Hills Bank and Trust Companv

Member FDIC

HILLS BANK AND TRUST COMPANY'S RESPONSE TO REQUEST FOR PROPOSAL NUMBER 14570 FOR

Automatic Teller Machines Branch Financial Services

ID Card Financial Related Services

Proposal Due in eBid as .pdf Attachment: FRIDAY DECEMBER 2, 2011 - 3:00 PM

THE ' UNIVER.511Y

OFlOWA

This document includes 54 pages.

Ken Hinrichs Phone: (319) 679-5314

Email: ken h1nnchs@hillsbank com

Letter of Transmittal

Mr. John Hillesland, Purchasing Agent Purchasing Department 202 PCO Iowa City, Iowa 52242-2500 (319) 384-3399 john-hillesland@uiowa.edu

Dear Mr. Hillesland:

Hills Bank and Trust Company is pleased to respond to RFP No. 14570 for Automatic Teller Machines, Branch Financial Services, and ID Card Financial Related Services. The bank is proposing a partnership with the University that reflects technical innovation, personalized banking experience, marketing excellence, and outstanding financial benefits to the University of Iowa. The program wi ll be implemented by a project team that is led by senior management and includes technical resources with experience in launching state-of-the-art campus card programs at major universities throughout the United States.

Hills Bank is proposing a comprehensive program of financial services to the University that will include full-service branches at the IMU and UIHC, 24 surcharge-free ATM machines, and a campus card program that will offer ATM and Visa debit capability to students, faculty, and staff. The new Iowa One Cards with banking functionality will be instantly issued at the IMU. Students will be offered a free checking account. The bank will introduce the new Iowa One Card program with a well-funded marketing campaign that ensures the success of the program and promotes high levels of campus participation. The implementation plan will include a series of re-carding events, starting with new student orientation, that produce a smooth transition to the new Iowa One Card program.

Hills Bank wi ll invest approximately $4.7 million over the next five years to support the program. The total monetary value of direct payments to the University should exceed $1 .65 million and will include guaranteed payments exceeding $1 .0 million. The bank has created a special incentive plan that will provide revenues to the University based upon card transactions, or "swipe fees."

Our vision for the proposed partnership is unique. Hills Bank was built on strong character, financial foresight, and traditional Iowa values. As a locally owned community bank and one of the state's strongest financial institutions with capital in excess of $200 million, Hills Bank is committed to providing leadership in our community and truly believes in personalized banking, sustainability, and financial literacy. These are among the reasons that Hills Bank seeks to become the University's partner and provide financial solutions for all of its students , faculty, staff and alumni.

Hills Bank is proud of its long standing commitment to the community and to the University of Iowa. I believe our proposal represents the kind of financial commitment, technical innovation, and on-going support that will provide the University community with unequaled service in the years ahead.

Respectfully submitted,

a~ Dwight 0 . Seegmiller President and Chief Executive Officer Hills Bank and Trust Company 319-679-2291 dwight_seegmiller@hillsbank.com

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Table of Contents

Letter of Transmittal ............................................ .............................................................. ............ 2 Executive Summary ...... ........................................... .................. ..................... ............................... 4

Table 1: Guaranteed and Incentive Payments .. ... ... ............... .. .......................................... 5 Figure 1: Swipe Fee-Based Incentive Payments ............................ .. ........ .... ....... ........ ...... . 5 Table 2: Total Investment ....... .......... .............. .......... ....................... .. ........ .. .... ..... .............. 7 Figure 2: Sample Iowa One Card Issuance Process Flows .. ........ ... .. .. ............. ............... .. 8

SECTION 3.1- GENERAL (ALL FIRMS MUST COMPLY) ....... ...................................................... 9 Section 4 - Scope of Work .............................. .... ........................................................................ 12

Section 4 - Part 1 - General Information .......................... ......... ... .. .... .............. .. ..... ............. ... 12 4.1.A. Personnel. ... ... ....................................... .... ............ .. ... .... ........ .... ... .... ...................... 12 4.1.B. Experience ....... ....... ....... ... .... ... .. ... ......... .... .... .... .. ......... ....... .. .... ... ... ...... ....... ...... .... 14 4.1.C. Risk Management ............................ ... .............. .............. ................................. .. .... 15

Section 4 - Part 2 - Services ........ ... .. .. ... ........... .. ....... ... ..... .. ........ .... .... ........... ... .. .. .......... ....... 18 4.2.1. ATM Services ............. .... ............. ................. ... ............................. ... ....... ... ... ... .. ...... 18

Figure 3: ATM Functionality by ATM Location .... .................. .... .. ............................... 19 4.2.1.1. ATM Reporting ......................................................................... ..... .. .................. ... 21 4.2.1.2. ATM Implementation .............................................................. .. .. ..... .. .... ....... ...... .. 22

Figure 4: Milestone Target Dates for ATM Installation .......... ........ ....... .... .................. 22 4.2.1.3. ATM Financial Partnership ....................... ... ........... ..... ........ .. .. .. .... ............. .......... 23 4.2.2. IMU & UIHC Branch Financial Services .... .............. ............. ..... ..... ... ....... .............. 23

Figure 5: Products and Services ........................... .. ......... ...... .. ..... .. ..... ............... ... ... . 24 4.2.3. ID Cards and Debit Functionality .. ........................ ....... ................ ............. .. ... .. ....... 26

Figure 6: Instant Issuance of Iowa One Card PLUS .. .. ...... ............ ... .. .... .. .......... .. ..... 28 4.2.3.1 . Campus ID Cards Reporting ...... ... ....... ........... .. .......... ...... .. ...... ......... .... ....... ...... . 32 4.2.3.2. Campus ID Cards Implementation .... ... ...... ..... ... .......... ..... ........ ... ..... ......... ... ....... 33

Figure 7: Milestone Target Dates ....... .......... ...... ..... ...... ...... .... .............. ... ...... .... ... .. ... 34 4.2.3.3. Campus ID Cards Financial Partnership ....................... ....... ..... .. .... ... ................. 36

Table 3: Total Hills Bank Investment... ..... ........ ................... .. ................ ............. ...... .. 36 Figure 9: Example Swipe Fee Calculation ................................................................. 38

Section 5 - Form of Proposal ....................... ............. ................................................................. 39 ATTACHMENT A .................................................... ... ...... ................. ........................ ..................... 43 ATTACHMENT B ...................................... .................... .................................... ............................. 44 ATTACHMENT C ......................... ............. ................................... ......... ....................................... .. 45 ATTACHMENT D-1 Financial Partnership .................... ............................................... ............... 46 ATTACHMENT D-2 Financial Partnership ........................................................ .......................... 47 ATTACHMENT D-3 Financial Partnership ................................................................................ .. 48 Appendix ..................... ............ ...... .... ... .............................. ................................. .......................... 49

Exhibit I: List of Hills Bank ATM Locations ..... ..... .... ......................................................... 50 Exhibit II: Map of Hills Bank Branch and ATM Locations ........ .... ................ ....... .... .... ..... .. 53 Exhibit Ill : Sample ATM Report ................. ..................................... ...... ..... .... ........... .. ... ... . 54 Exhibit IV: Hills Bank ATM Card Encoding Layout .. ............. .... ...... .. ................... ............. 54 Exhibit V: Hills Bank 2009 Financial Report .... .......... .. ................................... ... ........ ....... 54 Exhibit VI : Hills Bank 2009 Annual Report ........................... ........ ... ............... ....... .. ..... ..... 54 Exhibit VII : Hills Bank 2010 Financial Report ...... ...... .. .............. ..... ....... ... ........... .. ....... .... 54 Exhibit VIII : Hills Bank 2010 Annual Report ...................................................................... 54 Exhibit IX: Hills Bank Certificates of Insurance, One Original and One Copy .................. 54 Exhibit X: Bankers Blanket Bond or Financial Institutional Bond, 1 Original and 1 Copy. 54

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Executive Summary

Hills Bank and Trust Company has been a community leader in financial services for more than 100 years and is one of the strongest financial institutions in Iowa. A subsidiary of Hills Bancorporation, the bank was founded in 1904 and operates 14 offices in three eastern Iowa counties, with more than 425 employees and total assets approaching $2 billion, along with Trust and Wealth Management Services with managed assets of $1 billion. The bank is presenting a comprehensive proposal to provide the University of Iowa with 24 surcharge-free A TM machines, two campus

branches, and a state-of-the-art campus card program to support the financial services requirements of students, faculty, and staff. Our Iowa City Downtown office located at the corner of Clinton and Washington Streets will effectively give University students and staff a third campus branch location. This proposal is in compliance with all stated requirements of Request for Proposal Number 14570 and reflects a long-term commitment to the University in terms of technical innovation, personalized service, and marketing excellence.

Hills Bank envisions the Iowa One Card program at the center of student commerce and student life - and a major factor in student satisfaction. The bank's goal is to build a program that will provide students, faculty, and staff with convenient access to their money, while offering strong local support and accountability. To achieve this goal, Hills Bank will implement one of the most technically innovative campus card programs in the United States. This program will feature instant issuance of:

1. A new Iowa One Card that includes a free checking account and offers cardholders access to funds at ATMs and PIN-based point of sale merchant locations.

2. A new Iowa One Card, the Iowa One Card PLUS1, that includes a free checking account

and offers cardholders the added convenience of worldwide Visa merchant acceptance.

The proposed business model combines guaranteed payments and incentives that will produce revenues to the University of approximately $1 .65 million over the next five years, with guaranteed payments of $1 .04 million as shown in Table 1:

1 For purposes of this response, the name Iowa One Card PLUS is being used to identify the Visa-branded Iowa One Card. Hills Bank recognizes that the University will decide the card name.

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Table 1: Guaranteed and Incentive Payments

Guaranteed Payments Year1 Year 2 Year 3 Year4 Years SYrTotals Signing Bonus $ 125,000 $ - $ - $ - $ - $ 12S,OOO Guaranteed Annual Royalty $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 2S0,000 Branch Rent- IMU and UIHC $ 100,520 $ 100,520 $ 137,520 $ 137,520 $ 137,520 $ 613,600 Card Stock Contribution $ 50,000 $ - $ - $ - $ - $ S0,000

Totals $ 32S,S20 $ 1SO,S20 $ 187,S20 $ 187,S20 $ 187,S20 $1 ,038,600

Incentive Payments Year 1 Year2 Year3 Year4 Years s Yr Totals Swipe Fee Incentive Payments $ - $ 35,214 $ 94,281 $ 155,549 $ 191,379 $ 476,423 Swipe Fee Incentive Payments- Campus Student Organizations $ 7,39S $ 17,043 $ 28,856 $ 41,110 $ 48,276 $ 142,680

Totals $ 7,39S $ S2,2S7 $ 123,1 37 $ 196,6S9 $ 239,6SS $ 619,103

Year 1 Year 2 Year 3 Year 4 Year S S Yr Totals Guaranteed Payments + Incentive Pa ments s J32.91S s 202,777 s 310,657 s 384,179 s 427,175 s 1,6S7,703

Total five year compensation to the University includes:

A signing bonus of $125,000.

Guaranteed annual royalty payments of $50,000.

