July 17, 2015 Dear Stockholder: You are cordially invited to attend the Annual Meeting of Stockholders of Harvard Illinois Bancorp, Inc. (the “Company”). The Annual Meeting will be held at the Harvard Police Station, 201 West Front Street, 2nd Floor, Harvard, Illinois, at 8:00 a.m. Illinois Time on August 27, 2015. The enclosed Notice of Annual Meeting and proxy statement describe the formal business to be transacted. During the Annual Meeting we will also report on our operations. Our directors and officers will be present to respond to any questions that stockholders may have. Also enclosed for your review is our Annual Report to Stockholders, which contains information concerning our activities and operating performance. On May 20, 2015, the Company and Harvard Savings Bank entered into a Purchase & Assumption Agreement (the “Purchase Agreement”) with Wonder Bancorp, Inc., and its wholly-owned subsidiary State Bank, which are headquartered in Wonder Lake, Illinois. Pursuant to the Purchase Agreement, Harvard Savings Bank will sell substantially all of its assets and transfer substantially all of its liabilities to State Bank, in exchange for a purchase price equal to the adjusted tangible book value of the assets and liabilities acquired (calculated as of the end of the month prior to the closing date), adjusted for certain expenses, plus a premium of $3.0 million in cash, of which $300,000 will be held back at the closing pending calculation of final amounts payable. The assets that Harvard Savings Bank will not transfer consist primarily of certain deferred tax assets and pre-paid expenses, which totaled approximately $7.9 million at May 31, 2015, and judgments, awards, claims, reimbursements, payments, distributions and all other rights related to Harvard Savings Bank’s investment in securities issued by Pennant Management, Inc. and the related litigation (the “Pennant Assets”). The Board of Directors has received the written opinion of Keller & Company, Inc. that the consideration to be received by Harvard Savings Bank in the sale is fair from a financial point of view. If the purchase and assumption of the assets of Harvard Savings Bank is completed, Harvard Savings Bank subsequently will be merged with and into the Company and the Company will continue to exist solely for purposes of collecting and distributing the Pennant Assets, a process which may take several years. The stockholders of the Company will not receive any payment as a result of the purchase and assumption. At the discretion of the Board of Directors, stockholders of the Company may receive one or more distributions following the completion of the merger of Harvard Savings Bank into the Company, and following significant payments to the Company related to the Pennant Assets. At the Annual Meeting, you will be asked to approve the Purchase Agreement. A majority of the Company’s outstanding shares must vote for approval and adoption of the Purchase Agreement for the sale to be completed. A vote for approval of the Purchase Agreement is also a vote for the merger of Harvard Savings Bank with and into the Company. If the Purchase Agreement is approved, and all other conditions described in the Purchase Agreement have been met or waived, including regulatory approval, the sale is expected to occur during the fourth quarter of 2015. The accompanying proxy statement provides you with detailed information about the proposed sale and includes, as Appendix A, a copy of the Purchase Agreement (without exhibits). We urge you to read the enclosed materials carefully for a complete description of the sale. Other business to be conducted at the Annual Meeting includes the election of two directors of the Company, the ratification of the appointment of BKD, LLP as our independent registered public accountants for the year ending December 31, 2015, and the approval or an adjournment of the Annual Meeting if necessary in order to solicit additional proxies. The Board of Directors has determined that the matters to be considered at the Annual Meeting are in the best interests of Harvard Illinois Bancorp, Inc. and its stockholders. For the reasons set forth in the proxy statement, the Board of Directors unanimously recommends a vote “FOR” the approval of the Purchase Agreement, “FOR” the election of Duffield J. Seyller III and Michael P. Feeney, “FOR” the ratification of the appointment of BKD, LLP, and “FOR” the adjournment of the Annual Meeting if necessary in order to solicit additional proxies. Your vote will be especially important at this year’s Annual Meeting because approval of the Purchase Agreement requires the affirmative vote of a majority of the shares outstanding and entitled to vote at the Annual Meeting, so

broker non-votes and proxies marked “ABSTAIN” have the same effect as a vote “AGAINST” the Purchase Agreement. Your vote is important, regardless of the number of shares that you own. Please complete, sign and date the proxy card, and return it in the enclosed postage-paid envelope. Please sign and return your proxy even if you currently plan to attend the Annual Meeting. Voting by proxy will not prevent you from voting in person, but will assure that your vote is counted if you are unable to attend the meeting.

Sincerely,

Duffield J. Seyller III Donn L. Claussen Chairman of the Board of Directors President and Chief Executive Officer

Harvard Illinois Bancorp, Inc. 58 North Ayer Street

Harvard, Illinois 60033 (815) 943-5261

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS To Be Held On August 27, 2015

Notice is hereby given that the Annual Meeting of Stockholders (the “Meeting”) of Harvard Illinois Bancorp, Inc. will be held at the Harvard Police Station, 201 West Front Street, 2nd Floor, Harvard, Illinois, on August 27, 2015 at 8:00 a.m., Illinois Time.

A proxy card, the proxy statement for the Meeting, and the 2014 Annual Report to Stockholders are enclosed.

The Meeting is for the purpose of considering and acting upon:

1. A proposal to approve the Purchase and Assumption Agreement, dated as of May 20, 2015 (the “Purchase Agreement”) by and between Harvard Illinois Bancorp, Inc. and Harvard Savings Bank, on the one hand, and Wonder Bancorp, Inc. and State Bank, on the other hand, pursuant to which Harvard Savings Bank will sell substantially all of its assets and transfer substantially all of its liabilities to State Bank for a purchase price equal to the adjusted tangible book value of the assets and liabilities acquired (calculated as of the end of the month prior to the closing date), adjusted for certain expenses, plus a premium of $3.0 million in cash, and the subsequent merger of Harvard Savings Bank with and into Harvard Illinois Bancorp, Inc. as more fully described in the accompanying proxy statement;

2. the election of two directors of Harvard Illinois Bancorp, Inc.;

3. the ratification of the appointment of BKD, LLP as our independent registered public accountants for the year ending December 31, 2015;

4. the potential adjournment of the Meeting if necessary to solicit additional proxies; and

such other matters as may properly come before the Meeting, or any adjournments thereof. The Board of Directors is not aware of any other business to come before the Meeting.

Any action may be taken on the foregoing proposals at the Meeting on the date specified above, or on any date or dates to which the Meeting may be adjourned. Stockholders of record at the close of business on July 2, 2015 are the stockholders entitled to vote at the Meeting, and any adjournments thereof.

EACH STOCKHOLDER, WHETHER HE OR SHE PLANS TO ATTEND THE MEETING, IS REQUESTED TO SIGN, DATE AND RETURN THE PROXY CARD WITHOUT DELAY IN THE ENCLOSED POSTAGE-PAID ENVELOPE. ANY PROXY GIVEN BY THE STOCKHOLDER MAY BE REVOKED AT ANY TIME BEFORE IT IS EXERCISED. A PROXY MAY BE REVOKED BY FILING WITH OUR SECRETARY A WRITTEN REVOCATION OR A DULY EXECUTED PROXY BEARING A LATER DATE OR BY FOLLOWING THE INTERNET OR PHONE INSTRUCTIONS ON THE ENCLOSED PROXY CARD. ANY STOCKHOLDER PRESENT AT THE MEETING MAY REVOKE HIS OR HER PROXY AND VOTE PERSONALLY ON EACH MATTER BROUGHT BEFORE THE MEETING. HOWEVER, IF YOU ARE A STOCKHOLDER WHOSE SHARES ARE NOT REGISTERED IN YOUR OWN NAME, YOU WILL NEED ADDITIONAL DOCUMENTATION FROM YOUR RECORD HOLDER IN ORDER TO VOTE PERSONALLY AT THE MEETING.

By Order of the Board of Directors

Richard J. Lipinsky Executive Vice President and Corporate Secretary Harvard, Illinois July 17, 2015 IMPORTANT: A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED WITHIN THE UNITED STATES.

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PROXY STATEMENT

HARVARD ILLINOIS BANCORP, INC. 58 North Ayer Street

Harvard, Illinois 60033 (815) 943-5261

ANNUAL MEETING OF STOCKHOLDERS

AUGUST 27, 2015

This proxy statement is furnished in connection with the solicitation of proxies on behalf of the Board of Directors of Harvard Illinois Bancorp, Inc. (the “Company”) to be used at our Annual Meeting of Stockholders (the “Meeting”), which will be held at the Harvard Police Station, 201 West Front Street, 2nd Floor, Harvard, Illinois, on August 27, 2015 at 8:00 a.m., Illinois Time, and all adjournments thereof. The accompanying Notice of Annual Meeting of Stockholders and this proxy statement are first being mailed to stockholders on or about July 20, 2015. OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE PURCHASE AND ASSUMPTION AGREEMENT, FOR THE ELECTION OF EACH OF THE BOARD’S NOMINEES, FOR THE RATIFICATION OF THE APPOINTMENT OF BKD, LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS, AND FOR THE ADJOURNMENT OF THE MEETING IF NECESSARY TO SOLICIT ADDITIONAL PROXIES, ALL BY USING THE ENCLOSED PROXY CARD.

REVOCATION OF PROXIES

Stockholders who execute proxies in the form solicited hereby retain the right to revoke them in the manner described below. Unless so revoked, the shares represented by such proxies will be voted at the Meeting and all adjournments thereof. Proxies solicited on behalf of our Board of Directors will be voted in accordance with the directions given thereon. Please sign and return your proxy card in the postage paid envelope provided. Where no instructions are indicated on the proxy card, signed proxies will be voted “FOR” the election of the nominees for director named herein and “FOR” the ratification of the appointment of BKD, LLP as our independent registered public accountants for the year ending December 31, 2015.

A proxy may be revoked at any time prior to its exercise by sending written notice of revocation to our Corporate Secretary, Richard J. Lipinsky, at our address shown above, or by filing a duly executed proxy bearing a later date or by following the internet or phone instructions on the enclosed proxy card or by voting in person at the Meeting. The presence at the Meeting of any stockholder who had given a proxy shall not revoke such proxy unless the stockholder delivers his or her ballot in person at the Meeting or delivers a written revocation to our Corporate Secretary prior to the voting of such proxy.

If you have any questions about giving your proxy or require assistance, please call:

Regan & Associates, Inc. 505 Eighth Avenue

Suite 800 New York, New York 10018

(800) 737-3426

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

Except as otherwise noted below, holders of record of our common stock (“common stock”) at the close of business on July 2, 2015 (the “Voting Record Date”) are entitled to one vote for each share held. As of the Voting Record Date, there were 799,136 shares of common stock outstanding. The presence in person or by proxy of at least a majority of the outstanding shares of common stock entitled to vote is necessary to constitute a quorum at the Meeting.

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In accordance with the provisions of our Articles of Incorporation, record holders of common stock who beneficially own in excess of 10% of the outstanding shares of common stock (the “Limit”) are not entitled to any vote with respect to the shares held in excess of the Limit. Our Articles of Incorporation authorize the Board of Directors (i) to make all determinations necessary to implement and apply the Limit, including determining whether persons or entities are acting in concert, and (ii) to demand that any person who is reasonably believed to beneficially own stock in excess of the Limit supply information to us to enable the Board of Directors to implement and apply the Limit.

The following table sets forth the beneficial ownership of our common stock held by our directors, nominees and executive officers, individually and as a group, and all individuals known to management to own more than 5% of our common stock as of the Voting Record Date.

Name of Beneficial Owner Number of Shares of Common

Stock Beneficially Owned(1) Percent of All Common

Stock Outstanding Five Percent Stockholders: Stilwell Value Partners II, L.P. 79,645(2) 9.97% Stilwell Value Partners V, L.P. Stilwell Value Partners VII, L.P. Stilwell Activist Fund, L.P. Stilwell Activist Investments, L.P. Stilwell Partners, L.P. Stilwell Value LLC Joseph Stilwell 111 Broadway, 12th Floor New York, New York 10006 Directors and Executive Officers: Michael P. Feeney 3,010(3) * William D. Schack 7,588(4) * Steven D. Garrels 5,711(5) * Donn L. Claussen 44,765(6) 5.37% Brian S. Rebhorn 1,500 * Duffield J. Seyller III 38,694(7) 4.64% Richard L. Walker 7,510(8) * Richard J. Lipinsky 33,987(9) 4.07% Verne S. Sisson 41,617 (10) 4.99% Brenda S. Gratz 7,456 (11) * David Dobson 5,701(12) * All directors, nominees and executive officers as a group (11 persons) 197,539 23.68%

* Less than 1%. (1) A person is deemed to be the beneficial owner for purposes of this table of any shares of common stock if he has sole or shared voting or investment

power with respect to such security, or has a right to acquire beneficial ownership at any time within 60 days from the date as of which beneficial ownership is being determined. As used herein, “voting power” is the power to vote or direct the voting of shares and “investment power” is the power to dispose or direct the disposition of shares.

(2) Based on a Schedule 13D/A filed with the SEC on June 25, 2015. (3) Includes 188 unvested shares of restricted stock and vested options to purchase 785 shares of common stock. (4) Includes 251 unvested shares of restricted stock and vested options to purchase 1,098 shares of common stock. (5) Includes 2,450 shares held in an IRA for the benefit of Mr. Garrels, 188 unvested shares of restricted stock and vested options to purchase 785 shares

of common stock. (6) Includes 15,325 shares held in an IRA for the benefit of Mr. Claussen, 1,256 unvested shares of restricted stock, and vested options to purchase 6,592

shares of common stock. (7) Includes 13,409 shares held in an IRA for the benefit of Mr. Seyller, 2,059 shares held by our employee stock ownership plan, 1,569 unvested shares of

restricted stock, and vested options to purchase 11,535 shares of common stock. (8) Includes 188 unvested shares of restricted stock and vested options to purchase 785 shares of common stock.

(footnotes continue on following page)

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(continued from previous page) (9) Includes 2,500 shares held in an IRA for the benefit of Mr. Lipinsky, 16,029 shares held in Mr. Lipinsky’s account in the Company’s 401(k) Plan,

1,560 shares held by our employee stock ownership plan, 942 unvested shares of restricted stock, and vested options to purchase 4,080 shares of common stock.

(10) Includes 5,690 shares held in Mr. Sisson’s account in the Company’s 401(k) Plan, 25,726 shares held in an IRA for the benefit of Mr. Sisson, 628 unvested shares of restricted stock awarded under the 2011 Equity Incentive Plan and vested options to purchase 3,531 shares of common stock.

(11) Includes 125 unvested shares of restricted stock, 733 shares held by our employee stock ownership plan, and vested options to purchase 3,646 shares of common stock.

(12) Includes 324 shares held in Mr. Dobson’s account in the Company’s 401(k) Plan, 603 unvested shares of restricted stock, 985 shares held by our employee stock ownership plan, and vested options to purchase 2,147 shares of common stock.

VOTING PROCEDURES AND METHOD OF COUNTING VOTES

As to the approval of the Purchase Agreement, by checking the appropriate box a stockholder may (i) vote “FOR” the proposal; (ii) vote “AGAINST” the proposal; or (iii) “ABSTAIN” from voting on the proposal. The affirmative vote of a majority of the shares outstanding and entitled to vote at the Meeting is required to approve the Purchase Agreement. Broker non-votes and proxies marked “ABSTAIN” have the same effect as a vote “AGAINST” the Purchase Agreement. Your vote is very important on this matter.

As to the election of the directors, the proxy card provided by the Board of Directors enables a stockholder to (i) vote “FOR” the election of the nominees proposed by the Board of Directors; or (ii) “WITHHOLD AUTHORITY” to vote for the nominees being proposed. Under Maryland law and our Articles of Incorporation and Bylaws, directors are elected by a plurality of the shares voted at the Meeting without regard to either broker non-votes or proxies as to which the authority to vote for the nominee is withheld. Plurality means that individuals who receive the largest number of votes cast are elected, up to the maximum number of directors to be elected at the Meeting.

As to the ratification of BKD, LLP as our independent registered public accountants, by checking the appropriate box a stockholder may (i) vote “FOR” the ratification; (ii) vote “AGAINST” the ratification; or (iii) “ABSTAIN” from voting on the ratification. The ratification of independent registered public accountants must be approved by a majority of the shares voted at the Meeting without regard to broker non-votes or proxies marked “ABSTAIN.”

As to the approval of the adjournment of the Meeting, by checking the appropriate box a stockholder may (i) vote “FOR” the proposal; (ii) vote “AGAINST” the proposal; or (iii) “ABSTAIN” from voting on the proposal. The affirmative vote of holders of a majority of the votes cast at the Meeting is required for the adjournment of the Meeting, without regard to broker non-votes, or proxies marked ABSTAIN.

Proxies solicited hereby will be returned to us and will be tabulated by Regan & Associates, Inc., the inspector of election designated by our Board of Directors.

Participants in the Harvard Savings Bank ESOP or 401(k) Plan and Holders of Non-Vested Restricted Stock

Participants in the Harvard Savings Bank Employee Stock Ownership Plan (the “ESOP”) and persons who hold Company common stock through the Harvard Savings Bank 401(k) Profit Sharing Plan (the “401(k) Plan”), will receive a Vote Authorization Form for each plan that reflects all of the shares that participants may direct the trustees to vote on his or her behalf under that plan. Under the terms of the ESOP, the ESOP trustee votes all shares held by the ESOP, but each ESOP participant may direct the trustee how to vote the proportionate interest of shares of Company common stock allocated to his or her account. Shares for which no voting instructions are given or for which instructions were not timely received will be voted in the same proportion as shares for which voting instructions were received.

Under the terms of the 401(k) Plan, a participant is entitled to provide instructions for all shares credited to his or her 401(k) Plan account and held in the Company Stock Fund. Shares for which no voting instructions are

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given or for which instructions were not timely received will be voted in the same proportion as shares for which voting instructions were received.

Please return the enclosed ESOP Vote Authorization Form and 401(k) Plan Vote Authorization Form. The deadline for returning your ESOP Vote Authorization Form and 401(k) Plan Vote Authorization Form is August 24, 2015 at 5:00 p.m. Central Time. Telephonic and internet voting cutoff is also 5:00 p.m. Central Time, August 24, 2015.

Pursuant to the terms of the Harvard Illinois Bancorp, Inc. 2011 Equity Incentive Plan, a participant is entitled to direct how to vote the non-vested restricted shares of the Company awarded to him or her.

CONSENT ORDER

On May 15, 2015, Harvard Savings Bank stipulated to the issuance of a Consent Order by the Federal Deposit Insurance Corporation (“FDIC”) and the Illinois Department of Financial and Professional Regulations (“IDFPR”). The Consent Order requires Harvard Savings Bank to, among other things, maintain its Tier 1 capital to total assets ratio at a minimum of 9% and its total capital as a percentage of risk-weighted assets at a minimum of 13%. The Consent Order also requires Harvard Savings Bank to continue its efforts to sell or merge itself or to otherwise immediately obtain a sufficient capital investment to fully meet the capital requirements of the Consent Order.

If the Purchase Agreement is not approved by Harvard Illinois Bancorp, Inc. stockholders or is terminated by any of the parties to the Purchase Agreement, Harvard Savings Bank would need to comply with the terms of the Consent Order, including the capital requirements of the Consent Order. Harvard Savings Bank does not currently meet the minimum capital levels required by the Consent Order.

PROPOSAL I—APPROVAL OF THE PURCHASE AGREEMENT

The information in this proxy statement concerning the terms of the sale of substantially all of Harvard Savings Bank’s assets and the transfer of substantially all of its liabilities (the “Sale”) is qualified in its entirety by reference to the full text of the Purchase Agreement (without exhibits), which is attached as Appendix A and incorporated by reference herein. All stockholders are urged to read the Purchase Agreement in its entirety. All information contained in this proxy statement with respect to Wonder Bancorp, Inc. and its wholly owned subsidiary, State Bank, has been supplied by Wonder Bancorp, Inc. and State Bank for inclusion herein and has not been independently verified by the Company.

General

As soon as possible after the conditions to consummation of the Sale described below have been satisfied or waived, and unless the Purchase Agreement has been terminated as discussed below, Harvard Savings Bank will sell substantially all of its assets and transfer substantially all of its liabilities to State Bank for a purchase price equal to the adjusted tangible book value of the assets and liabilities acquired (calculated as of the end of the month prior to the closing date), adjusted for certain expenses, plus a premium of $3.0 million (the “Purchase Price”). The assets that Harvard Savings Bank will not transfer consist primarily of judgments, awards, claims, reimbursements, payments, distributions and all other rights related to Harvard Savings Bank’s investment in securities issued by certain funds managed by Pennant Management, Inc. and the related litigation (the “Pennant Assets”) and certain tax assets and pre-paid expenses, the net book value of which was approximately $7.9 million at May 31, 2015. The liabilities that Harvard Savings Bank will not transfer consist primarily of any federal or state income tax liability of the Company or Harvard Savings Bank, any liabilities relating to the Company’s or Harvard Savings Bank’s employment of its employees or former employees, including pursuant to employment agreements, change in control agreements or deferred compensation agreements that are not assumed by Wonder Bancorp, Inc. or State Bank, any liabilities or obligations of Harvard Savings Bank related to the Pennant Assets, and any indemnification claims brought by a director or officer of Harvard Savings Bank. See “—Background” and “Summary of the Purchase Agreement—Pennant Assets” for additional information regarding Pennant Management, Inc. and the Pennant Assets.

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If the purchase and assumption of the assets of Harvard Savings Bank is completed, Harvard Savings Bank subsequently will be merged with and into the Company and the Company will continue to exist solely for purposes of collecting the Pennant Assets and making distributions to the Company’s stockholders, a process that may take several years.

The stockholders of the Company are not entitled to receive any payment as a result of the purchase and assumption. The Board of Directors, in its sole discretion, may authorize one or more distributions to the Company’s stockholders following the completion of the Sale, or following significant payments to the Company related to the Pennant Assets, but is not obligated to do so. After the resolution of all claims related to the Pennant Assets, the Company expects to solicit the vote of the stockholders of the Company to dissolve the Company, at which time all assets not used to pay or reserved for the purpose of paying the Company’s liabilities will be distributed to the stockholders or placed in a liquidating trust. There can be no assurances as to the timing or amount of any distributions to stockholders, including in the event of the dissolution of the Company. As of May 31, 2015, the Company’s unconsolidated assets consisted of 100% of the stock of Harvard Savings Bank and cash, securities and other assets of approximately $540,000, and the Company had unconsolidated liabilities of $2.4 million.

Background

The Pennant Asset

Between June, 2013 and August, 2014, Harvard Savings Bank purchased $18.1 million of undivided interests in the United States Department of Agriculture (“USDA”)-guaranteed portions of loans sold by First Farmers Financial, LLC (“FFF”) to the FFF Repo B Fund, which was advised by Pennant Management, Inc. (“Pennant”). Pennant was an investment advisor in the business of acquiring, through funds that it advises, portions of loans guaranteed by the USDA and the Small Business Administration (the “SBA”) and selling interests in those funds to community banks, qualified retirement plans, municipalities and political subdivisions. Pennant had managed more than $850 million in funds that owned USDA and SBA guaranteed loans. Harvard Savings Bank has invested in similar funds advised by Pennant at various times over the course of an approximately 10-year business relationship. The investments in the FFF Repo B Fund were purported to be backed by the guaranteed portion of 25 loans totaling approximately $174 million that were originated by FFF, a USDA-approved non-traditional lender (i.e., not a financial institution), and FFF entered into a master repurchase agreement with Pennant that obligated FFF to repurchase any loans as to which various representations and warranties are false.

In mid-September 2014, Pennant discovered that FFF and its principals had fraudulently generated loan documentation and forged USDA-guarantee documents, that the 25 loans held by the FFF Repo B Fund did not exist, and that the principals of FFF had diverted the proceeds from the sale of the fraudulent loans to Pennant for their personal use. Pennant informed Harvard Savings Bank of this development and issued a press release on September 29, 2014. The Boards of Directors of the Company and Harvard Savings Bank met to discuss the Pennant situation, and the Company issued a press release on October 1, 2014. As a result, after extensive due diligence, Harvard Savings Bank recorded an allowance for loan losses of $8.5 million as of September 30, 2014.

On September 29, Pennant filed suit (later amended) against FFF, its principals and their related entities, claiming damages in excess of $600 million (which includes the repurchase obligations, treble damages pursuant to the Racketeer Influenced and Corrupt Organization Act, and punitive damages). The United States filed a criminal complaint on September 29, 2014 against Nikesh A. Patel, FFF’s principal. He was arrested and subsequently released on bail, and is awaiting a federal indictment.

In 2014 agreed injunction orders were entered against the various defendants. On November 10, 2014 an agreed order was entered in the suit appointing a receiver for certain assets and directing other assets to be turned over to Pennant. On April 23, 2015 a further order was entered establishing a second receivership and clarifying certain receivership matters. The assets of FFF, its principals and their related entities were subject to these receiverships for the benefit of the 12 direct investors that purchased interests in 26 fraudulent loans. (25 loans were purchased by the 11 investors in the FFF Repo B Fund, while a 12th investor purchased the 26th loan). These assets included five hotels, cash accounts, a variety of luxury automobiles, a boat, gold, luxury jewelry and other personal items, and a number of loans receivable. Harvard Savings Bank possesses a 10.3477% pro rata interest in the

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proceeds of the sale of the assets, and expects to share in damages awarded against FFF and the other defendants in the suit.

Since the discovery of the fraud through April 30, 2015, Harvard Savings Bank had received pro-rata distributions from recoveries in the amount of $899,642.26. The liquidation of the assets and distribution of proceeds to the investors continues.

The Sale

The Company’s Board of Directors has periodically discussed and reviewed with management the business, strategic direction, performance and prospects of the Company in the context of the current and prospective business and regulatory environment, and Harvard Savings Bank’s size and resources relative to its competitors. On October 9, 2014, the Boards of Directors of the Company and Harvard Savings Bank met to discuss the Pennant situation and strategic alternatives for the Company and Bank, including raising capital or pursing a sale. At this meeting the Board of Directors of Harvard Savings Bank decided to engage Sterne, Agee & Leach, Inc. (“Sterne Agee”) to evaluate the Company’s strategic options, with a focus on marketing the sale of Harvard Savings Bank. Given the uncertainty surrounding the timing and the amount of any Pennant Asset recovery and in consultation with its legal and financial advisors, the Company and the Bank believed potential buyers would ascribe little, if any, value to the Pennant Asset. Therefore, in an effort to maximize the marketability of Harvard Savings Bank, the Boards determined the best course of action would be to pursue a purchase and assumption transaction whereby the Company would market substantially all of Harvard Savings Bank’s assets (excluding the Pennant Asset) and substantially all of its liabilities to potential buyers.

From October 15, 2014 to November 15, 2014, Sterne Agee made inquiries of 35 financial institutions as to whether they would be interested in considering a potential acquisition of Harvard Savings Bank. Of the companies contacted, 14 financial institutions signed confidentiality agreements and received access to the electronic data room containing information regarding Harvard Savings Bank. Of these, three parties were only interested in Harvard Savings Bank’s branch in Morris, Illinois and the Company did not continue negotiations with these parties. During this time, two parties, Party A and Party B were invited to perform onsite due diligence on Harvard Savings Bank and subsequently submitted written letters of intent (“LOI”). A third party, Wonder Bancorp, Inc., submitted a verbal indication of interest. All three parties expressed their offers as a cash premium over Harvard Savings Bank’s estimated tangible book value at closing. Wonder Bancorp, Inc. submitted an offer of $3.0 million over Harvard Savings Bank’s estimated tangible book at closing, subject to certain adjustments. Party A submitted an offer of $1.313 million over estimated tangible book value at closing and Party B submitted an offer of $2.7 million over estimated tangible book value at closing. All three offers were conditioned upon completion of further due diligence on Harvard Savings Bank.

On November 11, 2014, the Boards of Directors met to discuss the status of Sterne Agee’s inquiries and instructed Sterne Agee to schedule the completion of due diligence with all three bidders and to discuss with all three bidders the assumptions underlying their respective bids. The Board of Directors also appointed a committee comprised of Directors Claussen, Seyller and Garrels (the “Merger Committee”) and authorized the Merger Committee to take certain actions on behalf of the Boards of Directors, including further discussions with Wonder Bancorp, Inc., Party A, Party B and other interested parties, with material issues and decisions reserved for the entire Boards of Directors.

On November 13, 2014, Wonder Bancorp, Inc. submitted a written LOI confirming its verbal offer of $3.0 million over estimated tangible book value of Harvard Savings Bank at closing, including certain adjustments book value, which included the termination cost of exiting Harvard Savings Bank’s defined benefit plan.

From late November to early December 2014, all three parties continued to perform due diligence on Harvard Savings Bank, including Wonder Bancorp, Inc., which performed an on-site review of credit files and conducted management interviews. During this time, Party A informed Sterne Agee that it was no longer willing to pursue a transaction with Harvard Savings Bank. On December 2, 2014, the Boards of Directors met and discussed the letters of intent submitted by Wonder Bancorp, Inc. and Party B and instructed Sterne Agee to ask both parties for an updated LOI based on their due diligence review.

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On December 4, 2014, Wonder Bancorp, Inc. submitted a revised letter of intent that continued to offer $3.0 million over estimated tangible book value but agreed to remove any termination cost of Harvard Savings Bank’s defined benefit plan from the calculation of closing book value. Party B declined to submit an updated LOI and withdrew from the process.

The Merger Committee met on December 5, December 8 and December 11, 2014 to discuss with counsel and Sterne Agee various matters, including the revised offer from Wonder Bancorp, Inc. The Merger Committee determined to proceed with negotiations with Wonder Bancorp, Inc., subject to completion of satisfactory reverse due diligence. On December 19, 2014, the Merger Committee met with management of Wonder Bancorp, Inc. and the financial advisors to both the Company and Wonder Bancorp, Inc. to discuss the potential transaction and perform reverse due diligence on Wonder Bancorp, Inc.

Sterne Agee provided further updates as to the ongoing negotiations with Wonder Bancorp, Inc., at a Boards of Directors meeting on January 8, 2014. On January 23, 2015, the Merger Committee met to discuss potential terms for the line of credit from Wonder Bancorp, Inc. and additional developments. On January 26, 2015, the Merger Committee met to review the draft representations and warranties that Wonder Bancorp, Inc. proposed for inclusion in the definitive agreement.

On January 29, 2015, the Boards of Directors met to further review progress towards a potential transaction with Wonder Bancorp, Inc., and reviewed with counsel a preliminary draft of the Purchase Agreement. In addition, the Boards of Directors reviewed information prepared by litigation counsel regarding the best structure available to preserve the Company’s and Harvard Savings Bank’s rights related to the Pennant Assets. Based on this discussion, the Boards of Directors confirmed that any potential transaction would need to be structured as an asset purchase rather than a merger of Harvard Savings Bank in order to preserve the value of the Pennant Asset for the benefit of the Company’s stockholders. The Boards of Directors instructed transaction counsel and Sterne Agee to prepare a memorandum summarizing potential issues with the draft Purchase Agreement.

On February 18, 2015 and February 20, 2015, the Boards of Directors met, and counsel and Sterne Agee reviewed the latest draft of the Purchase Agreement. The Boards of Directors also discussed Wonder Bancorp, Inc.’s request that the Company agree in principal to the price of the proposed transaction and enter into a 45-day exclusivity agreement. The Boards of Directors instructed Sterne Agee to contact Party B to gauge Party B’s interest in re-opening discussions. Sterne Agee did so, and was informed that Party B was not interested in pursuing further discussions for a purchase of Harvard Savings Bank.

On February 26, 2015, the Boards of Directors discussed with counsel and Sterne Agee the current status of negotiations with Wonder Bancorp, Inc, and authorized management and the Merger Committee to enter into a 30-day exclusivity agreement with Wonder Bancorp, Inc. provided that Wonder Bancorp, Inc. and State Bank would agree:

• to provide documentation of their ability to acquire the capital necessary to achieve a Tier 1 leverage ratio of 9.0% taking into account the impact of the proposed transaction;

• that the sale of Harvard Savings Bank’s Morris branch would not be a condition to the closing of the proposed transaction; and

• to revise the definition of “Adjusted Tangible Book Value,” which was the basis for the purchase price.

Wonder Bancorp, Inc, Inc. subsequently agreed to these provisions and on March 4, 2015, the Company executed a 30-day exclusivity agreement.

Negotiations on the proposed Purchase Agreement continued through March and early April. During this time, the Boards of Directors authorized management to execute an extension of the exclusivity agreement to April 30, 2015, and the extension was executed on April 1, 2015.

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On April 11, 2015, management of the Company met with management of Wonder Bancorp, Inc. to discuss open terms of the proposed Purchase Agreement. On April 17, 2015, the Boards of Directors met to discuss the status of ongoing negotiations with Wonder Bancorp, Inc., and the parties continued discussions during the next two weeks. On April 29, 2015, counsel informed the Boards of Directors at a special meeting that the largest obstacle to finalizing the proposed Purchase Agreement was the timing of obtaining the approval of the Federal Reserve Board with respect to the line of credit from Wonder Bancorp, Inc. to maintain Harvard Savings Bank’s capital. On April 30, 2015, the Boards of Directors met to discuss the proposed Purchase Agreement and agreed to remove the requirement that Wonder Bancorp, Inc. provide a holding company loan in order to expedite the potential closing of the transaction.

On May 8, 2015, the Boards of Directors determined that it would be in the best interests of the Company and its stockholders to engage a second financial advisor to analyze and opine as to the fairness of the consideration being paid in connection with the Sale and engaged Keller & Company, Inc. (“Keller”) to prepare and deliver an opinion as to the fairness, from a financial point of view, of the Sale to the Company and Harvard Savings Bank.

On May 11, 2015, the Company’s representative at Sterne Agee announced that he had accepted a position at Raymond James & Associates, Inc. (“Raymond James”). Pursuant to the terms of the engagement letter between the Company and Sterne Agee, the engagement (and the parties’ obligations under the engagement letter) was transferred to Raymond James.

On May 15, 2015, the Boards of Directors of the Company held a special meeting. Mr. Claussen and Mr. Seyller, together with the Company’s legal advisors, reviewed with the Boards of Directors the terms of the proposed Sale to Wonder Bancorp, Inc. and State Bank. Legal counsel also reviewed the history of the actions taken by the Boards of Directors through the date of this meeting, and the negotiations with Wonder Bancorp, Inc. and State Bank’s counsel. Counsel again discussed the fiduciary obligations of the Boards of Directors in general, and, in particular, with respect to merger and sale transactions, and reviewed the legal terms of the proposed Sale and the related agreements. Raymond James presented its financial analysis of the transaction, and reviewed in further detail the process conducted by Harvard Savings Bank. Keller presented the process by which it determined that the Sale was fair, from a financial point of view, to the Company and Harvard Savings Bank, and delivered its verbal fairness opinion, with the written opinion to follow. After further discussion, and taking into consideration the factors described under “–The Company’s Reasons for the Sale and Recommendation of the Board of Directors,” the Boards of Directors of the Company and Harvard Savings Bank determined that the proposed Sale with Wonder Bancorp, Inc. and State Bank presented the best opportunity for enhancing the Company stockholder value and complying with the Consent Order. Accordingly, the Board of Directors of the Company determined that the proposed Sale was advisable and in the best interests of the Company and its stockholders, and unanimously approved the Purchase Agreement. The Board of Directors of Harvard Savings Bank also approved the Purchase Agreement.

On May 15, 2015, Harvard Savings Bank stipulated to the issuance of a Consent Order by the FDIC and the IDFPR. The Consent Order requires Harvard Savings Bank to, among other things, maintain its Tier 1 capital to total assets ratio at a minimum of 9% and its total capital as a percentage of risk-weighted assets at a minimum of 13%. The Consent Order also requires Harvard Savings Bank to continue its efforts to sell or merge itself or to otherwise immediately obtain a sufficient capital investment to fully meet the capital requirements of the Consent Order. Harvard Savings Bank does not currently meet the minimum capital levels required by the Consent Order.

Following approval of the respective Boards of Directors, on May 20, 2015, the parties executed the Purchase Agreement and publicly announced the transaction by issuing a joint press release.

The Company’s Reasons for the Sale and Recommendation of the Board of Directors

The Company’s Board of Directors reviewed and discussed the proposed Sale with management and its financial and legal advisors in determining that the proposed Sale is in the best interests of the Company and its stockholders. In reaching its conclusion to approve the Purchase Agreement, the Board of Directors considered a number of factors.

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The material factors considered by the Board of Directors were as follows:

• its understanding of the business, operations, financial condition, earnings and future prospects of the Company, including the limitations on its business as a result of the Consent Order entered into with banking regulators and the order of banking regulators directing the Company and the Bank to either increase capital or find a merger partner;

• the recognition by the Board of Directors that the ability to maintain capital in compliance with regulatory requirements was limited and the cost of capital in the current market was prohibitively expensive;

• Wonder Bancorp, Inc. and State Bank’s ability to pay the Purchase Price and obtain regulatory approval for the Sale, taking into account the Company’s due diligence investigation of Wonder Bancorp, Inc. and State Bank;

• the premium to book value of the Bank’s assets to be paid to the Company;

• the fact that the Sale is structured as an asset purchase with Wonder Bancorp, Inc. and State Bank agreeing to acquire substantially all of the Bank’s assets and assume substantially all of the Bank’s liabilities, while the Bank is able to retain the Pennant Assets, certain deferred tax assets and prepaid expenses, which could provide value to the Company’s stockholders in the future;

• the likelihood that the proposed structure, including the purchase and assumption structure and the subsequent elimination by merger of the regulated depository institution, Harvard Savings Bank, which would leave the Company as a stand-alone entity focused on realizing value of the Pennant Assets, would be acceptable to regulatory authorities and the Company’s shareholders;

• the process conducted by the Company and Raymond James (including through Sterne Agee, Inc.) and the Board’s belief that a transaction with Wonder Bancorp, Inc. and State Bank offered the best value reasonably available to the Company, including the residual value for the Company’s stockholders;

• the fact that the consideration is all cash, so that the transaction will provide the Company with sufficient liquidity to pursue the Pennant Assets and, at the discretion of the Board of Directors, return a portion of the Purchase Price to the stockholders;

• the current and prospective environment in which the Company operates, including national and local economic conditions, the competitive environment for financial institutions generally and the trend toward consolidation in the financial services industry;

• the review by the Company’s Board of Directors with its legal and financial advisors of the structure of the Sale and the financial and other terms of the Purchase Agreement;

• the financial presentation by Keller to the Board of Directors regarding the fairness, from a financial point of view, of the Sale to the Company and the Bank;

• The terms of the Purchase Agreement, including:

• the premium over book value of the acquired assets reflected in the Purchase Price; • the retention by Harvard Savings Bank and the Company of certain deferred tax assets

and the Pennant Assets, which if collected would provide significant value to the Company’s stockholders;

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• the fact that certain expenses are either shared between the parties or paid by Wonder Bancorp, Inc. and State Bank;

• the provisions of the Purchase Agreement that allow the Company, under limited

circumstances, to furnish information to and conduct negotiations with third parties regarding a business combination;

• the provisions of the Purchase Agreement that provide the Board of Directors with the

ability to terminate the Purchase Agreement in order to accept a superior proposal (subject to paying Wonder Bancorp, Inc. and State Bank a $250,000 fee);

• the provisions of the Purchase Agreement pursuant to which Wonder Bancorp, Inc. and

State Bank may be obligated to pay the Company a termination fee of $250,000 in the event that Wonder Bancorp, Inc. and State Bank are unable to obtain the necessary financing to consummate the Sale or in the event that Wonder Bancorp, Inc. and State Bank fail to file or withdraw the filing of required regulatory applications;

• The impact of the Sale on the depositors, employees, customers and communities served by the

Company;

• The presentation delivered to the Company’s Board of Directors by Raymond James regarding the terms of the transaction, the extent of the search for potential acquirers, and the responsiveness of other potential acquirers; and

The Company’s Board of Directors also considered potential risks associated with the Sale in connection with its deliberations of the proposed transaction, including:

• The interests of the Company’s executive officers and directors with respect to the Sale apart from their interests as holders of the Company common stock, and the risk that these interests might influence their decision with respect to the Sale. See “—Financial Interests of Directors and Officers in the Sale.”

