1. A flexible new solution for Charlotte Engineering 401(k) Retirement Plan First National Bank 2. First National Bank Discussion Agenda Introductions Thank you for the opportunity to meet today! Reviewing your situation and objectives Firm overview: First National Bank and BPAS Program Highlights Simplifying life for Human Resources Technology and websites Special product features Education, Investments and Fiduciary Services Fee structure Open discussion / Q&A 3. First National Bank Current plan highlights 401k plan currently serviced by Paychex 13.2 million 350 eligible participants 105 participants with a balance Match- 50% up to 6% deferrals Interested in automatic enrollment with an automatic escalation program. 43 outstanding loans- currently payroll deducted 4. First National Bank Reviewing your situation and objectives Plan type(s) offered? Assets and participant count? Current mix of providers and roles? How is payroll processed? Loans? Hardships? Employer contribution formula and rules? Recent compliance testing results? Participation rates, savings rates, key success metrics Investment menu Participant perceptions, comfort level with program? Strength of education program, relationship management services? Fiduciary status of providers? Who are your Plan Trustees? Total cost of services and how are fees handled now? What is working well? What areas of the plan could be improved? Have there been any recent problems, service issues or errors? Any other objectives or concerns? 4 5. First National Bank First National Bank Who we are www.FirstNationalBank.com One of the States five largest banking institutions Over 600 associates throughout our footprint region Over $2.5 billion in deposits, $800 million in trust and fiduciary assets Delivering a comprehensive array of fiduciary and investment services Retirement plans: Dedicated line of business Due to the complexities and costs of being in the retirement plan business, we opted to find a strategic partner 5 6. First National Bank Introducing BPAS Our administrative partner 6 3,600 retirement plans 375,000 plan participants $18.6 billion of assets under custody Nine offices and 250 employees across US and Puerto Rico Full-service retirement provider, offering entire spectrum of DC and DB plans Vertically integrated model: BPAS acts as TPA, recordkeeper, clearing firm and asset custodian within a single organization (extremely unique in the industry). One company. One call. Wholly owned subsidiary of NYSE-traded institution (ticker: CBU), with 2,200 employees in total. Profitable, stable institution with public financials Subject to multiple levels of regulatory and audit scrutiny 7. First National Bank 7 BPAS: More than 50 household name clients Includes plan sponsor clients across the continental U.S. and Puerto Rico. Information of public record through Form 5500 filings / DOL database. 7 8. First National Bank How we work together to service your plan 8 Educating your plan participants Helping plan sponsor meet its fiduciary obligations Being accessible for one-on-one participant needs Maintaining fund menu, meeting with RP Committee Investment Policy Statement, ERISA 404(c) assistance Responsive, proactive service (a relationship) The Relationship First National Bank Simplifying life for Human Resources Strength in compliance, consulting and technical matters Robust participant and plan sponsor websites (technology) Documents, notices, statements, enrollment kits and materials Open architecture investment universe, with SDBA option Responsive, proactive service (a relationship) The Platform BPAS 8 9. Program Highlights 9 10. First National Bank Simplifying Life for Employers(Administration versus recordkeeping , provided by BPAS) We track all employees on our system (not just those with a balance) We process census files for a variety of edits before notifying employer of amount to be funded We determine and monitor eligibility by source, by entry date (mailing welcome letters to newly eligible participants) We fully support online enrollment, auto enrollment, contribution rate changes, automatic escalation, online beneficiary designations Vesting updates real time during the year 10 11. First National Bank Simplifying Life for Employers (administration versus recordkeeping) Streamlined process for loans, hardships, QDROs, distributions Greatly reduced workload for compliance testing, allocations and Form 5500 process Reducing the burden of plan audits (certified audit package and direct communication with auditors) Interacting with HR through Action Items in plan sponsor website Your Plan Consultant: Single point of contact service Youd be amazed how many errors are found in a typical payroll system. The BPAS approach to administration provides a vital check and balance to catch many possible errors before they are traded into your Plan. This additional audit is a major advantage of BPAS versus other providers we have worked with. - Plan sponsor client 11 12. First National Bank The Workflow on New Contributions 1 Plan sponsor imports census file into CensusPro, submits to BPAS BPAS reviews file for numerous edit checks, sends email to plan sponsor instructing them to log onto CensusPro and review ACH verification, which includes corrections we made to data 2 Plan Sponsor 3 Plan Sponsor 3 Plan Sponsor Plan sponsor logs onto CensusPro, reviews / approves ACH verification 2 3 Plan Sponsor 4 If approved by 3:30 PM EST, BPAS initiates mutual fund purchases at that evenings prices. If after 3:30 PM EST, Purchases made on next business day. 5 The next morning, participants see trades reflected on website. BPAS ACH pulls required funds from plan sponsor checking account to settle prior days contributions. Note: for plan sponsors who prefer, authorization can be given to have BPAS automatically trade new contribution if there are no edits on ACH verification. 