Branch rental payments of $613,600 for the IMU and UIHC.

$50,000 toward Iowa One Cardstock and consumables to support University-wide re­carding.

Incentive payments of $476,423 based upon "swipe fees" as explained in Figure 1 below.

Incentive payments of $142,680 to campus student organizations based upon "swipe fees" as explained in Figure 1 below.

Figure 1: Swipe Fee-Based Incentive Payments

"Swipe Fees" are incentive payments to the University based upon 35% of interchange income collected by the bank from point of sale card purchases, from both PIN-based and signature­based debit transactions.

Swipe fees will be paid to UI for all PIN-based and signature-based debit purchase transactions for cards linked to an Iowa One Card or University Employee Advantage checking account, including:

1. Iowa One Card 2. Iowa One Care PLUS 3. Any Hills Bank Visa debit card linked to an Iowa One Card checking account or

University Employee Advantage checking account.

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Swipe fees that exceed $50,000 annually will be paid to the University in addition to the $50,000 annual guaranteed royalty payment. The bank also proposes to allocate 7% of total swipe fee revenues for Student-Run Campus Organizations. The projected swipe fee revenue to the University is based on a conservative five year account penetration model (please see Section 4.2.3.3.c, page 37) that assumes the bank will capture a percentage of incoming freshman and transfer students each year in addition to faculty and staff. The swipe fee model assumes a 50% penetration rate for incoming students by the fifth year and, conservatively, does not include penetration estimates for the existing student population. In all likelihood, some existing students will choose to bank on their Iowa One Cards, which will increase the incentive payments to the University.

Paying the University swipe fees will streamline accounting and provide monthly revenues to the University. Hills Bank is excited about promoting the use of the Iowa One Card in the merchant community, and the proposed incentive plan will allow the University to directly benefit from these marketing efforts.

The bank plans to make additional significant investments in the partnership, including:

$2.0 million for two state-of-the-art facilities at the IMU and the IMHC that will reinforce a personalized banking experience, including personnel and equipment.

$960,000 for an on-campus, surcharge-free A TM network of 24 machines.

Comprehensive marketing commitment of $220,000, to promote the new One Card at new student orientation events and re-carding events, including year-round promotional activities utilizing targeted direct mail, email , online advertising, and initiatives to support financial literacy.

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Hills Bank's total investment is summarized in the following table:

Table 2: Total Investment

Guaranteed Payments Year1 Year2 Year3 Year4 Year 5 5 Yr Totals Signing Bonus $ 125,000 $ - $ - $ - $ - s 125,000 Guaranteed Annual Royalty $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 s 250,000 Branch Rent- IMU and UIHC $ 100,520 $ 100,520 $ 137,520 $ 137,520 $ 137,520 $ 613,600 Card Stock Contribution $ 50,000 $ - $ - $ - $ - s 50,000

Totals $ 325,520 $ 150,520 $ 187,520 s 187,520 $ 187,520 s 1,038,600

Incentive Payments Year 1 Year2 Year3 Year4 Year5 5 Yr Totals Swipe Fee lncenllve Payments $ - $ 35,21 4 $ 94,281 $ 155,549 $ 191,379 s 476,423 Swipe Fee Incentive Payments- Campus Student Organizabons $ 7,395 $ 17,043 s 28,856 s 41,110 $ 48,276 s 142,680

Totals s 7,395 $ 52,257 s 123,137 s 196,659 s 239,655 s 619,103

Year 1 Year 2 Year 3 Year 4 Year 5 5 Yr Totals Guaranteed Pa ments +Incentive Payments S 332.915 $ 202.777 S 310,657 S 384,179 S 427,175 S 1.657,703

Capital Investment and Mar1<etino Support Year 1 Year2 Year3 Year4 Years 5 Yr Totals Brandl Construction and Staffing $ 260,000 $ 267,200 $ 334,604 $ 282.217 $ 290,048 s 1,434,069 ATM Machines $ 400,000 $ - $ - $ - $ - $ 400,000 ATM Operabon $ 112,000 $ 112,000 $ 112,000 s 112,000 $ 112,000 $ 560,000 Marketmr;i $ 50,000 $ 50,000 $ 40,000 $ 40,000 $ 40,000 s 220,000

Totals s 822,000 $ 429,200 $ 486,604 $ 434,217 $ 442,048 s 2,614,069

ITotallnvestment I $1.154,915 IS 631,977 IS 797,261 IS 818,396 IS 869.223 I $4,271 ,772 I

Hills Bank will work closely with UI to ensure the Iowa One Card supports all current required card features, and is compatible with the University's technical goals regarding magnetic encoding of data. Both Iowa One Card solutions can also support financial aid refund deposits to student checking accounts.

Students will receive their new Iowa One Cards with the payment functionality they desire, all without the delays, security concerns, and environmental costs associated with mailed cards. Once issued, all Iowa One Card PLUS cards will work immediately at Visa merchant locations, PIN debit locations, and ATMs. Cardholders will benefit from selecting their own personal identification numbers for their Iowa One Cards. The program will be completely "opt in." Students will be offered a free student checking account that parents will be able to fund from their own bank via a convenient ACH process.

Our free student checking account will include the following features: Free Mobile Banking Unlimited free Hills Bank ATM transactions Up to 6 free foreign A TM transactions per month Free Hills Bank Online Free Power Pay Free eStatement

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A high level Iowa One Card issuance workflow diagram is shown below:

Figure 2: Sample Iowa One Card Issuance Process Flows

Issuance in Iowa One Card Office of ATM / PIN Debit Iowa One Card (Pri nter #1)

Issuance in Hills Bank IMU Bank Branch of Iowa One Card PLUS (Printer #2)

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Hills Bank recognizes the importance of technical innovation and has engaged Runge & Company to assist in the design and implementation of the Iowa One Card program. Erik Runge has over a decade of experience launching banking-capable ID card programs at major universities, including the University of Iowa. His other clients include Visa U.S.A. and the Datacard Corporation.

Hills Bank looks forward to making a formal presentation of its proposal at the earliest possible date.

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SECTION 3.1- GENERAL (ALL FIRMS MUST COMPLY)

A. Organization: The Firm must clearly demonstrate and provide documentation substantiating that they are compliant. The University reserves , solely, the right to reject any proposal if the evidence or references submitted by such Firm fails to satisfy the University that said Firm is properly qualified in any of these areas. It shall not be the responsibility of the University to request additional information to satisfy these requirements, if such information is not provided with the submitted proposal. Any exceptions must be noted on the Proposal C?)liance Form, Attachment C, as required by the specifications. Firm agrees. Signature: k,4~

B. Executive Summary: Provide an executive summary that briefly summarizes the history of the Firm and its experience. The summary should clearly indicate any major requ irements that cannot be met by the Firm and highlight the major features of the proposal , to assist the reader in determining generally how the qualifications of the Firm and the proposal meets and exceeds the requirements proposed by the University. Firm agrees. Signature: a~

C. Single Point Contact: Provide a single-point managerial-level contact person dedicated to the University account during the term of the resultant contract and any succeeding renewal or extension. This person's duty shall include, but not be limited to, coordinating all requirements and to be the point of contact for any problems/questions wh ich may arise; meet periodically with University personnel ; and, research information and deliver special reports as needed or directed by the University. All Firms must include th;s:ontact person's name, qualifications and level of involvement. Firm agrees. Signature: ~~ ....

0 . References: Provide a listing of compa.rable clients for which the Firm has provided services similar to those on which they are bidding. Select three to four clients from the list (preferably of equivalent size to The University of Iowa, and also representing a mix of long-standing and recent clients) and provide the names, titles, business addresses, and business telephone numbers of individuals at each of the organizations who may be contacted for references. Firm agrees. Signature: a~

3.2 ATM (FOR FIRMS BIDDING ON ATMs)

A. ATMs: Firm must provide A TMs and/or ? P) cial servicing of University owned or leased ATM equipment. Firm agrees. Signature: ~~

B. A TM Fees: The University is agreeable to a reasonable minimum ATM surc~e; not to exceed the average surcharge in the Iowa City market. Firm agrees. Signature: ~~

C. A TM Customer Service: The Firm shall provide customer service which is readily available and easily identifiable to ATM customers. Firm agrees. Signature: a~

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D. ATM Reporting: The Firm shall provide monthly and annual standardized reporting of ATM Usage by location and by transaction type. Firm agrees. Signature: a~

3.3 BRANCH LOCATIONS (FOR FIRMS BIDDING ON BRANCH FINANCIAL LOCATIONS)

A. Financial Services Branch Locations: The Firm(s) shall enter into separate lease agreements for space within the Iowa Memorial Union and/or at th~. 11 IHC, which will be negotiated independently of this proposal. Firm agrees. Signature: ~~

3.4 ID CARD DEBIT FUNCTIONALITY (FOR FIRMS BIDDING ON ID CARD FINANCIAL RELATED SERVICES)

Firms bidding on this service will be required to submit proposals that include A TMs in High Traffic Student Venues and are also encouraged to bid on the IMU branch location. (See attachment E for included A TM locations.) Firm agrees. Signature: a~

A. ID Card Debit Functionality: At a minimum, the Firm shall have the ability to provide A TM/Pl N-basef-Gybit capability linked to the University's ID cards and badges. Firm agrees.

Signature: w~

B. ID Card Design: The Firm acknowledges that the Iowa One® Card and the UI Health Care Badge are the property of the University and as such the appearance of the(;cards will be determined jointly by the University and the UIHC. Firm agrees. Signature: w~,

C. ID Card Supply Ordering: The University will maintain functional control ~rdering

consumable supplies used in the production of ID cards. Firm agrees. Signature: w~

D. Marketing: The Firm will submit for approval all on campus promotions, marketing and communications targeted to students, employees, patients or other populations associated with the University. Participation at student orientations will be coordinated with the Iowa One® Card Program and access to students outside of the relationship with the Iowa One® Card, must be authorized by Orientation Services or other sponsoring University organization. Please refer to the Conditions of Use of University Facilities policy documented in Part V, Chapter 35 of the University of Iowa Operation~anual. http://www.uiowa.edu/-our/opmanual/v/35.htm Firm agrees. Signature: u~

E. ID Card Issuer Identification Number (llN): The Firm shall assist the University in obtain ing an llN from the American National Standards Institute (ANSI) which will be used to identify the University of Iowa as the card issuer. Firm agrees, provided proper regulatory and association

approval is received. Signature: a~"

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F. ID Card Encoding: The Firm shall provide the University with track 2 encoding specifications to assist the University in transitioning to a single magnetic stripe which can be used on-campus as well as A TM and Pl N-based debit transactions. Firm agrees. Signature:

G. ID Card Reporting: The Firm shall provide monthly and annual standardized reporting of: 1. Number of accounts attributed to the University and used in financial incentive calculations i. Should be detailed by person type (student, employee, alumni) ii. Should itemize the differen}J¥-~es of accounts (checking, savings, etc.) Firm agrees. Signature: t4-~

3.5 MISCELLANEOUS (ALL FIRMS MUST COMPLY)

A. Liability: The University will assume no liability for fraudulent use or overdrafts occurring due to A TM transactions, check writing or POS transactions on accounts provided under this proposal. Liability regarding( osystolen cards is between the merchant, cardholder and the Firm. Firm agrees. Signature: WJu.r'L

B. Regulatory Compliance: The Firm shall comply with all state and federal laws including, but not limited to , financial regulatory and statutory rules, regulations , and policies of those agencies having jurisdiction over the Firm, the Health Insurance Portability and Accountability Act (HIPAA) and the Gramm-Leach-Bliley Act (GLB). Documentation of~ compliance shall be provided to the University upon request. Firm agrees. Signature: k.4~

C. Security of ATMs and/or Branches: The Firm agrees to provide a detailed description of the security measures in Llce for the protection of equipment and the branches. Firm agrees. Signature: ~ . ·'

I~ D. Insurance: The Firm agrees to provide a copy of a Bankers Blanket Bond or Financial Institutional Bond, including computer p)e and errors and omissions insurance with submitted proposal. Firm agrees. Signature: t4-~ ... 1. Please provide duplicate copies of Certificates of Insurance.

