Memorandum on findings

FIRST NATIONAL BANK OF OMAHA

1620 DODGE STREET
OMAHA, Nebraska 68197

STAR RATING: 3
Predictive Indicator
As of September 30, 2009
Federal Reserve System Identifier 527954

HOLDING COMPANY INFORMATION

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INTRODUCTION

U.S. commercial banks are chartered under either federal or state jurisdiction for the purposes of accepting funds for deposit and extending loans to either individual or business borrowers. Banks are subject to credit, interest rate, and operational risk, and, because of both their public purpose and their importance to the nation's economy, banks are the object of intense regulatory scrutiny.

The Bankrate proprietary commercial bank rating model analyzes capitalization, asset quality, earnings, and liquidity and produces composite and component "Star" ratings that can be used as a measure of the rated entity's financial safety and soundness. Additionally, early warning components of the model highlight operating characteristics of immediate concern and recommended follow-up actions.

Institution Commentary

OVERVIEW of Institution
Organized in 1863, FIRST NATIONAL BANK OF OMAHA is a nationally chartered commercial bank, which, as of September 30, 2009, reported $8.6261 billion in total assets. At that date, loans and deposits held by the bank amounted to $4.4539 billion and $7.1055 billion, respectively. The bank's September 30, 2009 equity base of $561.8450 million produced an Equity/Assets ratio of 6.51%, as of that date.

COMPOSITE SUMMARY
Bankrate believes that, as of September 30, 2009, this bank exhibited a generally satisfactory condition, characterized by approximately normal overall, sustainable profitability, satisfactory asset quality, below standard capitalization and near normal liquidity.

EARNINGS ANALYSIS
For the nine months ended September 30, 2009, the bank recorded net income of $5.7770 million. The bank experienced a return on average assets (ROA) of 0.31% over the latest four quarters. Year earlier nine month results amounted to a net profit of $62.5710 million, or a 0.89% annualized ROA. An ROA of at least 1.0% is deemed satisfactory in accordance with banking industry standards, and the industry's ROA for the first nine months of 2009 was approximately 0.05%. We have concluded that for the first nine months of 2009, the bank achieved a very healthy return on equity. We deem net interest margin to have been mid-range. Noninterest income was solid. We also observed overhead ratios that were significantly higher than average, and the composition of overhead should be thoroughly analyzed. Importantly, net interest margins, noninterest income components, and overhead expense levels represent operating factors that combine to impact overall operating results.

ASSET QUALITY ANALYSIS
The bank revealed, as previously stated, satisfactory asset quality. Our conclusion with respect to asset quality incorporates our analysis of data depicting regional economic conditions as well as our computations of a higher than standard September 30, 2009 nonperforming asset ratio, much better than normal reserve coverage for nonperforming loans, and much greater than average holdings of commercial real estate and construction loans, two categories that can intensify credit risk.

Commercial real estate and construction loans should be examined for:

• Loan underwriting and appraisal standards that differ from normal bank guidelines.
• Loan-to-value benchmarks deemed not in conformance with prudent underwriting requirements.
• Speculative construction activity.
• The deferral of interest payments during construction periods.
• The funding of the entire amount of construction costs and land valuation.

Other asset categories, such as farm and consumer loans, which may carry more than usual default potential, should not have a substantial negative impact upon future results.
Farm loan exposure does warrant information regarding crop and livestock conditions as well as analyses of category performance and loss reserve adequacy.
Securitization activities related to the sale of credit card receivables have not totally eliminated the bank's credit exposure arising from initially originating and retaining those receivables.

Loan yield can measure financial reward versus credit risk. Excessive loan yield may be an indicator of existing or future problems. Our loan review indicates that the bank has assumed a seemingly prudent position between credit risk and financial reward.

CAPITAL ANALYSIS
Balance sheet structural changes, through the one year period of time ended September 30, 2009, have possibly had a negative impact upon the bank's capital position. Our analytical methodology does take into account the quantity, quality, and durability of net worth, and, as set forth above, we have determined, based upon our series of tests, that the bank demonstrates below standard capitalization. We have calculated the bank's September 30, 2009 Total Risk-Based Capital position, a computation used by industry regulators, and have concluded that this bank exceeded the requirement, set by regulation, for this test. Notwithstanding any of the information contained within this section, we believe, based upon our analysis, that the institution should consider plans for enhancing reported capitalization.

LIQUIDITY ANALYSIS
As of September 30, 2009, the bank displayed Approximately Normal balance sheet liquidity and a No Greater Than Average Dependence upon wholesale, or non-core liabilities, which include all borrowings, such as Federal Home Loan Bank Advances, and CD's greater than $100,000.

Accounting principles require some securities to be categorized as "Available-for-Sale." Changes in market value of these securities are reflected through the GAAP (Generally Accepted Accounting Principles) net worth of the institution. Based upon the bank's present balance sheet, changes in the value of the current level of securities reported as "Available-for-Sale" are almost certain to have a substantial impact upon future net worth of the bank.

INSTITUTION SUMMARY
This bank has been rated generally satisfactory.
Negative factors that impacted that rating follow:

• Capitalization

As noted previously, early warning indicators, possibly requiring specific investigation include:

• Overhead
• Commercial Real Estate and Construction Lending
• Farm Loans
• Capital Adequacy

PREDICTIVE INDICATOR
As stated, we have determined a composite Star rating for this bank of 3 , indicative of a generally satisfactory financial condition. At times, financial conditions of banks change rapidly and significantly. Hence, our Safe & Sound Star ratings should not be deemed predictive of likely future ratings. However, in view of early warning indicators set forth within this report, in combination with the institution's financial data, we believe that the Star rating for this institution is unlikely to change within the ensuing twelve month period.