12 13. First National Bank Small benefits, BIG difference! Adjudicating loans, hardships, distributions and QDROs interacting directly with participants and taking HR out of the hot seat Handling all age 70- notices for entire plan Preparing all required notices (safe harbor, QDIA, SMM, SAR, 408(b)(2), 404a-5, etc.) No redemption fees (opposite way trade block used, where applicable) No blackout period for fund changes Plan sponsors can assist participants in a variety of ways obtaining paperwork in website, transactional access, etc. We can reset PINs over the phone (after security questions are correctly answered) 13 14. First National Bank Specialists at Plan Design Age or service-weighted allocations QNEC and QMACs New comparability Allocations Hours requirements Handling of forfeitures Entry dates Compensation definitions Last day rules Safe harbor designs Vesting Automatic enrollment Roth, catch-up contributions Loan provisions In-service distributions True-ups Distribution options Deferral rate changes QDIA options Contribution limits We help you navigate ERISA and its complexities, helping you make informed plan design decisions. Age-weighted allocations Social Security integration 14 15. First National Bank Full Service Call Center CSR CSR CSR CSR CSR CSR CSR CSR All calls recorded and archived Next available routing across multiple offices If queue exists, approximate hold time provided Option to hang up and get immediate callback when next CSR becomes available CSR Team Manager Instant management reports Real-time reporting of: incoming call volume number of calls on hold average hold time call abandonment rate individual CSR performance Can add additional CSRs to queue at any time based on volume ideal system for managing, training individual CSRs Translator line covers approximately 100 languages Hours: 8:30 AM 6:30 PM EST Email and voicemail available 24/7/ 365 15 16. First National Bank Quarterly Participant Statements Quarterly statements and newsletters mailed to participant homes Account Summary YTD Rate of Return Detail by source and investment Investment performance and benchmarks Expenses Retirement Projections Includes investor newsletter Permanently archived in participant website Three part option for e-delivery in website (statements, required notices and confirms) 16 17. First National Bank Enrollment Kits Hard copy kits plus the online enrollment kit (always up-to-date) Complete education experience in a single, bound booklet Hard copy kits can be ordered from plan sponsor website at any time 17 18. First National Bank Our Participant Website Welcome screen Statement on demand Online enrollment wizardAccount realignment 18 19. First National Bank 20. First National Bank Specific features in participant website Account breakdown by fund, source Statement on demand with dynamic date ranges Transaction research, export to Excel Fund-to-fund transfers Re-directing new contributions Account rebalancing Automatic rebalancing Online enrollment, deferral rate changes, auto- escalation Loan modeling and requests Loan, hardship, distribution paperwork Personalized rate of return (dynamic date range) Fund research library Online fact sheets, prospectuses, performance history Education and guidance Education and multimedia library Secure email with CSR team Archive of past statements and newsletters Required notices Integration with Mint.com Online beneficiary designations Continuously evolving features 20 21. First National Bank The Financial Resource Center 21 22. First National Bank Online Library of Planning Calculators (23 in total) 22 23. First National Bank Market Dashboard Real-time Market Insights 23 24. First National Bank The MasteryPoint Guidance Plus Suite 24 25. First National Bank Our Plan Sponsor Website Welcome screen Log on as a participant Participant messagingThe Resource Center an online file cabinet of all data and reports 25 26. First National Bank Some highlights of the plan sponsor website Account breakdown by fund, source Statement on demand with dynamic date ranges (plan level) Transaction research, export to Excel Drill down as a participant Transactional access (enabled or disabled) Resource Center (library of tools and reports) Action Items Informational Reports Annual Plan Reports Quarterly Plan Reports Utilization Reports Complete data table on employee population through .CSV files Research status of transactions (loans, hardships, distributions, etc.) View login, transaction history by participant Fund research library Retirement Gap Reports (review retirement income adequacy of participants) Education and guidance suite Multimedia library Banner messaging at participant level Ongoing rollout of new enhancements over time 26 27. First National Bank 28. First National Bank The Annual Plan Review Report (APRR) 28 29. First National Bank Are your participants headed to a secure retirement? Quarterly reports in plan sponsor website, run for all plans (.CSV file and PDF summary) Based around goal of 7.2 times projected final pay in retirement balance 35 year old earning $40,000 with total balance of $84,000: Current wealth accumulation factor (WAF) of 2.1 62 year old earning $72,000, balance of $850,000: Current wealth accumulation factor (WAF) of 11.8 Based on projected final WAF, participants receive grade of A+ to F (A+ for > 7.2 times) Two page quarterly summary report reviews breakdown by 10 year age bands and plan as a whole. Ideal handout for retirement committee meetings to track progress. 