E. In-Person Presentation: If requested by the University, the Firm will be prepared to give an

in-person presentation regarding the services outlined in this RFP and submitted for consideration. Such presen(811~n would include, but not be limited to, items noted in Section 3. Firm agrees. Signature: w~

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Section 4 - Scope of Work

Section 4 - Part 1 - General Information

4.1.A. Personnel

1. Provide the names, titles, experience and areas of responsibility for all the staff who will be directly assigned to work on this project. How do you propose to devote sufficient personnel be assigned to our account to adequately handle our needs?

Hills Bank has assembled a dedicated team of financial services professionals to launch and support the partnership with the University. Those individuals are listed below. It will be a goal of Hills Bank to continue with its philosophy of serving its customers needs and developing deep, long-lasting relationships. Hills Bank will provide a list of direct contacts who will ensure that the needs of the University are met. .

Hills Bank envisions the Iowa One Card program at the center of student commerce and student life - and a major factor in student satisfaction. The bank's goal is to build a program that will promote high levels of cardholder participation, and create substantial revenue opportunities for the University. Hills Bank has assembled a dedicated team of financial services professionals to launch and support the partnership with the UI , including:

Dwight 0 . Seegmiller, President and Chief Executive Officer Mr. Seegmiller is a graduate of Iowa State University's Agricultural Business Honors Program and the Stonier Graduate School of Banking at Rutgers University. He joined Hills Bank and Trust Company in 1975 and has been President since 1986. Prior to 1986, Mr. Seegmiller was the Senior Vice President of Lending.

James G. Pratt, Senior Vice President and Chief Financial Officer. Mr. Pratt is a graduate of the University of Iowa and is a CPA. He has been the CFO since joining the Bank in 1982. Mr. Pratt is in charge of the investment portfolio of the Bank and all responsibil ities regarding financial reporting of the Bank and the Bank's holding company, Hills Bancorportion. Hills Bancorporation is an SEC reporting one-banking holding company since 1983.

Marty J. Maiers, Senior Vice President, Director of Retail Banking Marty has overall responsibility for the management and direction of the Retail Banking function , including its branch and electronic delivery channels. Mr. Maiers, a University of Iowa graduate and CPA, has been employed at Hills Bank since 1984.

Shari DeMaris, Senior Vice President, Director of Finance Shari is a graduate of the University of Iowa and DePaul University and is a CPA. She has been with the bank since 2005. Ms. DeMaris oversees the bank's risk management program which includes enterprise risk management, information security, physical security, internal audit, compliance and regulatory reporting. Mr. DeMaris also works with Mr. Pratt on financial reporting and accounting issues.

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Tim Webber, Senior Vice President, Director of Operations Tim oversees all operations areas including Deposits Operations and Processing, Loan Operations and Support, Information Technology and Electronic Banking Services. Mr. Webber has over 29 years of banking experience, including 22 years with Hills Bank and is a 1992 graduate of the University of Iowa with a BA in Finance.

Ken Hinrichs, AAP, CTP ·Vice President-E-Banking Services Ken is responsible for administration of the bank's A TM deployment program including the negotiation of all ATM agreements, A TM equipment purchases, A TM service contracts and A TM vendor management. Mr. Hinrichs acts as the bank's primary contact person for all off­premise ATM installations. Ken also the oversees the bank's Debit, Credit, ATM and Pre­Paid card programs, and will be the designated person for the University to handle all ATM and Iowa One Card related activities and requests. Mr. Hinrichs has over 17 years of banking experience and is an Accredited ACH Professional and Certified Treasury Professional.

Jennifer Eden, AAP E-Services Officer Jenni is responsible for the daily operations of the Hills Bank Debit, Credit, A TM and Pre-Paid card programs, and will be the secondary contact person for the University for the ID Card program and A TM program. Ms. Eden has over 10 years of banking experience and is an Accredited ACH Professional.

Erik Runge, Contractor - President, Runge & Company Hills Bank recognizes the importance of technical innovation and has engaged Runge & Company (www.rungeandcompany.com) to assist in the design and implementation of the Iowa One Card program. Runge & Company specializes in the design and deployment of campus ID card systems. Erik Runge has over 13 years of experience in the financial services industry and managed Wachovia Bank's campus card program. Runge & Company's consulting services will include guidance in integrating card issuance procedures, specifications for magnetic stripe encoding, management of system testing, relationship management, marketing plan development, coordination of promotional campaigns and on-campus carding events. Mr. Runge is an Iowa native and a graduate of Wake Forest University. Mr. Runge has launched banking-capable ID card programs at major universities, including:

University of North Carolina at Chapel Hill One Card Plus (2001) Launched the first instantly issued Visa~branded campus card in the U.S., as well as an A TM/PIN debit capable campus card.

Oakland University Spirit Card Plus (2005) Launched an instantly issued MasterCard-branded campus card.

University of Iowa One Card (2006)

Colorado State University Ram Card Plus (2008) Developed the first unembossed, Visa-branded campus card program, featuring two color-coded magnetic stripes, a Mifare contactless smart chip, and instant issuance in the CSU card office.

Utah Valley University PlusCard (2008)

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Developed an instantly issued Visa-branded campus card, with a Mifare contactless chip to act as a municipal bus pass.

Idaho State University Bengal Card Plus (2011) Developed an instantly issued MasterCard-branded campus card, with two color­coded magnetic stripes and instant issuance in the credit union office next door to the card office.

Cedarville University One Card (2011) Launched an instantly issued A TM/PIN-Debit campus card, with an HID contactless chip used for facilities access.

Runge & Company welcomes the opportunity to arrange site visits to demonstrate the success of these programs. References for Erik Runge and Runge & Company include:

1. Oakland University- Don Rittenburgh, Manager, ID Card Operations, (248) 370-2533 2. The University of Iowa- Laurie Lentz, Manager, University ID Card Services, (319)

335-1398 3. Utah Valley University- Dawn Burgess, Manager, UVU Campus Connection, (801)

863-7797 4. Colorado State University- Neal Lujan, Manager, RamCard Program, (970) 491-2344 5. DataCard Corporation- Ron Zanotti , SVP Financial Instant Issuance, (303) 754-2054

2. Provide a single-point managerial-level contact person dedicated to the University during the term of the resultant contract and any succeeding renewal or extension. This person's duty shall include, but not be limited to, coordinating all requirements and be the point of contact for any problem/questions which may arise; meet periodically with University personnel; and research information and deliver special reports as needed or directed by the University. All Firms must include this contact person's name, qualifications and level of involvement.

Ken Hinrichs, AAP, CTP {Vice President-E-Banking Services) Ken is responsible for administration of the bank's ATM deployment program including the negotiation of all A TM agreements, ATM equipment purchases, A TM service contracts and A TM vendor management. Mr. Hinrichs acts as the bank's primary contact person for all off­premise ATM installations. Ken also the oversees the bank's Debit, Credit, ATM and Pre­Paid card programs, and will be the designated person for the University to handle all Iowa One Card-related activities and requests . Mr. Hinrichs has over 17 years of banking experience and is an Accredited ACH Professional and Certified Treasury Professional.

Ken Hinrichs Vice President- E-Banking Services Phone: 319-679-5314 Email : ken hinrichs@hillsbank.com

4.1.B. Experience

1. If your institution is currently for sale or involved in any transaction to expand or to become acquired by another organization, please explain. If your institution has been involved in any reorganization, acquisition, or merger within the last three (3) years, please explain.

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Hills Bank has been in the Johnson County market since 1904 and has grown with the needs of the community. The bank prides itself in being a locally owned community bank with the ability to provide quality financial services that enable us to compete with larger regional banks.

Hills Bank is currently building its 15th office location at the corner of Highway 965 and Forevergreen Road in North Liberty. The bank has no further expansion plans at this time. In the last three years Hills Bank has not been involved in any reorganization, acquisition or merger.

2. Have any complaints or lawsuits been filed with state or federal agencies, or in the courts of the State of Iowa, against your institution where the alleged violation was directly related to A TMs, branch services and/or ID card financial related services? If so, describe the circumstances and the outcome, including the names and the docket number of the case.

There have been no complaints filed with any state or federal agencies, or in the courts of the State of Iowa. Attached to this proposal (via pdfs in eBid) are the 2009 and 2010 audited financial statements.

3. We request that you submit your institution 's audited financial statements and annual report for the past two (2) years.

For audited financial statements and annual reports for the past two years, please see the files attached to this response (via pdfs in eBid).

4.1.C. Risk Management

1. Describe your organization's business continuity and disaster recovery plan in the event of disaster or equipment failure at your primary processing site(s).

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2. Describe your local back-up and/or redundant systems. What is the method of backup, how

3. Describe your data back-up capabilities in case of a complete site failure. How often are

they tested?

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4. Describe the last time the use of your data back-up system was required, the circumstances

and the length of time the back-up system was in use.

5. What is the expected recovery time frame to become operational should a catastrophic event occur?

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Section 4 - Part 2 - Services

4.2.1. A TM Services

A. Provide a list of the A TM equipment planned for each location, including but not limited to manufacturer's name and model number. Include only those brochures, photos, descriptive literature, etc., which fully describe the equipment.

Hills Bank will install NCR 6632 Image ATMs for full function service at the following locations; UIHC South Lobby, UIHC Boyd Tower and UIHC Pomerantz Family Pavilion. In addition, Hills Bank will install NCR 6622 cash only ATM's at the following locations; Burge, Hillcrest and Mayflower Residence Halls, IMU, Pappajohn Business Building and UIHC Main Entrance. The remaining 15 locations will be equipped with NCR 16 cash only ATMs, including the two (2) new locations referenced in the RFP. (See Figure 3 on page 19)

NCR16 NCR6622 NCR6632

NCR SelfServ

B. Describe the A TM functions that will be provided for the A TM locations within the desired venues. See Attachment E for A TM locations, withdrawal transaction volumes and venue type groupings.

Hills Bank has the ability to offer on-screen marketing at the ATM and coupons that can be attached to the ATM receipt. This marketing feature can be driven by time of day and be a unique message for each ATM . This marketing feature is available to the University for each ATM location ..

