Cedar Hill will prepare the Step One goodwill impairment test accordance with Statement of Financial Accounting Standards Number 142. The first step in the annual testing is to perform what is referred to as a “Step One Test.” This test requires a valuation of the fair value of a reporting unit with goodwill on its balance sheet and a comparison of this calculated fair value to the reporting unit’s book value of equity. Cedar Hill will employ generally accepted valuation techniques to estimate the fair value of the reporting unit. The techniques will generally include two separate valuation approaches - the Income Approach and the Market Approach.

Pursuant to SFAS 142, if the fair value of the reporting unit exceeds its book value, then the goodwill of the reporting unit is not considered impaired. However, if the book value of the reporting unit exceeds its fair value, there is potential for goodwill impairment and a Step Two Test analysis must be performed to determine the amount of the impairment loss.

Cedar Hill will prepare a valuation report that will include the following sections that could be shared with your external accountants and bank examiners when presenting the results of your annual goodwill impairment testing:

       A) Purpose of the Report

       B) Methods of Determining Fair Value

       C) Overview of Current External M&A Market

       D) Fair Value - Market and Income Approach

       E) Documentation of Assumptions Employed

       F) Conclusions & Appendix