------------------------------------
<Caption>
Required
YEAR Market Necessary
ENDED Shares Total Value / Implied Implied Earnings
09/30 OWNED[4] ASSETS[2,3] SHARE[5] LTM EPS[6] ROA GROWTH [7]
----- -------- ----------- -------- ---------- --- ----------
2001 1.00 153.5 11.00 $1.67 0.42% n/a
2002 1.00 168.9 29.57 4.22 0.97% 152.69%
2003 1.00 185.8 33.71 4.82 1.01% 69.89%
2004 1.00 204.4 38.42 5.49 1.05% 48.69%
2005 1.00 224.8 43.80 6.26 1.09% 39.14%
2006 1.00 247.3 49.94 7.13 1.13% 33.68%
2007 1.00 272.0 56.93 8.13 1.17% 30.19%
2008 1.00 299.2 64.90 9.27 1.21% 27.74%
2009 1.00 329.1 73.98 10.57 1.25% 25.94%
2010 1.00 362.0 84.34 12.05 1.30% 24.56%
2011 1.00 398.2 96.15 13.74 1.35% 23.46%
2012 1.00 438.0 109.61 15.66 1.39% 22.57%
-------------------------------------------------------------------------------------
OFFER VALUE = $22.75
-------------------------------------------------------------------------------------
107% PREMIUM TO MARKET
186% TANGIBLE BOOK VALUE [3]
-------------------------------------------------------------------------------------
<Caption>
Required
YEAR Market Necessary
ENDED Shares Total Value / Implied Implied Earnings
09/30 OWNED[4] ASSETS[2,3] SHARE[5] LTM EPS[6] ROA GROWTH [7]
----- -------- ----------- -------- ---------- --- ----------
2001 1.00 153.5 11.00 $1.67 0.42% n/a
2002 1.00 168.9 29.57 4.22 0.97% 152.69%
2003 1.00 185.8 33.71 4.82 1.01% 69.89%
2004 1.00 204.4 38.42 5.49 1.05% 48.69%
2005 1.00 224.8 43.80 6.26 1.09% 39.14%
2006 1.00 247.3 49.94 7.13 1.13% 33.68%
2007 1.00 272.0 56.93 8.13 1.17% 30.19%
2008 1.00 299.2 64.90 9.27 1.21% 27.74%
2009 1.00 329.1 73.98 10.57 1.25% 25.94%
2010 1.00 362.0 84.34 12.05 1.30% 24.56%
2011 1.00 398.2 96.15 13.74 1.35% 23.46%
2012 1.00 438.0 109.61 15.66 1.39% 22.57%
</Table>
Notes:
- --------------------------------------
(1) 2001 EPS reflects an earnings estimate of $1.67 per share as provided by
Ryan, Beck's Research Department.
(2) Assets assumed to grow at 10% per year.
(3) Initially as reported in the Company's financial statements dated March 31,
2001.
(4) Assumes dividends are reinvested in common shares at the end of the previous
period market price.
(5) Equates to required market value divided by shares owned. Required market
value equates to initial offer value compounded annually at the discount rate.
(6) Equates to required market value divided by P/E.
(7) Compound annual growth rate of earnings necessary to provide the same
increase in value to shareholders as the initial offer value, assuming a 14.0%
discount rate, a 7.0x P/E ratio and the specified dividend payout ratio.
4
<Page>
<Table>
<Caption>
INPUTS FOR CALCULATIONS:
Company Name RFS Bancorp, Inc.