The NCR 6632 Image ATMs will be envelop-free and accept check and cash deposits, cash withdrawals, account transfers and account inquiries. The NCR 6622 and NCR16 Cash Only ATMs will permit cash withdrawals, account transfers and account inquiries. A summary is shown below:

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Figure 3: ATM Functionality by ATM Location

Location

Burge Residence Hall Hillcrest Residence Hall Mayflower Residence Hall Iowa Memorial Union Pappajohn Business Building Main Library Quadrangle Residence Hall UIHC - South Lobby UIHC - Main Entrance UIHC - Boyd Tower UIHC - Pomerantz Family Pavilion UIHC - Pappajohn Entrance Medical Education Research Facility College of Dentistry College of Law University Services Building Campus Recreation and Wellness Center Finkbine Golf Course Center for Disability and Development (new) College of Public Health (new) Carver Hawkeye Arena Kinnick Stadium #1 Kinnick Stadium #2 Kinnick Stadium #3

NCR 6632 NCR 6622 Full Function Cash Image ATM Dispense

Only x x x x x

x x

x x

NCR16 Cash

Dispense Only

x x

x x x x x x x x x x

Sept - Nov Sept - Nov Sept - Nov

C. Describe in detail your program of preventive maintenance and regular replacement of worn and/or malfunctioning equipment.

All A TMs operated by Hills Bank are covered by a maintenance agreement with NCR Corporation, which is in effect from 8:00 am - 8:00 pm, seven days a week. The agreement covers the repair or replacement of parts and labor by a factory-trained NCR field engineer. Each A TM receives periodic preventative maintenance, which improves the performance of the ATM.

In addition, all ATMs operated by Hills Bank are also covered by a first-line maintenance agreement (fault call service) with Rochester Armored Car, a third-party company, which is in effect from 7:00 am - 11 :00 pm, seven days a week. This agreement covers out-of­service conditions, malfunctions, data communication errors, and other problems that don't require an NCR field engineer. Rochester also performs the cash replenishments on all A TMs on a predetermined schedule.

0 . Please explain the security measures in place for the protection of A TM equipment.

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NCR 6632 and NCR 6622 ATMs will have UL rated cash vaults that meet industry standards. Subject to University approval, all A TMs will be secured to the floor with an anchor bolt. All A TMs are alarmed with the alarms monitored 24 hours a day. Cash replenishment and deposit collection services are performed by an armored car company, currently Rochester Armored Car. Rochester is also on site with NCR field engineers if access to the cash vault is needed when servicing the A TM.

E. A TM equipment should fit within the existing space provided at the current locations on campus. Will this be a problem? If so, please explain.

The ATMs installed by Hills Bank will be of a comparable size or smaller than the ATMs currently installed and will pose no issues from a space allocation standpoint.

F. Please outline your anticipated transition plan for the installation of new A TMs in the venues of interest and any potential additional locations.

Hills Bank proposes to work closely with the incumbent to create a smooth ATM transition for the University. Vendor staging will also be coordinated with appropriate University staff.

G. The University wishes to honor representations made to new students and their parents regarding the availability of A TMs on campus without surcharge. Please indicate the Firm's willingness to install equipment prior to March 15 yet delay the implementation of surcharges on transactions at High Traffic Student Venue ATMs until June 1, 2012.

Hills Bank will work diligently with our ATM vendor to have ATMs in place as soon as possible. However, ATM vendors are currently facing heavy new order requests due to changes in the Americans with Disabilities Act (ADA) and therefore cannot commit to meeting the March 15 deadline given the time window between the contract being awarded and the transition taking place. Hills Bank will not be surcharging transactions conducted at High Traffic Student Venues at any time during our contract term.

H. If new A TM locations are requested by the University, please indicate how the revenue/cost sharing of each additional A TM will be determined.

Hills Bank will seek to receive reimbursement for out-of-pocket costs related to the operation of the ATM in the event ATM revenue does not exceed A TM operating costs. Revenue in excess of ATM operating costs will be paid to the University.

I. Indicate any A TM networks your firm presently a member of, i.e. Privileged Status, MoneyPass, etc.

Hills Bank is part of the Cirrus, Plus and Shazam networks. Our ATMs also accept Visa, Mastercard, American Express and Discover Cards. Hills Bank is also a member of the Shazam Privileged Status Network. See Exhibit I for a listing of Hills Bank A TMs that are part of Privileged Status.

J. Give a detailed listing of your current A TMs located in Iowa and Illinois. Provide a breakdown by county within Iowa and include a map of the A TM locations within a 50 mile radius of The University of Iowa.

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Hills Bank has 76 ATMs within 50 miles of UI. It has been our goal to make ATMs accessible to our customers and place equipment in locations that are convenient to all of our customers in our community.

For a list and a map of Hills Bank's existing ATM locations, please see Exhibit I: List of Hills Bank ATM Locations on page 50 and Exhibit II: Map of Hills Bank Branch and ATM Location on page 53.

K. Please indicate the Firm 's interest in servicing campus A TMs which may be owned or leased directly by the University.

Hills Bank will own and operate all A TMs included in this proposal. If the University were to own or lease A TMs, the bank would be willing to assist with coordinating the servicing of these machines.

L. Despite the lower annual volume of Sports Venues, there is a critical business need for A TMs in these locations to accommodate peak volumes for specific sport seasons and events. If appropriate, please provide any alternative solutions such as portable options for A TMs in Carver Hawkeye Arena, and the Kinnick Football Stadium.

Hills Bank proposes operating ATMs at Sports Venues and Finkbine Golf Course on a cost­share basis. Based on historical transactional data provided, in order to operate these A TMs with no surcharge the cost to the University would be approximately $400 per month for A TMs at Sports Venues and $600 per month at Finkbine for the months they are in operation.

4.2.1.1. ATM Reporting

A. Describe in detail the Firm's ability to provide monthly and annual reporting of A TM Transactions by location by transaction type.

Each transaction at an A TM is recorded by the SHAZAM network. Transaction information includes the date, time, cardholder number, transaction number, transaction type, and transaction amount. SHAZAM issues monthly reports to each ATM establisher, which provides totals by type of transaction for each ATM operated. These monthly reports provide the information needed to report A TM transaction activity to the University. The A TMs also keep track of the total number of deposits, number of bills dispensed, etc.

B. Please provide samples of customary reporting delivered on a monthly and annual basis.

The bank can provide monthly A TM reports to the University that will show A TM transaction volume. These reports will show the number and types of transactions. The standard method for delivery of reports is in paper format. Excel files can be securely e-mailed to selected University employees. The bank can optionally provide copies of the SHAZAM network ATM reports along with the Hills Bank prepared reports. Hills Bank currently does not provide this information online.

C. Please explain the Firm's internal process for verifying and reporting data.

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The bank would be able to provide standard reports to the University by the 15th of the month for the prior month's activity . Custom reports can be provided upon request to provide information on trends in transaction activity.

0 . What other types of reports may be of interest to the University?

The bank will create custom reports at the request of the University. Custom reports will be sent to the University in an agreed upon format and delivery method.

E. What file formats are available for reporting (.pdf, .xis, .bai2, .csv)?

Reporting can be provided in .pdf, .xis or .csv file formats. We will work with the University to deliver these reports in for format desired.

F. What methods of delivery are available for reporting? (e.g. U.S. mail, e - mail, fax, online, etc.)

Hills Bank can deliver reports to UI via secured email and would entertain discussion on developing an FTP site for file delivery.

4.2.1.2. ATM Implementation

A. Based on previous projects of a similar scope, identify any problematic items and how these issues were mitigated.

Hills Bank would need 90 days for delivery of new A TMs from NCR Corporation. The order would be placed, and the delivery period would begin, on the date the new ATM service agreement with the University is signed. Historically, the lead time on orders was around 60 days. Current delivery timeframes have increased due to the high volume of new machines being ordered to address changes in the American's with Disabilities Act (ADA), which go into effect in March, 2012.

B. Provide a schedule showing milestone target dates necessary for full implementation of a resultant contract.

The timeline for ATM installation and milestones for full implementation is shown below:

Figure 4: Milestone Target Dates for ATM Installation

Day 1 Sign Contract Day 1 Complete A TM Service Aoreement with SHAZAM Dav 1 Complete State of Iowa Application for A TM location operation Day 1 Initiate ATM order with NCR Day 1 Initiate ATM topper or surround order Day 1 Notify the alarm company of the installation date Day 1 Notify the armored car company of the installation date. Day 1 Contact the exiting ATM provider. Dav 2 Contact appropriate University staff to discuss installation arranqements Dav4 Verify SHAZAM ATM Service Aqreement

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Day 85

Da 90

Veri Veri Veri Coordinate ATM installation with all parties; Armored Courier vendor, alarm vendor, SHAZAM, Hills Bank staff, exitin A TM rovider, and the Universit Install the A TM

C. How long do you estimate it will take to install A TM equipment and have the equipment fully functional?

We want to ensure minimal downtime when the new A TM is placed in service and the old A TM removed from service. We have addressed this in the past by working directly with the exiting firm and Shazam to ensure all parties understand their responsibilities and the timeline of the project.

D. Please explain the Firm's strategy for engaging University stakeholders. Based on your Firm's experience, identify individuals and/or groups you believe should be involved or have input in the implementation process, and identify their significance to the process.

Hills Bank will work with the University to establish a list of key stakeholders. We would like to have a key contact from each location to coordinate specifics related to access to communications rooms and power. We will deliver project plans to University staff and conduct meetings as appropriate to keep everyone informed on the progress of the A TM installations.

4.2.1.3. A TM Financial Partnership

A. Please provide an explanation of revenue or cost sharing opportunities on the attached form (Attachment D.1 ).

Hills Bank will operate all ATMs (24) listed in the RFP with no surcharge. We will fund the entire A TM deployment and ongoing operations with the exception of Sports Venues and Finkbine Golf Course. Hills Bank proposes operating ATMs at Sports Venues and Finkbine Golf Course on a cost-share basis. Based on historical transactional data provided, in order to operate these ATMs with no surcharge the cost to the University would be approximately $400 per month for ATMs at Sports Venues and $600 per month at Finkbine for the months they are in operation. The decision to surcharge at these locations would be made by the University.

4.2.2. IMU & UIHC Branch Financial Services

A. Describe the branch financial services that will be made available to students and employees.

Hills Bank is prepared to offer a wide variety of financial products and services for the benefit of the University community . Below is a brief summary:

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Figure 5: Products and Services

Checking - various types including Free Student Checking Insured Money Market - various types Savings - Regular and Penny Savers Certificates of Deposit - various maturities; $500 minimum

Individual Retirement Accounts (IRAs) - Savings and certificates of deposit (other investment types available through our Trust Department) A TM and Debit cards Automated Clearing House (ACH)

Automatic transfer for overdraft sweep Check cashing Check Safekeeping Coin Counting Collection items Direct Deposit E-statement Fax Hills Bank Online (internet banking) Mobile Banking Notary service Official checks Photocopies Power Pay Push Button Banker Stop payment Telephone transfer Wire transfer (incoming and outgoing)

Consumer loans Residential Loans Home Equity loans Home Equity Lines of Credit Ready Reserve

Trust and Wealth Management Services Insurance products

8 . The University prefers that branch hours follow regular University business hours Monday through Friday, 8am to 5pm, and an option for extended hours during peak times of student orientation (/MU location only). Describe how you will accommodate the University and provide the hours of operation.

