Dynamic Source for Flexible Funding
Many community banks are experiencing strong performance and see opportunities to grow even faster. One of the biggest challenges is the consistent need to increase deposits. Without a way to generate new deposits in a cost effective and easy-to-process manner, community banks are unable to meet future lending needs and increase bottom line performance.
New Source of Flexible Funding
The Capital Market CD program (CMCD) is a dynamic funding solution. The program is a straightforward, unique and efficient way to raise money from the capital markets to deliver a new, fresh source of deposits to community banks.
Valuable Funding Advantages
The Capital Market CD program provides Community Bankers with: • • Lower Total Funding Costs – no collateral costs, no stock purchase, no annual fees, no costly audits Efficient Funding Source - funding generated directly from the capital markets, not local deposits. Ability to systematically “Ladder in” intermediate term deposits (2-5 years) helping stabilize the funding base, extend liabilities and reduce interest rate risk • Easy to Use and Administer - all CDs issued in book entry form and interest payments transmitted through ACH, making the program efficient and easy to administer
Capital Market CD Highlights
Lower Funding Costs
Cost Effective No Collateral Reduce Interest Rate Risk Enrollment Costs CMCD rate is based on the 3 year Treasury rate. rate.annual fee to participate Agency +50 No No annual fee to participate Collateral freed up for other funding needs Extend liabilities to reduce interest rate risk No enrollment costs, no extra fees
Efficient Funding Source
Funding Levels Intermediate Term Deposits FDIC
From $100,000 per month Up to 1 to 5 million a week. You choose the weeks you want to participate.
3 year funding solution FDIC has opined positively on the program
Easy to Use and Administer
Easy to Use, Less Administration No Hassle State Endorsed and Sponsorship All CDs issued in book entry form, no paper certificates and ACH used to transmit interest payments No subscription fees, no rate sensitive deposits, no early redemption, no signature card or 1099’s required State Banking Associations endorsing and helping sponsor the program
Capital Market CD Delivers Fresh Capital Market Funding
Limited Liability Corporations The Capital Market CD program creates customers for your bank by forming individual Limited Liability Corporations (LLC) to buy Certificates of Deposits (CDs) Notes Sold to Capital Market The LLC creates and sells a note to the capital markets, which is secured with the CD from your bank Buy Certificates of Deposits from Banks The money from the notes is used to buy CDs from individual banks. The CMCD program does not lend money to the bank, a CD is purchased from the bank FDIC Insured and AAA Rates The CD is insured by the FDIC. The note carries a AAA Fitch and S&P rating, allowing us to raise money at AAA rates FDIC Each purchased CD is fully insured up to $100,000. FDIC requires each issuance to have a minimum of 100 banks partcipating in the issue.
Enrollment & Funding Process
Enrollment Placing Funding Order Funding Activiation Confirmation Reporting Requirements Interest Payments Enrollment completed one time by signing and and returning applicable agreement Enrollment completed one time by signing returning a three part program agreement Sign up for the specific weeks and amounts for weekly Capital Market CD issue Funds sent to your bank each week via wire transfer Confirmation sent with each weekly issue Confirmations available online Accounting and holdings reports published via the IPFS web site Remitted to Wilmington Trust via ACH on semi-annual basis Remitted ACH on semi-annual basis
Community Bank Funding Company
The Capital Market CD was created by Community Bank Funding Company, based in Aurora, Colorado that originated the idea for capital market funding and has a patent on the process. Community Bank Funding Company has partnered with Republic Financial Corporation, a 35 year old financial investment company to provide strong service and reliability. Both companies are committed to providing an innovative and reliable source of funding for community financial organizations. For more information contact Community Bank Funding Company 3300 S. Parker Road, Suite 315, Aurora, Colorado 80014 Phone 800.483.6835 Fax 303.923.2249 Email info@cbankfunding.com www.cbankfunding.com