• The risk that the terms of the Purchase Agreement, including provisions relating to the payment of

a termination fee under specified circumstances, although required by Wonder Bancorp, Inc. and State Bank as a condition to its willingness to enter into a Purchase Agreement, could have the effect of discouraging other parties that might be interested in a transaction with the Company from proposing such a transaction.

• Stockholders do not have appraisal rights under Maryland law, such that they may not seek appraisal of the fair value of their shares as determined by the Maryland courts.

• The regulatory risk that the merger of Harvard Savings Bank with and into the Company is not specifically permitted by applicable regulations, and may not be approved by applicable banking regulators.

The Board of Directors evaluated the factors described above, including asking questions of management

and its legal and financial advisors, and reached consensus that the Sale, the Purchase Agreement and the transactions contemplated thereby was in the best interests of the Company and its stockholders. In considering the factors described above, individual members of the Board of Directors may have given different weights to different factors. The Board of Directors considered these factors as a whole, and overall considered them to be favorable to, and to support its determination. Accordingly, the Board of Directors unanimously approved the Purchase Agreement and unanimously recommends that the stockholders vote “FOR” approval of the Purchase Agreement.

The foregoing discussion of the information and factors considered by the Board of Directors is not intended to be exhaustive, but constitutes the material factors considered by the Board of Directors. In

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reaching its determination to approve and recommend the Purchase Agreement, the Board of Directors did not assign any relative or specific weights to the foregoing factors, and individual directors may have weighed factors differently. The terms of the Purchase Agreement were the product of arm’s length negotiations between representatives of the Company, Harvard Savings Bank, Wonder Bancorp, Inc. and State Bank.

Opinion of the Company’s Financial Advisor

The Company’s Board of Directors retained Keller to render an opinion as to the fairness, from a financial point of view, to the Company of the Purchase Price pursuant to the terms of, and subject to the conditions set forth in, the Purchase Agreement.

On May 15, 2015, Keller rendered its oral opinion, and confirmed this oral opinion with its written opinion on May 15, 2015, to the Boards of Directors of the Company and Harvard Savings Bank to the effect that, subject to the factors, procedures, assumptions, qualifications and limitations set forth in its opinion, the consideration to be paid to Harvard Savings Bank in the proposed Purchase Agreement was fair, from a financial point of view. The full text of the written opinion of Keller, dated May 15, 2015, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the review undertaken by Keller in rendering its opinion, is attached (without exhibits) as Appendix B to this Proxy Statement and is incorporated herein by reference in its entirety. Keller’s opinion is addressed to the Boards of Directors of Harvard Savings Bank and the Company, is directed only to the fairness, from a financial point of view and as of the date of the opinion, of the consideration to be paid to Harvard Savings Bank in the proposed Sale. Keller was not requested to express, and did not express, any opinion with respect to any of the other terms, conditions, determinations or actions with respect to the Sale. Keller provided its advisory services and opinion for the information and assistance of the Board of Directors in connection with its consideration of the Sale. Keller’s opinion does not constitute a recommendation to any stockholder of Harvard Savings Bank or the Company as to how to vote with respect to the Purchase Price, the Purchase Agreement or any other matter.

The summary of Keller’s opinion set forth below is qualified in its entirety by reference to the full text of

such opinion (without exhibits) attached as Appendix B. Stockholders are urged to read the opinion carefully in its entirety. Keller has not assumed any responsibility for updating or revising its opinion based on circumstances or events occurring after the date of its opinion.

In connection with preparing its opinion, Keller, among other things, (i) examined certain publicly available business and financial information relating to Harvard Savings Bank, (ii) reviewed the financial terms of the Purchase and Assumption Agreement in relation to current and historical market prices and trading volumes of Harvard Savings Bank common stock, the historical and projected earnings and other operating data of Harvard Savings Bank and the capitalization and financial condition of Harvard Savings Bank, (iii) considered, to the extent publicly available, the financial terms of certain other relevant transactions, (iv) analyzed certain financial, stock market and other publicly available information relating to the business of other companies whose operations are considered relevant in evaluating that of Harvard Savings Bank, (v) conducted such other analyses and examinations and considered such other information and financial, economic and market criteria as Keller deemed appropriate, and (vi) reviewed the purchaser’s financial condition and performance.

Keller, as part of its bank consulting and advisory business, is regularly engaged in the evaluation of financial institutions and their securities, in connection with mergers and acquisitions and distributions of listed and unlisted securities. Keller is familiar with the market for common stocks of publicly traded banks, thrifts and bank holding companies and regularly prepares stock valuations for banks and thrifts, which are not publicly traded. Harvard Savings Bank’s Board of Directors selected Keller on the basis of the firm's reputation, experience and expertise in other merger and acquisition transactions. No limitations were imposed by Harvard Savings Bank’s or the Company’s Boards upon Keller with respect to the investigations made or procedures to be followed in rendering an opinion.

In rendering its opinion, Keller analyzed certain comparable merger and acquisition transactions,

comparing the acquisition price relative to the book value, tangible book value, latest twelve months earnings, price to assets, and premium to core deposits. The analysis included a comparison of representative pending and completed acquisitions from January 1, 2014, through May 8, 2015, reviewing the low, average and high pricing

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ratios for these transactions, where the selling institution had an asset size of less than $300 million and greater than $50 million and was located in the Midwest. As a result of the use of these transaction criteria, the following eleven financial institutions were used in analyzing comparable transactions:

Institution Location Assets

(In millions) Alpena Banking Corp. Michigan $74 First Com. Bank Ohio $101 FNBM Financial Pennsylvania $79 Peninsula Financial Corp. Michigan $131 First of Huron Corp. Michigan $228 Phoenix Bancorp Pennsylvania $141 Herget Financial Corp. Illinois $273 Citizens National Bank Pennsylvania $76 Monarch Com. Bancorp Michigan $175 BNB Bancorp Ohio $109 New Bancshares Wisconsin $87

For each of these 11 transactions, Keller derived and compared the most recent return on assets for each

selling institution, the most recent equity level and equity to asset ratio, the total deal value and the form of exchange, the most recent price-to-book value ratio, the most recent price-to-tangible-book value ratio, the most recent price to earnings multiple based on the latest twelve months earnings, the price to assets ratio and the premium on deposits.

The transaction review and analysis resulted in a range of values for Harvard Savings Bank based upon

comparable merger and acquisition transactions. Keller derived the low, average and high pricing levels of the comparable group and summarized the results of comparative merger and acquisition transactions and compared the range of values to the total consideration to be received by Harvard Savings Bank. The comparable merger and acquisition information resulted in the pricing ranges as noted below.

Pricing Measure Price to Book

Ratio Price to

Earnings1 Price to Assets

Deposit Premium

Low Pricing Level

63.0% 11.4x 5.8% (4.0)%

Average Pricing Level

104.5% 41.0x 11.2% 0.6%

High Pricing Level

143.0% 107.4x 17.6% 5.8%

(1) Only seven of the eleven transactions indicated price to earnings multiples.

Keller viewed the comparable group as an appropriate basis in determining a comparable transaction value based on, among other things, Harvard Savings Bank’s equity level and ratio, size, geographic location, earnings performance, nonperforming asset level and level of allowance for loan losses. Keller viewed, as being statistically significant for purposes of comparison, the fact that the review based on the previous criteria produced eleven transactions with reported pricing ratios for the comparable group. Keller reviewed each of the pricing ratios (price to book, price to tangible book, price to last twelve months earnings, price to assets, and core deposit premium) from the comparable transactions focusing on the minimum to average pricing levels to use to evaluate the fairness, from a financial point of view, of the Transaction, recognizing that Harvard Savings Bank’s earnings position was in the lower segment of the comparable group and its equity position was also in the lower segment of the comparable group. Harvard Savings Bank had a negative return on assets for the twelve months ended March 31, 2015, and a Tier 1 leverage ratio of 7.47 percent, compared to an average return on assets for the comparable group of 0.08%,

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with three of the comparable group institutions showing negative earnings, and an average equity to asset ratio of a higher 10.67%.

Keller believes that these analyses support the fairness, from a financial point of view, of the consideration

to be paid to Harvard Savings Bank. This summary does not purport to be a complete description of the analysis performed by Keller and should

not be construed independent of the other information considered by Keller in rendering its opinion. Selecting portions or sections of Keller’s analysis or isolating certain aspects of the comparable transactions without considering all analysis and factors, could result in an incomplete or potentially misleading view of the evaluation process.

Keller assumed and relied upon the accuracy and completeness of the financial information provided to it

by Harvard Savings Bank. In its review, with the consent of Harvard Savings Bank’s and the Company’s Boards of Directors, Keller did not undertake any independent verification of the information provided to it, nor did it make any independent appraisal or evaluation of the assets or liabilities and potential or contingent liabilities of Harvard Savings Bank. Certain Federal Income Tax Consequences of the Sale and Subsequent Merger of Harvard Savings Bank into the Company.

The following discussion is a general summary of the anticipated U.S. federal income tax consequences of the Sale and subsequent merger of Harvard Savings Bank into the Company. The following discussion is based upon the Internal Revenue Code (“Code”), its legislative history, currently applicable and proposed Treasury regulations under the Code and published rulings and decisions, all as currently in effect as of the date of this proxy statement, and all of which are subject to change, possibly with retroactive effect. Tax considerations under state, local and non-U.S. laws, or federal laws other than those pertaining to income tax, are not addressed in this proxy statement. The following discussion has no binding effect on the Internal Revenue Service (the “IRS”) or the courts.

The proposed Sale will be treated as a sale of corporate assets in exchange for cash and the assumption of

certain liabilities. The proposed Sale is a taxable transaction for U.S. federal income tax purposes, and Harvard Savings Bank anticipates that we will realize a gain for U.S. federal income tax purposes as a result of the Sale. If Harvard Savings Bank realizes any gain as a result of the Sale, Harvard Savings Bank anticipates that our tax attributes will be available to offset all or a portion of Harvard Savings Bank’s U.S. federal income tax liability resulting from such gain. The determination of whether Harvard Savings Bank will realize gain or loss on the Sale and whether and to what extent Harvard Savings Bank’s tax attributes will be available is highly complex and is based in part upon facts that will not be known until the completion of the Sale.

Following the Sale, Harvard Savings Bank, a wholly owned subsidiary of the Company, will merge with

and into the Company (the “Merger”). The Merger will be a tax-free liquidation of a subsidiary into its parent corporation in accordance with Section 332 of the Internal Revenue Code.

The proposed Sale by Harvard Savings Bank and Merger of Harvard Savings Bank into Harvard Illinois

Bancorp, Inc. are entirely corporate actions. Harvard Illinois Bancorp, Inc.’s U.S. stockholders will not realize any gain or loss for U.S. federal income tax purposes as a result of the Sale or, following the Sale, as a result of the merger of Harvard Savings Bank into Harvard Illinois Bancorp, Inc.

U.S. Federal Income Tax Consequences of the Dissolution of the Company

The following discussion is a general summary of the anticipated U.S. federal income tax consequences of the expected dissolution (the “Dissolution”) of the Company to the Company and its stockholders. Any such dissolution would be subject to stockholder approval. This discussion addresses only those U.S. holders (as defined below) of shares of our common stock that hold their shares of our common stock as capital assets (generally, property held for investment purposes). The discussion does not address all of the U.S. federal income tax consequences that may be relevant to particular holders of shares of our common stock in light of their individual circumstances or, except where specifically identified, to holders of shares of our common stock that are subject to

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special rules, such as financial institutions, insurance companies, mutual funds, subchapter S corporations, partnerships or other pass-through entities (or investors in subchapter S corporations, partnerships or other pass-through entities), tax-exempt organizations, dealers in securities or currencies, traders in securities that elect to use a mark to market method of accounting, persons that hold shares of our common stock as part of a straddle, hedge, constructive sale or conversion transaction, shareholders who have a functional currency other than the U.S. dollar, persons who are not U.S. holders, U.S. expatriates, shareholders who acquired their shares of our common stock through the exercise of an employee stock option or otherwise as compensation, and shareholders who will own, directly, indirectly or constructively, 5% or more (by vote or value) of our equity.

For purposes of this summary, a “U.S. holder” is a beneficial owner of shares of our common stock who, for U.S. federal income tax purposes, is a citizen or individual resident of the United States, a corporation (or other entity that is treated as a corporation for U.S. federal income tax purposes) that is created or organized in or under the laws of the United States or any State thereof or the District of Columbia, an estate whose income is subject to U.S. federal income tax regardless of its source, or a trust (i) if a U.S. court can exercise primary supervision over the trust’s administration and one or more U.S. persons are authorized to control all substantial decisions of the trust, or (ii) that validly elects to be treated as a U.S. person for U.S. federal income tax purposes.

If a partnership (including any entity treated as a partnership for U.S. federal income tax purposes) or other pass-through entity is a holder of shares of our common stock, the tax treatment of a partner, beneficiary or other stakeholder will generally depend on the status of that person and the tax treatment of the pass-through entity. A partner, beneficiary or other stakeholder in a pass-through entity that holds shares of our common stock should consult its own tax advisor regarding the tax consequences of the Dissolution.

The following discussion is based upon the Code, its legislative history, currently applicable and proposed Treasury regulations under the Code and published rulings and decisions, all as currently in effect as of the date of this Proxy Statement, and all of which are subject to change, possibly with retroactive effect. Tax considerations under state, local and non-U.S. laws, or federal laws other than those pertaining to income tax, are not addressed in this Proxy Statement.

The following discussion has no binding effect on the IRS or the courts. No ruling has been requested from the IRS with respect to the anticipated tax treatment of the Dissolution, and we will not seek an opinion of counsel with respect to the anticipated tax treatment summarized herein.

If any of the conclusions stated herein proves to be incorrect, the result could be increased taxation at the Company and/or the stockholder level, thus reducing the benefit to the stockholders and the Company from the liquidation.

U.S. Federal Income Tax Consequences to the Company

Even if we liquidate, we will continue to be subject to U.S. federal income tax on the Company’s taxable income until the liquidation is complete (i.e., until all of our remaining assets have been distributed to the stockholders). We will realize gain or loss upon any liquidating distribution of non-cash property to stockholders as if such property were sold to the stockholders at its fair market value. Ordinarily, corporate gain or loss (unless certain exceptions to loss recognition apply) with respect to distributed property is recognized in an amount equal to the difference between the Company’s adjusted tax basis for each distributed asset and the asset’s fair market value on the date of distribution. It is anticipated that the Company will not incur any material U.S. federal income tax liability from any asset distribution to the stockholders.

U.S. Federal Income Tax Consequences to U.S. Holders

U.S. holders will not realize any gain or loss for U.S. federal income tax purposes as a result of a sale by the Company of its assets. If we effect the Dissolution and liquidate, for U.S. federal income tax purposes, it is expected that U.S. holders will be treated as receiving a series of liquidating distributions in complete liquidation of the Company in which U.S. holders are treated as receiving such amounts as full payment in exchange for their common stock.

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If a U.S. holder holds different blocks of shares of our common stock (generally as a result of having acquired different blocks of shares of our common stock at different times or at different prices), gain or loss is calculated separately with respect to each block of shares of our common stock. In general, each U.S. holder must allocate liquidating distributions from the Company (less the amount attributable to imputed interest, if any, as discussed below) equally to each block of shares of our common stock and compare the allocated portion of each liquidating distribution with the U.S. holder’s adjusted tax basis in each block of shares of our common stock at the time of such distribution. A U.S. holder’s initial tax basis in his shares generally will equal the holder’s cost for his shares of common stock. A U.S. holder must first apply a liquidating distribution against, and reduce, the adjusted tax basis of its shares of our common stock before reporting gain or loss. Such adjusted tax basis is then used to calculate any gain or loss in connection with subsequent transactions involving the shares of our common stock, including the receipt of additional liquidating distributions from the Company. Thus, the total gain or loss realized by a U.S. holder that receives all of the liquidating distributions paid on a block of shares of our common stock will equal (1) the aggregate of the liquidating distributions (less the amount attributable to imputed interest, if any, as discussed below) allocated to such block of shares of our common stock less (2) the U.S. holder’s adjusted tax basis in such block of shares of our common stock. Such gain or loss will be long-term capital gain or loss provided that the U.S. holder’s holding period for such shares of our common stock is more than one year at the time of the Dissolution. U.S. holders generally cannot recognize a loss on a liquidating distribution to such holder until the final distribution is received. The deductibility of capital losses may be subject to limitations. U.S. holders should consult their own tax advisors on the year in which they can claim a loss, if any, on their shares of our common stock.

If the Company effects the dissolution and liquidates, we currently intend, at the close of the taxable year, to provide stockholders and the IRS with a statement of the amount of cash and our best estimates of the fair market value of other property, if any, distributed to the stockholders during that year, as determined by the Company, including any imputed interest, at such time and in such manner as required by the Treasury regulations.

Under Section 483 of the Code, a portion of a liquidating distribution made more than one year after the first liquidating distribution (described above) may be deemed to constitute interest income that is subject to U.S. federal income tax as ordinary income. The balance of the liquidating distribution will be treated as sales proceeds, with the consequences described above. We currently intend to report any amounts that may be treated as interest, as interest, for purposes of U.S. federal information reporting.

Backup Withholding

A U.S. holder generally will be required to comply with certain certification procedures in order to

establish that such holder is a U.S. person in order to avoid backup withholding with respect to the liquidating distributions pursuant to the expected Dissolution. Such certification procedures generally will be satisfied through the provision of a properly executed IRS Form W-9 (or other appropriate form). Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or credit against the holder’s U.S. federal income tax liability provided the required information is correctly and timely provided to the IRS.

The above summary is not intended to constitute a complete analysis of all tax consequences

applicable to U.S. holders relating to the expected Dissolution. U.S. holders should consult their own tax advisors as to the tax consequences applicable to them in their particular circumstances.

Effects on Harvard Illinois and Our Stockholders if the Sale is Not Completed

In the event that the Purchase Agreement is not approved by the Company’s stockholders or if the Sale is not completed for any other reason, the Company’s stockholders will not receive any payment for their shares in connection with the Sale and the Company will not voluntarily liquidate. In addition, if the Purchase Agreement is terminated under certain circumstances, the Company may be obligated to pay a termination fee of between $150,000 and $250,000 to Wonder Bancorp, Inc. and State Bank. For a description of the circumstances obligating payment of the termination fee, see—“Termination of the Purchase Agreement.”

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On May 15, 2015, Harvard Savings Bank stipulated to the issuance of a Consent Order by the FDIC and the IDFPR. The Consent Order requires Harvard Savings Bank to, among other things, maintain its Tier 1 capital to total assets ratio at a minimum of 9% and its total capital as a percentage of risk-weighted assets at a minimum of 13%. If the Purchase Agreement is not approved by Harvard Illinois Bancorp, Inc. stockholders or is terminated by any of the parties to the Purchase Agreement, Harvard Savings Bank would need to comply with the terms of the Consent Order, including the capital levels required by the Consent Order. Harvard Savings Bank does not currently meet the minimum capital levels required by the Consent Order, and the Company and Harvard Savings Bank believe that the Sale represents the best opportunity to comply with the Consent Order.

No Appraisal Rights

Appraisal or dissenters’ rights are statutory rights that, if applicable under law, enable stockholders to dissent from an extraordinary transaction, such as merger or the sale of substantially all of a corporation’s assets, and to demand that the corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead receiving the consideration otherwise payable to stockholders in the transaction. Section 3-202 of the Maryland General Corporation Law provides that stockholders may not demand the fair value of their stock and are bound by the terms of an approved transaction if the articles of incorporation provide that stockholders are not entitled to exercise the rights of objecting stockholders under the Maryland General Corporation Law. The Articles of Incorporation of Harvard Illinois Bancorp, Inc. provide that stockholders are not entitled to exercise any rights of an objecting stockholder provided for under the Maryland General Corporation Law unless the Board of Directors, pursuant to a resolution approved by a majority of the directors then in office, shall determine that such rights apply with respect to all or any classes or series of stock. Because the Sale is structured as a sale of assets rather than a merger, and because the proceeds of the Sale will inure to Harvard Savings Bank and not directly to stockholders of Harvard Illinois Bancorp, Inc., the Board of Directors did not determine that such rights are applicable to the Sale. Financial Interests of Directors and Officers in the Sale

Our Directors and Executive Officers have interests in the Sale as individuals in addition to, or different from, their interests as stockholders of the Company, including, but not limited to, employment agreements, a change in control agreement, salary continuation agreements and equity awards under the Company’s 2011 Equity Incentive Plan. Our Board of Directors was aware of these interests and considered them in its decision to approve the Purchase Agreement. These interests are discussed below.

In connection with entering into the Consent Order, Harvard Savings Bank was designated as being in “troubled condition” for regulatory purposes. As a result, certain payments described below that may be due to employees, officers and directors are subject to the FDIC “golden parachute” rules and may not be able to be paid unless we obtain regulatory approval or non-objection.

Harvard Savings Bank has entered into employment agreements with Donn Claussen and David Dobson

and a change in control agreement with Richard Lipinsky. Under the agreements, if the executive’s employment terminates involuntarily or if the executive terminates his employment for “good reason” following a change in control of either Harvard Savings Bank or the Company, the executive becomes entitled to severance benefits.

Mr. Dobson’s employment agreement provides for a severance equal to six month’s base salary. Mr.

Claussen’s employment agreement provides for a severance benefit equal to the greater of (i) three times the sum of (A) his highest base salary paid under the agreement and (B) the greater of (x) the average annual cash bonus paid during the last three fiscal years or (y) the cash bonus paid during the current fiscal year, or (ii) 299% of his “base amount” (i.e., the average taxable income paid to him for the five taxable years prior to the taxable year in which the change in control occurs). In addition, Mr. Claussen would receive continued life insurance and non-taxable medical and dental insurance for 36 months. Mr. Lipinsky’s change in control agreement provides for a severance benefit equal to (i) three times his base salary and (ii) the highest annual cash bonus paid during the last three calendar years. In addition, Mr. Lipinsky would receive continued non-taxable medical and dental insurance for 36 months.

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The Sale will constitute a change in control under each of the employment and change in control agreements. In the event Mr. Dobson’s or Mr. Lipinsky’s employment is terminated following the Sale in an event where severance benefits would be owed under the employment or change in control agreements, Harvard Savings Bank intends to file an application with the FDIC seeking approval for Harvard Savings Bank to pay Mr. Dobson a lump sum severance benefit equal to six month’s base salary and/or for Harvard Savings Bank to pay Mr. Lipinsky a lump sum severance benefit equal to one year’s base salary. Harvard Savings Bank and the Company intend to continue to employ Mr. Claussen following the Sale and the subsequent merger of Harvard Savings Bank into the Company and the Company will assume the obligations of Harvard Savings Bank under the employment agreement. Accordingly, no severance payments are expected to be made to Mr. Claussen in connection with the Sale. The Company and Mr. Claussen may negotiate a new employment agreement and compensation structure following the merger of Harvard Savings Bank into the Company.

Harvard Savings Bank has entered into a salary continuation agreement with Mr. Claussen. Under the

salary continuation agreement Mr. Claussen becomes entitled to an annual benefit of $65,000, paid for 15 years, upon his separation from service on or after attaining age 65. If Mr. Claussen separates from service before attaining age 65, he is entitled to the “account value” (i.e., the accrued benefit), paid in 180 monthly payments, commencing on the first day of the month following his separation from service. Upon a change in control, he becomes entitled to his normal annual retirement benefit (i.e., $65,000) in monthly installments over 15 years, commencing on the first day of the month following the month in which the executive attains age 65. Mr. Claussen has agreed to waive any benefit enhancement under his salary continuation agreement as a result of a change in control.

Certain officers and directors hold stock options and unvested restricted stock grants under the Harvard

Illinois Bancorp, Inc. 2011 Equity Incentive Plan. Under the plan, at the time of an involuntary termination of employment or service, all awards of restricted stock become fully vested and all unvested stock options become fully exercisable. The stock options then remain exercisable subject to the expiration provisions otherwise applicable to them. The Sale will constitute a change in control under the equity plan. Employees and directors who remain in service with the Company following the Sale and merger of Harvard Savings Bank into the Company will continue to vest in their awards during their service.

The Company previously agreed to assume all obligations and liabilities of under salary continuation

agreements and other deferred compensation arrangements with employees, directors, former employees and former directors of Harvard Savings Bank. The Sale will not trigger any additional benefits under these arrangements. However, the Company may terminate these agreements at some point following the Sale and the merger of Harvard Savings Bank into the Company and pay all benefits due under the agreements to participants following the termination of the arrangements. Regulatory Approvals

General. The Company and State Bank have agreed to obtain all permits, consents, approvals and authorizations of all governmental entities that are necessary or advisable to consummate the Sale. This includes the approval or non-objection of the FDIC and the IDFPR. State Bank has filed the application or notice materials necessary to obtain the regulatory approvals of the FDIC and the IDFPR. The Sale cannot be completed without such approvals. State Bank cannot assure that it will obtain the required regulatory approvals and non-objections, when they will be received, or whether there will be conditions in the approvals or any litigation challenging the approvals. We also cannot assure that the United States Department of Justice or any state attorney general will not attempt to challenge the Sale on antitrust grounds, or what the outcome will be if such a challenge is made. Harvard Savings Bank has also filed an application with the IDFPR for approval to merge with and into the Company following completion of the purchase and assumption transaction with State Bank.

We are not aware of any material governmental approvals or actions that are required prior to the Sale other than those described below. We presently contemplate that we will seek any additional governmental approvals or actions that may be required in addition to those requests for approval currently pending; however, we cannot assure you that we will obtain any such additional approvals or actions.

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FDIC. The Sale is subject to approval by the FDIC. State Bank has filed the required applications and notifications with the FDIC.

The FDIC may not approve any transaction that would result in a monopoly or otherwise substantially lessen competition or restrain trade, unless it finds that the anti-competitive effects of the transaction are clearly outweighed by the public interest. In addition, the FDIC considers the financial and managerial resources of the companies and their subsidiary institutions if applicable, the convenience and needs of the communities to be served, the conformity of the transaction to applicable law and factors related to fairness of and disclosure concerning the transaction. Under the Community Reinvestment Act (“CRA”), the FDIC must take into account the record of performance of each institution in meeting the credit needs of its entire communities, including low and moderate income neighborhoods, served by each institution. Harvard Savings Bank and State bank each have a satisfactory CRA rating, while Wonder Bancorp, Inc. is not subject to the CRA.

Federal law requires publication of notice of, and the opportunity for public comment on, the applications submitted by State Bank for approval of the Sale and authorizes the FDIC to hold a public hearing in connection with the applications if it determines that such a hearing would be appropriate. Any such hearing or comments provided by third parties could prolong the period during which the application is subject to review. In addition, under federal law, a period of 30 days must expire following approval by the FDIC within which period the Department of Justice may file objections to the Sale under the federal antitrust laws. This waiting period may be reduced to 15 days if the Department of Justice has not provided any adverse comments relating to the competitive factors of the transaction. If the Department of Justice were to commence an antitrust action, that action would stay the effectiveness of the FDIC approval of the Sale unless a court specifically orders otherwise. In reviewing the Sale, the Department of Justice could analyze the Sale’s effect on competition differently than the FDIC, and thus it is possible that the Department of Justice could reach a different conclusion than the FDIC regarding the Sale’s competitive effects.

In addition, immediately following the Sale, Harvard Savings Bank will file a certification of the assumption of its deposit liabilities by State Bank with the FDIC and the FDIC will terminate Harvard Savings Bank’s deposit insurance.

IDFPR. The Sale is also subject to approval of the IDFPR, which must approve State Bank’s purchase of assets and assumption of the liabilities of Harvard Savings Bank and the merger of Harvard Savings Bank with and into Harvard Illinois Bancorp, Inc. following the Sale. Summary of the Purchase Agreement

Consideration to be Received in the Sale

Under the terms of the Purchase Agreement, State Bank will pay to Harvard Savings Bank, at the closing of the Sale, an amount equal to: (i) the estimated adjusted tangible book value, plus (ii) $3.0 million, minus (iii) $300,000 that is being held back at the closing pending final calculation of amounts payable to Harvard Savings Bank under the Purchase Agreement.

Within 90 days after the last day of the calendar month in which the closing date occurs, subject to the

terms and conditions of any regulatory approval, Wonder Bancorp, Inc. and State Bank will provide Harvard Savings Bank with a statement setting forth their total shared expenses; and Harvard Savings Bank will provide Wonder Bancorp, Inc. and State Bank with a statement setting forth the final adjusted tangible book value, its total shared expenses and its total transactional expenses.

Within 14 days of delivery of the above statements, Wonder Bancorp, Inc. and State Bank will provide Harvard Savings Bank with a statement setting forth their calculation of (i) the difference between the estimated adjusted tangible book value and the final adjusted tangible book value, and (ii) the portion of the $300,000 holdback payable to Harvard Savings Bank. If the Company and Harvard Savings Bank have paid or accrued more than 50% of the aggregate shared expenses of all parties, then Wonder Bancorp, Inc. and State Bank will pay Harvard Savings Bank an amount equal

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to: (i) the amount by which it and the Company’s shared expenses exceeds 50% of the aggregate shared expenses of all parties, plus (ii) the $300,000 holdback, minus (iii) transactional expenses, minus (iv) 50% of the excess from terminating data processing, plus or minus (v) the difference between the estimated adjusted tangible book value and the final adjusted tangible book value.

If Wonder Bancorp, Inc. and State Bank have paid or accrued more than 50% of the aggregate shared expenses of all parties, then they will pay Harvard Savings Bank an amount equal to: (i) the $300,000 holdback, minus (ii) the amount by which the shared expenses of Wonder Bancorp, Inc. and State Bank exceeds 50% of the aggregate shared expenses of all parties, minus (iii) transactional expenses, minus (iv) 50% of the excess from terminating data processing, plus or minus (v) the difference between the estimated adjusted tangible book value and the final adjusted tangible book value.

Pennant Assets

The following summarizes the Pennant Assets, as set forth in the Purchase Agreement. Please see the Purchase Agreement for a complete description of the Pennant Assets.

“Pennant Assets” means all of Harvard Savings Bank’s rights, title, interests, claims or reimbursement of any monies, assets or things of value arising from or related to Harvard Savings Bank’s purchase of an interest or interests in loans and/or repurchase agreements made by or related to Pennant, GreatBanc Trust Company (“GreatBanc”), U.S. Fiduciary Services, Inc., First Farmers Financial, LLC and other individuals and companies listed in the Merger Agreement, including but not limited to

(i) securities or undivided percentage interests in the First Farmers Financial LLC (Repo B Fund) issued by Pennant and/or GreatBanc pursuant to:

(a) the Master Repurchase Agreement (Repo B) dated May 9, 2013 between First Farmers Financial, LLC (“FFF”) and Pennant;

(b) the Repurchase Transaction Tri-Party Custody Agreement dated May 9, 2013 among Pennant, FFF and GreatBanc;

(c) the Investment Advisory Agreement dated October 9, 2012 between Pennant and Bank;

(d) the Customer Account Control Agreement (First Farmers Financial, LLC Repo B) dated June 5, 2013 among Pennant, GreatBanc and Harvard; and,

(e) any documents or instruments executed or delivered in connection with any of the foregoing or Harvard Savings Bank’s purchase of and investment in First Farmers Financial, LLC Repo B Fund (“Repo B Fund”);

(ii) any judgments or awards entered in any lawsuit, arbitration or other proceeding brought or settlement of any claims asserted by Harvard Savings Bank against FFF, Pennant, GreatBanc or any other persons or entities (or their respective insurers) arising from or related to any of the documents described in clause (i) and Harvard Savings Bank’s investment in the Repo B Fund, including but not limited to those claims arising from or related to any breaches or violations of the provisions or requirements (including but not limited to rescission rights) of:

(a) any federal or state securities laws as described in the Purchase Agreement.

(b) any contract or common law or other statutory duties whether arising from theories of negligence, gross negligence or reckless misconduct, neglect, intentional acts or conspiring, aiding and abetting or acting in concert to breach or violate such duties, or otherwise arising,

(c) any legal theory that would impose punitive or treble damages or attorneys’ fees;

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(iii) any judgment or award entered in any lawsuit, arbitration or other proceeding brought by or settlement of any claims asserted by Harvard Savings Bank against any of Harvard Savings Bank’s or the Company’s insurance carriers or bond issuers relative to any matters described in clauses (i) or (ii) hereof;

(iv) any payments or distributions made to Harvard Savings Bank by Pennant, GreatBanc, FFF or other persons or entities related to any of the matters set forth in the foregoing clauses (i) through (iii), both inclusive, including but not limited to payments or distributions arising from or related to:

(a) any final order or settlement of claims asserted or that may be asserted by Pennant against the U.S. Department of Agriculture; or,

(b) any final order or settlement of claims asserted or that may be asserted against any of the defendants (or any other person or entity) in the case entitled Pennant Management, Inc., Plaintiff v. First Farmers Financial, LLC, et al., Defendants, currently pending in the United States District Court for the Northern District of Illinois and bearing case number 14CV 7581 (the “Case”);

(v) any payments or distributions made to Harvard Savings Bank from any receiver, trustee or distribution agent appointed in the Case;

(vi) any payments or distributions made to Harvard Savings Bank under or pursuant to the Trust Agreement dated January 19, 2015 between Pennant and GreatBanc; and

(vii) all of Harvard Savings Bank’s right title and interest in and under, including but not limited to the right to assert claims in and under any applicable bond or insurance policies maintained by Harvard Savings Bank or the Company.

Time of Completion

The closing of the Sale will occur on a date that is mutually agreed by the parties. However, if the parties fail to agree, the closing will occur 10 business days after the last of: (i) the receipt of the last necessary regulatory approval for the Sale and the expiration of any required waiting period; and (ii) the satisfaction or waiver in writing of all conditions set forth in the Purchase Agreement. However, if, based upon the foregoing, the closing would occur prior to the 10th business day of any month, then the closing will be delayed until the 10th business day of that month.

Representations and Warranties

The parties have made certain customary representations and warranties to each other in the Purchase Agreement relating to their businesses. For information on these representation and warranties, please refer to the Purchase Agreement, attached as Appendix A.

The representations and warranties contained in the Purchase Agreement were made only for purposes of

such agreement and are made as of specific dates, were solely for the benefit of the parties to the Purchase Agreement, and may be subject to limitations agreed to by the parties, including being qualified by disclosures between the parties. These representations and warranties may have been made for the purpose of allocating risk between the parties to the Purchase Agreement instead of establishing these matters as facts, and may be subject to standards of materiality that differ from the standard of materiality that an investor may apply when reviewing statements of factual information.

Each of the parties has made representations and warranties to the other regarding, among other things: • corporate matters, including due organization and qualification;

• authority relative to execution and delivery of the Purchase Agreement and the absence of conflicts with, violations of, or a default under organizational documents or other obligations as a result of the Sale;

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• governmental filings and consents necessary to complete the Sale;

• legal proceedings; and

• CRA ratings.

In addition, the Company and Harvard Savings Bank have made other representations and warranties about themselves to Wonder Bancorp, Inc. and State Bank, including as to:

• financial statements;

• books and records;

• real and personal property;

• leasehold interests;

• loan portfolio matters;

• the absence of any event or action that would, or reasonably be expected to, constitute a material adverse effect since the date of the last financial statement;

• tax matters;

• compliance with legal requirements;

• matters relating to certain contracts;

• employee matters and benefit plans;

• insurance matters;

• compliance with environmental laws;

• the filing of regulatory reports;

• indemnification claims;

• related party transactions;

• brokerage commissions; and

• stockholder actions.

The representations and warranties of each of the parties will expire 15 months from the closing date.

Conditions to Completing the Sale

Wonder Bancorp, Inc.’s and State Bank’s obligations to consummate the Sale are conditioned on the following:

• the representations and warranties of the Company and Harvard Savings Bank are true and correct

in all material respects as of the closing date of the Sale (except to the extent such representations and warranties speak as of an earlier date); however, any representations and warranties that are subject to a standard of materiality, material adverse effect or similar standard, in the Purchase Agreement will be true and correct in all respects; provided, however, that references to materiality, material adverse effect or similar standards in the sections of the Purchase Agreement dealing with financial statements and reports, and the absence of certain changes and events will be taken into account;

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• The Company and Harvard Savings Bank will have performed or complied with in all material respects all agreements and covenants to be performed or complied with at or prior to the closing of the Sale; however, to the extent the performance and compliance with any covenants and agreements are subject to a standard of materiality, material adverse effect or similar standard in the Purchase Agreement, the Company and Harvard Savings Bank will have performed or complied with, in all respects, all agreements and covenants to the extent of the applicable materiality, material adverse effect or similar standard;

• all proceedings, and related documents, to be taken by the Company and Harvard Savings Bank that are connected to the Sale will be reasonably satisfactory in form and substance to Wonder Bancorp, Inc. and State Bank and all original records and documents relating to the business and affairs of the Company and Harvard Savings Bank that may reasonably be requested will have been available to Wonder Bancorp, Inc. and State Bank for examination;

• no proceeding will have been commenced or threatened against the Company or Harvard Savings Bank since May 20, 2015 that would reasonably be expected to have a material adverse effect on Harvard Savings Bank or on Wonder Bancorp, Inc.’s or State Bank’s rights;

• no change in the financial condition, assets or business of Harvard Savings Bank that has had or that would reasonably be expected to have a material adverse effect on Harvard Savings Bank or on Wonder Bancorp, Inc.’s or State Bank’s rights will have occurred before the closing of the Sale;

• all necessary consents and approvals will have been obtained and will be reasonably satisfactory to Wonder Bancorp, Inc. and State Bank, and all applicable waiting periods will have expired;

• consummation of the Sale will not, directly or indirectly, materially contravene, or conflict with or result in a material violation of, or cause Wonder Bancorp, Inc. or State Bank or their respective affiliates to be required to make any material change in their operations as a result of: (a) any applicable legal requirement or order; or (b) any legal requirement or order that has been published, introduced or otherwise proposed by or before any regulatory authority;

• no enforcement action, whether formal or informal, will have been issued or threatened against Harvard Savings Bank by any regulatory authority since May 20, 2015;

• no enforcement action to which the Company or Harvard Savings Bank is subject as of the closing of the Sale, whether formal or informal, will be imposed upon Wonder Bancorp, Inc. or State Bank as a result of the Sale; and

• Wonder Bancorp, Inc. will have received any necessary financing.