Hours will be from 8:00am - 5:00 p.m. (Monday through Friday) at both IMU and UIHC. This will include tellers and personal bankers proficient in both deposits and consumer loans. During peak times of student orientation we will provide expanded hours (past 5:00 p.m.) as well as additional staffing as required. The bank is familiar with the need for additional staffing during peak times during student orientation the first few weeks of each semester.

C. The /MU and UIHC branches will follow the University of Iowa academic calendar for holiday observances. Describe how you will accommodate the University and provide a schedule of holidays the branches will be closed.

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The branches will be closed for all federal holidays as published by the Federal Reserve System. Otherwise, the branches will be open during the hours listed in "B" above. The bank would like to have a dialog with UI about branch hours of operation during holiday breaks. A list of holidays is provided below:

New Year's Day Martin Luther King, Jr. Day President's Day Memorial Day Independence Day Labor day Veteran's Day Thanksgiving Day Christmas Day

D. Please indicate if the Firm will provide some type of financial account with a PIN-based A TM card for unbankable individuals in the University of Iowa community.

UI staff who do not qualify for a traditional checking account will be able to obtain a Hills Bank Reloadable PrePaid Visa card with PIN access to funds at the POS and ATM.

This card can be funded by bringing funds to any branch location to make a deposit to the card, in the same way a traditional deposit can be made. The card would be accepted at ATM's and anywhere Visa Debit is accepted.

E. Please explain the Firm's plan for staffing branch location(s) . Do you anticipate hiring any University of Iowa students to work in either of the two locations?

Since Hills Bank established branches in Iowa City almost 30 years ago we have always hired UI students primarily in the teller area. Based on their aptitudes and class schedules, the hiring of UI students has been a positive move for both the bank and the students. We intend to continue this in the future, especially with the two new branches at the IMU and UIHC.

We would like to have further discussions on the transition of the branch locations, especially the IMU to insure we are able to work with incoming freshmen during early orientation sessions in June.

F. Please explain the security measures in place for the protection of each branch location.

G. Based on previous projects of a similar scope, identify any problematic items and how these issues were mitigated.

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No problems are anticipated but if they occur they wil l be handled as quickly and efficiently as possible. Hills Bank has built and opened several new branches in the last 1 O+ years and has encountered few problems and have opened the branches according to schedule.

H. Provide a schedule showing milestone target dates necessary for full implementation of a resultant contract.

Our understanding is we are taking over currently leased space and we expect the location to be fully operational within 30 days of possession date.

How long do you estimate it will take to be fully operational in the branch location(s)

It is anticipated the branches can be fully functional in five days or less after taking possession of the two branches.

I. Please explain the Firm's strategy for engaging University stakeholders. Based on your Firm's experience, identify individuals and/or groups you believe should be involved or have input in the implementation process, and identify their significance to the process.

Consultation with UI facilities management will be necessary in coordinating the bank's move into the branches at the IMU and UIMC.

4.2.3. ID Cards and Debit Functionality

Confidential and Proprietary

Confidential and Proprietary

B. The University requests that the Firm provide assistance in obtaining the University's own unique /IN from ANSI. Describe how this will be accomplished.

After speaking with several processors and other references in the industry, it is the bank's understanding that oversight groups have become very restrictive with regard to allowing non-financial institutions to own a debit card BIN. The basis for these concerns has to do with potential fraud and compliance issues. Prior to requesting an llN, Hills Bank would need to work with the University to review all compliance and regulatory concerns. After certifying this information with the University, we would work with the ABA and the Iowa Division of Banking to get their approval to proceed.

Confidential and Proprietary

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Confidential and Proprietary

28

Confidential and Proprietary

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Confidential and Proprietary

E. The University will not allow bank branding on the front of the ID card. Bank branding is allowable on the back of the card. Please indicate if the Firm is able to comply with this requirement.

Hills Bank will comply with this requirement.

F. The University will assume no liability for fraudulent use or overdrafts occurring due to A TM transactions, check writing or POS transactions on accounts provided under this proposal. Liability regarding lost/stolen cards is between the merchant, cardholder and the Firm. Describe the customer supporl that will be provided to assist cardholders in the event of a lost/stolen debit enabled ID card.

To report your debit card lost or stolen, contact us immediately. After bank hours, call 800-383-8000 to cancel your debit card.

Any Hills Bank cardholder can call any office or the call center during business hours, we can offer the ability to place a temporary block on the card if the card may be just misplaced while trying to find the card. If after hours, contact our processor, Shazam at 800-383-8000 to report the card lost or stolen and have the card canceled.

G. Describe how lost/stolen cards are deactivated. If a card is found, describe how the Firm will reactivate the card. Please describe your lost/stolen card policy.

A cardholder will need to contact UI and Hills Bank to report a lost or stolen card. Replacement Iowa One Card Plus cards will be instantly issued in the Hills Bank campus branch during normal business hours. Replacement Iowa One Cards with ATM/PIN debit functionality will be instantly issued in the Iowa One Card office during normal business hours. Outside of normal business hours, a cardholder will need to follow Ul's current process for obtaining an "emergency" One Card (without ATM or debit functionality) for use until the cardholder can visit the school card office to confirm eligibility for either a replacement One Card.

Cardholders will deactivate lost or stolen Iowa One Cards for campus use by reporting the card lost or stolen to the ID card office, just like they would today. To deactivate banking functionality for a lost or stolen card, cardholders will call a toll-free customer service center, 24 hours a day, seven days a week, or visit any Hills Bank branch during normal branch hours. Once a card is deactivated (e.g. "hot carded"), it cannot be re-activated as a banking card.

H. Please provide information regarding the Firm's security policies in place for the protection of ID card and cardholder related data.

Hills Bank understands that it is very important that we keep all of our customers and potential customers information private and secure. We have policies and practices that are continually reviewed by our Audit staff and external examinations to make sure we are doing

30

what we can to protect that data. In general steps are taken to limit the data that staff and vendors have access to help control the sensitive data. We also take steps to train our staff on how to protect that data as well outside of the controls that we have put in place.

The instant issuance system used to produce Visa-branded Iowa One Cards meets both Visa's and MasterCard's requirements for data security, including physical and logical access controls. It is installed at hundreds of financial institutions who use it to produce Visa or MasterCard-branded banking cards instantly in the branch.

I. Please explain how an ID card with Visa or MasterCard debit capabilities would be issued to A cardholder and the length of time it would take to deliver this type of ID card to individuals who opt-in to this feature.

An ID card with Visa debit capability could be instantly issued on the UI campus, using proven technology that is currently in use at several schools. It takes approximately 2 - 2 1/2 minutes to instantly issue a Visa-branded ID card, depending on the amount of encoding, and whether or not the card is laminated. There are several approaches that could be taken for issuing these cards on campus, and Hills Bank wishes to consult with UI to build a custom solution that incorporates Ul's card management capabilities , Visa's instant issuance security requirements, the Hills Bank campus branch, Ul's orientation workflow, and potential mass re-carding scenarios.

J. Please explain data exchange requirements between the University and the Firm to provide this signature-based debit functionality.

Hills Bank would like to develop a simple, reliable, and cost effective signature-based debit solution that would enhance the Iowa One Card but not require any data exchange between Hills Bank and UI. The bank desires minimal impact to Ul 's existing system of card readers and back end card management system. A Visa-branded Iowa One Card with two discrete two track magnetic stripes (like the current Iowa One Card) would be the ideal way to achieve this goal. Colorado State University adopted this approach for its Visa-branded Ram Card PLUS program, because of inherent limitations with its ID card management system. Idaho State University recently implemented a similar two magnetic stripe program for its MasterCard-branded ID.

K. Describe the Firm's ability to provide staff on-campus to assist with the production campus ID cards during peak carding events.

Hills Bank understands that it is critical to have adequate staffing to assist with card production and new account opening, particularly during peak carding events. The bank will provide whatever staffing is necessary to support the card issuance requirements during orientation, or during the back to school rush in the fall. The bank anticipates working very closely with UI to customize a staffing model around the requirements of each particular carding event.

K. Describe the Firm's process for providing a low/no cost, web-based tool to transfer of funds to student checking or savings accounts. Please indicate whether funds would be available same or next-day.

Hills Bank will allow the parents of University students the ability to transfers funds to the students checking account via ACH. We will create an online form for the parent to

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complete to request the transfer the funds. If the request is made by 3:00 PM Central time funds will be made available to the student that same day. Parents also have the ability to send the student a payment via their online Bill Payment solution or P2P solution that they use today, in addition to a traditional wire transfer.

Hills Bank is currently looking at many P2P solutions that would potential give the ability of parents to make the transfer to the students account not only online, but with the use of a mobile device as well. Once available, we would work with the University to rollout new services as they become available.

4.2.3.1 . Campus ID Cards Reporting

A. Describe in detail the Firm's ability to provide monthly and annual reporting of the number of accounts attributed to the University, information should be available based on person type (student, employee, alumni, etc.), and should detail the types of accounts for each person type.

Hills Bank will be able to provide UI with monthly and annual reporting that details aggregate cardholder activity for each of the three card types, by card BIN (or llN): Iowa One Card with ATM/PIN debit and Iowa One Card PLUS with Visa debit. This reporting would include:

Number of cards from each BIN completing point of sale transactions (PIN-based and signature-based). Total PIN-based debit transactions. Total signature-based debit transactions. The number of Iowa One Card PLUS cards and Affinity Debit Cards issued during the time period. The number of Iowa One ATM/PIN debit cards "linked" to checking accounts during the time period. Cards that were reported lost or stolen.

B. Please provide samples of customary reporting delivered on a monthly and annual basis.

The bank has attached a report from its QRY internal "core" system, which illustrates how card transactions are reported.

C. Please explain the Firm's internal process for verifying and reporting data.

Data is pull from reports provide by Shazam. This data is reviewed by staff periodically to insure the information in correct.

D. What other types of reports may be of interest to the University?

Additional reports that may be of interest to the University include: A Lost/Stolen cards report for the Iowa One Card(s). An "accounts closed" report for the Iowa One Cards. A "funds transfer" report that shows, in aggregate, a count of transactions, and the sum of total funds transferred from parents to their childrens' checking accounts (within the confines of established privacy laws).

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E. What file formats are available for reporting (.pdf, .xis, .bai2, .csv)?

File formats available for reporting include .pdf, .xis, and .csv.

F. What methods of delivery are available for reporting? (e.g. U.S. mail, email, fax, online, etc.)

The bank will ensure that the appropriate delivery method is used, based upon the needs of UI. Preliminarily , Hills Bank would propose to share the reports via email.

