and assumptions regarding cost savings, purchase accounting adjustments, other merger-related adjustments and restructuring charges provided by Mid Penn management, and KBW assumed discount rates ranging from 11.0% to 15.0%. The range of values was derived by adding (i) the present value of the implied future excess capital available for dividends that William Penn could generate over the period from June 30, 2025 through December 31, 2029 as a standalone company, and (ii) the present value of William Penn’s implied terminal value at the end of such period, in each case applying estimated cost savings and assumptions regarding purchase accounting adjustments, other merger-related adjustments and restructuring charges, where applicable. KBW assumed that William Penn would maintain a tangible common equity to tangible assets ratio of 10.00% and would retain sufficient earnings to maintain that level. In calculating the terminal value of William Penn, KBW applied a range of 9.0x to 11.0x William Penn’s estimated 2030 earnings (inclusive of estimated cost savings). This dividend discount model analysis resulted in a range of implied values per share of William Penn common stock, taking into account the cost savings expected to result from the merger as well as certain purchase accounting adjustments and other merger-related adjustments and restructuring charges assumed with respect thereto, of $15.82 to $20.48. The dividend discount model analysis is a widely used valuation methodology, but the results of such methodology are highly dependent on the assumptions that must be made, including asset and earnings growth rates, terminal values, and discount rates. The foregoing dividend discount model analysis did not purport to be indicative of the actual values or expected values of William Penn or the pro forma combined company. Miscellaneous. KBW was retained by Mid Penn solely to render its opinion to the Mid Penn board of directors, and KBW did not act as a financial advisor or other advisor to, or as an agent of, Mid Penn or any other person. As part of its investment banking business, KBW is continually engaged in the valuation of bank and bank holding company securities in connection with acquisitions, negotiated underwritings, secondary distributions of listed and unlisted securities, private placements and valuations for various other purposes. As specialists in the securities of banking companies, KBW has experience in, and knowledge of, the valuation of banking enterprises. KBW and its affiliates, in the ordinary course of KBW’s and its affiliates’ broker-dealer businesses, may from time to time purchase securities from, and sell securities to, Mid Penn and William Penn. In addition, as market makers in securities, KBW and its affiliates may from time to time have a long or short position in, and buy or sell, debt or equity securities of Mid Penn or William Penn for its and their own accounts and for the accounts of its and their respective customers and clients. Pursuant to the KBW engagement agreement, Mid Penn has agreed to pay KBW a cash fee equal to $300,000, which became payable to KBW with the rendering of KBW’s opinion. Mid Penn also has agreed to reimburse KBW for reasonable out-of-pocket expenses and disbursements incurred in connection with its engagement and to indemnify KBW against certain liabilities relating to or arising out of KBW’s engagement or KBW’s role in connection therewith. Other than in connection with the present engagement, in the two years preceding the date of the opinion, KBW did not provide investment banking or financial advisory services to Mid Penn. In the two years preceding the date of KBW’s opinion, KBW did not provide investment banking or financial advisory services to William Penn. KBW may in the future provide investment banking and financial advisory services to Mid Penn or William Penn, and receive compensation for such services. Certain Prospective Financial Information of the Parties In connection with the proposed merger, Mid Penn provided certain of its prospective financial information to KBW, which was engaged by Mid Penn to render an opinion to Mid Penn’s board of directors, and also to William Penn and Piper Sandler, the financial advisor to William Penn, and William Penn provided certain of its prospective financial information to Piper Sandler and Mid Penn. The prospective financial information reflects numerous estimates and assumptions with respect to industry performance, general business, economic, regulatory, market and financial conditions and other future events, as well as matters specific to each of Mid Penn’s and William Penn’s respective businesses, all of which are inherently uncertain and difficult to predict and many of which are beyond the parties’ control. The prospective 84
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