In addition, the Company and Harvard Savings Bank’s obligations to consummate the Sale are conditioned on the following:

• the representations and warranties of Wonder Bancorp, Inc. and State Bank are true and correct in all material respects as of the closing date of the Sale (except to the extent such representations and warranties speak as of an earlier date); however, any representations and warranties that are subject to a standard of materiality, material adverse effect or similar standard, in the Purchase Agreement must be true and correct in all respects; provided, however, that references to materiality, material adverse effect or similar standards in the sections of the Purchase Agreement dealing with financial statements and reports, and the absence of certain changes and events will be taken into account;

• Wonder Bancorp, Inc. and State Bank will have performed or complied with in all material respects all agreements and covenants to be performed or complied with at or prior to the closing

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of the Sale; however, to the extent the performance and compliance with any covenants and agreements are subject to a standard of materiality, material adverse effect or similar standard in the Purchase Agreement, Wonder Bancorp, Inc. and State Bank will have performed or complied with, in all respects, all agreements and covenants to the extent of the applicable materiality, material adverse effect or similar standard;

• all proceedings, and related documents, to be taken by Wonder Bancorp, Inc. and State Bank that are connected to the Sale will be reasonably satisfactory in form and substance to the Company and Harvard Savings Bank;

• no proceeding will have been commenced or threatened against Wonder Bancorp, Inc., State Bank or their affiliates since May 20, 2015 that would reasonably be expected to have a material adverse effect on Wonder Bancorp, Inc. or State Bank or on the Company’s or Harvard Savings Bank’s rights;

• all necessary consents and approvals will have been obtained and will be reasonably satisfactory to the Company and Harvard Savings Bank, and all applicable waiting periods will have expired;

• Wonder Bancorp, Inc. will have received any necessary financing;

• the adjusted tangible book value will not be less than $0; and

• consummation of the Sale will not, directly or indirectly, materially contravene, or conflict with or result in a material violation of, or cause Wonder Bancorp, Inc. or State Bank or their respective affiliates to be required to make any material change in their operations as a result of: (a) and applicable legal requirement or order; or (b) any legal requirement or order that has been published, introduced or otherwise proposed by or before any regulatory authority.

The parties cannot guarantee that all of the conditions to the Sale will be satisfied or waived by the party permitted to do so.

Conduct of Business Before the Sale

The Company and Harvard Savings Bank have agreed that, until completion of the Sale and unless permitted to do otherwise by Wonder Bancorp, Inc. or State Bank, Harvard Savings Bank will:

General Business

• not take any affirmative action, or fail to take any reasonable action within its control, as a result of which a material adverse effect would be reasonably expected to occur, except as otherwise expressly permitted by the Purchase Agreement.

• conduct its business only in the ordinary course of business and in compliance with all legal requirements, and continue to make all normal expenditures and incur all regular expenses necessary to continue Harvard Savings Bank’s business consistent with past practice;

• use its reasonable best efforts to preserve intact its current business organization, keep the services of its current officers, employees and agents available, and maintain the goodwill of its suppliers, customers, landlords, creditors, employees, agents and others, and permit representatives of State Bank to hold meetings with officers and employees of Harvard Savings Bank in connection with employment opportunities;

• maintain all of its assets necessary for the conduct of its business in good operating condition and repair, with certain exceptions, and maintain policies of insurance upon its assets and with respect

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to the conduct of its business in amounts and kinds comparable to that in effect on May 20, 2015 any pay all premiums on such policies when due;

• not declare or pay any dividends or may any other similar distributions of cash or property to any of its directors, officers, employees or to its sole stockholder, the Company, other than regular salary or other earned compensation;

• file, in a timely manner, all required filings with all regulatory authorities and cause such filings to be true and correct in all material respects;

• record and carry on its books and records the net realizable value of other real estate owned, with such value to be supported by reasonable documentation of the same;

• maintain its books, accounts and records in the ordinary course of business, on a basis consistent with prior years;

• materially comply will all legal requirements and contracts;

• report periodically to Wonder Bancorp, Inc. and State Bank concerning the status of its business, operations and finances;

Branches

• cooperate with Wonder Bancorp, Inc. and State Bank in pre-marketing Harvard Savings Bank’s branch office located in Morris, Illinois to prospective purchasers;

Loans

• enter into loan transactions only in accordance with sound credit practices and only on terms and conditions that are not materially more favorable than those available to the borrower from competitive sources in arm’s-length transactions;

• not enter into any new loan, or renew or restructure an existing loan, which equals or exceeds (i) $417,000 for one- to four-family residential mortgage loans, or (ii) $500,000 for any other loan; provided, that, Harvard Savings Bank may approve such loans, renewals or restructurings that are not for one- to four-family mortgage loans consistent with its policies and practice;

• maintain an allowance for loan and lease losses that is adequate in all material respects under the requirements of GAAP, charge-off any loans or leases that would be deemed uncollectible in accordance with GAAP or any legal requirements and, to the extent required by GAAP or any legal requirement, place on non-accrual any loans or leases that are past due greater than 90 days, all consistent with past practice;

Employees

• notify all employees of the existence of Purchase Agreement;

• cooperate with State Bank to establish mutually agreed upon procedures for State Bank to interview potential employees and provide State Bank with appropriate information related to potential employees;

• be permitted to reserve an amount not to exceed $57,000, and make discretionary payments therefrom to employees and officers of Harvard Savings Bank to encourage them to continue working for Harvard Savings Bank until the closing of the Sale; and

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Investments

• not buy or sell any security held, or intended to be held, for investment in a manner that is not in accordance with its current investment policy.

Additional Covenants of the Parties in the Purchase Agreement

Agreement Not to Solicit Other Proposals

Neither the Company nor Harvard Savings Bank will directly or indirectly solicit, initiate or encourage any inquiries or proposals from, discuss or negotiate with, provide any non-public information to, or consider the merits of any unsolicited inquiries or proposals from, any person (other than Wonder Bancorp, Inc. or State Bank) relating to any acquisition transaction.

An acquisition transaction is:

(i) a merger or consolidation, or any similar transaction (other than the Sale);

(ii) a purchase, lease or other acquisition of all or substantially all the assets of the Company or Harvard Savings Bank;

(iii) a purchase or other acquisition of “beneficial ownership” by any “person” or “group” (as such terms are defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) (including by way of merger, consolidation, share exchange or otherwise) that would cause such person or group to become the beneficial owner of securities representing 20% or more of the voting power of the Company or Harvard Savings Bank;

(iv) a tender or exchange offer to acquire securities representing 20% or more of the voting power of the Company or Harvard Savings Bank;

(v) an offer to acquire substantially all of the assets of Harvard Savings Bank;

(vi) a public proxy or consent solicitation made to the stockholders seeking proxies in opposition to any proposal relating to any aspect of the Sale that has been recommended by the board of directors of the Company;

(vii) the filing of an application or notice with any regulatory authority (which application has been accepted for processing) seeking approval to engage in one or more of the transactions referenced in clauses (i) through (v) above; or

(viii) the making of a bona fide proposal to the stockholders, the Company or Harvard Savings Bank, by public announcement or written communication, that is or becomes the subject of public disclosure, to engage in one or more of the transactions referenced in (i) through (v) above.

The Company and Harvard Savings Bank may provide information at the request of, or enter into negotiations with, a third party with respect to an acquisition transaction if the board of directors of the Company determines, in good faith, that the failure to take such actions is inconsistent with its fiduciary duties to the stockholders under applicable law, and, provided further, that the Company or Harvard Savings Bank may not, in any event, provide any information to such third party that it has not provided (or does not simultaneously provide) to Wonder Bancorp, Inc. and State Bank. The Company and Harvard Savings Bank will promptly notify Wonder Bancorp, Inc. and State Bank orally and in writing in the event it receives any such inquiry or proposal and will provide reasonable detail of all relevant facts relating to such inquiries.

Subject to the requirements of the Purchase Agreement, If the board of directors of the Company determines in good faith that the failure to accept an acquisition transaction is inconsistent with its fiduciary

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obligations to the stockholders under applicable law, the board of directors of the Company may at any time change its recommendation to the stockholders to approve the Purchase Agreement or terminate the Purchase Agreement to enter into a definitive agreement with respect to an acquisition transaction.

Covenant Not to Compete; Not to Solicit

The Company and Harvard Savings Bank covenant and agree that they will not open, purchase, operate, control or otherwise have an interest in any financial institution, branch office, loan production office, deposit production office, remote service unit for the production of deposits or loans within a 10 mile radius of any branch office of Harvard Savings Bank or State Bank; or target and solicit deposits, loans, brokerage, credit or debit cards, or any other business from customers whose deposit liabilities are assumed hereunder.

The Company and Harvard Savings Bank will not directly or indirectly solicit any employee of Wonder Bancorp, Inc. or State Bank as prospective officers or employees of the Company, Harvard Savings Bank or any affiliate of Harvard Savings Bank; provided, however, that the Company and Harvard Savings Bank will not be prohibited or restricted from hiring an employee of Wonder Bancorp, Inc. or State Bank if such employee contacts the Company and Harvard Savings Bank to seek hiring or retention, whether in response to general advertising or otherwise, or if such employee is terminated by Wonder Bancorp, Inc.

Certain Other Covenants

The Purchase Agreement also contains other agreements relating to the conduct of all of the parties before consummation of the Sale, including the following:

• Harvard Savings Bank will allow Wonder Bancorp, Inc., State Bank and their representatives full access to its facilities, operations, records and properties; however, Harvard Savings Bank will not be required to disclose any information which it would be prohibited to disclose by any legal requirement;

• subject to certain limitations, Harvard Savings Bank will deliver to Wonder Bancorp, Inc. and State Bank its subsequent financial statements, real estate title reports, and title policies and surveys for business real estate as described in the Purchase Agreement; furthermore, Harvard Savings Bank may be required to provide surveys, unrelated to business real estate, to Wonder Bancorp, Inc. and State Bank upon request;

• not later than 30 days prior to the expected closing date, Harvard Savings Bank will appoint State Bank as successor custodian of all its IRA accounts and will mail notice of its resignation as custodian and appointment of State Bank as the successor;

• not later than 15 days prior to the expected closing date, State Bank and Harvard Savings Bank will mail a notice to each borrower under an acquired mortgage loan.

• not later than 30 days prior to the expected closing date, Harvard Savings Bank will provide State Bank with drafts of the transfer documents for the acquired assets;

• until the closing of the Sale, the selling parties (the Company and Harvard Savings Bank) and the buying parties (Wonder Bancorp, Inc. and State Bank) both covenant that they will promptly notify each other in writing if either becomes aware of any fact or condition that causes or constitutes a breach of any of their respective representations and warranties or covenants, or of the occurrence of any event that might reasonably be expected to make the satisfaction of the conditions precedent to the obligations of either parties impossible or unlikely;

• no information provided by the Company or Harvard Saving Bank concerning the Company and Harvard Savings Bank that is used or intended to be used in filings with any regulatory authority

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in connection with the Sale will be false or misleading with respect to any material fact, or omit to state any material fact necessary in order to make the statements therein not misleading;

• no information provided by Wonder Bancorp, Inc. or State Bank concerning Wonder Bancorp, Inc. and State Bank that is used or intended to be used in filings with any regulatory authority in connection with the Sale will be false or misleading with respect to any material fact, or omit to state any material fact necessary in order to make the statements therein not misleading;

• as soon as practicable after May 20, 2015, Harvard Savings Bank will obtain the consents listed in the schedules of the Purchase Agreement;

• all parties will cooperate, in good faith, to assist each other in preparing and filing any required notices, applications or other information with regulatory authorities for the purpose of obtaining all necessary approvals of the Sale, and State Bank will file all appropriate filings with regulatory authorities for approval of the Sale;

• The Company and Harvard Savings Bank will consult with Wonder Bancorp, Inc. and State Bank prior to the entry by either the Company or Harvard Savings Bank into any new, or any extension of any existing, data or item processing agreements and will coordinate with Wonder Bancorp, Inc. and State Bank in negotiating any such agreements;

• The Company will take all actions necessary to convene a meeting of its stockholders to vote on the Purchase Agreement and the Sale;

• The Company’s board of directors will recommend to the stockholders the approval of the Sale and the Purchase Agreement and, subject to certain limitations, will solicit stockholder approval; however, the Company’s board of directors may fail to make such recommendation or change or withdraw its recommendation if, after consultation with its financial and legal advisors, it determines, in good faith, that making such a recommendation would result in a violation of its fiduciary duties; and

• upon the written request of Wonder Bancorp, Inc. or State Bank, Harvard Savings Bank will take, to the extent permitted and subject to certain limitations contained in the Purchase Agreement, such action as may be necessary to amend or terminate any employee benefit plan that is also an assumed contract on or before the closing of the Sale.

Indemnification

The Company has agreed that for 15 months following the closing of the Sale it will indemnify Wonder Bancorp, Inc. and State Bank and each of their respective affiliates against and hold them harmless from:

• all losses, liabilities, claims, causes of actions, suits, damages or penalties (excluding punitive damages – other than punitive damages claimed by third parties – and damages solely attributable to lost profits) arising out of or resulting from: (i) any breach or incorrectness of any of the Company’s or Harvard Savings Bank’s representations and warranties or in any certificates they deliver or have delivered to Wonder Bancorp, Inc. or State Bank; (ii) any breach of any covenant or agreement made by the Company or Harvard Savings Bank; (iii) any litigation, proceeding or suit brought by any stockholder against any of the parties arising from or related to the Sale; and (iv) any liability or obligation of any nature and any loss, damage, cost or expense that is incurred or suffered by Wonder Bancorp, Inc. or State Bank and that is based upon or pertains to: (x) the excluded assets; or (y) provided that the Morris, Illinois branch is sold on or prior to the closing date, any claims arising from the operation of the Morris branch prior to the effective time; and

• the reasonable out-of-pocket expenses or costs incurred by Wonder Bancorp, Inc. and State Bank and each of their respective affiliates, including reasonable attorneys’ fees, in connection with

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investigating, attempting to correct or defending against any claims, liens or charges that are asserted against the Wonder Bancorp, Inc. and State Bank and each of their respective affiliates for which any of Wonder Bancorp, Inc. and State Bank and each of their respective affiliates is entitled to indemnity.

Terminating the Purchase Agreement

The Purchase Agreement may be, by prompt written notice given to the other parties prior to or at the closing of the Sale, terminated:

• by the mutual written consent of the parties;

• by Wonder Bancorp, Inc. if there has been a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by the Company or Harvard Savings Bank that would give rise to the failure of any of the conditions specified in the Purchase Agreement and such breach, inaccuracy or failure is incapable of being cured by February 20, 2016 (the “Termination Date”) or has not been cured by the Company or Harvard Savings Bank within 15 days of the Company’s or Harvard Savings Bank’s receipt of written notice of such breach, inaccuracy or failure from Wonder Bancorp, Inc.;

• by Wonder Bancorp, Inc. if any of the conditions precedent to the obligations of Wonder Bancorp, Inc. and State Bank has not been satisfied on or before the Termination Date, or if it becomes apparent that satisfaction of such a condition prior to the Termination Date will be impossible (other than through the failure of Wonder Bancorp, Inc. or State Bank to perform or comply with its covenants or obligations);

• by the Company if there has been a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Wonder Bancorp, Inc. or State Bank that would give rise to the failure of any of the conditions specified in the Purchase Agreement and such breach, inaccuracy or failure is incapable of being cured by the Termination Date;

• by the Company if any of the conditions precedent to the obligations of the Company and Harvard Savings Bank has not been satisfied on or before the Termination Date, or if it becomes apparent that satisfaction of such a condition prior to the Termination Date will be impossible (other than through the failure of the Company or Harvard Savings Bank to perform or comply with its covenants or obligations);

• by Wonder Bancorp, Inc. or the Company in accordance with an environmental investigation, as discussed in the Purchase Agreement;

• by Wonder Bancorp, Inc. if the board of directors of the Company, pursuant to the provision in the Purchase Agreement detailing other offers and in the exercise of its fiduciary duties, has failed to recommend in the proxy statement the approval of the Purchase Agreement, has withdrawn, modified or changed, in any manner adverse to Wonder Bancorp, Inc. or State Bank, or publicly announced its intent to withdraw, modify or change, in any manner adverse to Wonder Bancorp, Inc. or State Bank, such recommendation of the Purchase Agreement (provided that the stockholders do not subsequently approve the Purchase Agreement), or has failed to call or convene the meeting of stockholders referred to in, or if the Company is otherwise in breach of, the provision in the Purchase Agreement detailing the stockholders’ meeting;

• by Wonder Bancorp, Inc. or the Company if: (i) the stockholders’ meeting referred to in provision in the Purchase Agreement detailing the stockholders’ meeting has been held and completed and the stockholders have taken a final vote on a proposal to adopt the Purchase Agreement; and (ii) the required approval of the stockholders has not been obtained; provided, however, that this right to terminate the Purchase Agreement will not be available to the Company where the failure

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to obtain approval of the stockholders was by the action or failure to act of the Company or Harvard Savings Bank, and such action or failure to act constitutes a breach;

• by the Company, if the Company or Harvard Savings Bank have in accordance with the provision in the Purchase Agreement detailing other offers either: (i) terminated the Purchase Agreement; or (ii) entered into a definitive agreement (other than the Purchase Agreement) with respect to an acquisition transaction;

• by Wonder Bancorp, Inc. or State Bank if: (i) any regulatory authority appoints a receiver or conservator for Harvard Savings Bank or for all or substantially all of its assets; or (ii) Harvard Savings Bank files with any regulatory authority a notice of voluntary liquidation or other similar action;

• by any party if the closing of the Sale has not occurred (other than through the failure of any party seeking to terminate the Purchase Agreement to comply fully with its obligations) on or before the date that is nine months after the May 20, 2015, or such later date as the parties may agree in writing; provided, however, that the party seeking to terminate the Purchase Agreement pursuant to this section has used its reasonable best efforts to consummate the Sale prior to the Termination Date;

• by the Company or Harvard Savings Bank in the event that (i) Wonder Bancorp, Inc. and State Bank voluntarily withdraws their application requesting regulatory approval of the Sale and do not re-file their application within 30 days from the date of withdrawal, or (ii) Wonder Bancorp, Inc. and State Bank fail to consummate the Sale within 45 days of receipt of all regulatory approvals; or

• by Wonder Bancorp, Inc. or State Bank in the event that the regulatory authorities have not approved the Sale by the Termination Date solely because of the Illinois Department of Financial and Professional Regulation’s refusal to approve the merger of Harvard Savings Bank into the Company (or, in lieu thereof, the dissolution of Harvard Savings Bank following the consummation of the Sale) and/or the FDIC’s refusal to grant Harvard Savings Bank’s request for the deposit insurance termination.

Termination Fee

The Company and Harvard Savings Bank must pay Wonder Bancorp, Inc. (on a joint and several basis) a termination fee of $150,000 if the Purchase Agreement is terminated by Wonder Bancorp, Inc. in the following circumstances:

• due to a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by the Company or Harvard Savings Bank that would give rise to the failure of any of the conditions precedent to the obligations of the Company and Harvard Savings Bank;

• if, as a result of the Company’s or Harvard Savings Bank’s breach of any of its representations, warranties, covenants or agreements, any of the conditions precedent to the obligations of Wonder Bancorp, Inc. and State Bank, other than receipt of financing, have not been satisfied on or before the Termination Date; or

• in the event that the regulatory authorities have not approved the Sale by the Termination Date solely because of the Illinois Department of Financial and Professional Regulation’s refusal to approve the merger of Harvard Savings Bank into the Company (or, in lieu thereof, the dissolution of Harvard Savings Bank following the consummation of the Sale) and/or the FDIC’s refusal to grant Harvard Savings Bank’s request for the deposit insurance termination; in both cases neither being the result of Wonder Bancorp, Inc.’s or State Bank’s breach of any representation, warranty, covenant or agreement.

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The Company and Harvard Savings Bank must pay Wonder Bancorp, Inc. a termination fee of $250,000 if the Purchase Agreement is terminated in certain circumstances that involve an acquisition transaction. Specifically, the Company and Harvard Savings Bank, jointly and severally, must pay the termination fee if:

• Wonder Bancorp, Inc. terminates the Purchase Agreement (i) as a result of a breach by the Company of its covenant regarding the solicitation of other acquisition transactions or its obligation to call a stockholders’ meeting; (ii) the Company’s board of directors fails to recommend approval of the Sale or withdraws, qualifies, or revises its recommendation to approve the Sale; or (iii) due to a breach or failure to perform by the Company or Harvard Savings Bank under certain circumstances and, subsequently, within 12 months of termination, the Company, Harvard Savings Bank or their respective affiliates enters into another acquisition transaction;

• The Company terminates the Purchase Agreement or enters into another acquisition transaction under the provision in the Purchase Agreement detailing other offers; or

• Wonder Bancorp, Inc. or the Company terminates the Purchase Agreement as a result of the Company’s stockholders having not approved the Sale after voting on its approval at the stockholders’ meeting and, subsequently, within 12 months of termination, the Company, Harvard Savings Bank or their respective affiliates enters into another acquisition transaction.

Wonder Bancorp, Inc. must pay the Company a termination fee of $250,000 if the Purchase Agreement is terminated by the Company in the following circumstances:

• due to a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Wonder Bancorp, Inc. or State Bank that would give rise to the failure of any of the conditions precedent to the obligations of any of the parties;

• if, as a result of Wonder Bancorp, Inc.’s or State Bank’s breach of any of its representations, warranties, covenants or agreements, any of the conditions precedent to the obligations of the Company and Harvard Savings Bank have not been satisfied on or before the Termination Date; or

• if Wonder Bancorp, Inc. and State Bank voluntarily withdraw their application for regulatory approval of the Sale and do not refile within 30 days, or if Wonder Bancorp, Inc. and State Bank fail to consummate the Sale within 45 days of receiving regulatory approval.

Expenses

Each of the parties will pay its own costs and expenses incurred in connection with the Sale. In the event of any suit to enforce this provision, or a suit seeking to recover costs and expenses or damages for breach of the Purchase Agreement, the costs, fees, charges and expenses of the prevailing party shall be borne by the non-prevailing party.

Changing the Terms of the Purchase Agreement

The Purchase Agreement may only be amended upon written agreement, signed by each party, to: (a) extend the time for the performance of any of the obligations of the parties; (b) waive any inaccuracies in the representations or warranties; and (c) waive compliance with or modify, amend or supplement any of the conditions, covenants, agreements, representations or warranties or waive or modify performance of any of the obligations of any of the parties, which are for the benefit of the waiving party; provided, however, that no modifications, amendment or supplement agreed to after authorization of the Purchase Agreement by the stockholders will affect the rights of the stockholders in any manner that is materially adverse to them.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE PURCHASE AGREEMENT.

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PROPOSAL II—ELECTION OF DIRECTORS

Following the Meeting, our Board of Directors will consist of six persons. The Board of Directors is divided into three classes with one class of directors elected each year. Directors are generally elected to serve for a three-year period or until their respective successors shall have been elected and shall qualify. Our Nominating Committee has recommended to the Board of Directors and our Board of Directors has nominated Duffield J. Seyller III and Michael P. Feeney to serve as directors for three-year terms, with each of the nominees abstaining from any discussion or voting on his nomination. Messrs. Seyller and Feeney are currently members of the Board of Directors. Messrs. Seyller and Feeney have agreed to serve, if elected. The Board strongly urges you to support the Company’s nominees.

The table below sets forth certain information, as of the Voting Record Date, regarding the Board of Directors. It is intended that the proxies solicited on behalf of the Board of Directors (other than proxies in which the vote is withheld as to the nominees) will be voted at the Meeting for the election of the nominees identified below. If a nominee is unable to serve, the shares represented by all such proxies will be voted for the election of such substitute as the Board of Directors may recommend. At this time, the Board of Directors knows of no reason why any of the nominees might be unable to serve, if elected. There are no arrangements or understandings between any of the nominees and any other person pursuant to which the nominees were selected.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE HARVARD ILLINOIS BANCORP, INC. NOMINEES LISTED IN THIS PROXY STATEMENT.

Name Position(s) Held With

Harvard Illinois Bancorp, Inc. Age(1) Director Since(2)

Current Term Expires

NOMINEES

Duffield J. Seyller III Chairman of the Board 65 1988 2015 Michael P. Feeney Director 46 2008 2015(3)

DIRECTORS CONTINUING IN OFFICE

William D. Schack Vice Chairman of the Board 65 1989 2016 Steven D. Garrels Director 43 2010 2016 Donn L. Claussen President and Chief Executive Officer and Director 56 2008 2017 Brian S. Rebhorn Director 46 2014 2017

DIRECTORS WHO ARE NOT CONTINUING IN OFFICE

Richard L. Walker Director 71 2008 2015

EXECUTIVE OFFICERS

WHO ARE NOT DIRECTORS

David Dobson Vice President and Chief Financial Officer 53 n/a n/a Richard J. Lipinsky Executive Vice President, Secretary and Treasurer 51 n/a n/a Verne S. Sisson Vice President and Commercial Loan Officer 52 n/a n/a Brenda S. Gratz Vice President and Retail Loan Officer 52 n/a n/a (1) As of December 31, 2014. (2) Includes service with Harvard Savings Bank. (3) Mr. Feeney was serving a term expiring in 2016. Upon the retirement of Richard L. Walker, the Board of Directors elected to eliminate the

resulting vacancy by reducing the size of the Board of Directors to six effective as of the date of the Annual Meeting. Because the Bylaws of the Company require that the Board of Directors be divided into classes as nearly equal in size as is practicable, the Board of Directors moved Mr. Feeney to the class of directors serving terms expiring in 2015 to replace Mr. Walker.

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The biographies of each of the Company’s nominees, continuing board members and executive officers are set forth below. With respect to directors and nominees, the biographies also contain information regarding the person’s business experience and the experiences, qualifications, attributes or skills that caused the Nominating Committee and the Board of Directors to determine that the person should serve as a director. Unless otherwise indicated, directors and executive officers have held their positions for the past five years.

Director Nominees

Duffield J. Seyller III. Mr. Seyller is currently the Chairman of the Board of Directors. He has been employed in the banking industry since 1976 in various positions. Until his retirement in February 2014, he had been employed with Harvard Savings Bank since 1985, most recently serving as President and Chief Executive Officer of Harvard Savings Bank and Harvard Illinois Bancorp, Inc. Mr. Seyller has over 37 years experience in the banking industry. As former President and Chief Executive Officer, his experience in leading the Company and the Bank and his responsibilities for the strategic direction and management of the Company’s day-to-day operations, bring broad industry and specific institutional knowledge and experience to the Board of Directors.

Michael P. Feeney. Mr. Feeney is the owner and manager of Feeney Package Liquor in Morris, Illinois, a position he has held for at least five years. Previously, he was the operations manager of a Wal-Mart distribution center in Spring Valley, Illinois. Prior to joining the Harvard Savings Bank board of directors in April 2008, Mr. Feeney was a director of Morris Building & Loan, S.B. Mr. Feeney’s experience as owner and manager of his own company bring valuable business and leadership skills and financial acumen to the Board in furtherance of the Board’s objective of maintaining a membership of experienced and dedicated individuals with diverse backgrounds, perspectives, skills, and other qualities that are beneficial to the Company. In addition, as former director of Morris Building & Loan, S.B., he brings to the Board important perspectives on serving the needs of those Bank customers who were formerly customers of Morris Building & Loan, S.B. prior to its merger into the Bank.

Continuing Directors

Donn L. Claussen. Mr. Claussen was appointed as President and Chief Executive Officer of Harvard Savings Bank and Harvard Illinois Bancorp, Inc. as of March 1, 2014. He has been with Harvard Savings Bank since 2007 and with Harvard Illinois Bancorp, Inc. since its formation, and served as Executive Vice President and Chief Financial Officer from 2007 through February 2014. Previously, Mr. Claussen was a partner with the accounting firm of Lindgren, Callihan, Van Osdol & Co., Ltd., Rockford, Illinois, specializing in financial institution matters. As a certified public accountant and a former partner in a regional public accounting firm, Mr. Claussen brings to the Board of Directors his valuable experience in dealing with accounting principles, internal controls and financial reporting rules and regulations.

Brian S. Rebhorn. Mr. Rebhorn is the Store Manager of Buck Brother’s in Harvard, Illinois, a supplier of agricultural and landscaping equipment and supplies, a position he has held for at least five years. He has worked for Buck Brother’s (and its predecessor Harvard Implement) for 27 years. Mr. Rebhorn’s years of experience as a manager of a local agricultural business brings valuable business and leadership skills and financial acumen to the Board in furtherance of the Board’s objective of maintaining a membership of experienced and dedicated individuals with diverse backgrounds, perspectives, skills, and other qualities that are beneficial to the Company.

William D. Schack. Mr. Schack is the Vice Chairman of the Board of Directors. He is currently the owner

of the Harvard Retirement Home and Harvard Ranch, a position he has held for at least five years. Altogether, Mr. Schack has worked in the retirement field for 27 years. Mr. Schack’s years of experience as owner and manager of his own company bring valuable business and leadership skills and financial acumen to the Board in furtherance of the Board’s objective of maintaining a membership of experienced and dedicated individuals with diverse backgrounds, perspectives, skills, and other qualities that are beneficial to the Company.

Steven D. Garrels. Mr. Garrels has served as an independent certified public accountant for 20 years. Mr. Garrels is currently a partner with Borhart Spellmeyer & Company, LLC, Elgin, Illinois, a position he has held for at least five years. Mr. Garrels has experience with internal and external auditing of financial institutions. As a

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certified public accountant, Mr. Garrels brings to the Board of Directors his valuable experience in dealing with accounting principles, internal controls and financial reporting rules and regulations.

Executive Officers Who Are Not Directors

David Dobson. David Dobson was appointed to serve as Vice President and Chief Financial Officer as of March 1, 2014, and oversees the accounting and investment areas. Mr. Dobson has been employed with Harvard Savings Bank since 2010, most recently as Controller. Previously, he held the position of manager at a regional accounting firm in northern Illinois, serving thrifts and small businesses, and later joined a real estate management and development company in Rockford as Vice President of Housing. Mr. Dobson is a certified public accountant and a 2013 graduate of the Graduate School of Banking at the University of Wisconsin – Madison.

Brenda S. Gratz. Ms. Gratz is Vice President and Retail Loan Officer of Harvard Savings Bank and Harvard Illinois Bancorp, Inc. Ms. Gratz has been employed by the Company and the Bank since March 2011, and was appointed to her current position on March 1, 2012. Ms. Gratz has worked in the financial services industry for 34 years, including the last 11 years in a management capacity.

Richard J. Lipinsky. Mr. Lipinsky is Executive Vice President, Secretary and Treasurer of Harvard Savings Bank and Harvard Illinois Bancorp, Inc. He oversees the operations and information technology areas of Harvard Savings Bank. Mr. Lipinsky has been with Harvard Savings Bank since 1986.

Verne S. Sisson. Verne S. Sisson is Vice President and Commercial/Agricultural Loan Officer of Harvard Savings Bank and has been with Harvard Savings Bank since December 2009. Mr. Sisson has been in the financial services industry for 30 years, with seven years in a management capacity.

Board Independence and Leadership Structure

The Board of Directors has determined that each of our directors and nominees, with the exception of Duffield J. Seyller III, and President and Chief Executive Officer Donn L. Claussen, are “independent” as defined in the listing standards of the Nasdaq Stock Market. Mr. Claussen is not independent because he is one of our executive officers, and Mr. Seyller is not independent because he has been employed as an executive officer within the past three years.

To ensure effective and independent oversight of management, the Board of Directors has separated the

roles of Chief Executive Officer and Chairman of the Board in recognition of the differences between these two roles in management of the Company. The Chief Executive Officer is responsible for setting the strategic direction for the Company and the day-to-day leadership and performance of the Company, while the Chairman of the Board provides guidance to the Chief Executive Officer, sets the agenda for Board meetings and presides over meetings of the full Board. The Chairman of the Board is a non-management role. Meetings and Committees of the Board of Directors

Our Board of Directors meets on a monthly basis and may hold additional special meetings. During the year ended December 31, 2014, the Board of Directors of the Company met 22 times. No director attended fewer than 75% of the aggregate of the total number of meetings of the Board of Directors and the total number of meetings by all committees on which he served during the year ended December 31, 2014.

The Board of Directors of Harvard Illinois Bancorp, Inc. has standing Audit, Nominating and

Compensation Committees, which met eight, two and four times, respectively, during the year ended December 31, 2014.

The Audit Committee is responsible for supervising Harvard Illinois Bancorp, Inc.’s accounting, financial

reporting and financial control processes. Generally, the Audit Committee oversees management’s efforts with respect to the quality and integrity of our financial information and reporting functions and the adequacy and effectiveness of our system of internal accounting and financial controls. The Audit Committee also reviews the independent audit process and the qualifications of the independent registered public accounting firm. Each member

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of the Audit Committee is “independent” as defined in the Nasdaq corporate governance listing standards. The Audit Committee is comprised of Directors Michael P. Feeney, William D. Schack and Steven D. Garrels. The Audit Committee has sole responsibility for engaging our registered public accounting firm.

The Compensation Committee establishes Harvard Illinois Bancorp, Inc.’s compensation policies and reviews compensation matters. The Compensation Committee is comprised of Directors Steven D. Garrels, William D. Schack and Michael P. Feeney, each of whom is an independent director.

The Company considers a number of factors in its decisions regarding executive compensation, including,

but not limited to, the level of responsibility and performance of the individual executive officers, the overall performance of the Company and a peer group analysis of compensation paid at institutions of comparable size and complexity. The Company also considers the recommendations of the Chief Executive Officer with respect to the compensation of executive officers other than the Chief Executive Officer. The Board of Directors and the Chief Executive Officer review the same information in connection with this recommendation.

The base salary levels for the Company’s executive officers are set to reflect the duties and levels of

responsibilities inherent in the position and to reflect competitive conditions in the banking business in the Company’s market area. Comparative salaries paid by other financial institutions are considered in establishing the salary for the given executive officer. In setting salaries for 2014, the Board of Directors utilized bank compensation and benefits surveys of community banks located in Illinois, Wisconsin, and Minnesota, compiled by WIPFLI CPAs and Consultants, located in Eau Claire, Wisconsin. In setting the base salaries, the Board of Directors also considers a number of factors relating to the executive officers, including individual performance, job responsibilities, experience level, ability and the knowledge of the position. These factors are considered subjectively and none of the factors are accorded a specific weight.

The Nominating Committee meets annually in order to recommend nominees to the Board of Directors for

membership on the board of directors. The Nominating Committee is comprised of Directors Michael P. Feeney, Steven D. Garrels and William D. Schack, each of whom is an independent director. Members of the Nominating Committee who are being considered for re-election do not vote with respect to their own nominations.

The Nominating Committee identifies nominees by first evaluating the current members of the Board of

Directors willing to continue in service. Current members of the Board with skills and experience that are relevant to our business and who are willing to continue in service are first considered for re-nomination, balancing the value of continuity of service by existing members of the Board with that of obtaining a new perspective. If any member of the Board does not wish to continue in service, or if the Committee or the Board decides not to re-nominate a member for re-election, or if the size of the Board is increased, the Committee would solicit suggestions for director candidates from all Board members. In addition, the Committee is authorized, but not required, by its charter to engage a third party to assist in the identification of director nominees. The Nominating Committee would seek to identify a candidate who at a minimum satisfies the following criteria:

• has the highest personal and professional ethics and integrity;

• has had experiences and achievements that have given him or her the ability to exercise and develop good business judgment;

• is willing to devote the necessary time to the work of the Board and its committees, which includes being available for Board and committee meetings;

• is familiar with the communities in which we operate and/or is actively engaged in community activities;

• is involved in other activities or interests that do not create a conflict with his or her responsibilities to the us and our stockholders; and

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• has the capacity and desire to represent the balanced, best interests of our stockholders as a group, and not primarily a special interest group or constituency.

In addition, the Nominating Committee will review as appropriate whether a candidate satisfies the qualifications requirements of our Bylaws. Our Bylaws provide that no person shall be eligible to be appointed or elected to the Board of Directors: (a) if such person has been the subject of supervisory action by a financial regulatory agency that resulted in a cease and desist order or an agreement or other written statement subject to public disclosure under 12 U.S.C. §1818(u), or any successor provision; (b) if such person has been convicted of a crime involving dishonesty or breach of trust which is punishable by imprisonment for a term exceeding one year under state or federal law; (c) if such person is currently charged in any information, indictment, or other complaint with the commission of or participation in such a crime; or (d) if such person, other than full time employees of the Company, did not maintain his principal residence within 15 miles of an office of the Company or any subsidiary thereof for a period of at least one year prior to the date of his purported election or appointment to the Board of Directors. In addition, no person may serve on the Board of Directors and at the same time be a director or officer of a co-operative bank, credit union, savings bank, savings and loan association, trust company, bank holding company or banking association (in each case whether chartered by a state, the federal government or any other jurisdiction), other than of a subsidiary of the Company, that engages in business activities or solicits customers, whether through a physical presence or electronically, in the same market area as the Company or any of its subsidiaries. Finally, no person shall be eligible for election or appointment to the Board of Directors if such person is the nominee or representative, as that term is defined in the regulations of the Board of Governors of the Federal Reserve System, 12 C.F.R §212.2(n), of a company the directors, partners, trustees or 10% stockholders of which would not be eligible for election or appointment to the Board of Directors under the foregoing restrictions. The Board of Directors shall have the power to construe and apply foregoing restrictions and to make all determinations necessary or desirable to implement such provisions, including but not limited to determinations as to whether a person is a nominee or representative of a person, a company or a group, whether a person or company is included in a group, and whether a person is the nominee or representative of a group acting in concert.

The Nominating Committee will take into account whether a candidate satisfies the criteria for

“independence” under the Nasdaq corporate governance listing standards, and if a nominee is sought for service on the audit committee, the financial and accounting expertise of a candidate.