4.2.3.2. Campus ID Cards Implementation

A. Based on previous projects of a similar scope, identify any problematic items and how these issues were mitigated.

Typical problems associated with implementing campus card programs are outlined below, along with a description of potential solutions:

Inadequate communication and coordination between the financial institution and the school. Leadership, relationship management, and careful project documentation is essential. Inadequate testing of new cards to assure manufacturing quality and performance at on­campus locations. Technical "surprises" are not unusual and should be anticipated with a planned multi-testing procedure aimed at "zero defects". Communicating the program to incoming students for the first time. Direct mail materials are sometimes delayed by legal reviews causing timing problems in direct mail to incoming freshmen. This can have the effect of lowering the compensation to the University. It is essential to work closely with the University to insure adequate time for obtaining the required approvals so that the marketing plan can be properly executed. It is important that the program is "transparent" with respect to roles, responsibilities and accountability. Students may be confused about who is in charge of different aspects of a program. This can only be mitigated by a concerted and ongoing communications plan.

B. Provide a schedule showing milestone target dates necessary for full implementation of a resultant contract.

Hills Bank anticipates that a 5-6 month timeframe will be necessary to launch new Iowa One Card program. A preliminary schedule including milestone target dates is shown below:

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Figure 7: Milestone Target Dates

·~H~[=l~~ lr{ij'IEf"iiU - _ .... [[!.1uuu•···~r:u:ll hf1H "1...qten .,.,,

Contract Date (CD) Official Contract Date <Cm CD+ 10 days "Project Kick-Off Meeting" with marketing, operations, IT,

and card office staff. Establish one or more project "workinq qroups" and recurrinq meetinq schedule

CD+ 15 days Produce initial marketing collateral to announce the partnership between Hills Bank and UI

CD+ 20 days Define project requirements, including card encoding specifications for the ATM/PIN debit and Visa debit Iowa One Cards

CD+ 20 days Develop "short list" of ootential new Iowa One Card desians CD+ 25 days Hills Bank orders instant eauioment hardware and software CD+ 30 days Finalize strategy for summer carding events and identify

mass re-cardinq options CD+ 45 days Finalize Iowa One Card design(s). The University will have

final approval . Visa will need to approve the program and the card design

CD + 45 days Install ATMs CD+ 60 days Complete construction of Hills Bank branches in IMU and at

University Hospitals CD+ 60 days Setup dedicated BINs for both types of Iowa One Card CD+ 70 days Produce marketing collateral incorporating new Iowa One

Card(s) in brochure, direct mail , internet content CD+ 90 days Installation of instant issuance equipment at Hills Bank's

IMU camous branch CD+ 90 days Iowa One Cardstock is fabricated and delivered to campus.

The card fabrication process will include the following steps:

1. Select card manufacturer; release final artwork to card manufacturer

2. Hills Bank and UI review card proofs; conduct press check (optional)

3. Card manufacturer delivers Visa-branded Iowa One Cardstock to Hills Bank branch at IMU, delivers ATM/PIN debit Iowa One Cardstock to the Iowa One Card office

CD+ 100 days UI and Hills Bank produce test cards to verify that cards are encoded with the proper encoding format; UI tests cards at campus readers; Hills Bank links test cards to test accounts and uses them at ATMs and POS. UI and Hills Bank will also produce "production" test Iowa One Cards using actual Visa card stock to test encoding at A TMs, point-of-sale and at campus readers

CD+ 100 days Hills Bank trains UI card office staff on banking functionality available through the Iowa One Card; UI trains Hills Bank

3 Days refers to business days.

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on on-campus card functionality CD+ 100 days Projected live date for Iowa One Card I Hills Bank and UI

begin promoting the new card program TBD Freshman orientation direct mail TSO First freshman orientation event TBD Direct mail to returninQ students, faculty and staff TBD Hills Bank interviews students for staff positions in the IMU

branch TBD On-campus event(s) staffed by Hills Bank staff to answer

questions and open accounts TBD Mass re-carding event(s)

[Note: The implementation timeline above and the list of project milestones are preliminary. A final project schedule will depend upon the contract execution date, the final project requirements, UI and Visa U.S.A. approval timelines, and the completion of system testing.]

C. How long do you estimate it will take to have all necessary measures in place for the University-wide issuance of new cards?

Hills Bank anticipates that a 5-6 month timeframe will be necessary to launch the new Iowa One Cards. The bank would like to discuss with UI options for University-wide issuance of new cards. The goal would be to start issuing the new Iowa One Cards as soon as possible during freshman orientation in 2012. The ATM/PIN debit Iowa One Card could potentially be brought to market faster than the Iowa One Card PLUS. Preliminarily, the bank would look at fall 2012 to begin mass re-carding activities.

0 . Please explain the Firm 's strategy for engaging University stakeholders. Based on your Firm's experience, identify individuals and/or groups you believe should be involved or have input in the implementation process, and identify their significance to the process.

ID Card Office Management, because this stakeholder understands current operations, carding issues, and can provide insights into strategic planning objectives.

IT staff, because this group supports systems development for the ID card program. IT is essential for developing technical specifications, testing procedures, and timelines. It will be important that the University test new card stock to ensure the cards work on campus readers. IT can also act as a resource for developing web­based functionality or updating the University's website.

Facilities Management. Consultation with this group will be necessary in developing plans to construct the branches at the IMU and UIHC.

Marketing, because Hills Bank desires to work closely with the University in developing a marketing program consistent with the values and interests of the University.

University Legal department, because of the need for approval of marketing communications, and potential confidentiality or compliance issues.

35

Office of the Treasurer, because this office will be involved with auditing financial reports and collecting program revenues.

4.2.3.3. Campus ID Cards Financial Partnership

A. Describe in detail any additional unique business features, pricing arrangements, special services, or other value added services your institution would provide under any agreement resulting from this Request for Proposal not already discussed.

A five-year financial summary is provided below that shows the important elements of Hills Banks financial proposal. Bonus compensation, royalty guarantees, incentive compensation, rents , and other hard dollar guarantees are stated in detail. The bank's investment in marketing and promotion, branch construction and staffing, and ATM machines is also shown.

Table 3: Total Hills Bank Investment

Guaranteed Payments Year1 Year 2 Year3 Year 4 Years S Yr Totals Signin9 Bonus $ 125,000 $ - $ - s $ - $ 125,000 Guaranteed Annual Royalty s 50,000 $ 50,000 $ 50,000 s 50,000 $ 50,000 $ 250,000 Branch Rent- IMU and UIHC s 100,520 s 100,520 $ 137,520 s 137,520 $ 137,520 $ 613,600 Card stock Contribution $ 50,000 $ - $ - s - s - $ S0,000

Totals $ 32S,520 s 1S0,520 $ 187,S20 $ 187,S20 $ 187,S20 $1 038,600

Incentive Payments Year1 Year 2 Year3 Year 4 Years S Yr Totals SWipe Fee Incentive Payments s - s 35,21 4 $ 94.281 s 155,549 $ 191,379 s 476,423 SWipe Fee Incentive Payments- Campus student Organizations $ 7,395 $ 17,043 $ 28,856 $ 41,110 $ 48,276 $ 142,680

Totals s 7,39S $ S2,257 s 123,137 s 196,6S9 $ 239,6SS s 619,103

Year 1 Year 2 Year 3 Year 4 Year S S Yr Totals Guaranteed Payments+ Incentive Payments S 332,91S S 202,777 S 310,6S7 S 384,179 S 427.175 S 1.657.703

Capital Investment and Marketing Support Year 1 Year 2 Year 3 Year 4 Years S Yr Tota.ls Branch Construction and staffing s 260,000 s 267,200 s 334,604 s 282,217 s 290,048 s 1,434,069 ATM Machines s 400,000 s s - s - $ - s 400,000 ATM Operation $ 112.000 $ 112,000 $ 112,000 $ 112,000 $ 112,000 s S60,000 Marketin9 $ 50,000 s 50,000 $ 40,000 s 40,000 $ 40,000 s 220,000

Totals $ 822,000 s 429,200 s 486,604 $ 434,217 s 442,048 $ 2,614,069

!Total Investment I $1,154,915 I S 631,977 I S 797,261 I S 818,396 I S 869,223 I $ 4,271,772 I

36

B. Explain how the Firm will assist financially and functionally with the University-wide issuance

of new cards.

The bank will commit $50,000 for new Iowa One card stock and consumables to support University-wide issuance of new cards. Hills Bank understands that it is critical to have adequate staffing to assist with card production and new account opening, particularly during peak carding events. The bank will provide whatever staffing is necessary to support the card issuance requirements during orientation, or during the back to school rush in the fall. The bank anticipates working very closely with UI to customize a staffing model around the requirements of each particular carding event.

Hills Bank will work closely with UI to develop a University-wide re-carding strategy. Because Hills Bank is a local institution, it can bring significant resources to bear in order to support all card issuance scenarios, whether at orientation or mass re-carding. Developing the right re-carding strategy will require UI and the bank to agree upon how to handle the new card issuance; for example, will existing Iowa One Cardholders be required to get the new Iowa One Card with Hills Bank, and if so, does UI intend to "turn off' the existing ID in circulation after a particular cutoff date, effectively forcing everyone to obtain a new ID? Understanding these issues will help the bank collaborate with UI with regard to the scale and timing for any mass re-carding events.

Given the number of ID cards currently in circulation, a phased mass re-carding should be considered. Existing cardholders with a last name starting with A-E (for example) would have a scheduled time (e.g. the week of September 1-7 between 8 a.m. and 5 p.m.) to pick up their new ID cards. Anyone choosing the ATM/PIN debit Iowa One Card could have their card waiting for them to pick up at the scheduled time; these cardholders would be able to open their Hills Bank checking accounts before or after getting their new cards. Anyone choosing the Visa debit Iowa One Card would have their card produced instantly during the appointed time slot. To encourage everyone to get one of the new Iowa One Cards, UI would need to instruct all current cardholders that after a predetermined date, the old ID will cease working.

C. Explain how the Firm will pay royalties to the University. Provide a detailed financial incentive schedule including, but not limited to: ID card stock, signing bonuses, date(s) of payment to the University on the attached form (ATTACHMENT 0).

Signing bonus: $125,000, payable at contract execution.

Guaranteed annual royalty: $50,000.

Card stock: The bank will make a contribution of up to $50,000 for new Iowa One Cardstock and consumables.

Swipe Fees: These payments will be based upon the interchange income collected by the bank for point of sale debit transactions. The amount of the swipe fee will be equal to 35% of the total interchange income calculated on a monthly basis. Swipe

37

fees will be paid for all PIN based debit or signature based Visa debit point of sale transactions for cards linked to an Iowa One Card checking account or University Employee Advantage checking account, including the Iowa One ATM Card, Iowa One Card Plus with Visa debit, and any Hills Bank Visa debit card linked to an Iowa One Card checking account or University Employee Advantage checking account.

In addition, swipe fees will be paid to campus student organizations based upon the interchange income collected by the bank for point of sale transaction. The amount of the swipe fee will be equal to 7% of the interchange collected on a monthly basis.

The projected swipe fee revenue to the University is based on a conservative five year account penetration model that assumes the bank will capture a percentage of incoming freshman and transfer students each year in addition to faculty and staff. The model assumes a 50% penetration rate for incoming students by the fifth year and does not include penetration estimates for the existing student population, which would significantly increase the projected incentive payments to the University.

