Fill and Sign the Fairfield Communities Incthe Case Centre for Students Form

Capital Resources Group, Inc. 1701 K Street NW, Suite 700 Washington DC 20006 Telephone (202) 466-5685 Fax (202) 466-5695 July 22, 1994 Board of Directors Fairfield Communities, Inc. 2800 Cantrell Road Little Rock, Arkansas 72202 Dear Board Members: You have requested our opinion as to the fairness from a financial point of view to Fairfield Communities, Inc. ( AFairfield @) of the proposed consideration to be paid to Fairfield by Security Capital Bancorp ( ASecurity @) in connection with the proposed sale by Fairfield of all the issued and outstanding capit al stock of First Federal Savings and Loan Association of Charlotte ( AFirst Federal @) to Security Bank and Trust Company, a wholly-owned subsidiary of Security ( ATransaction @). Capital Resources Group, Inc. ( ACapital Resources @) is an investment banking firm that, as part of our specialization in financial i nstitutions, is regularly engaged in the financial valuations and analyses of business enterp rises and securities in connection with mergers and acquisitions, valuations for mutual-to-stock conversions of thrifts, initial and secondary offerings, divestiture and other corporate purpos es. Senior members of Capital Resources have extensive experience in such matters. We believe that, except for the fee we will receive for our opinion, we are independent of F airfield and First Federal. Financial Terms of the Offer We understand that, pursuant to a Stock Purchase Agreement d ated as of April 5, 1994 (AAgreement @), and discussions with Fairfield’s management and Fai rfield’s legal counsel, Security (or a designated subsidiary of Security) has agreed to acquire from Fairfield all of the issued and outstanding shares of common stock of First Federal. The purchase price for such -shares of First Federal will equa l $40,350,000 plus any earnings adjustment. The level of any earnings adjustment will be based on First Federal’s interim period earnings from October 1, 1993 to the effective time of the Transaction, as adjusted for certain extraordinary items (as defined in the Agreeme nt) and tax sharing payments between First Federal and Fairfield. While the earnings a djustment could be a negative number, it is our understanding based on discussions wi th management of Fairfield, that the earnings adjustment is expected to be positive b ut, unless closing is delayed beyond August 1, 1994, will not exceed $1,825,000 pursuant to the Agreem ent. CAPITAL RESOURCES GROUP, INC. Board of Directors July 22, 1994 Page 2 The purchase price (as defined above) will be comprise d of two components (1) a cash payment ( Acash payment amount @) to be paid at the effective time of the Transaction equal to the excess of the purchase price over a deferred payment amount and (2) a deferred payment amount of $1,387,000 to be paid i n one or more cash payments after the effective time of the Transaction upon satisfaction of certain conditions relating to three litigation cases and/or claims which First Federal is currently defending. Pursuant to the Agreement, Fairfield will also indemnify Security regarding certain matters, including certain pending claims against First Federal and other matters incident to the Transaction. The indemnification will be secured b y granting security interests in certain A excluded assets @ having a net book value of approximately $2,850,000. Pursuant to the Agreement, Fairfield may elect to cause Se curity to pay all or a portion of the cash payment amount to First Federal as an offset to, and a credit against, Fairfield’s payment for certain Aexcluded assets @ to be transferred and assigned from First Federal to Fairfield. The Aexcluded assets @ include loans, real estate and joint venture interests, timeshare and lot contract receivables and other assets. It is important to note that our fairness opinion con clusion rendered herein is based on the cash purchase price to be paid by Security for th e stock of First Federal. The purchase by Fairfield of First Federal =s Aexcluded assets @ does not fall within the scope of our fairness opinion and accordingly we have not pe rformed an appraisal of such assets. Materials Reviewed In the course of rendering our opinion we have, among ot her things: (1) Reviewed the terms of the Agreement and discussed t he Agreement provisions with management of Fairfield and Fairfield’s legal counsel; (2) Reviewed the following financial data of First Fed eral: ! the audited financial statements of First Federal for the fiscal years ended December 31, 1989 through December 31, 1993, plus unaudited financial statements through March 31, 1994, !the Office of Thrift Supervision quarterly Thrift Financi al Reports covering the period through March 31, 1994, the latest avail able period, ! First Federal’s latest available gap analysis report, CAPITAL RESOURCES GROUP, INC. Board of Directors July 22, 1994 Page 3!other miscellaneous internally-generated management in formation reports for recent periods, and ! First Federal’s most recent business plan and budget rep ort; (3) Discussed with executive management of Fairfield a nd First Federal the business, operations, recent financial condition and op erating results and future prospects of First Federal; (4) Compared First Federal’s financial condition and opera ting results to those of similarly-sized thrift institutions operating in North C arolina, the Southeast and the U.S.; (5) Compared First Federal’s financial condition and opera ting performance to the published financial statements and market price d ata of publicly-traded thrifts in general, and publicly traded thrifts in First Federal’s region of the U.S. specifically; (6) Performed such other financial analyses and investiga tions as we deemed necessary, including a comparative financial analysis and review of the financial terms of other pending and completed acquis itions of companies we consider to be generally similar to First Federal; and (7) Examined First Federal’s economic operating environment and the competitive environment of First Federal’s market area. In arriving at our opinion, we have relied upon the accuracy and completeness of the information provided to us by the various parties m entioned above, upon public information and upon the statements and representation s in the Agreement, and have not conducted any independent investigations to verify a ny such information or performed any independent appraisal of First Federal’s assets. This fairness opinion is supported by the detailed in formation and analysis contained in the Evaluation and Analysis Report dated April 8, 1994 (AOriginal Report @), which has been produced by Capital Resources and deli vered to Fairfield. The Original Report is relied upon for purposes of rendering our conclu sion in this fairness opinion. The Original Report contains a business description and fi nancial analysis of First Federal, an analysis of current economic conditions in First Federa l’s primary market area, and a financial and market pricing comparison with a selecte d group of thrift institutions which completed merger and acquisition transactions or are curre ntly subject to pending transactions. Such Original Report has been supplemented by a Supplemental Evaluation and Analysis Report dated July 22, 1994 ( ASupplemental Report @), which contains updated financial and market pricing data. CAPITAL RESOURCES GROUP, [NC. Board of Directors July 22, 1994 Page 4 It is our understanding that since December 15, 1993, the d ate on which Fairfield entered into a letter of intent for the proposed sale of First Federal to Security, in compliance with the terms of the letter of intent, no other proposals have been solicited by Fairfield, and no unsolicited proposals have been recei ved by Fairfield, in either case, which provide for an offer price in excess of that prop osed by Security. Opinion Based on the foregoing and on our general knowledge of and experience in the valuation of businesses and securities, we are of the opinion that, as of July 22, 1994, the cash consideration to be paid by Security under the Agree ment for 100 percent of the issued and outstanding shares of common stock of Firs t Federal is fair to Fairfield from a financial point of view. Respectfully submitted, CAPITAL RESOURCES GROUP, INC. David P. Rochester Chairman and Chief Executive OfficerS/ Michael B. Seiler Senior Vice President DPR/MBS/cct Fairfield Communities, Inc. 8/4/94