Procedures for the Recommendation of Director Nominees by Stockholders. The Nominating Committee has adopted procedures for the recommendation of director nominees by stockholders. If a determination is made that an additional candidate is needed for the Board, the Nominating Committee will consider candidates submitted by our stockholders. Stockholders can submit qualified names of candidates for director by writing to our Corporate Secretary at 58 North Ayer Street, Harvard, Illinois 60033. The Corporate Secretary must receive a submission not less than 120 days prior to the anniversary date of our proxy materials for the preceding year’s annual meeting for a candidate to be considered by the Nominating Committee for next year’s annual meeting of stockholders. The submission must include the following information:

• a statement that the writer is a stockholder and is proposing a candidate for consideration by the

Nominating Committee; • the qualifications of the candidate and why the candidate is being proposed; • the name and address of the stockholder as they appear on our books, and number of shares of our

common stock that are owned beneficially by such stockholder (if the stockholder is not a holder of record, appropriate evidence of the stockholder’s ownership will be required);

• the name, address and contact information for the candidate, and the number of shares of our

common stock that are owned by the candidate (if the candidate is not a holder of record, appropriate evidence of the stockholder’s ownership will be required);

• a statement of the candidate’s business and educational experience;

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• such other information regarding the candidate as would be required to be included in the proxy statement pursuant to SEC Rule 14A;

• a statement detailing any relationship between the candidate and us; • a statement detailing any relationship between the candidate and any of our customers, suppliers

or competitors; • detailed information about any relationship or understanding between the proposing stockholder

and the candidate; and • a statement that the candidate is willing to be considered and willing to serve as a director if

nominated and elected.

Recommendations that are received and that meet the criteria outlined above are forwarded to the Chairman of the Nominating Committee for further review and consideration.

It is important to distinguish between the recommendations of nominees by stockholders pursuant to this

policy from a nomination (whether by proxy solicitation or in person at a meeting) by a stockholder. Stockholders have certain rights under applicable law with respect to nominations, and any such nominations must comply with the procedural and informational requirements described in this proxy statement under the heading “Stockholder Proposals and Nominations.”

Stockholder Communications with the Board. Any of our stockholders who wish to communicate with the Board or with any individual director may write to our Corporate Secretary, 58 North Ayer Street, Harvard, Illinois 60033, Attention: Board Administration. The letter should indicate that the author is a stockholder and if shares are not held of record, should include appropriate evidence of stock ownership. Depending on the subject matter, management will:

• forward the communication to the director or directors to whom it is addressed;

• attempt to handle the inquiry directly, for example where it is a request for information about us or a stock-related matter; or

• not forward the communication if it is primarily commercial in nature, relates to an improper or irrelevant topic, or is unduly hostile, threatening, illegal or otherwise inappropriate.

At each Board meeting, management will present a summary of all communications received since the last meeting that were not forwarded and make those communications available to the directors.

PROPOSAL III—RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS

Our independent registered public accountants for the year ended December 31, 2014 were BKD, LLP. The Audit Committee has engaged BKD, LLP to be our independent registered public accountants for the 2015 fiscal year, subject to the ratification of the engagement by our stockholders. At the Meeting, stockholders will consider and vote on the ratification of the engagement of BKD, LLP for the year ending December 31, 2015. A representative of BKD, LLP is expected to attend the Meeting to respond to appropriate questions and to make a statement if he so desires.

Stockholder ratification of the selection of BKD, LLP is not required by our bylaws or otherwise. However, the Board of Directors is submitting the selection of the independent registered public accountants to the stockholders for ratification as a matter of good corporate practice. If the stockholders fail to ratify the selection of BKD, LLP, the Audit Committee will reconsider whether or not to retain that firm. Even if the selection is ratified,

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the Audit Committee in its discretion may direct the appointment of a different independent accounting firm at any time during the year if it determines that such change is in our best interests of the Company and its stockholders.

Required Vote and Recommendation of the Board of Directors

In order to ratify the selection of BKD, LLP as independent auditors for the 2015 fiscal year, the proposal must receive the affirmative vote of at least a majority of the votes cast at the Meeting, either in person or by proxy, without regard to broker non-votes or proxies marked “ABSTAIN”.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF BKD, LLP AS INDEPENDENT AUDITORS.

PROPOSAL IV—ADJOURNMENT OF THE ANNUAL MEETING

In the event that there are not sufficient votes to constitute a quorum or approve the adoption of Proposal I at the time of the Meeting, the Purchase Agreement may not be approved unless the Meeting is adjourned to a later date or dates in order to permit further solicitation of proxies. In order to allow proxies that have been received by the Company at the time of the Meeting to be voted for an adjournment, if necessary, the Company has submitted the question of adjournment to its stockholders as a separate matter for their consideration. The Meeting may be postponed or adjourned for the purpose of soliciting additional proxies. If it is necessary to adjourn the Meeting, no notice of the adjourned Meeting is required to be given to stockholders (unless a new record date is fixed, or unless the Meeting is adjourned to a date that is later than 120 days following the record date of July 2, 2015), other than an announcement at the Meeting of the hour, date and place to which the Meeting is adjourned. Required Vote and Recommendation of the Board of Directors

Approval of the Proposal to adjourn the Meeting requires the approval of a majority of the votes cast, without regard to broker non-votes or proxies marked “ABSTAIN”. At this time, we have no reason to believe that an adjournment of the Meeting will be necessary.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR”

THE ADJOURNMENT OF THE ANNUAL MEETING IF NECESSARY TO SOLICIT ADDITIONAL PROXIES.

STOCKHOLDER PROPOSALS AND NOMINATIONS

In order to be considered at our 2016 Annual Meeting of Stockholders, but not included in proxy materials, our Bylaws provide that a stockholder proposal to take action at such meeting must be received at our executive office not more than 90 days and not less than 80 days prior to the date of such meeting; provided, that if less than 90 days’ notice of such meeting is given to stockholders, such stockholder proposal must be received at our executive office not later than the 10th day following the date on which notice of such meeting was mailed to stockholders or was otherwise disclosed in a press release reported by a nationally recognized news service or on our website.

The notice with respect to stockholder proposals that are not nominations for director may be given only by

a stockholder of the Company who is a stockholder of record on the date that the stockholder gives the notice, and must set forth (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting; (ii) the name and address of such stockholder as they appear on the Company’s books and of the beneficial owner, if any, on whose behalf the proposal is made; (iii) the class or series and number of shares of capital stock of the Company which are owned beneficially or of record by such stockholder and such beneficial owner; (iv) a description of all arrangements or understandings between such stockholder and any other person or persons (including their names) in connection with the proposal of such business by such stockholder and any material interest of such stockholder in such business; and (v) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting.

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A notice with respect to director nominations may be given only by a stockholder of the Company who is a

stockholder of record on the date that the stockholder gives the notice, and must include (a) as to each person whom the stockholder proposes to nominate for election as a director, (i) all information relating to such person that would indicate such person’s qualification, as set forth in Article II, Section 12 of the Company’s Bylaws, to serve on the Board of Directors of the Company; (ii) an affidavit that such person would not be disqualified under the provisions of Article II, Section 12 of our Bylaws; (iii) such information relating to such person that is required to be disclosed in connection with solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, and (iv) a written consent of each proposed nominee to be named as a nominee and to serve as a director if elected; and (b) as to the stockholder giving the notice: (i) the name and address of such stockholder as they appear on the Company’s books and of the beneficial owner, if any, on whose behalf the nomination is made; (ii) the class or series and number of shares of capital stock which are owned beneficially or of record by such stockholder and such beneficial owner; (iii) a description of all arrangements or understandings between such stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder; (iv) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice; and (v) any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Regulation 14A under the Securities Exchange Act of 1934.

The date on which the next annual meeting of stockholders of the Company is expected to be held is June

23, 2016. Accordingly, advance written notice of business or nominations to the Board of Directors to be brought before next year’s annual meeting of stockholders must be given to the Company no earlier than March 25, 2016 and no later than April 4, 2016. If notice is received before or after that time period, it will be considered untimely, and the Company will not be required to present the matter at the meeting.

OTHER MATTERS

The Board of Directors is not aware of any business to come before the Meeting other than the matters

described above in this proxy statement. However, if any matters should properly come before the Meeting, it is intended that holders of the proxies will act as directed by a majority of the Board of Directors, except for matters related to the conduct of the Meeting, as to which they shall act in accordance with their best judgment.

MISCELLANEOUS

We will bear the cost of solicitation of proxies. We will reimburse brokerage firms and other custodians,

nominees and fiduciaries for reasonable expenses incurred by them in sending proxy materials to the beneficial owners of our common stock. In addition to solicitations by mail, directors, officers, and our regular employees may solicit proxies personally or by telegraph or telephone without additional compensation.

A COPY OF OUR ANNUAL REPORT TO STOCKHOLDERS FOR THE YEAR ENDED DECEMBER

31, 2014 WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS OF THE VOTING RECORD DATE UPON WRITTEN REQUEST TO RICHARD J. LIPINSKY, SECRETARY, HARVARD ILLINOIS BANCORP, INC., 58 NORTH AYER STREET, HARVARD, ILLINOIS 60033.

BY ORDER OF THE BOARD OF DIRECTORS

Richard J. Lipinsky Executive Vice President and Corporate Secretary

Harvard, Illinois July 17, 2015

APPENDIX A

EXECUTION COPY

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PURCHASE AND ASSUMPTION AGREEMENT

AMONG

WONDER BANCORP, INC.,

STATE BANK,

HARVARD ILLINOIS BANCORP, INC.,

AND

HARVARD SAVINGS BANK

AS OF MAY 20, 2015

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TABLE OF CONTENTS

ARTICLE 1 DEFINITIONS ................................................................................................................... 8 

Section 1.1  Definitions ..................................................................................................... 8 Section 1.2  Principles of Construction ......................................................................... 14 

Article 2 Purchase and Assumption .............................................................................................. 15 

Section 2.1  Purchase and Sale of the Acquired Assets ............................................... 15 Section 2.2  Excluded Assets .......................................................................................... 17 Section 2.3  Assumed Liabilities .................................................................................... 17 Section 2.4  Excluded Liabilities ................................................................................... 18 Section 2.5  Closing ......................................................................................................... 18 Section 2.6  Consideration ............................................................................................. 19 Section 2.7  Parent and the Bank’s Deliveries at Closing ........................................... 21 Section 2.8  Buyer Bank’s Deliveries at the Closing .................................................... 22 Section 2.9  [Reserved] ................................................................................................... 23 Section 2.10  Absence of Control ..................................................................................... 23 Section 2.11  Purchase Price Allocation ......................................................................... 24 

Article 3 Representations and Warranties of Parent and the Bank ............................................... 24 

Section 3.1  Parent Organization .................................................................................. 24 Section 3.2  Bank Organization ..................................................................................... 24 Section 3.3  Authorization; Enforceability ................................................................... 25 Section 3.4  No Conflict .................................................................................................. 25 Section 3.5  [Reserved] ................................................................................................... 25 Section 3.6  Financial Statements and Reports ............................................................ 25 Section 3.7  Books and Records ..................................................................................... 26 Section 3.8  Title to Properties ...................................................................................... 26 Section 3.9  Leasehold Interests .................................................................................... 26 Section 3.10  Loans; Allowance for Loan and Lease Losses ......................................... 26 Section 3.11  Undisclosed Liabilities; Adverse Changes ............................................... 27 Section 3.12  Taxes............................................................................................................ 27 Section 3.13  Compliance with Legal Requirements ..................................................... 28 Section 3.14  Legal Proceedings; Orders ........................................................................ 28 Section 3.15  Absence of Certain Changes and Events ................................................. 29 Section 3.16  Properties, Contracts and Employee Benefit Plans ................................ 30 Section 3.17  Employee Benefit Matters ......................................................................... 32 Section 3.18  No Defaults ................................................................................................. 33 Section 3.19  Insurance .................................................................................................... 33 Section 3.20  Compliance with Environmental Laws .................................................... 33 Section 3.21  Employee Matters ...................................................................................... 34 Section 3.22  Regulatory Filings ...................................................................................... 36 Section 3.23  Indemnification Claims ............................................................................. 36 Section 3.24  Insider Interests ......................................................................................... 36 

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Section 3.25  Brokerage Commissions ............................................................................ 37 Section 3.26  Approval Delays; CRA .............................................................................. 37 Section 3.27  Code Sections 280G, 409A and 4999 ........................................................ 37 Section 3.28  UDAAP Investigations ............................................................................... 37 Section 3.29  BSA/AML ................................................................................................... 37 Section 3.30  Fair Lending ............................................................................................... 38 Section 3.31  Shareholder Actions................................................................................... 38 Section 3.32  Disclosure .................................................................................................... 38 

Article 4 Representations and Warranties of Buyer and Buyer Bank .......................................... 38 

Section 4.1  Buyer Organization ................................................................................... 38 Section 4.2  Buyer Bank Organization ......................................................................... 38 Section 4.3  Authorization; Enforceability ................................................................... 39 Section 4.4  No Conflict .................................................................................................. 39 Section 4.5  CRA Rating ................................................................................................ 39 Section 4.6  Financing .................................................................................................... 39 Section 4.7  Approval Delays ......................................................................................... 39 Section 4.8  Legal Proceedings; Orders ........................................................................ 39 Section 4.9  Independent Investigation ......................................................................... 39 Section 4.9  Disclosure .................................................................................................... 40 

Article 5 Covenants of Parent and the Bank ................................................................................. 40 

Section 5.1  Access and Investigation............................................................................ 40 Section 5.2  Operation of the Bank ............................................................................... 40 Section 5.3  Negative Covenant ..................................................................................... 42 Section 5.4  Subsequent Financial Statements ............................................................. 42 Section 5.5  Title to Real Estate ..................................................................................... 42 Section 5.6  Surveys ........................................................................................................ 42 Section 5.7  Title Policies and Surveys for Business Real Estate ............................... 43 Section 5.8  Environmental Investigation..................................................................... 43 Section 5.9  Preparation of Transfer Documents for Acquired Assets ...................... 44 Section 5.10  Notice of IRA Custodian Resignation ...................................................... 44 Section 5.11  Notice of Mortgage Servicing Transfer .................................................... 44 Section 5.12  Advice of Changes ...................................................................................... 44 Section 5.13  Other Offers ............................................................................................... 45 Section 5.14  Data and Item Processing Agreements .................................................... 45 Section 5.15  Accounting and Other Adjustments......................................................... 46 Section 5.16  Consents; Third Party Approvals ............................................................ 46 Section 5.17  Voting Agreements..................................................................................... 46 Section 5.18  Shareholders’ Meeting............................................................................... 46 Section 5.19  Information Provided to Buyer or Buyer Bank ...................................... 46 Section 5.20  Amendment or Termination of Employee Benefit Plans ....................... 47 Section 5.21  Insurance .................................................................................................... 47 Section 5.22  Tax Returns and Tax Filings .................................................................... 47 Section 5.23  Covenant Not to Compete; Not to Solicit ................................................. 47 

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Section 5.24  [Reserved] ................................................................................................... 48 Section 5.25  Cooperation with Financing...................................................................... 48 

Article 6 Buyer’s and Buyer Bank’s Covenants ........................................................................... 48 

Section 6.1  Advice of Changes ...................................................................................... 48 Section 6.2  Transfer of the Bank’s ABA Routing Number ....................................... 48 Section 6.3  ATM Cards ................................................................................................. 48 Section 6.4  Payment of Checks, Drafts and Orders ................................................... 48 Section 6.5  Financing .................................................................................................... 49 Section 6.6  Information Provided to Parent and the Bank ....................................... 49 

Article 7 Mutual Covenants; Additional Agreements .................................................................. 49 

Section 7.1  Regulatory Approvals ................................................................................ 49 Section 7.2  Necessary Approvals .................................................................................. 49 Section 7.3  Cooperation with Marketing the Morris Branch ................................... 49 Section 7.4  Taxes............................................................................................................ 50 Section 7.5  Employee Matters ...................................................................................... 51 Section 7.6  Reasonable Best Efforts; Cooperation ..................................................... 52 

Article 8 Transitional Matters ....................................................................................................... 53 

Section 8.1  Transitional Actions................................................................................... 53 Section 8.2  Transitional Actions by the Bank ............................................................. 53 

Article 9 Conditions Precedent to Obligations of Buyer and Buyer Bank ................................... 54 

Section 9.1  Accuracy of Representations and Warranties ........................................ 54 Section 9.2  Performance of Covenants ........................................................................ 54 Section 9.3  Documents Satisfactory ............................................................................. 54 Section 9.4  No Proceedings ........................................................................................... 55 Section 9.5  Absence of Material Adverse Effects ....................................................... 55 Section 9.6  Consents and Approvals ............................................................................ 55 Section 9.7  No Prohibition ............................................................................................ 55 Section 9.8  No Enforcement Actions............................................................................ 55 Section 9.9  [Reserved] ................................................................................................... 55 Section 9.10  Receipt of Financing .................................................................................. 55 

Article 10 Conditions Precedent to Obligations of Parent and the Bank ...................................... 55 

Section 10.1  Accuracy of Representations and Warranties ........................................ 55 Section 10.2  Performance of Covenants ........................................................................ 56 Section 10.3  Documents Satisfactory ............................................................................. 56 Section 10.4  No Proceedings ........................................................................................... 56 Section 10.5  Consents and Approvals ............................................................................ 56 Section 10.6  Receipt of Financing .................................................................................. 56 Section 10.7  Minimum Adjusted Tangible Book Value ............................................... 56 

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Section 10.8  No Prohibition ............................................................................................ 56 

Article 11 Survival; Indemnification ............................................................................................ 56 

Section 11.1  Survival of Representations ...................................................................... 56 Section 11.2  Indemnification .......................................................................................... 57 Section 11.3  Anti-Sandbagging ...................................................................................... 57 Section 11.4  Indemnification Procedure ....................................................................... 57 Section 11.5  Exclusive Remedy ...................................................................................... 58 Section 11.6  Insurance and Other Payments ................................................................ 58 Section 11.7  Mitigation.................................................................................................... 58 Section 11.8  Subrogation ................................................................................................ 58 

Article 12 Termination .................................................................................................................. 58 

Section 12.1  Reasons for Termination and Abandonment .......................................... 58 Section 12.2  Effect of Termination ................................................................................ 60 Section 12.3  Termination Payments by Parent and the Bank ..................................... 60 Section 12.4  Termination Payment by Buyer and Buyer Bank .................................. 61 Section 12.5  Liquidated Damages .................................................................................. 61 

Article 13 Miscellaneous .............................................................................................................. 61 

Section 13.1  Governing Law ........................................................................................... 61 Section 13.2  Jurisdiction and Service of Process .......................................................... 61 Section 13.3  Waiver of Jury Trial .................................................................................. 61 Section 13.4  Expenses ...................................................................................................... 62 Section 13.5  Assignments, Successors ............................................................................ 62 Section 13.6  Waiver ......................................................................................................... 62 Section 13.7  Modification................................................................................................ 63 Section 13.8  Publicity ...................................................................................................... 63 Section 13.9  Confidentiality ............................................................................................ 63 Section 13.10  Notices ......................................................................................................... 63 Section 13.11  Entire Agreement ....................................................................................... 64 Section 13.12  Severability ................................................................................................. 64 Section 13.13  Further Assurances .................................................................................... 65 Section 13.14  Counterparts; Facsimile/PDF Signatures ................................................ 65 Section 13.15  No Third Party Beneficiaries .................................................................... 65 Section 13.16  Survival ....................................................................................................... 65 

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ANNEXES

Appendix A Definition of “Pennant Asset”

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PURCHASE AND ASSUMPTION AGREEMENT

THIS PURCHASE AND ASSUMPTION AGREEMENT (this “Agreement”) is entered into as of May 20, 2015 (the “Agreement Date”), by and among WONDER BANCORP, INC., an Illinois corporation (“Buyer”), STATE BANK, an Illinois chartered non-member commercial bank with its main office located at 7526 Hancock Drive, Wonder Lake, county of McHenry, in the State of Illinois ( “Buyer Bank”), HARVARD ILLINOIS BANCORP, INC., a Maryland corporation (“Parent”), and HARVARD SAVINGS BANK, an Illinois chartered non-member savings bank with its main office located at 58 North Ayer Street, Harvard, county of McHenry, in the State of Illinois (the “Bank”).

RECITALS

A. Buyer is the sole shareholder of Buyer Bank, and Parent is the sole shareholder of the Bank.

B. Buyer Bank desires to purchase certain assets and assume all of the deposits and certain other liabilities of the Bank upon the terms and conditions set forth in this Agreement (the “Purchase and Assumption”).

C. Following the consummation of the Purchase and Assumption, the Bank intends to: (i) immediately cease conducting the business of banking; (ii) terminate its deposit insurance pursuant to Section 8(q) of the Federal Deposit Insurance Act and Section 307.2(e) of the FDIC Rules and Regulations (the “Deposit Insurance Termination”); and (iii) merge with and into Parent (or another non-bank Affiliate of the Bank), with Parent (or the non-bank Affiliate) as the surviving entity in the merger (such transaction, the “Affiliate Merger”).

D. The boards of directors of each of Buyer, Buyer Bank and the Bank have approved this Agreement and the Purchase and Assumption upon the terms and subject to the conditions of this Agreement and in accordance with the Illinois Banking Act (the “IBA”) and Parent has approved this Agreement and the Purchase and Assumption upon the terms and subject to the conditions of this Agreement and in accordance with the Maryland General Corporation Law (the “MGCL”), approved and declared the advisability of this Agreement and have determined that consummation of the Purchase and Assumption in accordance with the terms of this Agreement is in the best interests of their respective entities and shareholders.

E. The parties to this Agreement desire to make certain representations, warranties and agreements in connection with the Purchase and Assumption and the other transactions contemplated by this Agreement and also agree to certain prescribed conditions to the Purchase and Assumption and the other transactions.

AGREEMENTS

In consideration of the foregoing premises, which are incorporated herein by this reference, and the mutual promises, covenants and agreements hereinafter set forth, the parties hereto, intending to be legally bound, hereby agree as follows:

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Article 1 DEFINITIONS

Section 1.1 Definitions. In addition to those terms defined throughout this Agreement, the following terms, when used herein, shall have the following meanings.

(a) “Accounting Records” means the general ledger and subsidiary ledgers and supporting schedules which support the general ledger balances.

(b) “Adjusted Tangible Book Value” means the total common shareholders’ equity of the Bank as of the end of the most recent month immediately preceding the Closing Date (the “Calculation Date”), calculated in accordance with GAAP less the sum of (i) all intangible assets (including the Bank’s deferred tax asset) other than the Bank’s mortgage servicing rights; and (ii) the Book Value of any Excluded Asset, net of any associated valuation allowance, plus (iii) the Book Value of any Excluded Liability.

(c) “Affiliate” of, or a Person “Affiliated” with, a specific Person is a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the Person specified.

(d) “ALLL” means the Bank’s allowance for loan and lease losses.

(e) “ATBV Excess” shall have the meaning set forth in Section 2.6(d).

(f) “ATBV Shortfall” shall have the meaning set forth in Section 2.6(d).

(g) “Bank Stock” means the Bank’s common stock, par value $1.00 per share, 100 shares of which are validly issued and outstanding and fully paid and nonassessable.

(h) “Book Value” means, with respect to any asset and liability, the dollar amount thereof, calculated in accordance with GAAP, stated on the Bank’s Accounting Records. The Book Value of any item shall be determined as of the close of business on the fifth (5th) Business Day preceding the Closing Date.

(i) “Breach” means, with respect to a representation, warranty, covenant, obligation or other provision of this Agreement or any instrument delivered pursuant to this Agreement, any material inaccuracy in or breach of, or any material failure to perform or comply with, such representation, warranty, covenant, obligation or other provision.

(j) Reserved.

(k) “Business Day” means any day except Saturday, Sunday and any day on which the Bank is authorized or required by law or other government action to close.

(l) “Business Real Estate” means the real estate owned by the Bank upon which its three offices are operated, more particularly described by street address on Section 3.16(a) of the Schedules attached to this Agreement, including the building and other improvements thereto.

(m) “Buyer Financing” means financing provided to Buyer by one or more third parties (including without limitation through the incurrence by Buyer of debt or the sale of preferred stock or common stock) in such amounts as are sufficient to ensure that Buyer Bank has a tier 1 leverage ratio

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of not less than nine percent (9%) immediately following the consummation of the Contemplated Transactions (or such lesser amount as may be permitted by the applicable Regulatory Authorities pursuant to their approvals of the Contemplated Transactions), calculated in accordance with all applicable Legal Requirements and all conditions set forth in any approval issued by a Regulatory Authority regarding the Contemplated Transactions.

(n) “Call Reports” means the quarterly reports of income and condition filed by the Bank with Regulatory Authorities.

(o) “Closing Date” shall have the meaning set forth in Section 2.5.

(p) “Code” means the Internal Revenue Code of 1986, as amended.

(q) “Commitment” means the unfunded portion of a line of credit or other commitment reflected on the Bank’s records to make an extension of credit (or additional advances with respect to a Loan) that was legally binding on the Bank as of the Closing Date.

(r) “Contemplated Transactions” means all of the transactions contemplated by this Agreement, including: (i) the Purchase and Assumption; (ii) the performance by Buyer, Buyer Bank, Parent and the Bank of their respective covenants and obligations under this Agreement; and (iii) Buyer’s payment of the Purchase Price in consideration for the Purchase and Assumption.

(s) “Contract” means any agreement, contract, obligation, promise or understanding (whether written or oral and whether express or implied) that is legally binding: (i) under which a Person has or may acquire any rights; (ii) under which such Person has or may become subject to any obligation or liability; or (iii) by which such Person or any of the assets owned or used by such Person is or may become bound.

(t) “CRA” means the Community Reinvestment Act, as amended.

(u) “Credit Documents” means the agreements, instruments, certificates or other documents at any time evidencing or otherwise relating to, governing or executed in connection with or as security for, a Loan, including, without limitation, promissory notes, bonds, loan agreements, guarantees, deeds of trust, mortgages, assignments, security agreements, pledges, subordination or priority agreements, certificates, documents, legal opinions, participation agreements and intercreditor agreements, and all amendments, modifications, renewals, extensions, rearrangements and substitutions with respect to any of the foregoing.

(v) “Data Processing Termination Cap” means $142,741.00; provided, that such amount will be increased or decreased, as the case may be, to be an amount equal to the final termination fee associated with the data processing agreement set forth on Section 5.14 of the Schedules; provided, further, that the termination fee calculated by FiServ, Inc. as of the date that the conversion of the Bank’s data processing occurs, and based upon the assumptions set forth at Exhibit A, shall be final and binding on the parties hereto.

(w) “Data Processing Termination Expenses” means the costs of terminating the data processing contracts set forth on Section 5.14 of the Schedules.

(x) “Data Processing Termination Excess” means, if any, an amount equal to (i) the Data Processing Termination Cap, minus (ii) the Data Processing Termination Expenses; provided,

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that if the foregoing calculation results in a negative number, “Data Processing Termination Excess” shall mean $0.

(y) “Deposit Accounts” means all of the deposit accounts maintained by the Bank, including: (i) demand deposit; (ii) checking; (iii) club; (iv) statement savings; (v) money market and negotiable order of withdrawal accounts; (vi) IRAs for which the Bank has not received, on or before the Closing Date, the written advice from the account holder of such account holder’s objection or failure to accept Buyer Bank as successor custodian; (vii) certificates of deposit; and (viii) all other deposit accounts.

(z) “Deposit Liabilities” means all of the Bank’s obligations, duties and liabilities of every type and character relating to all Deposit Accounts on the Closing Date.

(aa) “DFPR” means the Illinois Department of Financial and Professional Regulation.

(bb) “Effective Time” shall mean 11:59 p.m. on the Closing Date.

(cc) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

(dd) “ERISA Affiliate” means each “person” (as defined in Section 3(9) of ERISA) that is treated as a single employer with the Bank for purposes of Section 414 of the Code.

(ee) “Estimated Adjusted Tangible Book Value” shall have the meaning set forth in Section 2.6(a).

(ff) “Excluded Assets” shall have the meaning set forth in Section 2.2.

(gg) “Family” means with respect to an individual: (i) the individual; (ii) the individual’s spouse and former spouses; (iii) any other natural person who is related to the individual or the individual’s spouse within the second degree; and (iv) any other natural person who resides with such individual.

(hh) “FDIC” means the Federal Deposit Insurance Corporation.

(ii) “Federal Reserve” means the Board of Governors of the Federal Reserve System (or any of the Federal Reserve banks acting under delegated authority).

(jj) “Final Adjusted Tangible Book Value” shall mean the Adjusted Tangible Book Value, as finally determined pursuant to Section 2.6(e) or Section 2.6(f), as applicable.

(kk) “Fixed Assets” means the furniture, fixtures, equipment and any other tangible assets owned or leased by the Bank and located at the offices of the Bank.

(ll) “GAAP” means generally accepted accounting principles in the United States.

(mm) “Holdback Amount” means $300,000.

(nn) “Holdback Payment Statement” shall have the meaning set forth in Section 2.6(d).

(oo) “Independent Accountants” shall have the meaning set forth in Section 2.6(f).

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(pp) “Knowledge” with respect to:

(i) an individual means that such person will be deemed to have “Knowledge” of a particular fact or other matter if: (A) such individual is actually aware of such fact or other matter; or (B) a prudent individual could be expected to discover or otherwise become aware of such fact or other matter after due inquiry; and

(ii) a Person (other than an individual) means that such Person will be deemed to have “Knowledge” of a particular fact or other matter if any individual who is serving as a director or executive officer of such Person (or in any similar capacity) has Knowledge of such fact or other matter.

(qq) “Legal Requirement” means any federal, state, local, municipal, foreign, international, multinational or other Order, constitution, law, ordinance, regulation, rule, policy statement, directive, statute or treaty.

(rr) “Liens” means any mortgage, lien, pledge, charge, assignment for security purposes, security interest or encumbrance of any kind with respect to an Acquired Asset.

(ss) “Loan” or “Loans” means, individually or collectively, all of the following owed to or held by the Bank as of the Closing Date:

(i) loans (including loans which have been charged off on the Bank’s Accounting Records in whole or in part as of the Closing Date), participation agreements, interests in participations, overdrafts of customers, revolving commercial lines of credit, home equity lines of credit, Commitments, U.S. and/or state-guaranteed student loans and lease financing contracts;

(ii) all Liens, rights (including rights of set-off), remedies, powers, privileges, demands, claims, priorities, equities and benefits owned or held by, or accruing or to accrue to or for the benefit of, the holder of the obligations or instruments referred to in clause (i) above;

(iii) all amendments, modifications, renewals, extensions, refinancings, guaranties and refundings of or for any of the foregoing.

(tt) “Material Adverse Effect” with respect to a Person (other than an individual) means a material adverse effect (whether or not required to be accrued or disclosed under Accounting Standards Codification 450 (formerly known as Statement of Financial Accounting Standards No. 5)): (i) on the financial condition, properties, assets, liabilities, businesses or results of operations of such Person; or (ii) on the ability of such Person to perform its obligations under this Agreement on a timely basis; provided, however, that a Material Adverse Effect with respect to any Person that is a party hereto shall not include: (A) a change with respect to, or effect on, that Person and its subsidiaries resulting from a change in law, rule, regulation, GAAP or regulatory accounting principles, as such would apply to the financial statements of such Person; (B) a change with respect to, or effect on, that Person or any of its subsidiaries resulting from any other matter affecting depository institutions generally (including financial institutions and their holding companies), including changes in general economic conditions and changes in prevailing interest and deposit rates; or (C) actions or omissions of that Person as required hereunder and actions or omissions of such Person with the prior written consent of the other parties hereto. For the avoidance of doubt, any prohibition on or loss of the Bank’s ability to provide servicing, including mortgage servicing, for any Loan shall constitute a Material Adverse Effect with respect to the Bank.

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(uu) “Material Interest” means the direct or indirect beneficial ownership (as currently defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of voting securities or other voting interests representing at least ten percent (10%) of the outstanding voting power of a Person or equity securities or other equity interests representing at least ten percent (10%) of the outstanding equity securities or equity interests in a Person.

(vv) “OREO” means real estate owned by the Bank and designated as “other real estate owned.”

(ww) “Order” means any award, decision, injunction, judgment, order, ruling, extraordinary supervisory letter, policy statement, memorandum of understanding, resolution, agreement, directive, subpoena or verdict entered, issued, made, rendered or required by any court, administrative or other governmental agency, including any Regulatory Authority, or by any arbitrator.

(xx) “Ordinary Course of Business” shall include any action taken by a Person only if such action:

(i) is consistent with the past practices of such Person and is taken in the ordinary course of the normal day-to-day operations of such Person;

(ii) is not required to be authorized by the board of directors of such Person (or by any Person or group of Persons exercising similar authority), other than loan approvals for customers of a financial institution; and

(iii) is similar in nature and magnitude to actions customarily taken, without any authorization by the board of directors (or by any Person or group of Persons exercising similar authority), other than loan approvals for customers of a financial institution, in the ordinary course of the normal day-to-day operations of other Persons that are in the same line of business as such Person.

(yy) “Pennant Asset” shall have the meaning set forth on Annex A.

(zz) “Person” means any individual, sole proprietorship, corporation (including any non-profit corporation), general or limited partnership, limited liability company, joint venture, estate, trust, institution, public benefit corporation, association, unincorporated organization, organization, labor union or other entity or government (whether federal, state, county, city, municipal, local, foreign, or otherwise, including any instrumentality, division, agency, body or department thereof) or any Regulatory Authority.

(aaa) “Proceeding” means any action, arbitration, audit, hearing, investigation, litigation or suit (whether civil, criminal, administrative, investigative or informal) commenced, brought, conducted or heard by or before, or otherwise involving, any judicial or governmental authority, including a Regulatory Authority, or arbitrator.

(bbb) “Proxy Statement” means the proxy statement to be used by Parent in connection with the solicitation by its board of directors of proxies for use at the meeting of the Shareholders to be convened for the purpose of voting on this Agreement and the Purchase and Assumption, all pursuant to Section 5.18.

(ccc) “Purchase Price” means an amount in immediately available funds equal to the sum of (i) the Final Adjusted Tangible Book Value plus (ii) $3,000,000.

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(ddd) “Reasonable Best Efforts” means the efforts that a prudent Person desirous of achieving a result would use in similar circumstances to ensure that such result is achieved as expeditiously as possible; provided, however, that an obligation to use Reasonable Best Efforts under this Agreement does not require the Person subject to that obligation to: (i) take actions that would result in a material adverse change in the benefits to such Person of this Agreement and the Contemplated Transactions; or (ii) incur any substantial cost not otherwise required.

(eee) “Regulatory Authority” means any federal, state or local governmental body, agency, court or authority that, under applicable Legal Requirements: (i) has supervisory, judicial, administrative, police, enforcement, taxing or other power or authority over Buyer, Buyer Bank, Parent or the Bank; (ii) is required to approve, or give its consent to, the Contemplated Transactions; or (iii) with which a filing must be made in connection therewith, including the Federal Reserve, the DFPR and the FDIC.

(fff) “Remediation Cost” shall have the meaning set forth in Section 5.8(b).

(ggg) “Representative” means with respect to a particular Person, any director, officer, manager, employee, agent, consultant, advisor or other representative of such Person, including legal counsel, accountants and financial advisors.

(hhh) “Safe Deposit Boxes” means the safe deposit boxes of the Bank, including the removable safe deposit boxes and safe deposit stacks in the Bank’s vault(s), all rights and benefits under the Safe Deposit Box Contracts and all keys and combinations thereto.

(iii) “Safe Deposit Box Contracts” means the customer rental agreements associated with the Safe Deposit Boxes.

(jjj) “Shared Expenses” means the expenses incurred by the parties in fulfillment of their obligations pursuant to the last sentence of Section 2.7, Section 5.5, Section 5.10, and Section 5.20; provided, that the costs associated with any termination of the DB Plan pursuant to proviso (ii) of Section 5.20 shall not constitute “Shared Expenses”).

(kkk) “Shareholders” mean the holders of record of Parent’s issued and outstanding capital stock.

(lll) “Tax” means (a) any tax (including but not limited to alternative or add-on minimum business, escheat, goods recording, net receipts, profits, productions, ad valorem, documentary registration, lease, service use, environmental, property (real or personal), any income, gross receipts, capital gains, value-added, sales use, property, gift, estate, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, franchise, withholding, social security, unemployment, disability, transfer, estimated or any other tax), levy, assessment, tariff, duty (including any customs duty), deficiency or other fee, and any related charge or amount (including any fine, penalty, interest or addition to tax), imposed, assessed or collected by or under the authority of any Regulatory Authority or payable pursuant to any tax-sharing agreement or any other Contract relating to the sharing or payment of any such tax, levy, assessment, tariff, duty, deficiency or fee together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties; and (b) any liability for the payment of the type described in clause (a) as a result of any contract, assumption, operation of law, or as a result of being a transferee or successor to any person or as a result of any express or implied obligations to indemnify any other person.

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(mmm) “Tax Return” means any return (including any informational return), report, declaration, claim for refund, statement, schedule, notice, form or other document or information filed with or submitted to, or required to be filed with or submitted to, any Regulatory Authority in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any Legal Requirement relating to any Tax and including amendment thereof.

(nnn) “Threatened” means a claim, Proceeding, dispute, action or other matter for which any written or, to the Knowledge of the subject Person, oral demand, statement or written notice has been made or any notice has been given (orally or in writing).

(ooo) “Transactional Expenses” means all transaction costs and expenses of the Bank incurred or accrued (or required to be accrued in accordance with GAAP) in connection with the Contemplated Transactions, including: (i) the aggregate fees and expenses of attorneys, accountants, consultants, brokers, finders, financial advisors and other professional advisors paid or accrued by the Bank in connection with this Agreement and the Contemplated Transactions; (ii) all costs and expenses associated with the preparation, completion and filing of all necessary Tax Returns as a result of the Contemplated Transactions, including all necessary Tax reporting forms required to be sent to Shareholders; (iii) the Data Processing Termination Expenses, provided, that the Data Processing Termination Expenses included in “Transactional Expenses” pursuant to this clause (iii) shall not exceed the Data Processing Termination Cap; (iv) any payments required to be made, or other benefits provided, at the Closing Date, under any change-in-control or other employment-related agreements as a result of the Contemplated Transactions (other than an amount equal to 20% of the payments to be made from the Retention Pool pursuant to Section 7.5(h), which shall be borne by Buyer and Buyer Bank); and (v) any other costs and expenses required by the terms of this Agreement to be paid by the Bank (including without limitation, and subject to Section 5.8(b), the Remediation Costs), other than costs and expenses that are Shared Expenses. For the avoidance of doubt, (w) transaction costs incurred in connection with the marketing or sale of the Morris Branch shall not constitute Transactional Expenses, (x) costs associated with the termination of data or item processing agreements in excess of the Data Processing Cap shall not constitute Transactional Expenses, (y) costs and expenses required to be borne by Buyer or Buyer Bank pursuant to the terms of this Agreement shall not constitute Transactional Expenses, and (z) expenses not specifically included in “Shared Expenses” and not specifically excluded in this Section 1.1(ooo) shall constitute Transactional Expenses.

(ppp) “Willful Breach” means a knowing or intentional Breach, made with intent or knowledge, by a party of any representation, warranty, covenant, obligation or other provision of this Agreement.

Section 1.2 Principles of Construction.