0 . Please explain whether or not the University will be given credit in the financial incentive calculations for existing accounts that can be associated back to the University.

Existing checking accountholders may opt to change their Hills Bank account to the Iowa One Card checking account or University Employee Advantage checking account for the University to receive the financial incentive.

E. Describe any additional revenue sharing opporlunities that will exist between the Firm and the University.

38

Section 5 - Form of Proposal Automatic Teller Machines, Campus Branch Financial Services and ID Card Financial Related Services

Request for Proposal Number 14570

To: The University of Iowa Purchasing Department 202 PCO Iowa City , Iowa 52242 - 2500

5.1 The undersigned Firm, in response to Request for Quotation number 14570, having examined the General Information, Instructions to Firms, Specifications I Firm Requirement, Scope of Work, Terms and Conditions, Evaluation Criteria I Method of Award, and, this Form of Proposal, all of which comprise the Contract Documents, hereby submits its proposal in accordance with the Contract Documents, within the time set forth therein.

5.2 Firm acknowledges receipt of the following Addenda , which are a part of the Contract Documents:

I Addendum Number #1

5.3 The sections of this proposal listed below represent trade secrets, proprietary or confidential information.

Note: Monetary sections of this proposal cannot be withheld as trade secret, proprietary or confidential information.

If none, mark: None.

Page Subsection/Section Description No. Ebid attachment Exhibit IV Hills Bank ATM Card

Encoding Layout 26 and 27 4.2.3.A, C, D Card encoding and card

issuance processes

5.4 The undersigned Firm provides the following references as required per the specifications of the Request for Proposal. The University of Iowa reserves the right to check additional sources or make any further investigations deemed necessary.

References: (In addition to the name and address of the organization please include the name of a contact person, their phone number and e-mail address.)

39

5.5 The Firm states that full compliance with the Contract Documents is maintained in this proposal, unless otherwise stated on Attachment C, Proposal Compliance Form, submitted in response to this Request for Proposal number 14570.

5.6 The Firm understands that the University of Iowa reserves, solely, the right to reject any and all proposals, to waive irregularities, defect, or technicalities in any proposal, and accept any proposal in whole or in part that it deems to be in its best interest.

5.7 The Firm agrees their proposal is an offer to The University of Iowa that may not be withdrawn for a period of one hundred twenty (120) calendar days after the opening of the proposals.

5.8 To assist in preparing the Firm's proposal, the Firm is reminded the following documents must be included with submitted proposal to receive consideration:

1. Section 5, Form of Proposal, pages 21 through 23, completed and signed.

2. Complete detailed responses in numeric order to all requested information and questions included in Section 3 - Specifications/Firm Requirements.

3. Complete detailed responses in numeric order to all requested information and questions included in Section 4 - Scope of Work.

4. Attachment A - Proposal Certification Form

5. Attachment B - RFP Response and Firm Question Form

6. Attachment C - Proposal Compliance Form with any exception clearly explained, to the terms, conditions, or specifications of Request for Proposal number 14570.

7. Attachment D - Quotations

40

0 .1 - A TM Quotations

0 .2 - Branch Financial Services Quotations

0.3 - ID Card Financial Related Services Quotations

8. Two (2) Certificates of Insurance, one original and one copy.

9. Bankers Blanket Bond or Financial Institutional Bond, one original and one copy.

5.9 The Firm hereby certifies by signing below: that this proposal is genuine and is not made in the interest of or on behalf of any undisclosed person, firm or corporation ; that the Firm has not directly or indirectly induced or solicited any other Firm to put in a false or sham proposal ; that the Firm has not solicited or induced any person, firm or corporation to refrain from bidd ing; and, that the Firm has not sought by collusion or kickback to obtain any advantage over any other Firm or over The University of Iowa.

Firm Business Name: Hills Bank and Trust Company

Firm's Official Business Address: 131 Main Street Hills, IA 52235

Federal Employment Identification 42-0310580 Number:

Firm's State or Foreign Country of Iowa Residence: ~

Authorized Signature: k4¥ Name, Printed or Typed: Dwight 0 . Seegmiller

Title: President and CEO

Telephone Number: 319-679-2291

Date: 12/2/11

Firm's representative to contact Marty Maiers during normal business hours regarding this proposal is: Telephone number of this 319-358-2259 representative:

E-mail Address of this Marty_maiers@hillsbank.com representative:

41

42

ATTACHMENT A Proposal Certification Form

The University of Iowa Purchasing Department 202 PCO Iowa City, Iowa 52242-2500

The undersigned certifies that to the best of her/his knowledge: (check one)

(_K_) There is no officer or employee of The University of Iowa who have, or whose relative has, a substantial interest in any contract award subsequent to this proposal.

(__} The names of any and all public officers or employees of The University of Iowa or the Iowa Board of Regents who have, or whose relative has, a substantial interest in any contract award subsequent to this proposal are identified by name as a part of this submittal.

The undersigned further certifies that their firm (check one) __ IS, or, _x._ IS NOT currently debarred, suspended, or proposed for debarment by any federal or state entity. The undersigned agrees to notify The University of Iowa of any change in this status, should one occur, until such time as an award has been made under this procurement action.

In compliance with the Request for Proposal, 14570, after carefully reviewing all the terms, cond itions and requirements contained therein , the undersigned agrees to furnish such goods/services in accordance with the specifications I scope of work.

Firm Name: Hills Bank and Trust Company

Firm Address: 131 Main Street Hills, IA 52235

Signed by: 01i,. J.,.t.< II Title: President a d CEO

Phone Number: 319-679-2291

Fax Number: 319-679-2810

Federal ID #: 42-0310580

43

ATTACHMENT B RFP Response and Firm Questions Form

Email the following Response letter by Tuesday November 8, 2011 to the attention of:

To: John Hillesland Purchasing Agent The University of Iowa Purchasing Department 202 PCO Iowa City, Iowa 52242 john-hillesland@uiowa.edu

Dear Mr. Hillesland:

Check all that apply

From: Marty Maiers Hills Bank and Trust Company Senior Vice President of Retail Banking 1401 South Gilbert Street Iowa City, IA 52240 Marty _maiers@hillsbank.com Ph: 319-358-2259 Fax: 319-679-5536

X Yes, my Firm WILL respond to Request for Proposal number 14570. No, my Firm WILL NOT respond to Request for Proposal number 14570.

Please indicate with "X" the items your firm will be I ma on b"dd'

WILL WILL NOT RESPOND RESPOND

ATM VENUES: HIGH TRAFFIC STUDENT VENUES x UIHC COMPLEX x SPORTS VENUES x LOW TRAFFIC MIXED USE LOCATIONS (ONE OR x MORE)

BRANCH LOCATIONS: IMU BRANCH x UIHC BRANCH x

ID CARD FINANCIAL RELATED SERVICES: (must also bid on HIGH TRAFFIC STUDENT A TM VENUES and encouraged to bid on /MU BRANCH)

ATM/PIN-based Debit x SiQnature-based Debit x

Firm Questions: All questions from the Firms concerning this RFP number 14570 should be emailed to Purchasing by Tuesday November 8, 2011 3:00 PM CDT.

With all questions submitted, please indicate your complete Firm name, address, the name, phone number,

fax number, and e-mail address of the person(s) submitting questions regarding this RFP.

44

ATTACHMENT C Proposal Compliance Form

Note: Firms must review and respond to the terms and conditions listed in the eBid System.

I hereby certify total compliance with all terms, conditions and specifications of this Request for Proposal (RFP) Number 14570, except as expressly stated below.

RFP Item Number Comments

~

y~ J~h j/

Signature:

Name, Printed or Typed: Dwight 0 . Seegmiller

Date: December 2, 2011

45

ATTACHMENT D-1 Financial Partnership ATM Revenue I Cost Sharing Quotation Form

Disclose any and all revenue sharing or cost sharing on ATMs and other incentives, as well as surcharging proposed. Indicate ATM functionality and network membership. The RFP stipu lates a minimum 5 year contract. Firms may bid on 1 or more of the numbered line items. (See Attachment E. for specific locations included in each line item.) Firm may also submit one bid to include all ATM locations. Firms are encouraged to consider cost sharing bids on lower volume A TM locations.

Please indicate annual revenue/cost sharing quotes under 5 and 10 year contract term scenarios .

Current ATMs Quotation:

1-HIGH TRAFFIC STUDENT VENUES

2-UIHC COMPLEX

3-SPORTS VENUES

4-LOW TRAFFIC MIXED USE­COLLEGE OF DENTISTRY

5-LOW TRAFFIC MIXED USE­COLLEGE OF LAW

6-LOW TRAFFIC MIXED USE­UNIVERSITY SERVICES BUILDING

7-LOW TRAFFIC MIXED USE­CAMPUS RECREATION & WELLNESS CENTER 8-LOW TRAFFIC MIXED USE­FINKBINE GOLF COURSE

Proposed New Locations:

9-LOW TRAFFIC MIXED USE­CENTER FOR DISABILITIES & DEVELOPMENT 10-LOW TRAFFIC MIXED USE­COLLEGE OF PUBLIC HEAL TH

11-Servicing UI Owned/Leased ATMs

12-Quotation for all ATMs

Annual Revenue I Cost Sharing (If cost sharing, please indicate

as a negative amount)

5-Year Contract Term

0

0

$(19,200)

0

0

0

0

$(7,200)

0

0

See 4.2.1 .K

46

10-Year Contract

Term

Surcharg e per

Transacti on

0

0

0

0

0

0

0

0

0

0

Functionality (Full Function

or Cash Dispense)

See Figure 3

See Figure 3

See Figure 3

See Figure 3

See Figure 3

See Figure 3

See Figure 3

See Figure 3

See Figure 3

See Figure 3

See Figure 3

See Figure 3

ATM Network(s)

Shazam

Shazam

Shazam

Shazam

Shazam

Shazam

Shazam

Shazam

Shazam

Shazam

Shazam

Shazam

ATTACHMENT D-2 Financial Partnership Branch Financial Services Rent Quotation Form

Specify annual rental arrangements on a square foot basis for financial branch locations. Disclose any other incentives. Firms may bid on one or more locations. The RFP stipulates a minimum 5 year contract.

Please indicate annual rent payment quotes under 5, 10 and 15 year contract term scenarios.

Annual Rent (sQ ft) Other Incentives 5-Year 10-Year 15-Year

Contract Contract Contract Term Term Term

IMU Branch- Option 1 Years 1-3: -500 sq. ft. on 1•1 Floor $47,333

Years 4-5: -1200 sq. ft. on Ground Floor $72,000

IMU Branch- Option 2 -440 sq. ft. on 1•1 Floor

Years 4-5: -1200 sq. ft. on Ground Floor

UIHC Branch (819 sq. ft. Fountain Entrance) $65,520

47

ATTACHMENT 0-3 Financial Partnership ID Card Financial Related Services Quotation Form

Describe and estimate any and all revenue sharing or cost sharing for any proposed ID Card Financial Related Services and other applicable incentives as outlined below. The RFP stipulates a minimum 5 year contract. Firms bidding on these ID services must also bid on High Traffic Student Venue ATMs, and are also encouraged to bid on IMU Branch Financial Services.

