Exhibit 99.6
Letter Agreement regarding Appraisal Services
and Business Plan Preparation
KELLER & COMPANY, INC.
555 METRO PLACE NORTH
SUITE 524
DUBLIN, OHIO 43017
(614) 766-1426
(614) 766-1459 FAX
May 16, 1996
The Board of Directors
Preferred Savings Bank
4800 S. Pulaski Road
Chicago, IL 60632
Re: Conversion Valuation Agreement
Attn: Kim P. Rooney, President
Keller & Company, Inc. (hereinafter referred to as KELLER) hereby
proposes to prepare an independent conversion appraisal of Preferred Savings
Bank, Chicago, Illinois (hereinafter referred to as PREFERRED), relating to
the conversion of PREFERRED from a mutual to a stock institution. KELLER will
provide a pro forma valuation of the market value of the shares to be sold in
the proposed conversion of PREFERRED.
KELLER is a financial consulting firm that primarily serves the
financial institution industry. KELLER is experienced in evaluating and
appraising thrift institutions and thrift institution holding companies.
KELLER is an experienced conversion appraiser for filings with the Federal
Deposit Insurance Corporation ("FDIC") and the Office of Thrift Supervision
("OTS"), and is also approved by the Internal Revenue Service as an expert in
thrift stock valuations.
KELLER agrees to prepare the conversion appraisal in the format
required by the OTS in a timely manner for prompt filing with the OTS and the
Securities and Exchange Commission. KELLER will provide any additional
information as requested and will complete appraisal updates in accordance
with regulatory requirements.
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The appraisal report will provide a detailed description of
PREFERRED, including its financial condition, operating performance, asset
quality, rate sensitivity position, liquidity level and management
qualifications. The appraisal will include a description of PREFERRED's market
area, including both economic and demographic characteristics and trends. An
analysis of other publicly-traded thrift institutions will be performed to
determine a comparable group and adjustments to the appraised value will be
made based on a comparison of PREFERRED with the comparable group.
In making its appraisal, KELLER will rely upon the information in the
Subscription and Community Offering Circular (Prospectus), including the
financial statements. Among other factors, KELLER will also consider the
following: the present and projected operating results and financial condition
of PREFERRED; the economic and demographic conditions in PREFERRED's existing
marketing area; pertinent historical financial and other information relating
to PREFERRED; a comparative evaluation of the operating and financial
statistics of PREFERRED with those of other thrift institutions; the proposed
price per share; the aggregate size of the offering of Common Stock; the
impact of the Conversion on PREFERRED's capital position and earnings
potential; PREFERRED's proposed dividend policy; and the trading market for
securities of comparable institutions and general conditions in the market for
such securities. In preparing the appraisal, KELLER will rely solely upon, and
assume the accuracy and completeness of, financial and statistical information
provided by PREFERRED, and will not independently value the assets or
liabilities of PREFERRED in order to prepare the appraisal.
Upon completion of the conversion appraisal, KELLER will make a
presentation to the Board of Directors of PREFERRED to review the content of
the appraisal, the format and the assumptions. A written presentation will be
provided to each board member.
For its services in making this appraisal, KELLER's fee will be a fee
of $15,000, plus out-of-pocket expenses for travel and copying and binding not
to exceed $500. The appraisal fee will include the preparation of two
valuation updates. All additional valuation updates will be subject to an
additional fee of $1,000 each. Upon the acceptance of this proposal, KELLER
shall be paid a retainer of $3,000 to be applied to the total appraisal fee of
$15,000, the balance of which will be payable at the time of the completion of
the appraisal.
PREFERRED agrees, by the acceptance of this proposal, to indemnify
KELLER and its employees and affiliates for certain costs and expenses,
including reasonable legal fees, in connection with claims or litigation
relating to the appraisal and arising out of any misstatement or untrue
statement of a material fact in information supplied to KELLER by PREFERRED or
by an intentional omission by PREFERRED to state a material fact in the
information so provided, accept where KELLER has been negligent or at fault.
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This proposal will be considered accepted upon the execution of the
two enclosed copies of this agreement and the return of one executed copy to
KELLER, accompanied by the specified retainer.
KELLER & COMPANY, INC.
By: /s/ Michael R. Keller
----------------------------
Michael R. Keller
President
PREFERRED SAVINGS BANK
By: /s/ Kim P. Rooney
----------------------------
Kim P. Rooney
President
Date: 5-31-96
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