CASH 2018 Special Proxy Statement

In order to manage its exposure to changes in interest rates, Crestmark management closely monitors Crestmark’s interest rate risk. One component of the monitoring process is performing a net interest income analysis. A net interest income analysis measures the change in net interest income over a one-year period in the event of a hypothetical change in interest rates. This analysis assesses the risk of change in net interest income in the event of a sudden and sustained increase or decrease in increments of 100 basis points. Key assumptions in the simulation analysis include prepayments on loans, probable calls of investment securities, changes in market conditions, loan volumes and loan pricing, deposit sensitivity, and customer preferences. These assumptions are inherently uncertain as they are subject to fluctuation and revision in a dynamic environment. The assumptions used in the interest rate sensitivity analysis are inherently uncertain and, as a result, the simulations cannot precisely measure net interest income or precisely predict the related changes in net interest income. Actual results will differ from simulated results due to timing, magnitude and frequency of interest rate changes as well as changes in market conditions and management strategies. The table below presents projected changes in net interest income for the various rate shock levels at December 31, 2017 and December 31, 2016. Changes in Net Interest Income Over One Year Horizon (Dollars in thousands) At December 31, 2017 At December 31, 2016 Changes in Levels of Interest Rates Dollar Change Percentage Change Dollar Change Percentage Change -1.00% . . . . . . . . . . . . . . . . . . $(1,600) -1.50% $(1,700) -1.90% +1.00% . . . . . . . . . . . . . . . . . . 1,600 1.60% 1,800 2.10% +2.00% . . . . . . . . . . . . . . . . . . 3,200 3.10% 3,600 4.10% +3.00% . . . . . . . . . . . . . . . . . . 4,800 4.70% 5,400 6.20% +4.00% . . . . . . . . . . . . . . . . . . 6,400 6.20% 7,200 8.20% 127