Please indicate annual revenue/cost sharing quotes under 5 and 10 year contract term scenarios .

Estimated Value over term of Contract4 Estimated Value

5-Year 10-Year over term of

Contract Contract Term

Contract Term

ATM/PIN-Based Debit:

One Time Signing Bonus $125,000 $125,000

Annual Guaranteed Financial Incentive $250,000 $250,000

Penetration Based Financial lncentive5 $619,103 $619,103

Card Stock $50,000 $50,000

Signature-Based Debit:

One Time Signing Bonus $125,000 $125,000

Annual Guaranteed Financial Incentive $250,000 $250,000

Penetration Based Financial Incentive $619,103 $619,103

Card Stock $50,000 $50,000

4 Hills Bank proposes to offer both types of Iowa One Cards. In other words, the Signing Bonus, Annual Guarantees, Penetration Based Financial Incentive, and Card Stock amounts are the same, regardless of which type of Iowa One Card is issued, or if both are issued. 5 Hills Bank proposes a "swipe fee" incentive for both types of Iowa One Cards.

48

Appendix

49

Exhibit I: List of Hills Bank ATM Locations

Name Street City St Zip County Availability Services Image Shazam Deposit Privileged

Status Casey's ATM 617 42nd Av Amana IA 52203 Iowa Available daily Cash only

Casey's ATM 130 W Evans St Williamsburg IA 52361 Iowa Available daily Cash only

Fast Stop ATM 103 S Highland St Williamsburg IA 52361 Iowa Available daily Accepts Yes deposits

Coral Ridge Mall ATM 1451 Coral Ridge Ave Coralville IA 52241 Johnson Available daily Cash only - Center Coral Ridge Mall ATM 1451 Coral Ridge Ave Coralville IA 52241 Johnson Available daily Cash only - Food Court Coral Ridge Mall ATM 1451 Coral Ridge Ave Coralville IA 52241 Johnson Available daily Cash only - Food Court Coral Ridge Mall ATM 1451 Coral Ridge Ave Coralville IA 52241 Johnson Available daily Cash only -West DeliMartATM 506 2nd St Coralville IA 52241 Johnson Available daily Cash only

DeliMart ATM 590 1st Av Coralville IA 52241 Johnson Available daily Cash only

Hills Bank Coralville 1009 2nd St Coralville IA 52241 Johnson 24 hr drive-up Accepts Yes Yes ATM deposits Hills Bank Coralville 1009 2nd St Coralville IA 52241 Johnson 24 hr drive-up Accepts Yes ATM deposits Hills Bank Coralville 1009 2nd St Coralville IA 52241 Johnson 24 hr walk-up Accepts Yes ATM deposits Casey's ATM 310W Main St Hills IA 52235 Johnson Available daily Cash only

Cold Stone Creamery 132 E Washington St Iowa City IA 52240 Johnson 24 hr Accepts ATM deposits Colonial Lanes ATM 2253 Old Hwy 218 S Iowa City IA 52246 Johnson Available daily Cash only

Dan's Short Stop ATM 2221 Rochester Av Iowa City IA 52245 Johnson Available daily Cash only Yes

DeliMartATM 525Hwy1 W Iowa City IA 52246 Johnson Available daily Cash only

DeliMartATM 1920 Lower Muscatine Iowa City IA 52240 Johnson Available daily Cash only Rd

DeliMart ATM 2410 Mormon Trek Iowa City IA 52246 Johnson Available daily Cash only Blvd

DeliMart ATM 206 E Benton St Iowa City IA 52240 Johnson Available daily Cash only

Hills Bank Iowa City 201 S Clinton St Iowa City IA 52240 Johnson 24 hr walk-up Accepts Yes ATM deposits Hills Bank Iowa City 201 S Clinton St Iowa City IA 52240 Johnson 24 hr walk-up Accepts Yes ATM deposits Hills Bank Iowa City 2621 Muscatine Av Iowa City IA 52240 Johnson 24 hr drive-up Accepts Yes Yes ATM deposits Hills Bank Iowa City 1401 S Gilbert St Iowa City IA 52240 Johnson 24 hr drive-up Accepts Yes Yes ATM deposits Hills Bank Iowa City 1401 S Gilbert St Iowa City IA 52240 Johnson 24 hr walk-up Accepts Yes Yes ATM deposits Johnson Co Admin 913 S Dubuque St Iowa City IA 52240 Johnson Available daily Cash only Yes Bldg ATM L & M Mighty Shop 504 E Burlington St Iowa City IA 52240 Johnson Available daily Cash only ATM On the Go ATM 2315 Muscatine Av Iowa City IA 52240 Johnson Available daily Cash only

50

Oral B Laboratories 1832 Lower Muscatine Iowa City IA 52240 Johnson Available daily Cash only ATM Rd Suburban Amoco ATM 1905 Keokuk St Iowa City IA 52240 Johnson Available daily Cash only

Suburban Amoco A TM 370 Scott Ct Iowa City IA 52245 Johnson Available daily Accepts Yes deposits

Sycamore Mall ATM 1600 Sycamore St Iowa City IA 52240 Johnson Available daily Cash only

Sycamore Mall ATM 1600 Sycamore St Iowa City IA 52240 Johnson Available daily Cash only

Casey's ATM 595 N Kansas Av North Liberty IA 52317 Johnson Available daily Cash only

Casey's ATM 625 W Zeller St North Liberty IA 52317 Johnson Available daily Cash only

Hills Bank North 25 Hwy965 N North Liberty IA 52317 Johnson 24 hr drive-up Accepts Yes Yes Liberty ATM deposits Amoco ATM 4141 Center Point Rd Cedar IA 52402 Linn Available daily Cash only

NE Rapids Amoco ATM 2601 Williams Blvd Cedar IA 52404 Linn Available daily Cash only

SW Rapids Armstrong Center 2nd 222 3rd Av SE Cedar IA 52401 Linn Available daily Cash only floor ATM Rapids Casey's - Coe College 12011st Av SE Cedar IA 52402 Linn Available daily Cash only ATM Rapids Casey's - Kirkwood 3434 1st Av NE Cedar IA 52402 Linn Available daily Cash only College ATM Rapids Casey's ATM 501 6th St SW Cedar IA 52404 Linn Available daily Cash only

Rapids Casey's ATM 2018th Av SE Cedar IA 52401 Linn Available daily Cash only

Rapids Casey's ATM 1661 32nd St NE Cedar IA 52402 Linn Available daily Cash only

Rapids Casey's ATM 380 33rd Av SW Cedar IA 52404 Linn Available daily Cash only

Rapids Casey's ATM 130 41st Av Dr SW Cedar IA 52404 Linn Available daily Cash only

Rapids Casey's ATM 1495 Blairs Ferry Rd Cedar IA 52402 Linn Available daily Cash only

NE Rapids Casey's ATM 641 Edgewood Rd NE Cedar IA 52405 Linn Available daily Cash only

Rapids Casey's ATM 3625 Edgewood Rd Cedar IA 52404 Linn Available daily Cash only

SW Rapids Casey's ATM 5555 Edgewood Rd Cedar IA 52411 Linn Available daily Cash only

NE Rapids Casey's ATM 701 Ellis Blvd NW Cedar IA 52405 Linn Available daily Cash only

Rapids Casey's ATM 20 Miller Av SW Cedar IA 52404 Linn Available daily Cash only

Rapids Casey's ATM 3349 Mt Vernon Rd Cedar IA 52403 Linn Available daily Cash only

SE Rapids Casey's ATM Hwy 13, 888 Vernon Cedar IA 52403 Linn Available daily Cash only

Valley Dr SE Rapids Eastern Iowa Airport 2121 Arthur Collins Cedar IA 52404 Linn 24 hr walk-up Cash only Yes ATM Pkwy SW Rapids Hills Bank Cedar 240 3rd Av SE Cedar IA 52401 Linn 24 hr walk-up Accepts Yes Yes Rapids ATM Rapids deposits Hills Bank Cedar 3905 Blairs Ferry Rd Cedar IA 52402 Linn 24 hr drive-up Accepts Yes Yes Rapids ATM NE Rapids deposits Hills Bank Cedar 3610 Williams Blvd Cedar IA 52404 Linn 24 hr drive-up Accepts Yes Yes Rapids ATM SW Rapids deposits Hills Brothers Jiffy Mart 1904 Mt Vernon Rd Cedar IA 52403 Linn Available daily Cash only ATM SE Rapids Lindale Mall ATM 4444 1st Av NE Cedar IA 52402 Linn Available daily Cash only

Rapids

51

Mercy Hospital ATM 70110th St SE Cedar IA 52403 Linn 24 hr Cash only Yes Rapids

St. Luke's Hospital 1026AAv NE Cedar IA 52406 Linn 24 hr Cash only Yes ATM Rapids Casey's ATM 780 N Center Point Rd Hiawatha IA 52233 Linn Available daily Cash only

Casey's ATM 150 Kirkwood Av Lisbon IA 52253 Linn Available daily Cash only

Hills Bank Lisbon ATM 103 W Main St Lisbon IA 52253 Linn 24 hr walk-up Accepts Yes deposits

Casey's ATM 2020 7th Av Marion IA 52302 Linn Available daily Cash only

Casey's ATM 975S11th St Marion IA 52302 Linn Available daily Cash only

Hills Bank Marion ATM 800 11th St Marion IA 52302 Linn 24 hr drive-up Accepts Yes Yes deposits

Casey's ATM 323 Hwy 30 SW Mt Vernon IA 52314 Linn Available daily Cash only

Hills Bank Mt Vernon 720 1st Av SE Mt Vernon IA 52314 Linn 24 hr drive-up Accepts Yes Yes ATM deposits P-n-P Gas Station 1206 1st St SW Mt Vernon IA 52314 Linn Available daily Cash only Yes ATM Casey's ATM 601 E Av Kalona IA 52247 Washington Available daily Cash only

Hills Bank Kalona ATM 120 5th St Kalona IA 52247 Washington 24 hr walk-up Accepts Yes Yes deposits

Westside Petro ATM 1031stSt Kalona IA 52247 Washington Available daily Cash only Yes

Corner Stop ATM 100 E Madison St Washington IA 52353 Washington Available daily Cash only Yes

Hills Bank Wellman 229 8th Av Wellman IA 52356 Washington 24 hr walk-up Accepts Yes ATM deposits

52

Exhibit II : Map of Hills Bank Branch and ATM Location

Hills Bank and Trust Comnanv C!dor Rapids • Coralville • Hilk • Iowa Oty • Kalona • Lnbon • Marion • Mount Vernon

North Liberty • Wellman • 1-800-4-45-5725 • hillsbank.com • Member FDIC

BEN T(:)ll

Center Point

0 alo •

•

LI El u

N

r I I I

Marion Atkins

•

FJ1•ldx

• W.ilrora• C

E1v •

0 Wdhamsburg

0 \)

80

Swisher • o Shue1 ,,11.,

Kalona

I I

Wash111gton 0

53

Soron

• Hills

• Hills Bank Locations

CJ Hills Bank ATM Locations

J 0 N E S

D AR

• West 81 anch

• ~·/est Liberty

54