29 The Retirement Gap Report 30. First National Bank Web utilization report YTD Rate of Return Report Participant investment Grid Login history and transaction report Beneficiary changes report Participant email addresses / e- delivery report More under development 30 Other key reports 31. First National Bank31 Fee Disclosure Process BPAS takes a comprehensive approach which provides significant benefits to your organization 408(b)(2) plan level 404a-5 participant level Go Green approach, promoting e-delivery Fee Summary Document Mailing Services Team (as needed) 32. First National Bank Traditional Loan Processing Sponsor handles much of process through payroll deduction Multiple loan deductions with different payoff dates Additional payments must generally be an even multiple of payment amount Potential issues with proper handling of loan defaults Upon termination of employment, participant must repay outstanding balance within 90 days or default Sponsor gets out of loan business One monthly amount due per participant (tracked by BPAS) BPAS assumes all aspects of monitoring and payment processing Participants can make additional principal payments at any time BPAS alerts participants of pending loan default and notifies plan sponsor Terminated participants can continue to pay their loans instead of being forced to default (compassionate solution) Ideal for employees with significant variable compensation MyPlanLoan Processing Two options for participant loans 32 33. First National Bank MyPlanLoan Screen Shots 33 34. First National Bank MyPlanLoan Screen Shots 34 35. Education, Investments and Fiduciary Services 35 36. First National Bank36 Answering the Call on Participant Education First National Bank manages entire process Initial year enrollments Ongoing meetings (semiannual, quarterly, etc.) Continuing education classes on specific topics Can offer technology-based meetings for large, dispersed workforces Communicating with employees on their level in a friendly, non- intimidating way Personalized assistance during the year Quarterly statements and newsletters Enrollment kits, online enrollment kits, customizable pieces Vast education library delivered online through our participant website Participant advice options available (as driven by client needs) 37. First National Bank37 Some presentations we use 38. First National Bank38 True Open Architecture on Investments Starting point: More than 300 fund families traded across BPAS platform (20,000+ total funds available, counting all fund families) No proprietary funds. No ratio requirements or required QDIA funds. No variable annuities or separate accounts. Able to select strongest possible mix of investments for your plan since we are 100% revenue neutral Full range share classes available, with focus on institutional share classes (Admiral Shares, R6, I, etc.) All funds trade no-load with same day trading (4 PM EST participant cutoff time) Any revenue sharing used to offset fees at the level of each fund far superior to ERISA recapture methodology (fee fairness among participants) 39. First National Bank39 Additional services provided by First National Bank Fiduciary Services Serving as Discretionary Trustee Maintaining Investment Policy Statement, monitoring funds, quarterly scoring, maintaining watch list, making fund changes when needed Plan update meetings with your retirement plan committee Important trends / key success measures Discussion of plan design Discussion of investments Administrative issues and ways to improve the plan Set priorities for coming year Serving as relationship manager and local point of contact, keeping the plan running smoothly 40. First National Bank Understanding the Platform Fee and fee normalization 40 35 basis points American Growth Fund of America R4 35 bps Buffalo Small Cap Stock 25 bps 10 bp custodial fee Dodge & Cox International 10 bps 25 bp custodial fee 35 bp custodial fee Pure institutional funds (Vanguard T. Rowe, etc) Any custodial fee is applied as a level monthly charge against holdings in the fund. For example, if a 25 basis point custodial fee is required, it would be charged as 2.08 basis points / month from that fund, or $2.08 / month for a participant with $10,000 invested. = revenue sharing = platform true up Typical platform charge on smaller plan: 35 basis points on mutual fund assets 41. First National Bank41 Easy Onboarding Process Our Conversions Team manages the process and coordinates with all parties , to minimize work for plan sponsor 2 months prior 1 month prior Month #1 New provider memo and blackout notice given to employees Enrollment / education meetings, Forms returned (or online enrollment) Begin processing employee contributions per investment elections Plan Profile Form and enrollment booklet order form submitted. Fund selections made. $ $ Fund map-over process / re-registration of shares (typically 1-2 business days) File received from prior recordkeeper Blackout period ends. PINs mailed to participant homes. Plan is live! This illustration depicts the typical sequence of events in a map-over process conversion. Actual circumstances of each plan conversion will drive the ultimate outcome, including the timeliness and accuracy of data received from 42. First National Bank42 In summary, our program will. Help you fulfill your duties as a plan sponsor while greatly reducing your fiduciary and compliance risk Simplify life for your Human Resources team through comprehensive administration and consulting services Deliver a quality and diverse array of investments thanks to our open architecture platform and ongoing due diligence Upgrade the client experience through state-of-the-art participant and plan sponsor websites Move the needle on key success measures, thanks to the local presence and diligence of First National Bank Deliver all of the above at competitive and fully transparent fees