(a) In this Agreement, unless otherwise stated or the context otherwise requires, the following uses apply: (i) actions permitted under this Agreement may be taken at any time and from time to time in the actor’s reasonable discretion; (ii) references to a statute shall refer to the statute and any successor statute, and to all regulations promulgated under or implementing the statute or successor, as in effect at the relevant time; (iii) in computing periods from a specified date to a later specified date, the words “from” and “commencing on” (and the like) mean “from and including,” and the words “to,” “until” and “ending on” (and the like) mean “to, and including”; (iv) references to a governmental or quasi-governmental agency, authority or instrumentality shall also refer to a regulatory body that succeeds to the functions of the agency, authority or instrumentality; (v) indications of time of day mean Chicago, Illinois, time; (vi) ”including” means “including, but not limited to”; (vii) all references to sections, schedules and exhibits are to sections, schedules and exhibits in or to this Agreement unless otherwise

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specified; (viii) all words used in this Agreement will be construed to be of such gender or number as the circumstances require; (ix) the captions and headings of articles, sections, schedules and exhibits appearing in or attached to this Agreement have been inserted solely for convenience of reference and shall not be considered a part of this Agreement nor shall any of them affect the meaning or interpretation of this Agreement or any of its provisions; and (x) any reference to a document or set of documents in this Agreement, and the rights and obligations of the parties under any such documents, shall mean such document or documents as amended from time to time, and any and all modifications, extensions, renewals, substitutions or replacements thereof.

(b) Unless otherwise specified herein, all references in this Agreement to schedules are to the disclosure schedules of Parent and the Bank delivered to Buyer and Buyer Bank before the Agreement Date (the “Schedules”). The disclosures in the Schedules, and those in any supplement thereto, shall relate to the representations and warranties in the Section of the Agreement to which they expressly relate and also to any other representation or warranty in this Agreement so long as it is reasonably clear from the context that the disclosure in such other Schedule is also applicable to the Section of this Agreement in question. If there is any inconsistency between the statements in the body of this Agreement and those in the Schedules (other than an exception expressly set forth as such in the Schedules with respect to a specifically identified representation or warranty), the statements in the body of this Agreement will control.

(c) All accounting terms not specifically defined herein shall be construed in accordance with GAAP.

(d) With regard to each and every term and condition of this Agreement and any and all agreements and instruments subject to the terms hereof, the parties hereto understand and agree that the same have or has been mutually negotiated, prepared and drafted, and that if at any time the parties hereto desire or are required to interpret or construe any such term or condition or any agreement or instrument subject hereto, no consideration shall be given to the issue of which party hereto actually prepared, drafted or requested any term or condition of this Agreement or any agreement or instrument subject hereto.

Article 2 Purchase and Assumption

Section 2.1 Purchase and Sale of the Acquired Assets. Pursuant to the terms and conditions, and exceptions (if any), set forth herein, at the Closing, each of Parent and the Bank hereby agrees to sell, convey, assign, transfer and deliver to Buyer Bank free and clear of all liens and encumbrances, except as disclosed in this Agreement or the Schedules, and Buyer Bank hereby agrees to purchase from Parent and the Bank, for the price hereinafter set forth, all of Parent’s and the Bank’s right, title and interest in and to all of the assets used in or relating to the business conducted by the Bank as of the Effective Time, other than the Excluded Assets (collectively, the “Acquired Assets”), including the following:

(a) Cash on Hand. All cash on hand at the Bank, including vault cash, petty cash, ATM cash, tellers’ cash and items in the process of collection.

(b) Loans. All of the Loans (except for any portion of the Pennant Asset carried by the Bank as a Loan and any associated valuation allowance), together with all associated Credit Documents (such purchased Loans, the “Acquired Loans”). Section 2.1(b) of the Schedules sets forth a true and correct list of the Acquired Loans as of the date of this Agreement, which shall be updated within three (3) Business Days of the Closing Date and delivered to Buyer Bank at the Closing.

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(c) Investment Securities. All of the Investment Securities. Section 2.1(c) of the Schedules sets forth a true and correct list of the Investment Securities as of the date of this Agreement, which shall be updated within three (3) Business Days of the Closing Date and delivered to Buyer Bank at the Closing.

(d) Real Estate. All of the Bank’s interest in the Bank Real Estate and the Business Real Estate.

(e) Fixed Assets. All of the Fixed Assets. Section 2.1(e) of the Schedules sets forth a true and correct list of the Fixed Assets (other than Fixed Assets that are fully depreciated) as of the date of this Agreement, which shall be updated within three (3) Business Days of the Closing Date and delivered to Buyer Bank at the Closing.

(f) Prepaid Expenses. Any prepaid expenses reflected on the Accounting Records of the Bank, but excluding any prepaid expenses relating to Excluded Assets. Section 2.1(f) of the Schedules sets forth a true and correct list of the prepaid expenses reflected on the Accounting Records of the Bank as of the date of this Agreement, which shall be updated within three (3) Business Days of the Closing Date and delivered to Buyer Bank at the Closing.

(g) Records. All records, documents, warranties, manuals and instructions related to the Acquired Assets and the Assumed Liabilities as may exist and are available to and maintained by Parent and the Bank (in whatever form or medium then maintained by Parent and the Bank), including those relating to the Deposit Accounts, as well as any and all documents and records related to the Acquired Loans, the Credit Documents, the Investment Securities, the Bank Real Estate, the Fixed Assets, the Acquired Bank Real Estate, the Assumed Contracts, and the Safe Deposit Contracts, in each case, regardless of where located, including, with respect to the Acquired Loans and the Deposit Accounts, copies of all past account statements and electronic images of customer signature cards, to the extent retained by Parent or the Bank and excluding record books of the Bank containing minutes of meetings of directors and shareholders and any other records that related exclusively to the Bank’s organization or capitalization (collectively, the “Records”).

(h) Safe Deposit Boxes. All of the Safe Deposit Boxes and the Safe Deposit Box Contracts.

(i) Assumed Contracts. All on-going agreements of the Bank for goods and services in the Ordinary Course of Business, excluding (i) the Bank’s data processing agreement and (ii) any Employment Agreement or Change in Control Agreement between Parent or the Bank and any employee (the “Assumed Contracts”). Section 2.1(i) of the Schedules lists all of the Assumed Contracts.

(j) ATMs. The Bank’s interest in any ATMs owned by the Bank or in any lease agreements for any ATMs, which shall constitute Assumed Contracts pursuant to this Agreement.

(k) Intellectual Property. All Intellectual Property of the Bank, medallion program stamps, signs, URLs, domain names (and associated email addresses), Internet websites, printed supplies, stationary and documents and other materials bearing any of the Bank’s Intellectual Property and advertising and marketing materials and similar property or rights owned by, relating to or referencing the Bank.

(l) Litigation. All rights to any proceeds from pending litigation pursued by the Bank or the assignment of any pending litigation to the Buyer Bank, as determined in Buyer’s Bank sole discretion, except for any such rights that are designated as Excluded Assets.

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(m) FHLB Advances. All of the Bank’s interest in and rights to any advances from the Federal Home Loan Bank of Chicago (the “FHLB”).

(n) Bank Owned Life Insurance. The Bank’s bank-owned life insurance (“BOLI”) portfolio.

(o) Telephone and Facsimile Numbers. The telephone numbers and facsimile numbers used by the Bank, if such numbers may be transferred.

(p) Defined Benefits Plans. All of the Bank’s rights under the Pentegra Defined Benefit Plan for Financial Institutions (the “DB Plan”), unless the DB Plan is terminated pursuant to Section 5.20.

Section 2.2 Excluded Assets. Notwithstanding Section 2.1, the Acquired Assets shall not include the following assets of the Bank (such assets, the “Excluded Assets”):

(a) Pennant Asset. The Pennant Asset and any interest, right, action, claim or judgment relating to the Pennant Asset or against any Person through which the Pennant Asset was purchased by the Bank or any other Person involved in the Pennant Asset.

(b) Deferred Tax Assets. The Bank’s deferred tax asset.

(c) Tax Records. All tax returns, books and records (including tax identification numbers) relating to tax matters (including copies of the tax returns of the Bank).

(d) Personnel Records. All Records related to personnel of the Bank that the Bank is required pursuant to any Legal Requirement to retain in its possession.

(e) Excluded Insurance Policies and Premiums. All (i) insurance of the Bank, including the Bank’s general liability, directors’ and officers’ liability, cyber liability, fidelity bond, casualty, health, life (other than the BOLI), disability, workers’ compensation and welfare policies; and (ii) rights to any insurance refunds relating to portions of any premiums paid by the Bank or Parent on or prior to the Closing that cover periods following the Closing Date.

(f) Tax Refunds. All rights to tax refunds or other charges imposed by Regulatory Authorities for periods or portions of periods ending on or prior to the Closing Date.

For the avoidance of doubt, the Excluded Assets are not included in the Acquired Assets and shall not be sold or transferred to Buyer at the Closing and will be retained by the Bank.

Section 2.3 Assumed Liabilities. Subject to the terms and conditions of this Agreement, on and as of the Effective Time, Buyer Bank shall assume, be liable for and agree to timely pay, perform and discharge only the following liabilities or obligations of the Bank (collectively, the “Assumed Liabilities”), and no other liabilities or obligations:

(a) Deposit Liabilities. Buyer Bank shall assume all of the Bank’s obligations, duties and liabilities relating to the Deposit Liabilities. The “obligations, duties and liabilities” referred to in the immediately preceding sentence include the obligation to pay and otherwise process all Deposit Accounts in accordance with applicable Legal Requirements and their respective contractual terms and the duty to supply all applicable reporting forms for periods following the Closing Date, including IRS Forms 1098 and 1099 and other informational tax reports and reports relating to the Deposit Accounts to

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be filed and provided after the Closing Date and relating to interest paid after the Closing Date. With regard to each IRA included within the Deposit Accounts, Buyer Bank shall also assume the appropriate plan pertaining thereto and the trustee or custodial arrangement in connection therewith. For purposes of this Agreement, the Deposit Liabilities transferred at the Closing shall include, and Buyer Bank shall assume liability for, any interest or earnings accrued but not credited on or to the Deposit Liabilities as of the Effective Time and due after the Closing Date.

(b) FHLB. Buyer Bank shall assume all of the Bank’s obligations to the FHLB as required to ensure that Buyer Bank may continue to receive advances from the FHLB on the same terms and conditions as the Bank.

(c) Liabilities Associated With Acquired Assets. All liabilities related to the Acquired Assets arising after the Closing Date. All liabilities related to the conduct of the Bank’s business by Buyer Bank after the Closing Date.

(d) Tax Liabilities. All liabilities for Taxes arising out of or related to the Acquired Assets or the operation of the Bank’s business by Buyer Bank, in each case for any tax period following the Closing Date.

(e) Employee Related Liabilities. All actual or potential obligations related to the employment or benefits arising on or after the Closing Date that relate to any employee of the Bank that becomes a Retained Employee (as defined herein), including liabilities related to the DB Plan.

(f) Other Liabilities. Buyer Bank shall assume all of the Bank’s or Parent’s, as the case may be, obligations arising under the Credit Documents, the Commitments, the Deposit Accounts, the Assumed Contracts and the Safe Deposit Box Contracts, but only to the extent that such obligations are required to be performed after the Closing Date.

Section 2.4 Excluded Liabilities. Other than the Assumed Liabilities, or as otherwise provided in this Agreement, Parent and the Bank shall continue to be responsible on and after the Closing Date for all known and unknown liabilities and obligations associated with its operations on or prior to the Closing (collectively, the “Excluded Liabilities”), including:

(a) Tax Liabilities. Any federal or state income tax liability of Parent or the Bank;

(b) Employee Related Liabilities. Any liabilities relating to Parent’s or the Bank’s employment of its employees or former employees, including pursuant to Employment Agreements or Change in Control Agreements that are not Assumed Contracts;

(c) Liabilities Related to the Pennant Asset. Any liabilities or obligations of the Bank related to the Pennant Asset; and

(d) Indemnification Claims. Any indemnification claims brought by a director or officer of the Bank.

For the avoidance of doubt, Buyer Bank shall not assume and shall not be responsible to pay, perform or discharge any liabilities or obligations of Parent or the Bank other than the Assumed Liabilities.

Section 2.5 Closing. Provided that this Agreement shall not have been terminated in accordance with its express terms, the closing of the Purchase and Assumption (the “Closing”) shall

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occur on a date that is mutually agreed by the parties; provided, however, that if the parties fail to agree, the Closing shall occur on the date that is ten (10) Business Days after the last to occur of: (i) the receipt of the last necessary regulatory approval for the Purchase and Assumption and the expiration of the last of any required waiting period with respect to the necessary regulatory approvals; and (ii) the satisfaction or waiver in writing of all of the conditions set forth set forth in Article 9 and Article 10 (other than those conditions that by their nature are to be satisfied or waived at the Closing); provided, further, however, that if based upon the foregoing, the Closing would occur prior to the tenth (10th) Business Day of any month, then such Closing shall be delayed until, and shall occur on, such tenth (10th) Business Day (the “Closing Date”). The Closing shall occur through the mail, electronically, or at a time and place that is mutually acceptable to Buyer, Buyer Bank, Parent and the Bank, or if they fail to agree, at 10:00 a.m. on the Closing Date at the offices of Barack Ferrazzano Kirschbaum & Nagelberg LLP, counsel to Buyer and Buyer Bank, located at 200 West Madison Street, Suite 3900, Chicago, Illinois. Subject to the provisions of Article 11, failure to consummate the Contemplated Transactions on the date and time and at the place determined pursuant to this Section 2.5 will not result in the termination of this Agreement and will not relieve any party of any obligation under this Agreement. At the Closing Date, the Bank agrees to sell the Acquired Assets, and Buyer Bank agrees to purchase the Acquired Assets, in exchange for Buyer Bank’s: (i) assumption of the Assumed Liabilities; and (ii) payment of the Purchase Price.

Section 2.6 Consideration.

(a) Not later than five (5) Business Days prior to the Closing, the Bank shall deliver to Buyer and Buyer Bank a statement setting forth the calculation of the Adjusted Tangible Book Value as of the Calculation Date, together with supporting documentation (the “Estimated Adjusted Tangible Book Value”).

(b) At the Closing, Buyer and Buyer Bank shall pay to the Bank an amount in immediately available funds equal to: (i) the Estimated Adjusted Tangible Book Value, plus (ii) $3.0 million, minus (iii) the Holdback Amount.

(c) Within ninety (90) days after the last day of the calendar month in which the Closing Date occurs,

(i) Buyer and Buyer Bank shall deliver to the Bank a statement setting forth the total expenses paid or accrued by Buyer and Buyer Bank that are Shared Expenses, and

(ii) the Bank shall deliver to Buyer and Buyer Bank a statement setting forth (A) the calculation of the Final Adjusted Tangible Book Value, as of the Calculation Date, (B) (B) the total expenses paid or accrued by the Bank that are Shared Expenses, and (C) the total expenses paid or accrued by the Bank that are Transactional Expenses (including a separate calculation of the Data Processing Termination Expenses);

provided, that the ninety (90) day period set forth in this Section 2.6(c) shall be reduced to the extent required by the terms or conditions of any regulatory approval required pursuant to this Agreement.

(d) Within fourteen (14) days of delivery of the statements required pursuant to Section 2.6(c), Buyer and Buyer Bank shall deliver to the Bank a statement setting forth the calculation of (i) the difference between (A) the Estimated Adjusted Tangible Book Value, minus (B) the Final Adjusted Tangible Book Value (if a positive number, the “ATBV Excess”, and if a negative number, the positive integer thereof the “ATBV Shortfall”), and (ii) the portion of the Holdback Amount payable to the Bank (the “Holdback Payment Statement”).

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(e) Within fourteen (14) days of receipt of the Holdback Payment Statement, the Bank will notify Buyer and Buyer Bank of any dispute with respect to the Holdback Payment Statement, specifying the items or amounts as to which the Bank disagrees, the Bank’s calculation of such items and amounts and in reasonable detail Bank’s grounds for such disagreement. If the Bank does not notify Buyer and Buyer Bank of a dispute within such fourteen (14) day period, or if the Bank notifies Buyer and Buyer Bank that it agrees with the Holdback Payment Statement, the Holdback Payment Statement and the items and amounts set forth therein (including without limitation the Final Adjusted Tangible Book Value and the ATBV Excess or the ATBV Shortfall) as delivered to the Bank shall be final and binding and paid in accordance with Section 2.6(g).

(f) If the Bank timely notifies Buyer and Buyer Bank of a dispute under Section 2.6(e), and the dispute is not resolved within fourteen (14) days after the date of such notice, then (i) the dispute shall be referred to an accounting firm selected by mutual agreement of Parent and the Bank, on the one hand, and Buyer and Buyer Bank, on the other hand (the “Independent Accountants”), (ii) the parties shall use their reasonable efforts to cause the Independent Accountants to issue within thirty (30) days after their selection a written report stating their resolution of the dispute, and, in issuing such report the Independent Accountants shall be instructed to consider only those items or amounts in the Holdback Payment Statement as to which the Bank has disagreed and in resolving any disputed item, the Independent Accountants may not assign a value to such item greater than the greatest value or lower than the lowest value for such item claimed by either party as presented to the Independent Accountants, and (iii) upon the Independent Accountants issuing their written report, the Holdback Payment Statement (as adjusted in accordance with this written report) and the items and amounts set forth therein (including without limitation the Final Adjusted Tangible Book Value and the ATBV Excess or the ATBV Shortfall) shall be final and binding on the parties hereto, and no party hereto shall bring any action or proceeding in any forum seeking to invalidate, challenge, modify or prevent enforcement of such determination. The parties will bear equally all expenses of the Independent Accountants, and, for the avoidance of doubt, the costs of any accounting firm other than the Independent Accountants shall be borne by the party retaining such accounting firm.

(g) Subject to resolution of any dispute concerning the Holdback Payment Statement in accordance with Section 2.6(e) and Section 2.6(f), and if applicable the written report of the Independent Accountants delivered pursuant to Section 2.6(f)(ii),

(i) in the event that Parent and the Bank shall have paid or accrued more than 50% of the aggregate Shared Expenses paid or accrued by all parties, then Buyer and Buyer Bank shall pay to the Bank an amount equal to (A) the amount by which the Shared Expenses paid or accrued by Parent and Bank exceeds 50% of the aggregate Shared Expenses paid or accrued by all parties, plus (B) the Holdback Amount, minus (C) the Transactional Expenses, minus (D) 50% of the Data Processing Termination Excess, plus or minus, as the case may be, (E) the ATBV Excess or the ATBV Shortfall; or

(ii) in the event that Buyer and Buyer Bank shall have paid or accrued more than 50% of the aggregate Shared Expenses paid or accrued by all parties, then Buyer and Buyer Bank shall pay to the Bank an amount equal to (A) the Holdback Amount, minus (B) the amount by which the Shared Expenses paid or accrued by Buyer and Buyer Bank exceeds 50% of the aggregate Shared Expenses paid or accrued by all parties, minus (C) the Transactional Expenses, minus (D) 50% of the Data Processing Termination Excess, plus or minus, as the case may be, (E) the ATBV Excess or the ATBV Shortfall; or

(iii) in the event that the calculation pursuant to Section 2.6(g)(i) or (ii) results in a negative amount the positive integer of which is greater than 50% of the Data

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Processing Termination Excess, then the Bank shall pay to Buyer Bank an amount equal to (A) the positive integer of such negative amount, minus (B) 50% of the Data Processing Termination Excess.

(h) All amounts payable pursuant to Section 2.6(g) shall be paid by the relevant party in immediately available funds within five (5) Business Days following the final determination thereof.

Section 2.7 Parent and the Bank’s Deliveries at Closing. At the Closing, Parent and the Bank shall deliver or cause to be delivered the following items to Buyer Bank:

(a) a good standing certificate for Parent issued by the Maryland Department of Assessments and Taxation dated not more than five (5) Business Days prior to the Closing Date;

(b) a good standing certificate for the Bank issued by the DFPR dated not more than five (5) Business Days prior to the Closing Date;

(c) copies of resolutions of Parent, as sole shareholder of the Bank, and the board of directors of the Bank authorizing and approving this Agreement and the Purchase and Assumption, certified as of the Closing Date by the Secretary of the Bank;

(d) copies of resolutions of the board of directors of Parent and the Parent Shareholders authorizing and approving this Agreement and the Purchase and Assumption, certified as of the Closing Date by the Secretary of Parent;

(e) copies of all regulatory approvals required to be obtained by Parent and the Bank for the Contemplated Transactions, including the Affiliate Merger;

(f) certificates executed by the President of Parent and the Bank, dated the Closing Date, stating that the conditions set forth in Section 9.1 and Section 9.2 have been satisfied;

(g) a certificate executed by the Presidents of Parent and the Bank stating that all Transactional Expenses have been paid or otherwise fully accrued and reflected in Adjusted Tangible Book Value;

(h) documents, including safekeeping receipts and any required documents from the relevant custodian, evidencing transfer or intent to transfer at Closing of all Investment Securities.

(i) a Bill of Sale for the Acquired Assets in the form of Exhibit B, signed by a duly authorized officer of the Bank;

(j) an Assignment and Assumption of Accounts Agreement in the form of Exhibit C, signed by a duly authorized officer of the Bank;

(k) an Assignment and Assumption of Loans Agreement in the form of Exhibit D, signed by a duly authorized officer of the Bank;

(l) an Assignment and Assumption of Assumed Contracts Agreement in the form of Exhibit E, signed by a duly authorized officer of the Bank;

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(m) an Assignment, Transfer and Appointment of Successor Custodian for Individual Retirement Accounts in the form of Exhibit F, signed by a duly authorized officer of the Bank;

(n) an Assignment and Assumption of Safe Deposit Boxes and Safe Deposit Box Contracts in the form of Exhibit G, signed by a duly authorized officer of the Bank;

(o) general warranty deeds conveying the Bank Real Estate to Buyer Bank;

(p) the Title Policies contemplated by Section 5.7(b) hereof;

(q) original promissory notes for each Acquired Loan, duly indorsed to Buyer Bank by an authorized officer of the Bank;

(r) an Assignment of Mortgage for each Acquired Loan that is secured by a mortgage on real estate, on an appropriate form required for filing by the applicable county recorder of deeds, signed by a duly authorized officer of the Bank;

(s) the Acquired Assets that are capable of physical delivery, including all Records and all keys, security codes, combinations and similar items required for entry to and use of any of the Business Real Estate;

(t) a Limited Power of Attorney dated the Closing Date in the form of Exhibit H, signed by a duly authorized officer of the Bank;

(u) an account statement as of the Closing Date with respect to each Acquired Loan and Deposit Account;

(v) fully executed copies of the required consents indicated on Section 3.4(c) of the Schedules.

(w) copies of resolutions of the board of directors of the Parent or the Bank, as the case may be, certified by an executive officer of the Parent or the Bank freezing all new participations in and benefit accrual under the DB Plan with respect to employees of the Parent and the Bank as of a date that is at least forty-five (45) days prior to the Closing Date, and a copy of any statutorily required notice delivered to employees with respect to such board actions; and

(x) such other documents as are reasonably required by Buyer to consummate the Purchase and Assumption and the assignments and assumptions contemplated by this Agreement in accordance with the terms and conditions of this Agreement.

All of the foregoing items shall be reasonably satisfactory in form and substance to Buyer Bank and its counsel.

The Bank shall execute and deliver, at the request of Buyer Bank, such further instruments of transfer and assignment, and shall take such other action as Buyer Bank may reasonably request to consummate the assignments and assumptions contemplated by this Agreement.

Section 2.8 Buyer Bank’s Deliveries at the Closing. At the Closing, Buyer Bank shall deliver or cause to be delivered the following items to the Bank:

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(a) evidence of the wire transfer to the Bank of the amount required pursuant to Section 2.6 pursuant to wire instructions delivered to Buyer Bank not less than three (3) Business Days prior to the Closing Date;

(b) a good standing certificate for Buyer issued by the Illinois Secretary of State dated not more than five (5) Business Days prior to the Closing Date;

(c) a good standing certificate for Buyer Bank issued by the DFPR dated not more than five (5) Business Days prior to the Closing Date;

(d) copies of resolutions of the board of directors of Buyer Bank authorizing and approving this Agreement and the Purchase and Assumption, certified as of the Closing Date by the Secretary of Buyer Bank;

(e) copies of all regulatory approvals required to be obtained by Buyer or Buyer Bank for the Purchase and Assumption;

(f) certificates executed by the President of Buyer and Buyer Bank, dated the Closing Date, stating that the conditions set forth in Section 10.1 and Section 10.2 have been satisfied;

(g) a Bill of Sale for the Acquired Assets in the form of Exhibit B, signed by a duly authorized officer of Buyer Bank;

(h) an Assignment and Assumption of Accounts Agreement in the form of Exhibit C, signed by a duly authorized officer of Buyer Bank;

(i) an Assignment and Assumption of Loans Agreement in the form of Exhibit D, signed by a duly authorized officer of Buyer Bank;

(j) an Assignment and Assumption of Assumed Contracts Agreement in the form of Exhibit E, signed by a duly authorized officer of Buyer Bank;

(k) an Assignment, Transfer and Appointment of Successor Custodian for Individual Retirement Accounts in the form of Exhibit F, signed by a duly authorized officer of Buyer Bank;

(l) an Assignment and Assumption of Safe Deposit Boxes and Safe Deposit Contracts in the form of Exhibit G, signed by a duly authorized officer of Buyer Bank;

(m) evidence that the Buyer Financing has been obtained; and

(n) such other documents as are reasonably required by Parent or the Bank to consummate the Purchase and Assumption in accordance with the terms and conditions of this Agreement.

All of such items shall be reasonably satisfactory in form and substance to the Bank and its counsel.

Section 2.9 [Reserved].

Section 2.10 Absence of Control. Subject to any specific provisions of this Agreement, it is the intent of the parties to this Agreement that neither Buyer or Buyer Bank, on the one hand, nor Parent or the Bank, on the other hand, by reason of this Agreement shall be deemed to control, directly or

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indirectly, the other party and shall not exercise, or be deemed to exercise, directly or indirectly, a controlling influence over the management or policies of such other party.

Section 2.11 Purchase Price Allocation. Buyer, Buyer Bank, Parent and the Bank agree that the Purchase Price (and all other capitalizable costs) shall be allocated among the Acquired Assets for Tax purposes consistent with Section 1060 of the Internal Revenue Code. As soon as practicable after the Closing Date, but no later than ninety (90) days following the Closing Date, Buyer and Buyer Bank shall deliver to Parent and the Bank a schedule (the “Allocation”) in accordance with the above allocation. Subject to agreement between Buyer and Buyer Bank on the one hand and Parent and the Bank on the other hand regarding the Allocation, Buyer and Buyer Bank shall prepare, and Buyer, Buyer Bank, Parent and the Bank agree to timely file with the Internal Revenue Service IRS Form 8594, and any other forms or statements required by the Code, Treasury Regulations or the Internal Revenue Service. To the extent consistent with applicable Legal Requirements, Buyer, Buyer Bank, Parent and the Bank shall not file any Tax Return or other documents or otherwise take any position with respect to Taxes which is inconsistent with such allocation of the Purchase Price by any Regulatory Authority. The parties shall promptly inform one another of any Tax audit, controversy, litigation or challenge by any Governmental Authority relating to the Allocation or IRS Form 8594 and agree to consult with and keep one another informed with respect to the state of, and any discussion proposal or submission with respect to, such Tax audit, controversy, litigation or challenge. The parties will report (including with respect to the filing of Form 8594 with the IRS) the sale and purchase for all Tax purposes in a manner consistent with the Allocation and will not, in connection with the filing of any Tax return or similar report, make any allocation of the consideration payable hereunder that is contrary thereto.

Article 3 Representations and Warranties of Parent and the Bank

Parent and the Bank hereby jointly and severally represent and warrant to Buyer and Buyer Bank that the following are true and correct as of the Agreement Date, and will be true and correct as of the Effective Time:

Section 3.1 Parent Organization. Parent: (a) is a corporation duly organized, validly existing and in good standing under the laws of the State of Maryland and is also in good standing in each other jurisdiction in which the nature of business conducted or the properties or assets owned or leased by it makes such qualification necessary; (b) is registered with the Federal Reserve as a unitary savings and loan holding company under the Home Owners’ Loan Act of 1933, as amended (the “HOLA”); and (c) has full power and authority, corporate and otherwise, to operate as a savings and loan holding company and to own, operate and lease its properties as presently owned, operated and leased, and to carry on its business as it is now being conducted. Parent has, and will have on the Closing Date, no direct or indirect subsidiaries other than the Bank. Parent has delivered to Buyer and Buyer Bank complete and correct copies of the current articles of incorporation and bylaws of Parent and all amendments thereto.

Section 3.2 Bank Organization. The Bank is a non-member savings bank duly organized, validly existing and in good standing under the laws of the State of Illinois. The Bank has full power and authority, corporate and otherwise, to own, operate and lease its properties as presently owned, operated and leased, and to carry on its business as it is now being conducted, and is duly qualified to do business and is in good standing in each jurisdiction in which the nature of the business conducted or the properties or assets owned or leased by it makes such qualification necessary. The Bank has delivered to Buyer and Buyer Bank complete and correct copies of the current charter and bylaws of the Bank and all amendments thereto. The Bank’s main office is located at 58 North Ayer Street, Harvard, county of

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McHenry, in the State of Illinois, and, in addition to its main office, has one branch office located in each of Harvard, Illinois, and Morris, Illinois. The Bank has no trust service offices.

Section 3.3 Authorization; Enforceability. Each of Parent and the Bank has the requisite corporate power and authority to enter into and perform its obligations under this Agreement. The execution, delivery and performance of this Agreement by Parent and the Bank, and the consummation by Parent and the Bank of its obligations under this Agreement, have been authorized by all necessary corporate action, subject to approval by the Shareholders, and this Agreement constitutes a legal, valid and binding obligation of each of Parent and the Bank enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights generally and subject to general principles of equity.

Section 3.4 No Conflict. Except as set forth on Section 3.4 of the Schedules, neither the execution nor delivery of this Agreement nor the consummation or performance of any of the Contemplated Transactions will, directly or indirectly (with or without notice or lapse of time): (a) contravene, conflict with or result in a violation of any provision of any governing document of Parent or the Bank as in effect on the Agreement Date, or any currently effective resolution adopted by the board of directors of Parent or the Bank; (b) contravene, conflict with or result in a violation of, or give any Regulatory Authority or other Person the valid and enforceable right to challenge any of the Contemplated Transactions or to exercise any remedy or obtain any relief under, any Legal Requirement or any Order to which Parent or the Bank, or any of their assets that are owned or used by them, may be subject, except for any contravention, conflict or violation that is permissible by virtue of obtaining the regulatory approvals necessitated by the Contemplated Transactions, including such approvals under the Federal Deposit Insurance Act, as amended (the “FDIA”); (c) contravene, conflict with or result in a violation or breach of any provision of, or give any Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify any material Contract to which the Bank is a party or by which any of its assets is bound; or (d) result in the creation of any lien, charge or encumbrance upon or with respect to any of the assets owned or used by the Bank; except, in the case of each of clauses (c) and (d), where any such contravention, conflict, violation, breach, lien, charge or encumbrance would not reasonably be expected to have a Material Adverse Effect on the Bank. Except for the regulatory approvals referred to in Section 7.1 and the requisite approval of the Shareholders, neither Parent nor the Bank is or will be required to give any notice to or obtain any consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the Contemplated Transactions.

Section 3.5 [Reserved].

Section 3.6 Financial Statements and Reports. Parent has delivered to Buyer and Buyer Bank true, correct and complete copies of the following financial statements:

(a) audited consolidated financial statements for Parent as of and for the year ended December 31, 2013 and December 31, 2014;

(b) the amended Call Report for the Bank as of and for the period ended December 31, 2014.

Taken together, the financial statements described in clauses (a) above (collectively, and including the notes thereto, the “Financial Statements”) are complete and correct in all material respects, have been prepared on a basis consistent with GAAP and as required by applicable Legal Requirements and fairly and accurately present the financial position, assets, liabilities and results of operations of Parent and the Bank as of the respective dates thereof, and for the periods referred to therein. The

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Financial Statements do not include any material assets or omit to state any material liabilities, absolute or contingent, or other facts, which inclusion or omission would render the Financial Statements misleading in any material respect as of the respective dates thereof and for the periods referred to therein.

Section 3.7 Books and Records. The books of account, minute books, stock record books and other records of the Bank are complete and correct in all material respects and have been maintained in accordance with the Bank’s business practices and all applicable Legal Requirements. The minute books of the Bank contain accurate and complete records in all material respects of all meetings held of, and corporate action taken by, Parent, as its sole shareholder, board of directors and committees of the board of directors. At the Closing, all of those books and records will be in the possession of the Bank.

Section 3.8 Title to Properties. The Bank has good and marketable title to all assets and properties, whether real or personal, tangible or intangible, that it purports to own, including all Bank Real Estate and all available preliminary reports of title and ALTA surveys to the Bank Real Estate are listed on Section 3.8 of the Schedules. Except as set forth on Section 3.8 of the Schedules, the ownership interests of the Bank in the Business Real Estate are not subject to any valid liens, mortgages, security interests, encumbrances or charges of any kind except: (a) as noted in the most recent Financial Statements; (b) statutory liens for Taxes not yet delinquent or being contested in good faith by appropriate Proceedings and for which appropriate reserves have been established and reflected on the Financial Statements; (c) pledges or liens required to be granted in connection with the acceptance of government deposits, granted in connection with repurchase or reverse repurchase agreements, or otherwise incurred in the Ordinary Course of Business; and (d) minor defects and irregularities in title and encumbrances that do not materially impair the use thereof for the purposes for which they are held (all of such exceptions in clauses (a) through (d) are collectively referred to as the “Permitted Exceptions”). Except where any failure would not reasonably be expected to have a Material Adverse Effect on the Bank, all buildings and structures owned by the Bank lie wholly within the boundaries of the real property owned or validly leased by it and do not encroach upon the property of, or otherwise conflict with the property rights of, any other Person.

Section 3.9 Leasehold Interests. The Bank is not a party to any lease, as lessee, with respect to any real property.

Section 3.10 Loans; Allowance for Loan and Lease Losses.

(a) Except as set forth on Section 3.10 of the Schedules, each Loan reflected as an asset on any of the Financial Statements or reports filed with the Regulatory Authorities is evidenced by documentation that is customary and legally sufficient in all material respects and constitutes, to the Knowledge of Parent or the Bank, the legal, valid and binding obligation of the obligor named therein, enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting the enforcement of creditors rights generally or equitable principles or doctrines.

(b) All Loans originated or purchased by the Bank were made or purchased in accordance with the policies of the board of directors of the Bank (including Loans originated as exceptions to such policies after approval in accordance with such policies) and in the Ordinary Course of Business of the Bank. Except as set forth on Section 3.10 of the Schedules, the Bank’s interest in all Loans is free and clear of any security interest, lien, encumbrance or other charge, and the Bank has complied in all material respects with all Legal Requirements relating to such Loans.

(c) Except as disclosed on Section 3.10 of the Schedules, the Bank is not a party to any Loan: (i) under the terms of which the obligor is more than ninety (90) days delinquent in payment of

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principal or interest or in default of any other material provision as of the dates shown thereon or for which the Bank has discontinued the accrual of interest; (ii) that has been classified as “substandard,” “doubtful,” or “loss,” or any comparable classifications by the Bank; (iii) that has been listed on any “watch list” or similar internal report of the Bank; (iv) that, to the Bank’s Knowledge, has been the subject of any notice from any obligor of adverse environmental conditions potentially affecting the value of any collateral for such Loan; or (v) with respect to which the Bank has Knowledge of potential violations of any Environmental Laws that may have occurred on the property serving as collateral for such Loan or by any obligor of such Loan.

(d) The Bank’s ALLL reflected in the Financial Statements (including footnotes thereto) was determined on the basis of the Bank’s continuing review and evaluation of the portfolio of Loans under the requirements of GAAP and Legal Requirements, was established in a manner consistent with the Bank’s internal policies, and, in the reasonable judgment of the Bank, was adequate in all material respects under the requirements of GAAP and all Legal Requirements to provide for possible or specific losses, net of recoveries relating to Loans previously charged-off, on outstanding Loans.

(e) To the Knowledge of Parent or the Bank, except for Loans pledged to the FHLB: (i) none of the Loans is subject to any material offset or claim of offset; and (ii) the aggregate loan balances in excess of the ALLL are, based on past loan loss experience, collectible in accordance with their terms (except as limited above) and all uncollectible loans have been charged off.

Section 3.11 Undisclosed Liabilities; Adverse Changes. Except as set forth on Section 3.11 of the Schedules, the Bank has no material liabilities or obligations of any nature (whether absolute, accrued, contingent or otherwise), except for liabilities or obligations reflected or reserved against in the Financial Statements and current liabilities incurred in the Ordinary Course of Business since the respective dates thereof. Except as set forth on Section 3.11 of the Schedules, since the date of the latest Financial Statement, there has not been any change in the business, operations, properties, assets or condition of the Bank, and, to the Knowledge of Parent or the Bank, no event has occurred or circumstance exists, that has had or would reasonably be expected to have a Material Adverse Effect on the Bank. Neither Parent nor the Bank has any indebtedness secured by the BOLI.

Section 3.12 Taxes. Except as set forth on Section 3.12 of the Schedules:

(a) Parent and the Bank have duly and timely filed all Tax Returns required to be filed by it on or before the Closing Date for all taxable or reporting periods ending on or before the Closing Date, and each such Tax Return is true, correct and complete in all material respects. Parent or the Bank has paid, or made adequate provision for the payment of, all Taxes (whether or not reflected in Tax Returns as filed or to be filed) due and payable by Parent or the Bank, or claimed to be due and payable by any Regulatory Authority, and is not delinquent in the payment of any Tax, except such Taxes as are being contested in good faith and as to which adequate reserves have been provided. The Bank has been included in the consolidated group of Parent for at least the past ten (10) taxable periods and is currently in such consolidated group. Parent and the Bank has withheld and paid each Tax required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor, creditor, customer, shareholder or other party, and complied with all information reporting and backup withholding provisions of applicable law.

(b) There is no claim or assessment pending or, to the Knowledge of Parent or the Bank, Threatened against Parent or the Bank for any Taxes that it owes. No audit, examination or investigation related to Taxes paid or payable by Parent or the Bank is presently being conducted or, to the Knowledge of Parent or the Bank, Threatened by any Regulatory Authority. Parent or the Bank is not the beneficiary of any extension of time or waivers of statutes of limitations within which to file any Tax

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Return and no such extensions or waivers of statutes of limitations have been requested with respect to Taxes of Parent or Bank. There are no liens for Taxes (other than Taxes not yet due and payable) upon any of the Bank’s assets.

(c) Parent and the Bank have delivered or made available to Buyer and Buyer Bank true, correct and complete copies of all Tax Returns filed with respect to the last three (3) fiscal years by Parent and the Bank and any Tax examination reports and statements of deficiencies assessed or agreed to for any such time period.

