BAS Case Study - March 2023

03/31/19 financial statement results as soon as available.

- The timeline for the stock offering is expected to be four months from the issuance of the prospectus. (See the timeline provided by CAMELS Consulting.) - The stock offering will be handled internally with assistance from CAMELS Consulting and legal counsel. The plans from CAMELS Consulting include a 6-tiered strategy for identifying and obtaining new shareholders, utilizing a self-directed IRA product (currently available to shareholders). The concept of establishing a dividend reinvestment plan has been tabled pending further discussion. - The cost of the stock offering is estimated to be $75,000. The accounting of the stock offering cost will be to offset the offering proceeds. • The Board of Directors discussed the desirability of splitting shares prior to sale to improve the “affordability” of the shares. It was decided that the stock offering price is not likely to be a hinderance to participation in the offering. There will not be a stock split.

• The Board of Directors emphasize that shareholder communication is key to the success of the offering.

Share Liquidity

The Board of Directors has established a strategic goal to establish a stock liquidity program at the holding company. The purpose of this program will be to provide a source of immediate liquidity to shareholders that would like to sell their shares quickly and/or for the sale of large blocks of stock. The intent is that these shares would be purchased by the holding company and resold to individuals that had previously expressed their interest in acquiring shares. The price for these transactions would be set annually based on an independent valuation of the fair market value of the shares. The Board of Directors intends for this program to be available to shareholders subsequent to the stock offering.


The benefits of this capital plan are as follows:

• Improved capital position of Bank. The Tier 1 Capital ratio will increase from 8.18% to over 9.00%.

• Improved share liquidity. Shareholders wishing to sell their stock would be provided with specific guidance and potential buyers receive an improved method for becoming aware of and accessing shares that are available for sale.

• Expand and diversify the shareholder base.

• Potential for increasing the future market value and stimulating community ownership.

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