Current Market Price 11.00
Offer Price Case 1 22.75
Case 2 22.75
Case 3 22.75
Shares O/S 0.390156 MM
Assets 154 MM
Tang. Book Value per share 12.23
INPUTS FOR ASSUMPTIONS BOX:
Dividend Payout Ratio - Year 1 0.00%
Dividend Payout Ratio - Year 2 0.00%
Dividend Payout Ratio - Year 3 0.00%
Dividend Payout Ratio - Year 4 0.00%
Dividend Payout Ratio - Years 5-11 0.00%
EPS Estimate $1.67
Year for Earnings Estimate 2001
Discount Rate 14%
Asset Growth Rate 10%
Price/Earnings Ratio 7.0 x
INPUTS FOR FOOTNOTES:
Financial Statement Date 3/31/2001
Fiscal Year End 09/30
Earnings Estimate R
(Z=Zachs,R=RBCO,C=Company,I=I/B/E/S)
INPUTS FOR SUMMARY:
Specify Market Multiples:
8.0 x
10.0 x
Specify Acquisition Multiples:
12.0 x
14.0 x
Specify Discount Rates:
12.0%
14.0%
16.0%
18.0%
</Table>
5
<Page>
CONSIDERATIONS FOR REVERE, MHC
>> Depositor rights are preserved upon a conversion
>> Same Liquidation rights
>> Capital of Pro Forma Combined Company
>> Performance of Pro Forma Combined Company
>> Products and Services of Pro Forma Combined Company
1
<Page>
ASSUMPTIONS
<Table>
Acquiror:
Danvers Savings Bank DANV ESOP Unallocated Shares (9/30/01) 22,803 35,100
Target: ESOP Debt (9/30/01) $246
RFS Bancorp, Inc. RFED
ORIG. Option Shares 42,338
-----
Minority Shares 390,156 438,756 Option Strike Price $7.32
Majority Shares 494,767 MRP Shares (incl. in minority) 0
-------------
Total Shares Outstanding 884,923
Synergies:
Seller's Tangible Equity $10,821 Seller's Non-Interest Expenses $4,250
Seller's Amortization of Int. $0 Buyer's Non-Interest Expense $18,344
% $Amount
Seller's Tang. Book Value $12.23 2001 20.0% $561
Seller's Minority Book Value $27.74 2002 25.0% $701
Seller's Stock Price $11.00 $476.47 2003 26.3% $736
2004 27.6% $773
2005 28.9% $812
Acquisition Price $22.75 $9,529 Growth Rate: 5.0%
Buyer's Tax Rate 34.0%
Income: ACQUIROR TARGET Cost of Cash 6.00%
-------- ------
2001 $5,500 $650 AT Cost of Cash 3.96%
2002 $6,050 $715
2003 $6,655 $787 Goodwill Amortization (yrs.) 15
2004 $7,321 $865 ESOP Ben
2005 $8,053 $952 AT Restructuring Charge $1,537 $273
Growth Rate: 10% 10%
</Table>
1
<Page>
RATIO SUMMARY
<Table>
<Caption>
ACQUISITION PRICE
------------------------------------
DANV RFED $22.75 $9,529
12/31/2000 12/31/2000 PRO FORMA BP CHANGE
----------------- ----------------- ----------------- ----------------
TRANSACTION PRICING:
Offer Price / Tang. Book Value per Share 186.0%
Aggregate Offer / Tang. Book Value 88.1%
Aggregate Offer / 2001 Earnings 14.7 X
Offer Price / Market Price 2.1 X
CAPITAL RATIOS:
Equity / Assets 8.57% 7.05% 6.52% (2.05)
Tangible Equity / Tangible Assets 8.57% 7.05% 6.52% (2.05)
Intangibles / Equity 0.00% 0.00% 0.00% 0.00
PERFORMANCE RATIOS:
2001 Return on Assets 1.21% 0.42% 1.06% (0.15)
2001 Return on Equity 14.13% 6.01% 16.28% 2.14
Non-Interest Income / Assets 0.88% 0.30% 0.75% (0.13)
Non-Interest Expense / Assets 4.04% 2.77% 3.69% (0.35)
Efficiency Ratio 70.45% 80.49% 70.35% (0.10)
ASSET COMPOSITION:
Loans / Assets 87.91% 61.71% 82.80% (5.11)
Loans / Deposits 113.28% 90.97% 108.19% (5.09)
Equity / Deposits 11.05% 10.39% 8.53% (104.75)
Borrowings / Assets 12.74% 24.92% 16.11% 3.37
ASSET QUALITY:
NPLs / Loans 0.37% 0.55% 0.41% 0.03
Reserves / NPLs 355.47% NM 304.77% (50.70)
NPAs / Assets 0.36% 0.34% 0.36% 0.00
</Table>
2
<Page>
SELLER'S BALANCE SHEET ADJUSTMENTS
<Table>
<Caption>
RFED RESTRUCTURING TRANSACTION RFED
3/31/2001 CHARGE ADJUSTMENTS AS ADJUSTED
-------------- ----------------- ----------------- ----------------
ASSETS:
Cash and Due $6,467 $6,467
Securities Held to Maturity 31,532 31,532
Securities Available for Sale 7,057 (1,537) 5,520
Other Investments 7,015 7,015
Gross Loans 94,751 94,751
Less: Allowance for Loan Losses (835) (835)
----- -----
Net Loans 93,916 93,916
Premises & Equipment 4,339 4,339
Other Real Estate Owned 0 0
Accrued Interest Receivable 839 839
Intangible Assets 0 0 0
Other Assets 2,368 2,368
TOTAL ASSETS $153,533 ($1,537) $0 $151,996
======== ======== == ========
LIABILITIES:
Total Deposits 104,154 104,154
Total Borrowings 38,258 38,258
ESOP Debt 246 (246) 0
Other Liabilities 54 54
TOTAL LIABILITIES $142,712 $0 ($246) $142,466
TOTAL CAPITAL $10,821 ($1,537) 246 9,529
TOTAL LIABILITIES & CAPITAL $153,533 ($1,537) $0 $151,996
======== ======== == ========
</Table>
3
<Page>
BALANCE SHEET SUMMARY
<Table>
<Caption>
PRO FORMA MERGER
-------------------------------------
DANV RFED $22.75 $9,529
12/31/2000 AS ADJUSTED Adjustments Pro Forma
------------------ ------------------ ------------------ -----------------
ASSETS:
Cash and Due $15,820 $6,467 $22,287
Securities Held to Maturity 14,434 31,532 45,966
Securities Available for Sale 9,425 5,520 (9,529) 5,415
Other Investments 0 7,015 7,015
Gross Loans 399,071 94,751 493,822
Less: Allowance for Loan Losses (5,300) (835) (6,135)
------- ----- -------
Net Loans 393,771 93,916 487,687
Premises & Equipment 10,168 4,339 14,507
Other Real Estate Owned 133 0 133
Accrued Interest Receivable 0 839 839
Intangible Assets 0 0 0 0
Other Assets 10,215 2,368 12,583
TOTAL ASSETS $453,966 $151,996 ($9,529) $596,432
======== ======== ======== ========
LIABILITIES:
Total Deposits 352,298 104,154 456,452
Total Borrowings 57,854 38,258 96,112
ESOP Debt 0 0 0
Other Liabilities 4,899 54 4,953
TOTAL LIABILITIES $415,051 $142,466 $557,517
TOTAL CAPITAL $38,915 $9,529 ($9,529) $38,915
TOTAL LIABILITIES & CAPITAL $453,966 $151,996 ($9,529) $596,432
======== ======== ======== ========
</Table>
4
<Page>
INCOME STATEMENT IMPACT
- -------------------------------------
Acquisition Price
$22.75
- -------------------------------------
<Table>
<Caption>
2001 2002 2003 2004 2005
---- ---- ---- ---- ----
Danvers Savings Bank $5,500 $6,050 $6,655 $7,321 $8,053
RFS Bancorp, Inc. $650 $715 $787 $865 $952
---- ---- ---- ---- ----
Combined Net Income $6,150 $6,765 $7,442 $8,186 $9,004
Less:
Goodwill Amortization ($0) ($0) ($0) ($0) ($0)
Opportunity Cost of Cash ($377) ($377) ($377) ($377) ($377)
Plus:
Reversal of Seller's Intangibles $0 $0 $0 $0 $0
Synergies $561 $701 $736 $773 $812
---- ---- ---- ---- ----
PRO FORMA NET INCOME $6,334 $7,089 $7,800 $8,581 $9,439
Increase / (Decrease) $834 $1,039 $1,145 $1,261 $1,386
% Increase / (Decrease) 15.2% 17.2% 17.2% 17.2% 17.2%
</Table>
5
<Page>
RESTRUCTURING CHARGE SUMMARY
<Table>
<Caption>
PRE TAX TAX RATE A/T COST
------- -------- --------
Investment Banking Fees $250,000 0.00% $250,000
Legal Fees 250,000 0.00% 250,000
Accounting Fees 50,000 0.00% 50,000
Contracts Payment for Mr. McCarthy 355,287 34.00% 234,489
Non-compete for Mr. McCarthy 267,741 34.00% 176,709
Contract Payment for Mr. Patti 255,021 34.00% 168,314
Contract Payment for Ms. Tenaglia 144,047 34.00% 95,071
ESOP Benefit to Participants 273,068 34.00% 180,225
Severance estimate 50,000 34.00% 33,000
Termination Fee of Data Processing Contract 0 34.00% 0
Proxy/Meetings 25,000 34.00% 16,500
SEC Filings 5,000 34.00% 3,300
Misc. Expenses 121,000 34.00% 79,860
------- ------
Total Estimated Restructuring Charges $2,046,164 $1,537,468