Section 3.13 Compliance with Legal Requirements.

(a) The Bank holds all licenses, certificates, permits, franchises and rights from all appropriate Regulatory Authorities necessary for the conduct of its business. Except as set forth on Section 3.13 of the Schedules, the Bank is, and at all times since December 31, 2011, has been, in compliance with each Legal Requirement that is or was applicable to it or to the conduct or operation of its business or the ownership or use of any of their assets, except where the failure to comply would not reasonably be expected to have a Material Adverse Effect on the Bank. No event has occurred or circumstance exists that (with or without notice or lapse of time): (a) may constitute or result in a violation by the Bank of, or a failure on the part of the Bank to comply with, any Legal Requirement; or (b) may give rise to any obligation on the part of the Bank to undertake, or to bear all or any portion of the cost of, any remedial action of any nature in connection with a failure to comply with any Legal Requirement; except, in either case, where the failure to comply or the violation would not have a Material Adverse Effect on the Bank. Except as set forth on Section 3.13 of the Schedules, the Bank has not received, at any time since December 31, 2013, any notice or other communication (whether oral or written) from any Regulatory Authority or any other Person, nor does the Bank have any Knowledge regarding: (x) any actual, alleged, possible or potential violation of, or failure to comply with, any Legal Requirement; or (y) any actual, alleged, possible or potential obligation on the part of the Bank to undertake, or to bear all or any portion of the cost of, any remedial action of any nature in connection with a failure to comply with any Legal Requirement, except where any such violation, failure or obligation would not have a Material Adverse Effect on the Bank.

Section 3.14 Legal Proceedings; Orders.

(a) Section 3.14 of the Schedules is a true and correct list of all Proceedings and Orders entered into, affecting or involving Parent or the Bank or any of their assets or businesses, or the Contemplated Transactions that have not been fully satisfied and terminated. No officer, director, agent or employee of the Bank is subject to any Order that prohibits such officer, director, agent or employee from engaging in or continuing any conduct, activity or practice relating to the business of Parent or the Bank as currently conducted.

(b) Except as set forth on Section 3.14 of the Schedules, neither Parent nor the Bank: (i) is subject to any cease and desist or other Order or enforcement action issued by; (ii) is a party to any written agreement, consent agreement or memorandum of understanding with; (iii) is a party to any commitment letter or similar undertaking to; (iv) is subject to any Order or directive by; (v) is subject to any supervisory letter from; (vi) has been ordered to pay any civil money penalty, which has not been paid to; and (vii) has adopted any policies, procedures or board resolutions at the request of, any Regulatory Authority that currently restricts in any material respect the conduct of its business, relates in any material manner to its capital adequacy, restricts its ability to pay dividends, or limits in any material manner its credit or risk management policies, its management or its business.

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(c) No Proceeding is pending or, to the Knowledge of Parent or the Bank, Threatened against Parent or the Bank that questions or might question the validity of this Agreement or any actions taken or to be taken by Parent or the Bank pursuant to this Agreement, or that seeks to enjoin or otherwise restrain Parent or the Bank from consummating the Contemplated Transactions.

Section 3.15 Absence of Certain Changes and Events. Except as otherwise set forth in this Agreement or on Section 3.15 of the Schedules, since December 31, 2013, the Bank has conducted its business only in the Ordinary Course of Business, and without limiting the foregoing with respect to each, since December 31, 2013, there has not been any:

(a) change in its authorized or issued capital stock; grant of any stock option or right to purchase shares of its capital stock; issuance of any security convertible into such capital stock or evidences of indebtedness (except in connection with customer deposits); grant of any registration rights; purchase, redemption, retirement or other acquisition by it of any shares of any such capital stock; or declaration or payment of any dividend or other distribution or payment in respect of shares of its capital stock, except as reflected on the Financial Statements;

(b) amendment to its articles of incorporation, charter or bylaws or adoption of any resolutions by its board of directors or Parent, as its sole shareholder, with respect to the same;

(c) payment or increase of any bonus, salary or other compensation to any of its directors, officers or employees, except for (i) payments under the Retention Pool pursuant to Section 7.5(h), and (ii) normal increases in the Ordinary Course of Business or in accordance with any then-existing Employee Benefit Plan (as defined in Section 3.16(m)), or entry into any employment, consulting, non-competition, change in control, severance or similar Contract with any Affiliate, director, officer or employee, except for the Contemplated Transactions and except for any employment, consulting or similar agreement or arrangement that is not terminable at will or upon thirty (30) days’ notice or less, without penalty or premium;

(d) adoption, amendment (except for any amendment necessary to comply with any Legal Requirement or this Agreement) or termination of, or increase in the payments to or benefits under, any Employee Benefit Plan;

(e) damage to or destruction or loss of any of its assets or property, whether or not covered by insurance and where the resulting diminution in value individually or in the aggregate is greater than Two Thousand Five Hundred Dollars ($2,500);

(f) entry into, termination or extension of, or receipt of notice of termination of any joint venture or similar agreement pursuant to any Contract or any similar transaction;

(g) except for this Agreement, entry into any new, or modification, amendment, renewal or extension (through action or inaction) of the terms of any existing, lease, Contract or license that has a term of more than one year or that involves the payment by the Bank of more than Ten Thousand Dollars ($10,000) in the aggregate;

(h) Loan or commitment to make any Loan other than in the Ordinary Course of Business;

(i) Loan or commitment to make, renew, extend the term or increase the amount of any Loan to any Person if such Loan or any other Loans to such Person or an Affiliate of such Person is

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on the “watch list” or similar internal report of the Bank or has been classified by the Bank or any Regulatory Authority as “substandard,” “doubtful,” “loss,” or “other loans specially mentioned.”

(j) incurrence by it of any obligation or liability (fixed or contingent) other than in the Ordinary Course of Business;

(k) sale (other than any sale in the Ordinary Course of Business), lease or other disposition of any of its assets or properties, or mortgage, pledge or imposition of any lien or other encumbrance upon any of its material assets or properties, except: (i) for Permitted Exceptions; or (ii) as otherwise incurred in the Ordinary Course of Business;

(l) cancellation or waiver by it of any claims or rights individually with a value in excess of Five Thousand Dollars ($5,000) or in the aggregate with a value in excess of Fifty Thousand Dollars ($50,000);

(m) any investment by it of a capital nature exceeding Ten Thousand Dollars ($10,000) or aggregate investments of a capital nature exceeding Twenty Thousand Dollars ($20,000);

(n) except for the Contemplated Transactions, merger or consolidation with or into any other Person, or acquisition of any stock, equity interest or business of any other Person;

(o) transaction for the borrowing or loaning of monies, or any increase in any outstanding indebtedness, other than in the Ordinary Course of Business;

(p) filing of any applications for additional branches, opening of any new office or branch, closing of any current office or branch, or relocation of operations from existing locations;

(q) discharge or satisfaction of any material lien or encumbrance on its assets or repayment of any material indebtedness for borrowed money, except for obligations incurred and repaid in the Ordinary Course of Business;

(r) entry into any Contract or agreement to buy, sell, exchange or otherwise deal in any assets or series of assets, including any investment securities, in a single transaction in excess of Ten Thousand Dollars ($10,000) in aggregate value (other than any such Contracts entered into in the Ordinary Course of Business);

(s) purchase or other acquisition of any investments, direct or indirect, in any derivative securities, financial futures or commodities or entry into any interest rate swap, floors and option agreements, or other similar interest rate management agreements;

(t) hiring of any employee with an annual salary in excess of Fifty Thousand Dollars ($50,000), except for employees at will who are hired to replace employees who have resigned or whose employment has otherwise been terminated; or

(u) agreement, whether oral or written, by it to do any of the foregoing.

Section 3.16 Properties, Contracts and Employee Benefit Plans. Except for Contracts evidencing Loans made by the Bank in the Ordinary Course of Business, Section 3.16 of the Schedules lists or describes the following with respect to the Bank:

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(a) all interests in real property owned by it, including OREO (the “Bank Real Estate”), and the principal buildings and structures located thereon, together with the address of such real estate, and each lease of real property to which it is a party, identifying the parties thereto, the annual rental payable, the expiration date thereof and a brief description of the property covered, and in each case of either owned or leased real property, the proper identification, if applicable, of each such property as a branch or main office or other office;

(b) all loan and credit agreements, conditional sales Contracts or other title retention agreements or security agreements relating to money borrowed by it, exclusive of deposit agreements with customers of the Bank entered into in the Ordinary Course of Business, agreements for the purchase of federal funds and repurchase agreements;

(c) each Contract that involves performance of services or delivery of goods or materials by it of an amount or value in excess of Twenty-Five Thousand Dollars ($25,000);

(d) each Contract that was not entered into in the Ordinary Course of Business and that involves expenditures or receipts of it in excess of Twenty-Five Thousand Dollars ($25,000);

(e) each Contract not referred to elsewhere in this Section 3.16 that: (i) relates to the future purchase of goods or services that materially exceeds the requirements of its business at current levels or for normal operating purposes; or (ii) has a Material Adverse Effect on the Bank;

(f) each lease, rental, license, installment and conditional sale agreement and other Contract affecting the ownership of, leasing of, title to or use of, any personal property, except personal property leases and installment and conditional sales agreements having aggregate payments of less than Ten Thousand Dollars ($10,000);

(g) each licensing agreement or other Contract with respect to patents, trademarks, copyrights, or other intellectual property (collectively, “Intellectual Property Assets”), including agreements with current or former employees, consultants or contractors regarding the appropriation or the nondisclosure of any of its Intellectual Property Assets;

(h) each collective bargaining agreement and other Contract to or with any labor union or other employee representative of a group of employees;

(i) each joint venture, partnership and other Contract (however named) involving a sharing of profits, losses, costs or liabilities by it with any other Person;

(j) each Contract containing covenants that in any way purport to restrict, in any material respect, the business activity of the Bank or limit, in any material respect, the ability of the Bank to engage in any line of business or to compete with any Person;

(k) each Contract providing for payments to or by any Person based on sales, purchases or profits, other than direct payments for goods;

(l) the name and annual salary of each director and executive officer of the Bank, and the profit sharing, bonus or other form of compensation (other than salary) paid or payable by the Bank to or for the benefit of each such Person in question for the year ended December 31, 2014, and for the current year, and any employment agreement, consulting agreement, non-competition, severance or change in control agreement or similar arrangement or plan with respect to each such Person;

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(m) each “employee benefit plan” (as defined in Section 3(3) of ERISA), compensation, employment, profit sharing, group insurance, hospitalization, stock option and other equity and equity-like, pension, retirement, bonus, severance, change in control, deferred compensation, stock bonus, stock purchase, employee stock ownership and other employee welfare and benefit agreement, plan or arrangement, and each related trust or other agreement with any custodian or any trustee for funds held thereunder, for which the Bank has or may have any liability, including by reason of having an ERISA Affiliate (collectively, “Employee Benefit Plans”);

(n) the name of each Person who is or would be entitled pursuant to any Contract or Employee Benefit Plan to receive any payment from the Bank as a result of the consummation of the Contemplated Transactions (including any payment that is or would be due as a result of any actual or constructive termination of a Person’s employment or position following such consummation) and the maximum amount of such payment;

(o) each Contract entered into other than in the Ordinary Course of Business that contains or provides for an express undertaking by the Bank to be responsible for consequential damages;

(p) each Contract for capital expenditures in excess of Fifteen Thousand Dollars ($15,000);

(q) each Contract to which Parent is a party that the Bank uses or benefits from in the Ordinary Course of Business;

(r) each warranty, guaranty or other similar undertaking with respect to contractual performance extended by the Bank other than in the Ordinary Course of Business; and

(s) each amendment, supplement and modification in respect of any of the foregoing.

Section 3.17 Employee Benefit Matters. The Bank has assigned to Parent, and Parent has assumed, all of the liabilities under the compensation plans (the “Assigned Plans”) set forth on Section 3.17 of the Schedules. The Bank does not have any continuing or additional liability relating to or arising from the Assigned Plans. The Bank does not have any deferred compensation plans other than the Assigned Plans.

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Section 3.18 No Defaults. Except as set forth on Section 3.18 of the Schedules, each Contract identified or required to be identified on Section 3.16 of the Schedules is in full force and effect and is valid and enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights generally and subject to general principles of equity. The Bank is and at all times since December 31, 2013, has been, in full compliance with all applicable terms and requirements of each Contract under which the Bank has or had any obligation or liability or by which the Bank or any asset owned or used by it is or was bound, except where the failure to be in full compliance would not reasonably be expected to have a Material Adverse Effect on the Bank. To the Knowledge of Parent or the Bank, each other Person that has or had any obligation or liability under any such Contract under which the Bank has or had any rights is, and at all times since December 31, 2013, has been, in full compliance with all applicable terms and requirements of such Contract, except where the failure to be in full compliance would not reasonably be expected to have a Material Adverse Effect on the Bank. To the Knowledge of Parent and the Bank, no event has occurred or circumstance exists that (with or without notice or lapse of time) may contravene, conflict with or result in a material violation or breach of, or give the Bank or other Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify, any Contract. Except as set forth on Section 3.18 of the Schedules and except in the Ordinary Course of Business with respect to any Loan, the Bank has not given to or received from any other Person, at any time since December 31, 2013, any notice or other communication (whether oral or written) regarding any actual, alleged, possible or potential violation or breach of, or default under, any Contract, that has not been terminated or satisfied prior to the Agreement Date. Other than in the Ordinary Course of Business in connection with workouts and restructured loans, there are no renegotiations of, attempts to renegotiate, or outstanding rights to renegotiate, any material amounts paid or payable to the Bank under current or completed Contracts with any Person and the Bank has not received from any such Person written demand for such renegotiation.

Section 3.19 Insurance. Section 3.19 of the Schedules lists the policies and material terms of insurance (including bankers’ blanket bond and insurance providing benefits for employees) owned or held by the Bank or entered into for the benefit of the Bank, on the Agreement Date. Except as set forth on Section 3.19 of the Schedules, each policy is in full force and effect (except for any expiring policy which is replaced by coverage at least as extensive). All premiums due on such policies have been paid in full.

Section 3.20 Compliance with Environmental Laws. There are no actions, suits, investigations, liabilities, inquiries, Proceedings or Orders involving the Bank or any of its assets that are pending or, to the Knowledge of Parent or the Bank, Threatened, as a result of any asserted failure of the Bank, or any predecessor thereof, to comply with any federal, state, county and municipal law, including any statute, regulation, rule, ordinance, Order, restriction and requirement, relating to underground storage tanks, petroleum products, air pollutants, mold, water pollutants or process waste water or otherwise relating to the environment or toxic or hazardous substances or to the manufacture, processing, distribution, use, recycling, generation, treatment, handling, storage, disposal or transport of any hazardous or toxic substances or petroleum products (including polychlorinated biphenyls, whether contained or uncontained, and asbestos-containing materials, whether friable or not), including, the Federal Solid Waste Disposal Act, the Hazardous and Solid Waste Amendments, the Federal Clean Air Act, the Federal Clean Water Act, the Occupational Health and Safety Act, the Federal Resource Conservation and Recovery Act, the Toxic Substances Control Act, the Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 and the Superfund Amendments and Reauthorization Act of 1986, all as amended, and regulations of the Environmental Protection Agency, the Nuclear Regulatory Agency and any state department of natural resources or state environmental protection agency now or at any time hereafter in effect (collectively, the “Environmental Laws”). No environmental clearances or other governmental approvals are required for the conduct of the business of

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the Bank or the consummation of the Contemplated Transactions. Except as set forth on Section 3.20 of the Schedules, to the Knowledge of Parent and the Bank, the Bank is not the owner of any interest in real estate on which any substances have been used, stored, deposited, treated, recycled or disposed of, which substances if known to be present on, at or under such property, would require clean-up, removal or some other remedial action under any Environmental Law. This Section 3.20 contains the sole and exclusive representations and warranties of Parent and the Bank relating to Environmental Laws.

Section 3.21 Employee Matters.

(a) With respect to the Assumed Contracts:

(i) Section 3.21 of the Schedules is a complete and accurate list of: (i) all documents that set forth the terms of each Employee Benefit Plan, including all plan documents, summary plan descriptions, and other summaries and descriptions furnished to participants and beneficiaries; (ii) the most recent IRS determination or opinion letter and any pending request for a determination or opinion letter with respect to any Employee Benefit Plan that is intended to be qualified under Section 401(a) of the Code; (iii) all personnel, payroll and employment manuals and policies; (iv) a written description of any Employee Benefit Plan that is not otherwise in writing; (v) all registration statements filed with respect to any Employee Benefit Plan; (vi) all insurance policies purchased by or to provide benefits under any Employee Benefit Plan; (vii) the Form 5500 filed in each of the most recent three (3) plan years with respect to each Employee Benefit Plan, including all schedules thereto and the opinions of independent accountants; and (viii) all notices that were given by the Bank or an ERISA Affiliate or any Employee Benefit Plan to the Internal Revenue Service (the “IRS”) or any participant or beneficiary, pursuant to statute, within the three (3) years preceding the Agreement Date, including notices that are expressly mentioned elsewhere in this Section 3.21.

(ii) Parent or the Bank, as the case may be, have made available to Buyer or Buyer Bank copies of all of the documents, correspondence and other information described in Section 3.21(a)(i) other than (i) documents prepared and maintained by Pentegra with respect to the DB Plan, (ii) registration statements previously filed with the SEC with respect to Employee Benefits Plans, and (iii) Forms 5500 filed in years prior to the most recent plan year.

(iii) There are no obligations owed under any Employee Benefit Plan that is not subject to the disclosure and reporting requirements of ERISA.

(iv) All Employee Benefit Plans comply in form and in operation in all material respects with all applicable requirements of the Code and ERISA and other applicable Legal Requirements, including the Consolidated Omnibus Budget Reconciliation Act of 1985, Americans with Disabilities Act of 1990, the Family and Medical Leave Act of 1993, the Health Insurance Portability and Accountability Act of 1996, and the American Jobs Creation Act of 2004, in each case as amended. All “employee pension benefit plans,” within the meaning of Section 3(2) of ERISA, maintained by the Bank and which are intended to meet the qualification requirements of Section 401(a) of the Code have met such requirements at all times and have been and continue to be tax exempt under Section 501(a) of the Code, and a favorable determination as to the qualification under the Code of each such plan and each amendment thereto has been made by the IRS. The Bank has not: (i) become subject to any disallowance of deductions under Sections 419 or 419A of the Code; (ii) incurred any liability for excise tax under Sections 4972, 4975, or 4976 of the Code or any liability or penalty under ERISA; or (iii) breached any of the duties or failed to perform any of the obligations imposed upon the fiduciaries or plan administrators under Title I of ERISA.

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(v) Except as set forth on Section 3.21 of the Schedules, the Bank would not have any liability or contingent liability (including the payment by the Bank of premiums for health care coverage for active employees or retirees) if any Employee Benefit Plan were terminated or if the Bank were to cease its participation therein. Except with respect to the DB Plan, neither the Bank nor any ERISA Affiliates or Persons acting on its behalf have made any written or oral promises or statements to employees or retirees who are now living which might reasonably have been construed by them as promising “lifetime” or other vested rights to benefits under any Employee Benefit Plan that cannot be unilaterally terminated or modified by the Bank or the applicable ERISA Affiliate at its discretion at any time without further obligation.

(vi) On a timely basis, the Bank and the ERISA Affiliates have made all contributions or payments to or under each Employee Benefit Plan as required pursuant to each such Employee Benefit Plan, any collective bargaining agreements or other provision for reserves to meet contributions and payments under such Employee Benefit Plans which have not been made because they are not yet due.

(vii) No Employee Benefit Plan has ever acquired or held any “employer security” or “employer real property” (each as defined in Section 407(d) of ERISA).

(viii) Neither the Bank nor any ERISA Affiliate has any liability under any “multiemployer plan” (as defined in Section 3(37) of ERISA).

(ix) Neither the Bank nor any ERISA Affiliate provides or is obligated to provide health or welfare benefits to any current or future retired or former employee other than any benefits required to be provided under any applicable Legal Requirements.

(x) There are no pending audits or investigations by any governmental agency involving the Employee Benefit Plans and no Threatened or pending claims (except for individual claims for benefits payable in the normal operation of the Employee Benefit Plans), suits or proceedings involving any Employee Benefit Plan, any fiduciary thereof or service provider thereto, nor is there any reasonable basis for any such claim, suit or proceeding.

(xi) Since December 31, 2013, there has been no amendment to, announcement by the Bank or any ERISA Affiliate relating to, or change in employee participation or coverage under, any Employee Benefit Plan which would increase materially the expense of maintaining such Employee Benefit Plan above the level of the expense incurred therefor for the most recent fiscal year, except for increases directly resulting from an increase in the number of Persons employed by the Bank or promotions of existing employees in the ordinary course of business consistent with past practice.

(xii) Each Employee Benefit Plan that is subject to Section 409A of the Code in whole or in part has been at all times administered to comply in all material respects with the requirements of Section 409A of the Code and has been amended to be in documentary compliance with all applicable provisions of Section 409A of the Code.

(xiii) No transaction prohibited by ERISA Section 406, which is not otherwise exempt from Section 406 and no non-exempt “prohibited transaction” under Section 4975(c) of the Code has occurred with respect to any Employee Benefit Plan.

(xiv) Except as set forth on Section 3.21 of the Schedules, there is no unfunded liability under any Employee Benefit Plan.

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(xv) Neither the Bank nor any ERISA Affiliate has ever established or contributed to, or had an obligation to contribute to, any “voluntary employees’ beneficiary association” (as described in Section 501(c)(9) of the Code), any organization or trust described in Sections 501(c)(17) or Section 501(c)(20) of the Code, or any welfare benefit fund as defined in Section 419(e) of the Code.

(xvi) Except as otherwise contemplated by this Agreement, the consummation of the Contemplated Transactions will not result in the payment, vesting or acceleration of any benefit under any Employee Benefit Plan or other Contract to which the Bank is a party.

(b) As of the Agreement Date, the Bank employs twenty-seven (27]) full-time employees and no part-time employees (the “Bank Employees”). Except as set forth on Section 3.16(l) and Section 3.17 of the Schedules, none of the Bank Employees is party to any agreement or contract with the Bank, and all Bank Employees are employed “at will.”

(c) None of the employees of the Bank or any of its Affiliates is represented in his or her capacity as an employee of the Bank or any of its Affiliates by any labor organization and neither the Bank nor any of its Affiliates has recognized any labor organization nor has any labor organization been elected as the collective bargaining agent of any employees. Neither the Bank nor any of its Affiliates has experienced or been threatened with any strike, slow down, work stoppage or material grievance, claim of unfair labor practices, or other collective bargaining dispute within the past three (3) years. Neither the Bank nor any of its Affiliates has committed any unfair labor practice. To the Knowledge of Parent or the Bank, no organizational effort is presently being made or threatened by or on behalf of any labor union with respect to employees of the Bank or its Affiliates.

(d) The Bank and each of its Affiliates has complied, and is currently in compliance, in all respects, with all applicable foreign, federal, state and local laws relating to employment and the environment of labor, including those related to wages, hours, collective bargaining, withholding, collection and payment of social security, termination of employment, unemployment compensation and similar payroll taxes, equal pay, workers’ compensation, occupational health and safety, immigration, payment of overtime and the classification of employees as overtime eligible and overtime exempt, fair labor standards, discrimination on the basis of race, age, sex, religion, color, national origin, disability and other classifications protected by federal, state and local laws.

Section 3.22 Regulatory Filings. Each of Parent and the Bank has filed in a timely manner all required filings with all Regulatory Authorities, including the FDIC and the DFPR. Except as set forth on Section 3.22 of the Schedules, all such filings were accurate and complete in all material respects as of the dates of the filings, and no such filing has made any untrue statement of a material fact or omitted to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.

Section 3.23 Indemnification Claims. No action or failure to take action by any director or executive officer, or, to the Knowledge of Parent or the Bank, any employee or agent of the Bank has occurred that may give rise to a claim or a potential claim by any such Person for indemnification against the Bank under any Contract with, or the corporate indemnification provisions of, the Bank, or under any Legal Requirements.

Section 3.24 Insider Interests. Except as set forth on Section 3.24 of the Schedules, no officer or director of Parent or the Bank, any member of the Family of any such Person and no entity that any such Person “controls” within the meaning of Regulation O promulgated by the Federal Reserve has any loan, deposit account or any other agreement with the Bank or any interest in any material property

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(whether real, personal or mixed or tangible or intangible) used in or pertaining to the business of the Bank.

Section 3.25 Brokerage Commissions. Except as set forth on Section 3.25 of the Schedules, none of the Bank or any of its Representatives has incurred any obligation or liability, contingent or otherwise, for brokerage or finders’ fees or agents’ commissions or other similar payment in connection with this Agreement or the Contemplated Transactions.

Section 3.26 Approval Delays; CRA.

(a) To the Knowledge of Parent or the Bank, no fact or condition exists with respect to Parent or the Bank that will prevent any of the regulatory approvals referred to in Section 7.1 from being obtained or unduly delayed.

(b) The Bank’s most recent CRA rating is “satisfactory” or better. No Proceedings are pending or, to the Knowledge of Parent or the Bank, Threatened, that would result in a change of such rating. Parent and the Bank have not received any adverse public comments with respect to the Bank’s compliance under the CRA since the date of the Bank’s most recently issued CRA rating.

Section 3.27 Code Sections 280G, 409A and 4999. With respect to the Assumed Contracts, there is no payment that is owed or may become due to any director, officer, employee or agent of the Bank that will be non-deductible to the Bank or subject to Tax under Sections 280G, 409A or 4999 of the Code, nor will the Bank be required to “gross up” or otherwise compensate any such Person because of the imposition of any Tax, including any excise tax, on a payment to such Person. Except to the extent required under Section 601 et seq. of ERISA and Section 4980B of the Code and as set forth on Section 3.27 of the Schedules, the Bank does not provide, nor is it required to provide, health or welfare benefits to any active employee following such employee’s retirement or other termination of service.

Section 3.28 UDAAP Investigations. Neither Parent nor the Bank has received any written notice or communication from any Regulatory Authority alleging violation of, or noncompliance with, any Legal Requirement concerning unfair or deceptive acts or practices, including Section 5 of the Federal Trade Commission Act (15 U.S.C. §§45) and Regulation AA issued by the Federal Reserve Regulation (12 C.F.R. § 227) (each such Legal Requirement, a “UDAAP Law”). Neither Parent nor the Bank has been cited, fined or otherwise notified of any failure by it to comply with a UDAAP Law which has not been paid or cured. To the Knowledge of Parent or the Bank, neither Parent nor the Bank has taken any action, or failed to take a required action, that could reasonably form the basis for assertion of any proceeding against Parent or the Bank under any UDAAP Law that, if determined adversely to Parent or the Bank, could: (i) reasonably be expected to have a Material Adverse Effect on Parent or the Bank; or (ii) prohibit consummation of the Contemplated Transactions.

Section 3.29 BSA/AML. Neither Parent nor the Bank has received any written notice or communication from any regulatory authority alleging violation of, or noncompliance with, any Legal Requirement concerning compliance with bank secrecy and anti-money laundering matters, including the Currency and Foreign Transactions Reporting Act, the Money Laundering Control Act of 1986, Annunzio-Wylie Anti-Money Laundering Act, the Money Laundering Suppression Act of 1994, and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (also known as the USA PATRIOT Act) (each such legal requirement and the rules promulgated thereunder, a “BSA/AML Law”). Neither Parent nor the Bank has been cited, fined or, to the Knowledge of Parent and the Bank, otherwise notified in writing of any failure by it to comply with a BSA/AML Law which has not been cured. To the Knowledge of Parent or the Bank, neither Parent nor the Bank has taken any action, or failed to take a required action, that could reasonably form

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the basis for assertion of any proceeding against Parent or the Bank under any BSA/AML Law that, if determined adversely to Parent or the Bank, could: (i) reasonably be expected to have a Material Adverse Effect on Parent or the Bank; or (ii) prohibit consummation of the Contemplated Transactions.

Section 3.30 Fair Lending. Neither Parent nor the Bank has received any written notice or communication from any regulatory authority alleging violation of, or noncompliance with, any legal requirement concerning compliance with fair lending matters, including the Equal Credit Opportunity Act and the Fair Housing Act (each such legal requirement and the rules promulgated thereunder, a “Fair Lending Law”). Neither Parent nor the Bank has been cited been cited, fined or, to the Knowledge of Parent and the Bank, otherwise notified in writing of any failure by it to comply with a Fair Lending Law which has not been cured. To the Knowledge of Parent or the Bank, neither Parent nor the Bank has taken any action, or failed to take a required action, that could reasonably form the basis for assertion of any proceeding against Parent or the Bank under any Fair Lending Law that, if determined adversely to Parent or the Bank, could: (i) reasonably be expected to have a Material Adverse Effect on Parent or the Bank; or (ii) prohibit consummation of the Contemplated Transactions.

Section 3.31 Shareholder Actions. Except as set forth on Section 3.31 of the Schedules, no Shareholder of Parent has taken any action or, to the Knowledge of Parent or the Bank, Threatened to take any actions that, individually or in the aggregate, would impede or impair the parties’ ability to consummate the Contemplated Transactions or would reasonably be expected to have a Material Adverse Effect on Parent or the Bank.

Section 3.32 Disclosure. Neither any representation nor warranty of either Parent or the Bank in, nor any Schedule to, this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained herein or therein, in light of the circumstances under which they were made, not misleading. No notice given pursuant to Section 5.9 will contain any untrue statement or omit to state a material fact necessary to make the statements therein or in this Agreement, in light of the circumstances under which they were made, not misleading.

Article 4 Representations and Warranties of Buyer and Buyer Bank

Buyer or Buyer Bank, as the case may be, hereby represents and warrants to Parent and the Bank that the following are true and correct as of the Agreement Date, and will be true and correct as of the Effective Time:

Section 4.1 Buyer Organization. Buyer: (a) is a corporation duly organized, validly existing and in good standing under the laws of the State of Illinois; (b) is registered with the Federal Reserve as a bank holding company under the Bank Holding Company Act of 1956, as amended (the “BHCA”); and (c) has full power and authority, corporate and otherwise, to operate as a bank holding company and to own, operate and lease its properties as presently owned, operated and leased, and to carry on its business as it is now being conducted.

Section 4.2 Buyer Bank Organization. Buyer Bank is a non-member commercial bank duly organized, validly existing and in good standing under the laws of the State of Illinois. Buyer Bank has full power and authority, corporate and otherwise, to own, operate and lease its properties as presently owned, operated and leased, and to carry on its business as it is now being conducted, and is duly qualified to do business and is in good standing in each jurisdiction in which the nature of the business conducted or the properties or assets owned or leased by it makes such qualification necessary. Buyer Bank’s main office is located at 7526 Hancock Drive, Wonder Lake, county of McHenry, in the State of Illinois.

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Section 4.3 Authorization; Enforceability. Each of Buyer and Buyer Bank has the requisite power and authority to enter into and, subject to receipt of the necessary regulatory approvals, perform its obligations under this Agreement. Buyer has approved the execution of and performance of Buyer Bank’s obligations under this Agreement. The execution, delivery and performance of this Agreement by Buyer and Buyer Bank and the consummation of each of their obligations under this Agreement, have been authorized by all necessary actions, and this Agreement constitutes a legal, valid and binding obligation enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights generally and subject to general principles of equity.

Section 4.4 No Conflict. Neither the execution nor delivery of this Agreement nor the consummation or performance of any of the Contemplated Transactions will, directly or indirectly (with or without notice or lapse of time) contravene, conflict with or result in a violation of any provision of the certificate of incorporation, charter or bylaws, each as in effect on the Agreement Date, or any currently effective resolution adopted by the board of directors or shareholders, as appropriate, of, Buyer or Buyer Bank. Each of Buyer and Buyer Bank is not, or will not be, required to give any notice to or obtain any consent from any Person in connection with the execution and delivery of this Agreement or the consummation or performance of any of the Contemplated Transactions except such approvals of the Federal Reserve, the DFPR or the FDIC that are or may be required by law or regulation to consummate the Contemplated Transactions.

Section 4.5 CRA Rating. Buyer Bank’s most recent CRA rating is “satisfactory” or better. No Proceedings are pending or, to the Knowledge of Buyer or Buyer Bank, Threatened, that would result in a change of such rating. Buyer and Buyer Bank have not received any adverse public comments with respect to Buyer Bank’s compliance under the CRA since the date of Buyer Bank’s most recently issued CRA rating.

Section 4.6 Financing. To the Knowledge of Buyer and Buyer Bank, there is no reason why the Buyer Financing will not be available to Buyer and Buyer Bank on or prior to the Closing Date.

Section 4.7 Approval Delays. Other than the approvals referred to in Section 7.1, no approval, consent, authorization or action of or filing with any Regulatory Authority or other third party is required on the part of Buyer or Buyer Bank in connection with the execution, delivery or performance by Buyer and Buyer Bank of this Agreement or the consummation by Buyer or Buyer Bank of the transactions contemplated hereby. To the Knowledge of Buyer and Buyer Bank, no fact or condition exists with respect to Buyer or Buyer Bank that Buyer or Buyer Bank has reason to believe will prevent any of the regulatory approvals referred to in Section 7.1 from being obtained, Notwithstanding anything contained herein to the contrary, neither Buyer nor Buyer Bank are making any representations or warranties concerning whether the Deposit Insurance Termination or the Affiliate Merger will be, or can be, approved by the appropriate Regulatory Authorities.

Section 4.8 Legal Proceedings; Orders. No Proceeding is pending or, to the Knowledge of Buyer or Buyer Bank, Threatened against Buyer or Buyer Bank that questions or might question the validity of this Agreement or any actions taken or to be taken by Buyer or Buyer Bank pursuant to this Agreement, or that seeks to enjoin or otherwise restrain Buyer or Buyer Bank from consummating the transactions contemplated hereby.

Section 4.9 Independent Investigation. Buyer and Buyer Bank acknowledge that they have conducted to their satisfaction their own independent investigation, review and analysis of the Bank and its personnel, properties, assets, documents and data. Buyer and Buyer Bank acknowledge and agree that: (a) in making their decision to enter into this Agreement and to consummate the transactions

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contemplated hereby, they have relied solely upon their own investigation and the express representations and warranties of Parent and the Bank set forth in Article 3 of this Agreement (including related portions of the Schedules); and (b) neither Parent, the Bank nor any other Person has made any representation or warranty as to Parent or the Bank, or this Agreement, except as expressly set forth in Article 3 of this Agreement (including related portions of the Schedules).

Section 4.10 Disclosure. Neither any representation nor warranty of Buyer or Buyer Bank in this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained herein or therein, in light of the circumstances under which they were made, not misleading. No notice given pursuant to Section 6.1 will contain any untrue statement or omit to state a material fact necessary to make the statements therein, or in this Agreement, in light of the circumstances in which they were made, not misleading.

Article 5 Covenants of Parent and the Bank

Section 5.1 Access and Investigation. Buyer, Buyer Bank and their Representatives shall, at all times during normal business hours and with reasonable advance notice prior to the Closing, have full and continuing access to the facilities, operations, records, including all Loan files, and properties of the Bank in accordance with the provisions of this Section 5.1. Buyer, Buyer Bank and their Representatives may, prior to the Closing, make or cause to be made such reasonable investigation of the operations, records and properties of the Bank and of its financial and legal condition as Buyer and Buyer Bank shall deem necessary or advisable to familiarize itself with such records, properties and other matters; provided, however, that such access or investigation shall not interfere unnecessarily with the normal operations of the Bank. Upon request, the Bank will furnish Buyer, Buyer Bank or their Representatives attorneys’ responses to auditors’ requests for information regarding the Bank, and such financial and operating data and other information reasonably requested by Buyer or Buyer Bank (provided, with respect to attorneys, such disclosure would not result in the waiver by the Bank of any claim of attorney-client privilege), and will permit Buyer, Buyer Bank and their Representatives to discuss such information directly with any individual or firm performing auditing or accounting functions for the Bank, and such auditors and accountants shall be directed to furnish copies of any reports or financial information as developed to Buyer, Buyer Bank or their Representatives. No investigation by Buyer, Buyer Bank or any of their Representatives shall affect the representations and warranties made by the Bank. This Section 5.1 shall not require the disclosure of any information the disclosure of which to Buyer or Buyer Bank would be prohibited by any Legal Requirement.

Section 5.2 Operation of the Bank. Except with the prior written consent of Buyer or Buyer Bank (which shall not be unreasonably withheld or conditioned), between the Agreement Date and the Closing, the Bank will:

(a) conduct its business only in the Ordinary Course of Business and in compliance with all Legal Requirements, and continue to make all normal expenditures and incur all regular expenses necessary to continue the Bank’s business, consistent with past practice;

(b) use its Reasonable Best Efforts to preserve intact its current business organization, keep available the services of its current officers, employees and agents, and maintain the goodwill of its suppliers, customers, landlords, creditors, employees, agents and others who have business relationships with it, and, in connection therewith, permit representatives of Buyer Bank to hold meetings or discussions with officers and employees of the Bank in connection with employment opportunities after the Effective Time with Buyer Bank;

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(c) enter into loan transactions only in accordance with sound credit practices and only on terms and conditions that are not materially more favorable than those available to the borrower from competitive sources in arm’s-length transactions, and in connection therewith, from the Agreement Date to the Closing, shall not:

(i) enter into any new Loan, or renewal or restructuring of an existing Loan, (including Loans to any one borrower or related group of borrowers which, in the aggregate, equal or exceed (i) with respect to conforming one- to four-family residential mortgage loans, $417,000, and (ii) with respect to any other Loan, $500,000; provided, that, with respect to clause (ii) only, (x) the Bank shall deliver to Buyer, as soon as practicable following the close of business on each Thursday that is a Business Day (and if such Thursday is not a Business Day, then on the following Business Day written notice, including a complete loan package for each such Loan, renewal or restructuring, in a form consistent with the Bank’s policies and practice, that has been approved by the applicable committee of the Bank during the immediately preceding week, and (y) the Bank shall be permitted to make any such Loan, renewal or restructuring as to which Buyer or Buyer Bank has not objected in writing by the close of business on the Tuesday following delivery of such notice of proposed loans; provided, further, that any Loan, renewal or restructuring made pursuant to this Section 5.2(c)(i) shall be made in the Ordinary Course of Business consistent with the Bank’s current loan policies and applicable rules and regulations or applicable Regulatory Authorities with respect to amount, term, security and quality of such borrower or borrower’s credit; or

(ii) other than incident to a reasonable Loan restructuring or the renewal of any existing Loan, extend additional credit to any Person and any director or officer of, or any owner of a Material Interest in, such Person (any of the foregoing with respect to a Person being referred to as a “Borrowing Affiliate”) if such Person or such Borrowing Affiliate is the obligor under any indebtedness to the Bank which constitutes a non-performing loan or against any part of such indebtedness the Bank has established loss reserves or any part of which has been charged-off by the Bank;

(d) consistent with past practice, maintain an ALLL which is adequate in all material respects under the requirements of GAAP to provide for possible losses, net of recoveries relating to loans previously charged off, on loans outstanding (including accrued interest receivable), and charge-off any loans or leases that would be deemed uncollectible in accordance with GAAP or any Legal Requirements and, to the extent required by GAAP or any Legal Requirement, place on non-accrual any loans or leases that are past due greater than ninety (90) days;

(e) maintain all of its assets necessary for the conduct of its business in good operating condition and repair, reasonable wear and tear and damage by fire or unavoidable casualty excepted, and maintain policies of insurance upon its assets and with respect to the conduct of its business in amounts and kinds comparable to that in effect on the Agreement Date and pay all premiums on such policies when due;

(f) not buy or sell any security held, or intended to be held, for investment not in accordance with the current investment policy of the Bank;

(g) not declare or pay any dividends or make any other similar distributions of cash or property to any of the Bank’s directors, officers, employees or Parent, as its sole shareholder, other than regular salary or other earned compensation;

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(h) file in a timely manner all required filings with all Regulatory Authorities and cause such filings to be true and correct in all material respects;

(i) record and carry on its books and records the net realizable value of other real estate owned, with such value to be supported by reasonable documentation of the same;

(j) maintain its books, accounts and records in the Ordinary Course of Business, on a basis consistent with prior years;

(k) materially comply with all Legal Requirements and Contracts; and

(l) report periodically to Buyer and Buyer Bank concerning the status of its business, operations and finances.

