Skyline Presentation

The Difference is ClearSM
Confidential Information of Skyline Financial Corp.
12/17/2012 1

Bill Dallas - 35 Years in Mortgage Industry
Founded First Franklin
 Sold to NationsBank in 1998 for $232 million
 Bank of America & NationsBank merge in October 1998
 Purchased National Equity/NationPoint an Internet based retail lender
 Sold to National City Bank for $333M in 1999

Purchased Ownit in 2003 for $38 million
 Sold 20% to Merrill Lynch at $500 million pre-money in 2005
 Merrill Lynch pulled credit lines in late 2006

Investor and Board member in several mortgage and banking
technology companies
 Sysdome/Interthinx – sold for 7x invested capital in 4 years
 MindBox – sold for 9x invested capital in 3 years

Skyline Home Loans
 Became CEO and a major shareholder in 2009.

Confidential Information of Skyline Financial Corp. 12/17/2012 2

Mortgage Industry Turmoil Since 2006
 Pre-meltdown - 55,000 mortgage brokers & 5,000 mortgage
banks with 70% market share
 Today - 10,000 mortgage brokers and 3,500 mortgage banks
with 15% market share
 The 75% reduction resulted from new rules, reduced
warehouse financing, increased repurchase requests and
higher compliance costs.
 Four big banks now have 90% market share in a highly
profitable, consumer-rich market segment
 Talented mortgage veterans do not want to work for a bank


Regulatory Changes Have Been Dramatic

 Safe Act & NMLS
 Home Valuation Code of Conduct
 RESPA Reform and Enforcement
 Mortgage Disclosure Improvement Act
 Dodd-Frank Wall Street Reform & Consumer Protection Act
 Regulation Z—Loan Originator Compensation
 Creation of new Consumer Finance Protection Bureau
 GSE reform and FHFA’s plan to deal with Fannie & Freddie


Rare Opportunity in Mortgage Industry

Build an independent, well-capitalized mortgage bank
Take market share back from big banks
Use a consumer-focused eMortgage platform to ensure
compliance and lower bricks & mortar and compensation costs
Use low-cost acquisitions to grow
Deliver mortgage production directly to agencies and by-pass
bank aggregators
Go direct to consumers


Skyline Today

 Headquartered in Calabasas, CA
 250 employees, including 100+ loan officers, 7 locations
 Completed 5 acquisitions over the last 24 months
 $1.1 billion in forecast 2011 loan production
 $27 million in forecast 2011 revenue
 10% profit margins and expanding with volume


Loan Level Economics Are Very Attractive

Average loan size is $380K
Gross Revenue per loan - $9,684 (250 bps)
Gross profit per loan - $4,972 (128 bps)
Fixed expenses per loan - $4,331 (111 bps)
Operating Income per loan – $641 (16 bps)
Opportunity to improve Operating Income to 50 bps per loan
Based on Q3 2011 financial performance


Our Competitive Advantages

Institutional capital
Private “non-bank”
Innovative eMortgage Platform (“eMP ”) that reduces cost-to-
SM

produce and opens other channels of production beyond retail
 Next-generation CRM solution (“iPOSSM”) that allows loan officers to interact with
clients online
 Me&MyLoanSM direct-to-consumer portal
 Back-end functionality to ensure compliance with new regulatory environment
Top team in the business


Our Five-year Plan

 Grow annual production from $1B to $10B annually
 Increase EBITDA to $40-60 million
 Expand into other origination channels including
direct-to-consumer and “whole-tail”
 Use eMP to gain efficiencies across multiple origination
channels with a single, integrated platform


How We Get There
 Strategic add-on acquisitions
 New mortgage products
 Add direct connections to Fannie Mae and Ginnie Mae
 Drive consumer-direct volume via Me&MyLoanSM brand
 Use iPOSSM to create broker network (“whole-tail”)


Our eMortgage Platform - eMP
2) Me & My Loan and
1) Me & My Loan /iPOS widgets for 3) iPOS for
/ Affinity Branded Realtor, Credit Unions Loan Officers,
Portals and Bank Sites Brokers and
Call Center

Workflow
Event 200
• User • Loan
• Pricing
Auth App eMortgage Platform
Event 100 Event 500 • iPOS
Event 200

eMP
Integration
Services LOS
Fraud
Authentication AQUA Credit Title AUS
Services
System of
Pricing Engine Escrow AVM VOE/VOI/ Other Record
Appraisal Services
VOA


Me & My Loan – Loan Selection
SM

“My Top Picks”
for best loan is just
a click away!

•Close-on-Time
Guarantee

•Upfront savings and
rewards

•A home loan
experience that is
fun, easier and
hassle-free!


Me & My Loan℠ – Status Rewards
My Loan Center
guides our
customer through
each step of the
process

Unique solution
that actually
pays customer for
processing online

Virtual LO is always
available via online
chat to help


Me & My Loan℠ – Clear Disclosures
• Applying online
is easier
• Disclosures are faster
• Appraisal is ordered …
…customer feels safe and
in control!


iPOS℠ – For our Loan Officers

Our loan officers will have the latest
in CRM technology with iPOS℠
Loan officers will work online with
customers on the application
•The disclosure and appraisal process is
simple
•Loan officers will be able to market, price,
lock and communicate 24/7
•Our Borrower Loyalty program keeps
them connected for life
•Customer Satisfaction Measurement is
captured


iPOS℠ - Tools to Drive Production
iPOS℠ allows loan officers to price a loan, view
valuations, compare loan options, set rate alerts
and talk to the customer anytime, anywhere


eMP℠ – Our eVault
eVault safely stores all
loan documents
electronically

 Eliminates hard copies
 Keeps client connected
 Streamlines their next
loan and makes it truly
easy!


Skyline Presentation

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