Net Equity ($000) $9,529
Net Equity per Minority Share Outstanding $24.42
Options Outstanding 42,338
Weighted Avg. Price 7.32
=============
Break-even Price including Options $22.75 $9,529
=============
</Table>
6
<Page>
MARKETING PROCESS
- -------------------------------------------------------------------------------
The marketing process was determined based upon the need to balance the
interests of depositors and shareholders. As such, an early determination
was made to pursue a negotiated transaction with a depositor owned
institution that could afford to pay a fair price, and which at the same
time would not impair the book value of the pro forma company. Moreover,
non-financial objectives were established with an intent to preserve the
community orientation of Revere Federal Savings Bank.
In conjunction with RFS Bancorp management, Ryan Beck performed a screening
of all mutual institutions with assets above $400 million, located in the
area. Based upon this analysis, a decision was made to contact Danvers
based upon its financial capacity, its commitment to broad based community
oriented banking. However, prior to contacting Danvers, Revere was
contacted by Danvers.
<Page>
CONCLUSION
- -------------------------------------------------------------------------------
1. MINORITY SHAREHOLDERS: The proposed cash consideration of $22.75 per
share represents a price which is above: (i) the range of values
theoretically available to minority shareholders upon a second step
conversion and subsequent acquisition; and (ii) the price theoretically
available to minority shareholders upon a second step conversion in an
improved market environment. Based upon this and other financial and
non-financial factors, Ryan Beck is of the opinion that the proposed
consideration is fair to the minority shareholders of Revere stock from a
financial point of view.
2. DEPOSITORS: In Ryan Beck's opinion, the proposed transaction is fair to
members of Revere, MHC. In reaching this opinion, Ryan Beck has focused
on, among other things, the fact that there is no diminution in the
tangible equity of the combined company, the preservation of depositor
rights at Danvers, and the broad products and services available to
depositors.
<Page>
[LETTERHEAD OF RYAN, BECK]
The Board of Directors
RFS Bancorp, Inc.
310 Broadway
Revere, Massachusetts 02151
The Board of Directors
Revere, MHC
310 Broadway
Revere, Massachusetts 02151
Re: CONSENT OF RYAN, BECK & CO., LLC
Members of the Boards:
We hereby consent to the inclusion in the Rule 13e-3 Transaction
Statement on Schedule 13E-3 of RFS Bancorp, Inc., Revere, MHC and Revere
Federal Savings Bank (the "Schedule 13E-3")of our opinion and the
presentation entitled, "Merger Fairness Review of RFS Bancorp, Inc. and
Revere, MHC" dated April 27, 2001, which is attached thereto and to the
reference to such opinion, presentation and to our firm therein. In giving
such consent, we do not admit (i) that we come within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amdended (the "Securities Act") and the rules and regulations of the
Securities and Exchange Commission issued thereunder or (ii) that we are
experts with respect to any part of the Schedule 13E-3 within the meaning of
the term "experts" as used in the Securities Act and the rules and
regulations of the Securities and Exchange Commission promulgated herein.
By: /s/ DAVID P. DOWNS
-----------------------------
David P. Downs
Managing Director
Livingston, New Jersey
August 3, 2001