Buyer or Buyer Bank shall respond to any request by the Bank in connection with the foregoing within five (5) Business Days of receiving such request and, if Buyer or Buyer Bank does not object to such request within five (5) Business Days, Buyer and Buyer Bank shall be deemed to have consented to the Bank’s request. Notwithstanding anything else contained in this Agreement to the contrary, any request made by the Bank pursuant to this Section 5.2 must be made by facsimile transmission, electronic mail or overnight delivery.

Section 5.3 Negative Covenant. Except as otherwise expressly permitted by this Agreement, and in addition to the covenants in Section 5.2, between the Agreement Date and the Closing, the Bank will not, without the prior written consent of Buyer or Buyer Bank, take any affirmative action, or fail to take any reasonable action within its control, as a result of which a Material Adverse Effect would be reasonably expected to occur.

Section 5.4 Subsequent Financial Statements. As soon as reasonably available after the Agreement Date, the Bank will deliver to Buyer and Buyer Bank copies of: (a) monthly unaudited financial statements of the Bank that are provided to the management and directors of the Bank; (b) the Call Reports of the Bank for each quarterly or annual period completed after the Agreement Date; and (c) all other financial reports or statements submitted after the Agreement Date by the Bank to any Regulatory Authority, to the extent permitted by law (collectively, the “Subsequent Financial Statements”). Except as may be required by changes in any Legal Requirements effective after the Agreement Date, the Subsequent Financial Statements shall be prepared on a basis consistent with GAAP and any applicable Legal Requirements and shall fairly present in all material respects the financial condition and results of operations for the dates and periods presented.

Section 5.5 Title to Real Estate. As soon as practical after the Agreement Date, but in any event no later than thirty (30) days after the Agreement Date, the Bank shall obtain and deliver to Buyer and Buyer Bank as soon as practicable prior to the Closing, with respect to all Bank Real Estate, an owner’s preliminary report of title covering a date subsequent to the date hereof, issued by a title insurance company that is reasonably acceptable to Buyer and Buyer Bank, showing fee simple title in the Bank in such Bank Real Estate with coverage over all standard exceptions and subject to no liens, mortgages, security interests, encumbrances or charges of any kind except for any Permitted Exceptions.

Section 5.6 Surveys. Buyer and Buyer Bank may, in their discretion, within thirty (30) days after the Agreement Date, require the Bank to provide, at Buyer’s expense and as soon as practicable prior to the Closing, a current ALTA survey of any or all parcels of Bank Real Estate disclosing no survey defects that would materially impair the use thereof for the purposes for which it is held or materially impair the value of such property.

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Section 5.7 Title Policies and Surveys for Business Real Estate.

(a) The Bank shall deliver to Buyer Bank, at the Bank’s sole expense, with respect to the Business Real Estate, no later than thirty (30) days after the date of this Agreement, owner’s title commitments (the “Title Commitments”) having an effective date as near as feasible to the date of delivery of such Title Commitments, from a title insurance company designated by Buyer Bank (the “Title Insurer”), and a survey of the Business Real Estate and improvements located therein (“Survey”). If title to all or part of the Business Real Estate is subject to any defect, lien, encumbrance, easement, condition, restriction or encroachment, other than the Permitted Exceptions (as defined below), then Buyer Bank shall provide written notice thereof to the Bank within fifteen (15) days after the receipt by Buyer Bank of the applicable Title Commitment, inspection or Survey, whichever is later. The Bank shall have fifteen (15) days after written notice thereof from Buyer Bank to elect to remedy or remove any such defect, lien, encumbrance, easement, condition, restriction or encroachment, but, if the Bank elects not to cure the same and if such defect or encumbrance or other matter is not cured, then, the Bank and Buyer Bank shall attempt to renegotiate the terms and conditions of the acquisition of the Business Real Estate (including, without limitation, by reducing the Purchase Price). In the event that the Bank and Buyer Bank are unable to renegotiate such terms and conditions, Buyer Bank shall have the right, in its sole discretion, within fifteen (15) days of the date the Bank’s notice of its election should have been delivered, to: (a) waive any objection to such defect or encumbrance or other matter in which event such defect, encumbrance or other matter shall be deemed to be a Permitted Exception; (b) include such Business Real Estate on Section 5.7 of the Schedules as an Excluded Asset; or (c) to terminate this Agreement.

(b) At the Closing, the Bank shall obtain and deliver to Buyer Bank, at the Bank’s sole expense, owner’s title insurance policies, or irrevocable commitments to issue such a policy, dated as of the Closing Date, with respect to the Business Real Estate issued by the Title Insurer, insuring good and merchantable title of the fee simple estate of Buyer Bank in the Business Real Estate in the amount not less than the Book Value of the Business Real Estate as of the Closing Date, subject only to the Permitted Exceptions (the “Title Policy”) and containing endorsements to the Title Policy reasonably required by Buyer Bank, which shall include an extended coverage endorsement guaranteeing over all general or standard exceptions to title customarily contained in such Title Policy.

Section 5.8 Environmental Investigation.

(a) Buyer and Buyer Bank may, in their discretion, at any time within thirty (30) days following the Agreement Date, require the Bank to provide, at Buyer’s expense, a Phase I environmental site assessment for any interest in Bank Real Estate (each a “Phase I Report”), conducted by an independent professional consultant reasonably acceptable to Buyer and Buyer Bank to determine if any such real property contains or gives evidence of any adverse environmental condition or any violations of Environmental Laws on any such property. If a Phase I Report discloses any violations or adverse environmental conditions, or recommends a Phase II environmental report, then the Bank shall, upon Buyer’s request at the Bank’s expense, promptly obtain a Phase II environmental report with respect to any affected property, which report shall contain an estimate of the cost of any remediation or other follow-up work that may be necessary to address those violations or conditions in accordance with applicable laws and regulations (each a “Phase II Report,” and collectively referred to with the associated Phase I Report, an “Environmental Report”). Buyer and Buyer Bank shall have no duty to act upon any information produced by an Environmental Report for the benefit of the Bank or any other Person, but shall provide such information to the Bank as soon as practicable after such information becomes available to Buyer and Buyer Bank.

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(b) Upon receipt of the estimate of the costs of all follow-up work to an Environmental Report, Buyer and Buyer Bank, on the one hand, and Parent and the Bank, on the other, shall attempt to agree upon a course of action for remediation of any adverse environmental condition or violation suspected, found to exist, or that would tend to be indicated by an Environmental Report. The estimated total cost for completing all necessary work plans or removal or remediation actions is referred to collectively as the “Remediation Cost.” If the aggregate Remediation Cost for the parcels of property in which the Bank holds an interest exceeds $500,000, any party may terminate this Agreement upon (i) the delivery of thirty (30) days’ written notice to the other party and (ii) the failure of the parties, during such thirty (30) day period, to agree on a course of action with respect to the remediation. If the aggregate Remediation Cost is less than $500,000, the Bank shall use reasonable best efforts to cause the agreed upon course of action for remediation to be completed.

Section 5.9 Preparation of Transfer Documents for Acquired Assets. As soon as practicable following the date of this Agreement, the Bank shall commence preparation, at the Bank’s sole expense, of all instruments of transfer and assignment necessary to timely transfer the Acquired Assets to Buyer Bank at the Closing, including, without limitation, assignments of mortgages for each Acquired Loan that is secured by a mortgage on real estate and instruments to assign UCC financing statements. The Bank shall provide Buyer Bank with drafts of all such instruments of transfer and assignment not later than thirty (30) days prior to the expected Closing Date.

Section 5.10 Notice of IRA Custodian Resignation. Not later than thirty (30) days prior to the expected Closing Date or upon such other time as may be required by the terms of any agreements regarding any IRA accounts maintained by the Bank, whichever is closer to the Closing Date, the Bank shall appoint Buyer Bank as successor custodian of all such IRA accounts and by letter reasonably acceptable to Buyer Bank, mail notice of the Bank’s resignation as custodian and appointment of Buyer Bank as the successor custodian, effective upon the Closing, of each IRA maintained by the Bank. The notice shall include such other information that is required by any Legal Requirement and any other information that is mutually agreed upon by the Bank and Buyer Bank. At the Closing Date, Buyer Bank will accept appointment as custodian with respect to such IRA accounts and shall perform all of the duties so transferred.

Section 5.11 Notice of Mortgage Servicing Transfer. Not later than fifteen (15) days prior to the expected Closing Date, Buyer Bank and the Bank shall, at the Bank’s sole expense, and by letter reasonably acceptable to Buyer Bank that complies with Federal Reserve Regulation X, 12 C.F.R. § 1024.33(b), mail notice to each borrower under an Acquired Loan that constitutes a “mortgage loan” (as such term is defined in 12 C.F.R. § 1024.31).

Section 5.12 Advice of Changes. Between the Agreement Date and the Closing Date, Parent and the Bank shall promptly notify Buyer and Buyer Bank in writing if either Parent or the Bank becomes aware of any fact or condition that causes or constitutes a Breach of any of the representations and warranties of Parent or the Bank as of the Agreement Date, or if Parent or the Bank becomes aware of the occurrence after the Agreement Date of any fact or condition that would (except as expressly contemplated by this Agreement) cause or constitute a Breach of any such representation or warranty had such representation or warranty been made as of the time of occurrence or discovery of such fact or condition. If any such fact or condition would require any change in the Schedules if the Schedules were dated the date of the occurrence or discovery of any such fact or condition, Parent or the Bank will promptly deliver to Buyer and Buyer Bank a supplement to the Schedules specifying such change. During the same period, Parent and the Bank will promptly notify Buyer and Buyer Bank of the occurrence of any Breach of any covenant of Parent or the Bank in this Agreement or of the occurrence of any event that might reasonably be expected to make the satisfaction of the conditions in Article 9 impossible or unlikely.

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Section 5.13 Other Offers.

(a) Until such time, if any, as this Agreement is terminated pursuant to Article 12, neither Parent nor the Bank will directly or indirectly solicit, initiate or encourage any inquiries or proposals from, discuss or negotiate with, provide any non-public information to, or consider the merits of any unsolicited inquiries or proposals from, any Person (other than Buyer or Buyer Bank) relating to any Acquisition Transaction (as defined below). Notwithstanding such foregoing restriction, Parent and the Bank may provide information at the request of, or enter into negotiations with, a third party with respect to an Acquisition Transaction if the board of directors of Parent determines, in good faith, that the failure to take such actions is inconsistent with its fiduciary duties to the Shareholders under applicable law, and, provided further, that Parent or the Bank may not, in any event, provide to such third party any information which it has not provided (or does not simultaneously provide) to Buyer and Buyer Bank. Parent and the Bank shall promptly notify Buyer and Buyer Bank orally and in writing in the event it receives any such inquiry or proposal and shall provide reasonable detail of all relevant facts relating to such inquiries.

(b) Subject to Section 12.1 and Section 12.3, if the board of directors of Parent determines in good faith that the failure to accept an Acquisition Transaction is inconsistent with its fiduciary obligations to the Shareholders under applicable law, the board of directors of Parent may at any time change its recommendation to the Shareholders to approve this Agreement or terminate this Agreement to enter into a definitive agreement with respect to such Acquisition Transaction.

(c) “Acquisition Transaction” means with respect to Parent or the Bank any of the following: (i) a merger or consolidation, or any similar transaction (other than the Merger) of any Person with Parent or the Bank; (ii) a purchase, lease or other acquisition of all or substantially all the assets of Parent or the Bank; (iii) a purchase or other acquisition of “beneficial ownership” by any “person” or “group” (as such terms are defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) (including by way of merger, consolidation, share exchange or otherwise) that would cause such person or group to become the beneficial owner of securities representing twenty percent (20%) or more of the voting power of Parent or the Bank; (iv) a tender or exchange offer to acquire securities representing twenty percent (20%) or more of the voting power of Parent or the Bank; (v) an offer to acquire substantially all of the assets of the Bank; (vi) a public proxy or consent solicitation made to the Shareholders seeking proxies in opposition to any proposal relating to any aspect of the Contemplated Transactions that has been recommended by the board of directors of Parent; (vii) the filing of an application or notice with any Regulatory Authority (which application has been accepted for processing) seeking approval to engage in one or more of the transactions referenced in clauses (i) through (v) above; or (viii) the making of a bona fide proposal to the Shareholders, Parent or the Bank, by public announcement or written communication, that is or becomes the subject of public disclosure, to engage in one or more of the transactions referenced in clauses (i) through (v) above.

Section 5.14 Data and Item Processing Agreements. Set forth on Section 5.14 of the Schedules is a complete and accurate list of all existing data or item processing agreements to which Parent or the Bank is a party. Parent and the Bank agree to consult with Buyer and Buyer Bank prior to the entry by either Parent or the Bank by either action or inaction into any new, or any extension of any existing, data or item processing agreements. Parent and the Bank agree to coordinate with Buyer and Buyer Bank the negotiation of any new or extension of any existing data or item processing agreement or the termination of any existing data and item processing agreement with the purpose of achieving the best possible economic and business result in light of the Contemplated Transactions. For the avoidance of doubt, (i) expenses associated with the termination of data or item processing agreements in excess of the Data Processing Termination Cap (ii) expenses associated with the negotiation of any new or extension of

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any existing data or item processing agreements (including without limitation expenses related to the conversion or re-conversion process) shall be borne solely by Buyer and Buyer Bank.

Section 5.15 Accounting and Other Adjustments. The Bank agrees that it shall, upon receipt of a request from Buyer or Buyer Bank: (a) make any accounting adjustments or entries to its books of account and other financial records; (b) make additional provisions to any ALLL; (c) sell or transfer any investment securities held by it; (d) charge-off any loan or lease; (e) create any new reserve account or make additional provisions to any other existing reserve account; (f) make changes in any accounting method; (g) accelerate, defer or accrue any anticipated obligation, expense or income item; and (h) make any other adjustments that would affect the financial reporting of Buyer Bank after the Effective Time; provided, however, that, unless otherwise specified in this Agreement, the Bank shall not be obligated to take any such requested action until immediately prior to the Closing; and provided further, that none of the actions taken by the Bank if taken in compliance with this Section 5.15 will be taken into account in calculating Adjusted Tangible Book Value.

Section 5.16 Consents; Third Party Approvals. As soon as practicable after the Agreement Date, the Bank shall obtain the consents listed on Section 3.4 of the Schedules.

Section 5.17 Voting Agreements. Concurrently with the execution and delivery of this Agreement, Parent shall enter into and deliver to Buyer and Buyer Bank voting agreements in the form of Exhibit I executed by each of the directors of Parent or the Bank who own any capital stock of the Parent.

Section 5.18 Shareholders’ Meeting. Parent shall cause a meeting of the Shareholders to be held for the purpose of acting upon the Purchase and Assumption and this Agreement or present the Purchase and Assumption and this Agreement for action by the Shareholders at the 2015 Annual Meeting of the Shareholders. Such meeting shall be held at the earliest practicable date after the Agreement Date, provided that the Regulatory Authorities have accepted as informationally complete all filed applications that are necessary to consummate the Contemplated Transactions. Parent shall send to the Shareholders not less than ten (10) nor more than ninety (90) days prior to such meeting, notice of such meeting together with the Proxy Statement, which shall include: (a) a copy of this Agreement; (b) a statement that any dissenting shareholders will be entitled to payment of the value of their dissenting shares if their dissenting shares are voted against the Purchase and Assumption, proper demand is made on the Parent and they comply with the applicable provisions of the Maryland General Corporation Law (the “Maryland Statutes”) governing dissenting shares; and (c) a copy of the provisions of the Maryland Statutes governing the rights of dissenting shareholders. Subject to Section 5.13(b), Parent and its board of directors shall recommend to the Shareholders the approval of the Purchase and Assumption and this Agreement and shall solicit proxies voting only in favor thereof from the Shareholders, and Parent and its board of directors shall not withdraw, modify or change, in any manner adverse to Buyer or Buyer Bank, or publicly announce its intent to withdraw, modify or change, in any manner adverse to Buyer or Buyer Bank, such recommendation of this Agreement and the Purchase and Assumption. For the avoidance of doubt, the parties acknowledge that the failure of Parent to comply with the provisions of this Section 5.18 shall be deemed to have a Material Adverse Effect on Parent and the Bank and on Buyer’s and Buyer Bank’s rights under this Agreement.

Section 5.19 Information Provided to Buyer or Buyer Bank . Parent and the Bank agree that none of the information concerning Parent or the Bank that is provided or to be provided by Parent or the Bank to Buyer or Buyer Bank for inclusion in any documents to be filed with any Regulatory Authority in connection with the Contemplated Transactions will, at the respective times such documents are filed, be false or misleading with respect to any material fact, or omit to state any material fact necessary in order to make the statements therein not misleading. Notwithstanding the foregoing, neither

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Parent nor the Bank shall have any responsibility for the truth or accuracy of any information with respect to Buyer or Buyer Bank or any of their respective Affiliates contained in any document submitted to, or other communication with, any Regulatory Authority.

Section 5.20 Amendment or Termination of Employee Benefit Plans. To the extent permitted by applicable Legal Requirements, upon the written request of Buyer or Buyer Bank, the Bank shall take, at the Bank’s expense, such action as may be necessary to amend or terminate any Employee Benefit Plan that is also an Assumed Contract on or before the Closing on terms reasonably acceptable to Buyer or Buyer Bank; provided, however, that: (i) the Bank shall not be obligated to take any such requested action that is irrevocable until immediately prior to the Closing; and (ii) if Buyer and Buyer Bank request Bank to withdraw from the DB Plan, the cost of such withdrawal shall be paid solely by Buyer and Buyer Bank.

Section 5.21 Insurance. Upon Buyer or Buyer Bank’s request, Parent or the Bank, as the case may be, shall, prior to the Closing, cause to be acquired and maintained for a period of three (3) years from the Closing Date under Parent’s or the Bank’s existing director and officer liability insurance extended insurance coverage of acts or omissions occurring at or prior to the Effective Time with respect to those persons who are currently covered by such director and officer liability insurance (commonly referred to as “tail coverage”) on terms with respect to such coverage and amount substantially similar to the terms and conditions of Parent’s or the Bank’s director and officer liability insurance in effect as of the Agreement Date.

Section 5.22 Tax Returns and Tax Filings. Neither Parent nor the Bank shall make any election inconsistent with prior Tax Returns or elections or settle or compromise any liability with respect to Taxes without prior written notice to Buyer and Buyer Bank. Parent and the Bank shall timely file all Tax Returns required to be filed prior to the Closing; provided, however, that the portion of each such Tax Return relating to the Bank shall be delivered to Buyer and Buyer Bank for its review at least fifteen (15) Business Days prior to the anticipated date of filing of such Tax Return.

Section 5.23 Covenant Not to Compete; Not to Solicit.

(a) Parent and the Bank hereby covenant and agree that none of Parent, the Bank or any Affiliate, other than an individual, of the Bank (collectively, a “Restricted Person”) shall open, purchase, operate, control or otherwise have an interest in any financial institution, branch office, loan production office, deposit production office, remote service unit for the production of deposits or loans within a ten-mile radius of any branch office of the Bank or Buyer Bank; or target and solicit deposits, loans, brokerage, credit or debit cards, or any other business from customers whose Deposit Liabilities are assumed hereunder.

(b) A Restricted Person will not directly or indirectly solicit any employee of Buyer or Buyer Bank as prospective officers or employees of Parent, the Bank or any Affiliate of the Bank; provided, however, that a Restricted Person shall not be prohibited or restricted from hiring an employee of Buyer or Buyer Bank if such employee contacts a Restricted Person to seek hiring or retention, whether in response to general advertising or otherwise, or if such employee is terminated by Buyer.

(c) If any Restricted Person violates any of the obligations under this Section 5.23, Buyer or Buyer Bank may proceed against such party in law or in equity for such damages or other relief as a court may deem appropriate. Parent and the Bank acknowledge that a violation of this Agreement may cause Buyer and Buyer Bank to suffer irreparable harm that may not be adequately compensated for by money damages. Each of Parent and the Bank therefore agrees that, in the event of any actual or threatened violation of this Section 5.23, Buyer and Buyer Bank shall be entitled, in addition to any other

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remedies available to it, to a temporary restraining order and to preliminary and final injunctive relief against the Restricted Person to prevent any violations of this Section 5.23, without the necessity of posting a bond.

Section 5.24 [Reserved].

Section 5.25 Cooperation with Financing. Upon the request of Buyer or Buyer Bank, Parent and the Bank shall provide reasonable cooperation and assistance to Buyer and Buyer Bank in connection with the arrangement of the Buyer Financing.

Article 6 Buyer’s and Buyer Bank’s Covenants

Section 6.1 Advice of Changes. Between the Agreement Date and the Closing Date, Buyer and Buyer Bank shall promptly notify Parent and the Bank in writing if Buyer or Buyer Bank becomes aware of any fact or condition that causes or constitutes a Breach of any of its respective representations and warranties as of the Agreement Date, or if Buyer or Buyer Bank becomes aware of the occurrence after the Agreement Date of any fact or condition that would (except as expressly contemplated by this Agreement) cause or constitute a Breach of any such representation or warranty had such representation or warranty been made as of the time of occurrence or discovery of such fact or condition. If any such fact or condition would require any change in the Schedules if the Schedules were dated the date of the occurrence or discovery of any such fact or condition, Buyer or Buyer Bank will promptly deliver to Parent and the Bank a supplement to the Schedules specifying such change. During the same period, Buyer or Buyer Bank will promptly notify Parent and the Bank of the occurrence of any Breach of any of its respective covenants in this Agreement or of the occurrence of any event that might reasonably be expected to make the satisfaction of the conditions in Article 10 impossible or unlikely.

Section 6.2 Transfer of the Bank’s ABA Routing Number. Buyer shall use its Reasonable Best Efforts to cause the ABA routing number(s) used by the Bank to be assigned to Buyer Bank as of the Effective Time.

Section 6.3 ATM Cards. As soon as practicable after conversion of data processing operations, Buyer Bank shall mail to each depositor whose account may be accessed by ATM Cards (i) a letter reasonably acceptable to the Bank requesting that such depositor promptly cease using the Bank’s ATM card and (ii) new ATM cards that the depositor may draw use for the purpose of effecting transactions with respect to such Deposit Accounts.

Section 6.4 Payment of Checks, Drafts and Orders. After the Closing Date, Buyer Bank agrees (i) to pay in accordance with applicable law, the depository agreements and customary banking practice all checks, drafts and withdrawal orders properly drawn by depositors and properly presented to Buyer, whether drawn on the checks, withdrawal or draft forms provided by the Bank or by Buyer Bank, to the extent that the Deposit Account balances to the credit of the respective makers or drawers assumed by Buyer Bank under this Agreement are sufficient to permit the payment thereof (after taking into account any overdraft protection rights of the depositor), and (ii) in all other respects to discharge, in accordance with applicable law, the depository agreements and customary banking practice in the usual course of its banking business, all duties and obligations of Seller with respect to the balances due and owing to the depositors. If any of the depositors shall demand payment from the Bank for all or any part of any Deposit Account, the Bank shall not be liable or responsible for making such payment. Buyer Bank will be responsible for the escheat of any property for which it becomes the holder and that becomes abandoned during the calendar year in which the Closing occurs.

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Section 6.5 Financing. Buyer and Buyer Bank shall use their Reasonable Best Efforts to cause the Buyer Financing to be available at Closing.

Section 6.6 Information Provided to Parent and the Bank. Buyer and Buyer Bank agree that none of the information concerning it that is provided or to be provided by Buyer and Buyer Bank to Parent or the Bank for inclusion or that is included in any documents to be filed with any Regulatory Authority in connection with the Contemplated Transactions will, at the respective times such documents are filed, be false or misleading with respect to any material fact, or omit to state any material fact necessary in order to make the statements therein not misleading. Notwithstanding the foregoing, neither Buyer nor Buyer Bank shall have any responsibility for the truth or accuracy of any information with respect to Parent or the Bank or any of their respective Affiliates contained in any document submitted to, or other communication with, any Regulatory Authority.

Article 7 Mutual Covenants; Additional Agreements

Section 7.1 Regulatory Approvals.

(a) By no later than thirty (30) days after the Agreement Date: (i) Buyer and Buyer Bank shall make all appropriate filings with Regulatory Authorities for approval of the Contemplated Transactions, including the preparation of an application or any amendment thereto or any other required statements or documents filed or to be filed by any party with: (a) the Federal Reserve pursuant to the BHCA; (b) the FDIC pursuant to the FDIA; (c) the DFPR pursuant to the IBA; and (d) any other Person or Regulatory Authority pursuant to any applicable Legal Requirement, for authority to consummate the Contemplated Transactions; and (ii) Parent and the Bank shall make all appropriate filings with Regulatory Authorities for approval of the Deposit Insurance Termination and Affiliate Merger, including the preparation of an application or any amendment thereto or any other required statements or documents filed or to be filed by any party with: (a) the FDIC pursuant to the FDIA; (b) the DFPR pursuant to the IBA; and (c) any other Person or Regulatory Authority pursuant to any applicable Legal Requirement, for authority to consummate the Deposit Insurance Termination and Affiliate Merger.

(b) The parties will cooperate, in good faith, to assist each other in preparing and filing any required notices, applications or other information with Regulatory Authorities for the purpose of obtaining all necessary approvals of the Contemplated Transactions, Deposit Insurance Termination and Affiliate Merger. Buyer, Buyer Bank, Parent and the Bank agree that Buyer and Buyer Bank’s counsel will have primary responsibility for the preparation of the necessary applications for regulatory approval of the Contemplated Transactions and that Parent and the Bank’s counsel will have primary responsibility for the preparation of the necessary applications for regulatory approval of the Deposit Insurance Termination and Affiliate Merger. Each party shall promptly provide to the other parties copies of the non-confidential portions of all notices, applications or other information filed by them with the Regulatory Authorities for the purpose of obtaining all necessary approvals set forth in this Section 7.1 and all non-confidential portions of any subsequent correspondence with the Regulatory Authorities concerning the receipt of such approvals.

Section 7.2 Necessary Approvals. Each of Buyer, Buyer Bank, Parent and the Bank agree fully and promptly to cooperate with each other and their respective counsels and accountants in connection with any steps to be taken as part of their obligations under this Agreement.

Section 7.3 Cooperation with Marketing the Morris Branch. Each of Buyer, Buyer Bank, Parent and the Bank agree fully and promptly to reasonably cooperate with each other and their respective counsels and advisors in pre-marketing the Bank’s branch office located in Morris, Illinois (the “Morris

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Branch”) to prospective purchasers, including providing any information reasonably necessary to pre-market the Morris Branch. For the avoidance of doubt, Parent and the Bank agree to: (i) allow Buyer and Buyer Bank to market the Morris Branch to prospective purchasers independent of the efforts of Parent and the Bank; and (ii) provide reasonable cooperation, in good faith, with such efforts. Notwithstanding the foregoing, the Parties agree that it is the intent of the Parties that marketing efforts conducted prior to the Closing Date are to be preliminary in nature, and, in acknowledgement thereof, (u) Parent and the Bank shall have no obligation to take any action pursuant to this Section 7.3 until this Agreement shall have been approved by the stockholders of the Parent, (v) Parent and the Bank shall be obligated to provide only such information as is produced by the Bank in the Ordinary Course of Business and is readily available to the Bank, shall not be obligated to provide any information to any party other than by means of an electronic data room, and shall not be obligated to update, reorganize, reproduce or reconstitute such information, (w) no party shall be granted access to such electronic data room unless such party shall have executed a non-disclosure agreement in form satisfactory to Parent and the Bank, (x) no prospective purchaser shall be permitted to contact, directly or indirectly through its representatives or otherwise, any officers, directors or employees of Parent or the Bank, (y) Parent and the Bank shall not be obligated to grant to any party access to the premises to perform any on-site due diligence, and (z) Parent and the Bank shall not be obligated to review, execute, or assist with the preparation of disclosure schedules with respect to, any informal letter of intent or definitive agreement with respect to the sale of the Morris Branch Each of Buyer, Buyer Bank, Parent and the Bank further agree that the sale of the Morris Branch or the entry into a definitive acquisition agreement with respect to such sale shall not be a condition to either party’s obligation to consummate the Contemplated Transactions.

Section 7.4 Taxes.

(a) The Bank shall pay all applicable sales and transfer Taxes and filing, recording (mortgage or otherwise), registration, stamp, documentary, collateral assignment, value added, real property transfer and other similar Taxes and fees (the “Transfer Taxes”) imposed on the purchase and sale of the Acquired Assets and the assumption of the Assumed Liabilities. The parties shall cooperate in the preparation and filing of all Tax Returns relating to such Transfer Taxes.

(b) Unless otherwise agreed to by the parties, the Bank will report to the applicable taxing authorities and holders of Deposit Accounts, with respect to the period from January 1 of the year in which the Closing occurs through the Closing Date, all interest (including dividends and other distributions with respect to money market accounts) credited to, withheld from, and any early withdrawal penalties imposed upon the Deposit Accounts. Buyer Bank will report to the applicable taxing authorities and holders of Deposit Accounts, with respect to all periods from the day after the Closing Date, all such interest credited to, withheld from and any early withdrawal penalties imposed upon the Deposit Accounts. Any amounts required by any governmental authority to be withheld from any of the Deposit Accounts through the Closing Date will be withheld by the Bank in accordance with applicable law or appropriate notice from any governmental authority and will be remitted by the Bank to the appropriate agency on or prior to the applicable due date. Any such withholding required to be made subsequent to the Closing Date will be withheld by Buyer Bank in accordance with applicable law or appropriate notice from any governmental authority and will be remitted by Buyer Bank to the appropriate agency on or prior to the applicable due date.

(c) Unless otherwise agreed by the parties, the Bank shall be responsible for delivering to payees all IRS notices and forms with respect to information reporting and Tax identification numbers required to be delivered through the Closing Date with respect to the Deposit Accounts, and Buyer Bank shall be responsible for delivering to payees all such notices and forms required to be delivered following the Closing Date with respect to the Deposit Accounts.

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(d) For a period beginning on the Closing Date and ending on the thirtieth (30th) day following the Closing (the “Tax Transition Period”), Buyer Bank shall be entitled to rely upon, and Parent and the Bank shall, jointly and severally, indemnify Buyer Bank for any, damage resulting from such reliance upon, customer Tax forms (including IRS Forms W-9, W-8 and other similar forms) collected by Parent or the Bank on or before the Closing Date with respect to the Acquired Assets and the Assumed Liabilities for all Tax information reporting and Tax withholding obligations of Buyer Bank for the Tax Transition Period.

(e) Property Taxes for a Tax period beginning before and ending after the Closing Date (the “Property Tax Period”) allocated to the period ending on the Closing Date shall be the product of (A) the amount of such property taxes due for the entire Property Tax Period and (B) a fraction with the numerator equal to the number of days in the Property Tax Period up to and including the Closing Date and the denominator equal to the number of days in the entire Property Tax Period. Buyer Bank or the Bank, as applicable, shall invoice the other party for the amount of property taxes that the other party is responsible for pursuant to this Section 7.4, but were paid by Buyer Bank or the Bank, as applicable, and such amount shall be paid, in immediately available funds, within twenty (20) days of receipt of such invoice real property transfer tax and other similar tax.

Section 7.5 Employee Matters.

(a) With respect to all employees of the Bank, as soon as reasonably practicable, but no later than ten (10) days after the Agreement Date, Parent and the Bank will notify each employee that Buyer Bank and Bank have entered into an agreement with respect to Buyer Bank’s acquisition of the Acquired Assets.

(b) Buyer Bank, in its sole discretion, may extend offers of employment as of the Closing Date to employees of the Bank (such employees collectively, the “Potential Employees”). The Bank shall cooperate with Buyer Bank to establish mutually agreed upon procedures for Buyer Bank to interview the Potential Employees and for Bank to provide Buyer Bank with appropriate information relating to the Potential Employees (including, upon receipt of written consent from a Potential Employee, a copy of each such Potential Employee’s most recent performance review); provided, that Bank shall not unreasonably withhold its agreement to Buyer Bank’s proposed procedures. Buyer Bank agrees to contact and solicit Potential Employees in accordance with such agreed upon procedures and otherwise in a manner and at times that ensure that the regular operations of the Bank are not disrupted. The Bank shall assist Buyer Bank’s solicitation of Potential Employees to accept employment with Buyer Bank.

(c) Buyer Bank shall notify the Bank at least fifteen (15) days before the Closing which Potential Employees have accepted Buyer Bank’s offer of employment after Closing. The Bank shall terminate all such Potential Employees who accept employment with Buyer Bank effective as of the applicable Transfer Date. As used in this Agreement, the term “Retained Employee” means each Potential Employee who accepts an offer of employment from Buyer Bank made in accordance with this Agreement and who actually becomes employed by Buyer Bank in accordance with such offer. The effective date of a Retained Employee’s employment with Buyer Bank shall be the “Transfer Date,” which for each Retained Employee shall be the first Business Day after the Closing Date, except with respect to those individuals to whom employment offers are made and who are not actively employed as of the Closing Date, in which case the Transfer Date shall be the date upon which such individual is able to and does commence active duty with Buyer Bank. All Potential Employees who do not become Retained Employees shall remain the responsibility of the Bank.

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(d) Each Retained Employee shall be employed by Buyer Bank upon terms and conditions of employment substantially similar to the terms and conditions applicable to Buyer Bank’s similarly situated employees, determined solely by Buyer Bank’s policies, procedures and programs. Buyer Bank shall ensure that each benefit plan of Buyer Bank in which the Retained Employees participate after Closing, without duplication of benefits, recognizes each Retained Employee’s years of recognized credited service with the Bank prior to the Retained Employee’s Transfer Date for eligibility and vesting purposes (but not for benefit accrual purposes) under the corresponding employee benefit plan of Buyer Bank for the corresponding purpose for which such credited service was recognized under the employee benefit plans of the Bank. Each Retained Employee shall be permitted, to the extent permitted by law and the provisions of Buyer Bank’s plan, to participate in Buyer Bank’s 401(k) plan on and after the Retained Employee’s Transfer Date and, to the extent permitted by Buyer Bank’s 401(k) plan, to roll over any eligible rollover distributions from the Bank’s 401(k) plan into Buyer Bank’s 401(k) plan. On or before the Transfer Date of each Retained Employee, the Bank shall take any necessary action to fully vest as of such date the Retained Employee’s account balance under the Bank’s 401(k) Plan.

(e) All wages and salaries, workers’ compensation payments and social security and unemployment taxes of employees of the Bank (including Retained Employees) shall be paid by the Bank for the period before and including the Closing Date.

(f) Nothing contained herein shall (i) confer upon any former, current or future employee of the Bank or Buyer Bank or any legal representative or beneficiary thereof any rights or remedies, including, without limitation, any right to continued employment for any specified period, or (ii) cause the employment status of any former, present or future employee of Buyer Bank to be other than terminable at will.

(g) Before the Closing Date, the Bank and Buyer Bank shall cooperate in order to permit Buyer Bank to train Potential Employees who choose to accept employment with Buyer Bank.

(h) Buyer and Buyer Bank agree that the Bank shall be permitted to reserve an amount not to exceed $57,000 (the “Retention Pool”), and to make discretionary payments from the Retention Pool to such employees and officers of the Bank set forth on Section 7.5(h) of the Schedules or to such other employees of the Bank agreed to in writing by Buyer and Buyer Bank for the purpose of encouraging such employees and officers to continue in the employ of the Bank until the Closing Date. The amount of any such payments to individual employees and officers of the Bank shall be determined by the Compensation Committee of the Board of Directors of the Bank; provided, that (i) no payments requiring application pursuant to 12 C.F.R. Section 359a shall be made until such applications have been submitted and approved by the applicable Regulatory Authority, and (ii) all such payments shall be made on the Closing Date, or as soon thereafter as approval of the applicable Regulatory Authority is received.

Section 7.6 Reasonable Best Efforts; Cooperation. Each of Buyer, Buyer Bank, Parent and the Bank agrees to exercise good faith and use its Reasonable Best Efforts to satisfy the various covenants and conditions to Closing in this Agreement, and to consummate the Contemplated Transactions as promptly as possible. None of Buyer, Buyer Bank, Parent or the Bank will intentionally take or intentionally permit to be taken any action that would be a Breach of the terms or provisions of this Agreement. Between the Agreement Date and the Closing, each of Buyer, Buyer Bank, Parent and the Bank will, and will cause all of their respective Affiliates and Representatives to, cooperate with respect to all filings that any party is required by Legal Requirements to make in connection with the Contemplated Transactions.

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Article 8 Transitional Matters

Section 8.1 Transitional Actions. After the Closing, unless another time is otherwise indicated:

(a) Payment of Items After the Closing. Buyer Bank shall: (i) pay in accordance with Legal Requirements and customary banking practices and applicable Deposit Account contract terms, all properly drawn and presented checks, negotiable orders of withdrawal, drafts, debits and withdrawal orders presented to Buyer Bank by depositors of the Deposit Accounts assumed by Buyer Bank hereunder; and (ii) in all other respects discharge, in the usual course of the banking business, the duties and obligations of the Bank with respect to the balances due and owing to the depositors whose Deposit Accounts are assumed by Buyer hereunder.

(b) Interest Reporting and Withholding. With respect to any Deposit Accounts for which amounts are required by any governmental agency to be withheld (the “Withholding Accounts”), the Bank will: (i) for the period from January 1 of the year in which the Closing occurs through the Closing Date, report all interest credited to, withheld from and any early withdrawal penalties imposed upon the Deposits during such period (collectively, the “Reported Amounts”) incurred during such period on the Withholding Accounts to applicable taxing authorities and to the owners of the Withholding Accounts; and (ii) withhold any amounts required by any governmental agencies to be withheld from the Withholding Accounts on or before the Closing Date in accordance with applicable law or appropriate notice from any governmental agency and remit such amounts to the appropriate agency on or prior to the applicable due date. Buyer Bank shall report to applicable authorities and the borrowers of the Loans all interest paid on such Loans for the calendar year in which such loans are acquired by Buyer Bank.

(c) Cooperation. Buyer Bank shall use its commercially reasonable efforts to cooperate with the Bank and Parent in assuring an orderly transition of ownership of the Acquired Assets and responsibility for the liabilities, including the Deposit Liabilities.

(d) Survival. The duties and obligations of the Bank and Buyer Bank contained in this Section 8.1 shall survive the Closing.

Section 8.2 Transitional Actions by the Bank. After the Closing, unless another time is otherwise indicated:

(a) Payment and Settlement of Items. Prior to the Effective Time, the Buyer and Buyer Bank will develop appropriate procedures and arrangements (which may include establishment by Buyer Bank of a settlement account with the Bank) to provide for settlement by Buyer Bank of checks, drafts, withdrawal orders, returns and other items that are drawn on or chargeable against any Deposit Account after the Effective Time, all of which shall be provided by the Bank without expense to Buyer Bank for a period of 180 days after the Effective Time. The Bank will cooperate with Buyer Bank and take reasonable steps requested by Buyer Bank to ensure that, for 180 days after the Effective Time, each check, draft or withdrawal order drawn against any Deposit Account encoded for presentment to the Bank or to any bank for the account of the Bank is delivered to Buyer Bank in a timely manner and in accordance with applicable Legal Requirements and clearinghouse rules or agreements. The Bank shall provide all information and take all steps required to be taken by it as are reasonably necessary for Buyer Bank to effect the transfer of any direct deposit arrangement affecting any of the Deposit Accounts and, after the Effective Time, shall promptly pay to Buyer Bank, without interest, any funds received by the Bank or Parent which are intended for credit to any such Deposit Account.

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(b) Loan Payments and Information Received After the Closing Date. For two (2) years after the Effective Time, the Bank or Parent shall forward promptly to Buyer Bank: (i) any payments (properly endorsed without recourse as necessary) which are received by the Bank or Parent on or after the Closing Date that relate to the Acquired Loans and provide sufficient information so that any such payments may be properly applied to the extent such information is available to the Bank or Parent; and (ii) any notices or other correspondence received on or after the Closing Date that relate to the Acquired Loans or other Acquired Assets.

(c) Notice to Federal Reserve. As of the opening of business on the first Business Day after the Closing Date, the Bank shall provide the Federal Reserve with all information necessary in order to expedite the clearing and sorting of all checks, drafts, instruments and other commercial paper relative to the Deposit Accounts (collectively, the “Paper Items”). The Bank and Buyer Bank shall arrange for appropriate daily settlement between the parties so that the transmission of all monies associated with the matters set forth in this Section 8.2 might be effected promptly.

(d) Survival. The duties and obligations of Parent and the Bank contained in this Section 8.2 shall survive the Closing.

Article 9 Conditions Precedent to Obligations of Buyer and Buyer Bank

The obligations of Buyer and Buyer Bank to consummate the Contemplated Transactions and to take the other actions required to be taken by Buyer and Buyer Bank at the Closing are subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by Buyer or Buyer Bank, in whole or in part):

Section 9.1 Accuracy of Representations and Warranties. All of the representations and warranties of Parent and the Bank set forth in this Agreement shall be true and correct in all material respects with the same force and effect as if all of such representations and warranties were made at the Closing (except that to the extent such representations and warranties expressly relate to an earlier date, such representations shall be true and correct on and as of such earlier date); provided, however, that to the extent any representations and warranties are subject in this Agreement to a standard of materiality, Material Adverse Effect or similar standard, such representations and warranties shall be true and correct in all respects (except for Section 3.6 and Section 3.15, where references to materiality, Material Adverse Effect or similar standards shall be taken into account).

Section 9.2 Performance of Covenants. All of the covenants and agreements of Parent and the Bank to be performed or complied with at or prior to the Closing pursuant to this Agreement shall have been duly performed or complied with in all material respects by Parent and the Bank; provided, however, that to the extent the performance and compliance with any covenants and agreements are subject in this Agreement to a standard of materiality, Material Adverse Effect or similar standard, Parent or the Bank, as the case may be, shall have performed and complied in all respects with such covenants and agreements, in each case to the extent of the materiality, Material Adverse Effect or similar standard set forth herein.

Section 9.3 Documents Satisfactory. All proceedings, corporate or other, to be taken by Parent and the Bank in connection with the Contemplated Transactions, and all documents incident thereto, shall be reasonably satisfactory in form and substance to Buyer and Buyer Bank and their counsel, and Parent and the Bank shall have made available to Buyer and Buyer Bank for examination the originals or true and correct copies of all records and documents relating to the business and affairs of the Bank which Buyer and Buyer Bank may reasonably request in connection with said transactions.

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Section 9.4 No Proceedings. Since the Agreement Date, there must not have been commenced or Threatened against Parent or the Bank any Proceeding that would reasonably be expected to have a Material Adverse Effect on the Bank or on Buyer’s and Buyer Bank’s rights under this Agreement.

Section 9.5 Absence of Material Adverse Effects. From the Agreement Date to the Closing, there shall be and have been no change in the financial condition, assets or business of the Bank that has had or would reasonably be expected to have a Material Adverse Effect on the Bank or on Buyer’s or Buyer Bank’s rights under this Agreement.

Section 9.6 Consents and Approvals. Any consents or approvals required to be secured by any party by the terms of this Agreement, including those consents listed on Section 3.4 of the Schedules, including the approval of the Shareholders, and to transfer the Assumed Contracts shall have been obtained and shall be reasonably satisfactory to Buyer and Buyer Bank and all applicable waiting periods shall have expired.

Section 9.7 No Prohibition. The consummation of the Contemplated Transactions will not, directly or indirectly (with or without notice or lapse of time), materially contravene, or conflict with or result in a material violation of, or cause Buyer or Buyer Bank or any of their respective Affiliates to be required to make any material change in its operations as a result of: (a) any applicable Legal Requirement or Order; or (b) any Legal Requirement or Order that has been published, introduced or otherwise proposed by or before any Regulatory Authority.

Section 9.8 No Enforcement Actions. Since the Agreement Date, there must not have been issued or Threatened against the Bank any enforcement action, whether formal or informal, by the DFPR, the FDIC or any other Regulatory Authority. No enforcement action to which Parent or the Bank is subject as of the Closing Date, whether formal or informal, shall be imposed upon Buyer or Buyer Bank as a result of the Purchase and Assumption.

Section 9.9 [Reserved].

Section 9.10 Receipt of Financing. Buyer shall have received the Buyer Financing.

Article 10 Conditions Precedent to Obligations of Parent and the Bank

The obligations of Parent and the Bank to consummate the Contemplated Transactions and to take the other actions required to be taken by the Bank at the Closing are subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by Parent or the Bank, in whole or in part):

Section 10.1 Accuracy of Representations and Warranties. All of the representations and warranties of Buyer and Buyer Bank set forth in this Agreement shall be true and correct in all material respects with the same force and effect as if all of such representations and warranties were made at the Closing (except that to the extent such representations and warranties expressly relate to an earlier date, such representations shall be true and correct on and as of such earlier date); provided, however, that to the extent any representations and warranties are subject in this Agreement to a standard of materiality, Material Adverse Effect or similar standard, such representations and warranties shall be true and correct in all respects.

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Section 10.2 Performance of Covenants. All of the covenants and agreements of Buyer and Buyer Bank to be performed or complied with at or prior to the Closing pursuant to this Agreement shall have been duly performed or complied with in all material respects by Buyer and Buyer Bank; provided, however, that to the extent the performance and compliance with any covenants and agreements are subject in this Agreement to a standard of materiality, Material Adverse Effect or similar standard, Buyer or Buyer Bank, as the case may be, shall have performed and complied in all respects with such covenants and agreements, in each case to the extent of the materiality, Material Adverse Effect or similar standard set forth herein.

Section 10.3 Documents Satisfactory. All proceedings, corporate or other, to be taken by Buyer or Buyer Bank in connection with the Contemplated Transactions, and all documents incident thereto, shall be reasonably satisfactory in form and substance to Parent, the Bank and their counsel.

Section 10.4 No Proceedings. Since the Agreement Date, there must not have been commenced or Threatened against Buyer or Buyer Bank or any of their respective Affiliates, any Proceeding that would reasonably be expected to have a Material Adverse Effect on Buyer or Buyer Bank or on Parent’s or the Bank’s rights under this Agreement.

Section 10.5 Consents and Approvals. Any consents or approvals required to be secured by any party by the terms of this Agreement or otherwise reasonably necessary to consummate the Contemplated Transactions, including the approval of the Shareholders, shall have been obtained and shall be reasonably satisfactory to Parent and the Bank, and all applicable waiting periods shall have expired.

Section 10.6 Receipt of Financing. Buyer shall have received the Buyer Financing.

Section 10.7 Minimum Adjusted Tangible Book Value. The Adjusted Tangible Book Value shall not be less than Zero Dollars ($0).

Section 10.8 No Prohibition. The consummation of the Contemplated Transactions will not, directly or indirectly (with or without notice or lapse of time), materially contravene, or conflict with or result in a material violation of, or cause Buyer or Buyer Bank or any of their respective Affiliates to be required to make any material change in its operations as a result of: (a) any applicable Legal Requirement or Order; or (b) any Legal Requirement or Order that has been published, introduced or otherwise proposed by or before any Regulatory Authority.

Article 11 Survival; Indemnification

Section 11.1 Survival of Representations. All representations and warranties made by Parent and the Bank shall survive until the date that is fifteen (15) months from the Closing Date, and any Claims to be brought by the Buyer Indemnified Parties against Parent or the Bank: (a) pursuant to Section 11.2(i)(A) or (B) below shall be made only if, on or before the date is fifteen (15) months from the Closing Date, the appropriate Buyer Indemnified Party has given notice to Parent or the Bank of the Claim; and (b) pursuant to Section 11.2(i)(C) or (D) below, shall be made at any time following Closing through the end of the applicable statute of limitations. Any investigation by a party to be indemnified on account of any breach or incorrectness of such statements, representations, warranties or agreements shall not be a defense to a claim for indemnification.

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Section 11.2 Indemnification.

(a) Parent shall indemnify each of Buyer and Buyer Bank and each of their respective Affiliates (the “Buyer Indemnified Parties”) against and hold them harmless from: (i) any and all losses, liabilities, claims, causes of actions, suits, damages or penalties (excluding punitive damages (other than punitive damages claimed by third parties) and damages solely attributable to lost profits) (“Claims”) arising out of or resulting from: (A) any breach or incorrectness of any of the representations and warranties contained in Article 3 of this Agreement (including the Schedules thereto) or in any certificates delivered to Buyer or Buyer Bank by Parent or the Bank or with their express authorization; (B) any breach of any covenant or agreement made by Parent or the Bank in this Agreement; (C) any litigation, proceeding or suit brought by any Shareholder against Buyer, Buyer Bank, Parent or the Bank arising from or related to the Contemplated Transactions; and (D) any liability or obligation of any nature and any loss, damage, cost or expense that is incurred or suffered by Buyer or Buyer Bank and that is based upon or pertains to: (x) the Excluded Assets; or (y) provided that the Morris Branch is sold on or prior to the Closing Date, any Claims arising from the operation of the Morris Branch prior to the Effective Time; and (ii) the reasonable out-of-pocket expenses or costs incurred by the Buyer Indemnified Parties, including reasonable attorneys’ fees, in connection with investigating, attempting to correct or defending against any claims, liens or charges that are asserted against the Buyer Indemnified Parties for which any of the Buyer Indemnified Parties is entitled to indemnity pursuant to the foregoing provisions.

(b) Notwithstanding the foregoing, (i) Parent shall have no liability under this Section 11.2 until the Claims, in the aggregate, exceed Twenty-Five Thousand Dollars ($25,000) (the “Deductible Amount”), (ii) individual Claims that are less than $5,000 shall not be applied to the Deductible Amount; provided, however, that if the aggregate of all Claims exceeds the Deductible Amount, Parent’s obligation shall apply to all Claims in excess of the Deductible Amount, and (iii) Parent’s obligation under this Article 11 for any Claims shall not exceed Three Hundred Thousand Dollars ($300,000) in the aggregate.

Section 11.3 Anti-Sandbagging. Notwithstanding anything to the contrary contained in this Article 10, Parent shall not be liable under this Article 11 for any Claims based on or arising out of any inaccuracy in or Breach of any of the representations or warranties of Parent or the Bank contained in this Agreement if either Buyer or Buyer Bank had Knowledge of such inaccuracy or Breach prior to Closing.

Section 11.4 Indemnification Procedure. A Buyer Indemnified Party seeking indemnification shall assert a claim for indemnification under Section 11.2 by giving prompt notice in writing to the indemnifying party of the facts and circumstances giving rise to such Claim. Subject to the limitations of any contract of insurance, an indemnified party shall tender to the indemnifying parties the opportunity to manage and control any defense against any such Claim with counsel chosen by the indemnifying party, subject to the indemnified party’s approval of such counsel (which approval shall not be unreasonably withheld) and to such other conditions as the indemnified party reasonably determines in good faith to be necessary for the protection of its interests. If the indemnifying party assumes management and control of such defense, the indemnified parties shall cooperate reasonably with the indemnifying parties in the conduct of any such defense, and the indemnifying party shall have full rights to negotiate and enter into any compromise or settlement which is dispositive of such Claim; provided, however, that any compromise or settlement that will not be paid in full by the indemnifying party or that involves any remedy other than the payment of money damages shall be subject to the consent of the indemnified party. The indemnified parties shall be entitled to participate in the defense of such action at their own expense. In the event the indemnifying party fails to accept the management and control of such defense in a timely manner, the indemnified parties shall have the right to choose counsel and to

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assume management and control of the defense at the indemnifying parties’ expense, and the indemnifying party shall be entitled to participate in such defense at its own expense.

Section 11.5 Exclusive Remedy. Except for the additional right of indemnification set forth in Section 7.4, the rights of Buyer and Buyer Bank to indemnification under this Article 11 shall constitute the sole and exclusive remedy of such party for monetary damages from and after the Closing Date for any Breach, misrepresentation, breach of warranty or covenant or failure to fulfill any agreement or covenant hereunder by the counterparty of any provision of this Agreement; provided, however, such limitation shall not apply to any class for equitable relief or for claims based on fraud or intentional misrepresentation.

Section 11.6 Insurance and Other Payments. Indemnified Claims will be calculated after application of any insurance proceeds actually received by the Indemnified Party (net of any increase in premiums or reasonable costs of recovery) or any proceeds received by the Indemnified Party from any other party obligated to indemnify the Indemnified Party.

Section 11.7 Mitigation. Each party hereto shall take all commercially reasonable steps to mitigate its Losses for which indemnification may be claimed hereunder promptly after becoming aware of any event which would reasonably be expected to give rise to such Losses, it being understood and agreed that no party shall be under any obligation to take any steps pursuant to this Section 11.6 that would reasonably be expected to impose any material cost, result in the loss of any material benefit or otherwise adversely impair the Acquired Assets or the business of such party in any material respect.

Section 11.8 Subrogation. If an Indemnified Party recovers any amount from an Indemnifying Party under this Article 11 in respect of Claims, the Indemnifying Party shall be subrogated, to the extent of such recovery, to the Indemnified Party’s rights against any third party with respect to such Claims. Without limiting the foregoing, upon request from any Indemnifying Party that has paid an indemnification claim hereunder, the Indemnified Party to whom such payment was made will assign to the Indemnifying Party, to the fullest extent allowable, any rights to recover from insurance, applicable warranties or third-parties with respect to any Claims for which the Indemnifying Party provided indemnification to the Indemnified Party hereunder, or if such assignment is not permissible, but the Indemnified Party in question is nonetheless permitted to pursue such claim on such Indemnifying Party’s behalf, the Indemnified Party shall pursue such claim, at the Indemnifying Party’s direction and expense (which expenses shall be deemed indemnified Losses paid by the Indemnifying Party hereunder), with any recovery thereon to be transmitted to the Indemnifying Party promptly upon receipt, up to the amount of indemnified Losses paid by the Indemnifying Party with respect to the claim in question.

Article 12 Termination

Section 12.1 Reasons for Termination and Abandonment. This Agreement may, by prompt written notice given to the other parties prior to or at the Closing, be terminated:

(a) by mutual consent of the parties;

(b) by Buyer if there has been a Breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Parent or the Bank pursuant to this Agreement that would give rise to the failure of any of the conditions specified in Article 10 and such Breach, inaccuracy or failure is incapable of being cured by the Termination Date or has not been cured by Parent or the Bank within fifteen (15) days of Parent’s or the Bank’s receipt of written notice of such Breach,

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inaccuracy or failure from Buyer, and Buyer and Buyer Bank are not then in Breach of any provision of this Agreement;

(c) by Buyer if: (i) any of the conditions in Article 9 has not been satisfied on or before the Termination Date, or if it becomes apparent that satisfaction of such a condition prior to the Termination Date will be impossible (other than through the failure of Buyer or Buyer Bank to perform or comply with its covenants or obligations under this Agreement); and (ii) Buyer and Buyer Bank have not waived such condition on or before the Closing Date;

(d) by Parent if there has been a Breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Buyer or Buyer Bank pursuant to this Agreement that would give rise to the failure of any of the conditions specified in Article 9 or Article 10 and such Breach, inaccuracy or failure is incapable of being cured by the Termination Date or has not been cured by Buyer or Buyer Bank within fifteen (15) days of Buyer’s or Buyer Bank’s receipt of written notice of such Breach, inaccuracy or failure from Parent, and Parent and the Bank are not then in Breach of any provision of this Agreement;

(e) by Parent if: (i) any of the conditions in Article 10 has not been satisfied on or before the Termination Date, or if it becomes apparent that satisfaction of such a condition prior to the Termination Date will be impossible (other than through the failure of Parent or the Bank to perform or comply with its covenants or obligations under this Agreement); and (ii) Parent and the Bank have not waived such condition on or before the Closing Date;

(f) by Buyer or Parent in accordance with the provisions of Section 5.8(a);

(g) by Buyer if the board of directors of Parent, pursuant to Section 5.13 and in the exercise of its fiduciary duties, shall have failed to recommend in the Proxy Statement the approval of this Agreement, shall have withdrawn, modified or changed, in any manner adverse to Buyer or Buyer Bank, or publicly announced its intent to withdraw, modify or change, in any manner adverse to Buyer or Buyer Bank, such recommendation of this Agreement (provided that the Shareholders do not subsequently approve this Agreement) or shall have failed to call or convene the meeting of Shareholders referred to in, or if Parent is otherwise in Breach of, Section 5.18;

(h) by Buyer or Parent if: (i) the Shareholders’ meeting referred to in Section 5.18 (including any adjournments thereof) shall have been held and completed and the Shareholders shall have taken a final vote on a proposal to adopt this Agreement; and (ii) the required approval of the Shareholders contemplated by this Agreement shall not have been obtained; provided, however, that the right to terminate this Agreement under this Section 12.1(h) shall not be available to Parent where the failure to obtain approval of the Shareholders shall have been caused by the action or failure to act of Parent or the Bank, and such action or failure to act constitutes a Breach by Parent or the Bank of any provision of this Agreement;

(i) by Parent, without further action, if Parent or the Bank shall have in accordance with Section 5.13 either: (i) terminated this Agreement; or (ii) entered into a definitive agreement (other than this Agreement or any amendment hereto) with respect to an Acquisition Transaction; provided, however, that such termination under this Section 12.1(i) shall not be effective until the Bank has made payment to Buyer or Buyer Bank of the amounts required to be paid pursuant to Section 12.3;

(j) by Buyer or Buyer Bank if: (i) the FDIC or DFPR (or other Regulatory Authority) appoints, under any applicable federal, state or local banking law, a receiver or conservator for the Bank or for all or substantially all of the assets of the Bank; or (ii) the Bank files with the FDIC or

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DFPR (or other Regulatory Authority) a notice of voluntary liquidation or other similar action under any applicable federal, state or local banking law or other similar law;

(k) by either Buyer, Buyer Bank, Parent or the Bank if the Closing has not occurred (other than through the failure of any party seeking to terminate this Agreement to comply fully with its obligations under this Agreement) on or before the date that is nine (9) months after the Agreement Date, or such later date as the parties may agree in writing (the “Termination Date”); provided, however, that the party seeking to terminate this Agreement pursuant to this Section 12.1(k) has used its Reasonable Best Efforts to consummate the Contemplated Transactions prior to the Termination Date;

(l) by Parent or the Bank in the event that (i) Buyer and Buyer Bank voluntarily withdraws their application requesting regulatory approval of the Contemplated Transactions and do not re-file their application within thirty (30) days from the date of withdrawal, or (ii) Buyer and Buyer Bank fail to consummate the Contemplated Transactions within forty-five (45) days of receipt of all regulatory approvals; or

(m) by Buyer or Buyer Bank in the event that that Regulatory Authorities have not approved the Purchase and Assumption by the Termination Date solely because of the DFPR’s refusal to approve the Affiliate Merger (or, in lieu thereof, the dissolution of the Bank following the consummation of the Purchase and Assumption) and/or the FDIC’s refusal to grant the Bank’s request for the Deposit Insurance Termination.

Section 12.2 Effect of Termination. Except as provided in Section 13.4, Section 12.3 and Section 12.4, if this Agreement is terminated pursuant to Section 12.1, this Agreement shall forthwith become void, there shall be no liability under this Agreement on the part of Buyer, Buyer Bank, Parent or the Bank or any of their respective Representatives, and all rights and obligations of each party hereto shall cease; provided, however, that, subject to Section 13.4, Section 12.3 and Section 12.4, nothing herein shall relieve any party from liability for the Breach of any of its representations and warranties or the Breach of any of its covenants or agreements set forth in this Agreement occurring prior to termination.

Section 12.3 Termination Payments by Parent and the Bank.

(a) If this Agreement is terminated by Buyer pursuant to Section 12.1(b), Section 12.1(c) or Section 12.1(m) and, in the case of a termination pursuant to Section 12.1(c), all of the conditions to Parent’s and the Bank’s obligations to consummate the Closing under Article 10 have been satisfied (other than any such conditions which by their nature are to be satisfied on or by the Closing Date) and the failure of one or more conditions in Article 9 to be satisfied resulted from Parent’s or the Bank’s Breach of any of its representations, warranties, covenants or agreements set forth in this Agreement, Parent and the Bank (on a joint and several basis) shall pay to Buyer, upon its written demand, the amount of $150,000 by wire transfer of immediately available funds to such account as Buyer shall designate; provided, that, in no event shall Parent or the Bank be obligated under this Section 12.3(a) in the event that the Agreement is terminated by Buyer pursuant to Section 12.1(c) as a result of the failure of the condition set forth in Section 9.10 to be satisfied; provided, further, that if this Agreement is terminated pursuant to Section 12.1(m), Parent and the Bank shall not be obligated to make payment under this Section 12.3 if such failure was the result of Buyer’s or Buyer Bank’s Breach of any representation, warranty, covenant or agreement set forth in this Agreement.

(b) If this Agreement is terminated: (i) by Buyer pursuant to Section 12.1(g); (ii) by Parent pursuant to Section 12.1(i), (iii) by Buyer or Parent pursuant to Section 12.1(h); or (iv) by Buyer pursuant to Section 12.1(b) or Section 12.1(c) (and, in the case of a termination under clauses (iii) and

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(iv) only, within twelve (12) months after such termination Parent, the Bank or their respective Affiliates enter into a definitive agreement with any Person (other than Buyer, Buyer Bank or their Affiliates) with respect to another Acquisition Transaction)), Parent and the Bank (on a joint and several basis) shall pay to Buyer, upon its written demand, the amount of $250,000 by wire transfer of immediately available funds to such account as Buyer shall designate.

Section 12.4 Termination Payment by Buyer and Buyer Bank. If this Agreement is terminated by Parent pursuant to Section 12.1(d), Section 12.1(e) or Section 12.1(l) and, in the case of a termination pursuant to Section 12.1(e) or Section 12.1(l), all of the conditions to Buyer’s and Buyer Bank’s obligations to consummate the Closing under Article 9 have been satisfied (other than any such conditions which by their nature are to be satisfied on or by the Closing Date) and the failure of one or more conditions in Article 10 to be satisfied resulted from Buyer’s or Buyer Bank’s Breach of any of its representations, warranties, covenants or agreements set forth in this Agreement, Buyer shall pay to Parent, upon its written demand, the amount of $250,000 by wire transfer of immediately available funds to such account as Buyer shall designate; provided, however, that if this Agreement is terminated pursuant to Section 12.1(e) as a result of the failure to satisfy the condition set forth in Section 10.6, Buyer shall be obligated to make payment under this Section 12.4 regardless of whether the failure of such condition to be satisfied resulted from Buyer’s or Buyer Bank’s Breach of any representations, warranties, covenants or agreements set forth in this Agreement, and regardless of whether all of the conditions to Buyer’s and Buyer Bank’s obligations to consummate the Closing under Article 9 have been satisfied.

Section 12.5 Liquidated Damages. The amounts payable under Section 12.3 and Section 12.4 shall constitute liquidated damages and shall be the sole and exclusive remedy of Buyer and Buyer Bank, or Parent and the Bank, as applicable, or any of their Affiliates or Representatives, for any and all losses that may be suffered based upon, or resulting from or arising out of the circumstances giving rise to such termination, and upon payment of a termination fee by Buyer or Buyer Bank on the one hand or Parent or the Bank on the other hand pursuant to Section 12.3 and Section 12.4, neither the paying party or its Affiliates or Representatives shall not have any further liability or obligation relating to or arising out this Agreement or the Contemplated Transactions.

Article 13 Miscellaneous

Section 13.1 Governing Law. All questions concerning the validity and effect of the Contemplated Transactions or the construction, validity and interpretation of this Agreement and the performance of the obligations imposed by this Agreement shall be governed by the internal laws of the State of Illinois applicable to Contracts made and wholly to be performed in such state without regard to conflicts of laws.

Section 13.2 Jurisdiction and Service of Process. Any action or proceeding seeking to enforce, challenge or avoid any provision of, or based on any right arising out of, this Agreement shall be brought only in the courts of the State of Illinois, County of McHenry or, if it has or can acquire jurisdiction, in the United States District Court serving the County of McHenry, and each of the parties consents to the exclusive jurisdiction of such courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to jurisdiction or venue laid therein. Process in any action or proceeding referred to in the preceding sentence may be served on any party anywhere in the world.

Section 13.3 Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY OR DISPUTE THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT

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SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE CONTEMPLATED TRANSACTIONS. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT: (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (B) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (C) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY; AND (D) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS OF THIS Section 13.3.

Section 13.4 Expenses. Except as otherwise expressly provided in this Agreement, each party to this Agreement will bear its own respective expenses incurred in connection with the preparation, execution and performance of this Agreement and the Contemplated Transactions. If any of the parties hereto files suit to enforce this Section 13.4 or a suit seeking to recover costs and expenses or damages for Breach of this Agreement, the costs, fees, charges and expenses (including attorneys’ fees and expenses) of the prevailing party in such litigation (and any related litigation) shall be borne by the non-prevailing party.

Section 13.5 Assignments, Successors. No party may assign any of its rights under this Agreement to any other Person without the prior written consent of the other parties, which consent shall not be unreasonably withheld or delayed. Subject to the preceding sentence, this Agreement and every representation, warranty, covenant, agreement and provision hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

Section 13.6 Waiver. The rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the failure nor any delay by any party in exercising any right, power or privilege under this Agreement or the documents referred to in this Agreement will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege. To the maximum extent permitted by applicable law: (a) no claim or right arising out of this Agreement or the documents referred to in this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation of the claim or right unless in writing signed by the other parties; (b) no waiver that may be given by a party will be applicable except in the specific instance for which it is given; and (c) no notice to or demand on one party will be deemed to be a waiver of any obligation of such party or of the right of the party giving such notice or demand to take further action without notice or demand as provided in this Agreement or the documents referred to in this Agreement.

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Section 13.7 Modification. This Agreement may not be amended except by a written agreement signed by each of Buyer, Buyer Bank, Parent and the Bank. Without limiting the foregoing, Buyer, Buyer Bank, Parent and the Bank may by written agreement signed by each of them: (a) extend the time for the performance of any of the obligations or other acts of the parties hereto; (b) waive any inaccuracies in the representations or warranties contained in this Agreement or in any document delivered pursuant to this Agreement; and (c) waive compliance with or modify, amend or supplement any of the conditions, covenants, agreements, representations or warranties contained in this Agreement or waive or modify performance of any of the obligations of any of the parties hereto, which are for the benefit of the waiving party; provided, however, that no such modifications, amendment or supplement agreed to after authorization of this Agreement by the Shareholders shall affect the rights of the Shareholders in any manner that is materially adverse to them.

Section 13.8 Publicity. Prior to the Closing and except as required by law, the parties hereto will consult with each other before issuing any press releases or otherwise making any public statements with respect to this Agreement or the Contemplated Transactions and shall not issue any such press release or make any such public statement without the prior consent of the other parties, which consent shall not be unreasonably withheld. Prior to the mailing of the Proxy Statement to the Shareholders, each of the parties hereto shall keep this Agreement strictly confidential and not make any disclosure of this Agreement to any Person without the prior written consent of the other parties to this Agreement, unless required by applicable law or the terms of this Agreement. Buyer, Buyer Bank, Parent and the Bank will consult with each other concerning the means by which the Bank’s and the Bank’s employees, customers and suppliers and others having dealings with the Bank will be informed of the Contemplated Transactions.

Section 13.9 Confidentiality. Between the Agreement Date and the Closing, each of Buyer, Buyer Bank, Parent and the Bank will maintain in confidence, and will cause its respective Affiliates and Representatives to maintain in confidence, and not use to the detriment of any other party or any of its Affiliates any written, oral or other information obtained in confidence from any other party or any of its Affiliates in connection with this Agreement or the Contemplated Transactions, unless: (a) such information is already known to such party or to others not bound by a duty of confidentiality or such information becomes publicly available through no fault of such party; (b) the use of such information is necessary or appropriate in making any filing or obtaining any consent or approval required for the consummation of the Contemplated Transactions; provided, however, that any such information shall be filed under a request for confidential treatment to the applicable Regulatory Authority; or (c) the furnishing or use of such information is required by or necessary or appropriate in connection with any Proceedings. If the Contemplated Transactions are not consummated, each party will return or destroy as much of such written information as any other party may reasonably request.

Section 13.10 Notices. Except as required by Section 5.2, all notices, consents, waivers and other communications under this Agreement must be in writing (which shall include telecopier communication and electronic mail) and will be deemed to have been duly given if delivered by hand or by nationally recognized overnight delivery service (receipt requested), mailed by first class mail with postage prepaid, or telecopied or sent by electronic mail if confirmed immediately thereafter by also mailing a copy of any notice, request or other communication by mail as required in this Section 13.10:

if to Buyer or Buyer Bank: Wonder Bancorp, Inc.

7526 Hancock Drive Wonder Lake, Illinois 60097 Attention: Stephen Mitchell President & CEO

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Telephone: (815) 728-8000 Facsimile: (815) 728-1109 E-mail: smitchell@thestatebankgroup.com

with a copy to: Barack Ferrazzano Kirschbaum & Nagelberg, LLP 200 West Madison Street, Suite 3900 Chicago, Illinois 60606 Attention: J. Brent McCauley, Esq. Telephone: (312) 984-3100 Facsimile: (312) 984-3150 E-mail: brent.mccauley@bfkn.com

if to Parent or Bank: Harvard Illinois Bancorp, Inc.

58 North Ayer Street Harvard, Illinois 60033 Attention: Donn L. Claussen President and Chief Executive Officer Telephone: (815) 943-8603 Facsimile: (815) 943-7844 E-mail: donn@harvardsavingsbank.com

with a copy to: Luse Gorman, PC 5335 Wisconsin Avenue, N.W. Suite 780 Washington D.C. 20015 Attention: Kip A. Weissman, Esq. Telephone: (202) 274-2029 Facsimile: (202) 362-2902 E-Mail: kweissman@luselaw.com

or to such other Person or place as any party shall furnish to the other parties hereto in writing. Except as otherwise provided herein, all such notices, consents, waivers and other communications shall be effective: (a) if delivered by hand, when delivered; (b) if mailed in the manner provided in this Section 13.10, three (3) Business Days after deposit with the United States Postal Service; (c) if delivered by overnight express delivery service, on the next Business Day after deposit with such service; and (d) if by facsimile or electronic mail, on the next Business Day if also confirmed by mail in the manner provided in this Section 13.10.

Section 13.11 Entire Agreement. This Agreement and any documents executed by the parties pursuant to this Agreement and referred to herein constitute a complete and exclusive statement of the entire understanding and agreement of the parties hereto with respect to their subject matter and supersede all other prior agreements and understandings, written or oral, relating to such subject matter between the parties.

Section 13.12 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision

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or the remaining provisions of this Agreement unless the consummation of the Contemplated Transactions is adversely affected thereby.

Section 13.13 Further Assurances. The parties agree: (a) to furnish upon request to each other such further information; (b) to execute and deliver to each other such other documents; and (c) to do such other acts and things, as any party may reasonably request for the purpose of carrying out the intent of this Agreement and the documents referred to in this Agreement.

Section 13.14 Counterparts; Facsimile/PDF Signatures. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. This Agreement may be executed and accepted by facsimile or portable data file (pdf) signature and any such signature shall be of the same force and effect as an original signature.

Section 13.15 No Third Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

Section 13.16 Survival. Except for those obligations and covenants that are expressly contemplated by the terms of this Agreement to survive beyond the Closing Date, the other covenants, representations and warranties contained in this Agreement shall survive only until the Effective Time.

[THE REMAINDER OF THIS PAGE IS LEFT INTENTIONALLY BLANK]

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers or representatives as of the day and year first written above.

WONDER BANCORP, INC. By: /s/ Stephen Mitchell

Name: Stephen Mitchell Title: President and Chief Executive Officer

STATE BANK By: /s/ Stephen Mitchell

Name: Stephen Mitchell Title: President and Chief Executive Officer

HARVARD ILLINOIS BANCORP, INC. By: /s/ Donn L. Claussen

Name: Donn L. Claussen Title: President and Chief Executive Officer

HARVARD SAVINGS BANK By: /s/ Donn L. Claussen

Name: Donn L. Claussen Title: President and Chief Executive Officer

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APPENDIX A

“Pennant Assets” means all of the Bank’s rights, title, interests, claims or reimbursement of any monies, assets or things of value arising from or related to the Bank’s purchase of an interest or interests in loans and/or repurchase agreements made by or related to Pennant Management, Inc. GreatBanc Trust Company, U.S. Fiduciary Services, Inc., First Farmers Financial, LLC, Nikesh Ajay Patel, Timothy Glenn Fisher, Trisha N. Patel, Alena Hospitality, LLC, Alena Laboratories, LLC, Alena Aviation, LLC, Able Connection, LLC, NPASS, LLC, Kuber Capital Funding, LLC, Kuber Consulting, Suri Hospitality, LLC, Suri Hospitality International, LLC, Translucent Entertainment, LLC, Alena Production, LLC and ASL Pictures, LLC, including but not limited to

(i) securities or undivided percentage interests in the First Farmers Financial LLC (Repo B Fund) issued by Pennant Management, Inc. (“Pennant”) and/or GreatBanc Trust Company (“GreatBanc”) pursuant to:

(a) the Master Repurchase Agreement (Repo B) dated May 9, 2013 between First Farmers Financial, LLC (“FFF”) and Pennant;

(b) the Repurchase Transaction Tri-Party Custody Agreement dated May 9, 2013 among Pennant, FFF and GreatBanc;

(c) the Investment Advisory Agreement dated October 9, 2012 between Pennant and Bank;

(d) the Customer Account Control Agreement (First Farmers Financial, LLC Repo B) dated June 5, 2013 among Pennant, GreatBanc and Harvard; and,

(e) any documents or instruments executed or delivered in connection with any of the foregoing or the Bank’s purchase of and investment in First Farmers Financial, LLC Repo B Fund (“Repo B Fund”).

and,

(ii) any judgments or awards entered in any lawsuit, arbitration or other proceeding brought or settlement of any claims asserted by the Bank against FFF, Pennant, GreatBanc or any other persons or entities (or their respective insurers) arising from or related to any of the documents described in clause (i) and the Bank’s investment in the Repo B Fund, including but not limited to those claims arising from or related to any breaches or violations of the provisions or requirements (including but not limited to rescission rights) of:

(a) any federal or state securities laws, including but not limited to the following:

(W) the 1933 Securities Act, as amended, (15 U.S.C.§77a, et seq.) and the rules and regulations promulgated thereunder;

(X) the 1934 Securities Exchange Act, as amended, (15 U.S.C. §78a, et seq.) and the rules and regulations promulgated thereunder;

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(Y) the Investment Advisors Act of 1940, as amended, (15 U.S.C. §80b-1, et seq.) and the rules and regulations promulgated thereunder; and,

(Z) the Illinois Securities Law of 1953, as amended (815 ILCS 5/1 et seq.) and the rules and regulations promulgated thereunder.

(b) any contract or common law or other statutory duties whether arising from theories of negligence, gross negligence or reckless misconduct, neglect, intentional acts or conspiring, aiding and abetting or acting in concert to breach or violate such duties, or otherwise arising,

(c) any legal theory that would impose punitive or treble damages or attorneys’ fees,

and,

(iii) any judgment or award entered in any lawsuit, arbitration or other proceeding brought by or settlement of any claims asserted by the Bank against any of the Bank’s or Parent’s insurance carriers or bond issuers relative to any matters described in clauses (i) or (ii) hereof;

and,

(iv) any payments or distributions made to the Bank by Pennant, GreatBanc, FFF or other persons or entities related to any of the matters set forth in the foregoing clauses (i) through (iii), both inclusive, including but not limited to payments or distributions arising from or related to:

(a) any final order or settlement of claims asserted or that may be asserted by Pennant against the U.S. Department of Agriculture; or,

(b) any final order or settlement of claims asserted or that may be asserted against any of the defendants (or any other person or entity) in the case entitled Pennant Management, Inc., Plaintiff v. First Farmers Financial, LLC, et al., Defendants, currently pending in the United States District Court for the Northern District of Illinois and bearing case number 14CV 7581 (the “Case”).

and,

(v) any payments or distributions made to the Bank from any receiver, trustee or distribution agent appointed in the Case,

and,

(vi) any payments or distributions made to the Bank under or pursuant to that certain Trust Agreement dated January 19, 2015 between Pennant and GreatBanc,

and,

(vii) all of the Bank’s right title and interest in and under, including but not limited to the right to assert claims in and under any applicable bond or insurance policies maintained by the Bank or Parent.

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