HOw does it work ?

The Interbank Contingent Liquidity Funding Exchange is designed to provide a strategic and efficient method for community banks to bolster their Contingency Liquidity Pool while also enhancing their profitability. This mechanism is built on the mutual exchange of Irrevocable Stand-by Letters of Credit between participating banks. How it works Step-by-Step Process 1. Issuance of Letters of Credit: · Bank A issues an Irrevocable Stand-by Letter of Credit (SBLC) to Bank B for an amount of $250,000. · Concurrently, Bank B issues an Irrevocable Stand-by Letter of Credit to Bank A for the same amount of $250,000. 2. Contingency Trigger: · The Letters of Credit (LOCs) can only be drawn on in the event that a beneficiary bank experiences a Liquidity Event.

The Interbank Contingent Liquidity Funding Exchange is designed to provide a strategic and efficient method for community banks to bolster their Contingency Liquidity Pool while also enhancing their profitability. This mechanism is built on the mutual exchange of Irrevocable Stand-by Letters of Credit between participating banks. How it works Step-by-Step Process 1. Issuance of Letters of Credit: · Bank A issues an Irrevocable Stand-by Letter of Credit (SBLC) to Bank B for an amount of $250,000. · Concurrently, Bank B issues an Irrevocable Stand-by Letter of Credit to Bank A for the same amount of $250,000. 2. Contingency Trigger: · The Letters of Credit (LOCs) can only be drawn on in the event that a beneficiary bank experiences a Liquidity Event.

The Interbank Contingent Liquidity Funding Exchange is designed to provide a strategic and efficient method for community banks to bolster their Contingency Liquidity Pool while also enhancing their profitability. This mechanism is built on the mutual exchange of Irrevocable Stand-by Letters of Credit between participating banks. How it works Step-by-Step Process 1. Issuance of Letters of Credit: · Bank A issues an Irrevocable Stand-by Letter of Credit (SBLC) to Bank B for an amount of $250,000. · Concurrently, Bank B issues an Irrevocable Stand-by Letter of Credit to Bank A for the same amount of $250,000. 2. Contingency Trigger: · The Letters of Credit (LOCs) can only be drawn on in the event that a beneficiary bank experiences a Liquidity Event.

Benefits of Membership For one low annual fee, you will be able to: · Increased Liquidity Pool: Each participating bank effectively increases its liquidity pool by $250,000 x the number of exchangesges with other banks. This is crucial for managing unexpected liquidity shortfalls. · Profitability Improvement: By participating in this exchange, banks can improve their financial stability and potentially their profitability, given the enhanced liquidity position Replace assets in your short-term liquidity portfolio with higher yielding (core loan) assets. Receive Bauer Financial Due Diligence/Star Rating Report for banks with whom you have exchanged ISBLCs (an annual $1000 value)

The Interbank Contingent Liquidity Funding Exchange is designed to provide a strategic and efficient method for community banks to bolster their Contingency Liquidity Pool while also enhancing their profitability. This mechanism is built on the mutual exchange of Irrevocable Stand-by Letters of Credit between participating banks. How it works Step-by-Step Process 1. Issuance of Letters of Credit: · Bank A issues an Irrevocable Stand-by Letter of Credit (SBLC) to Bank B for an amount of $250,000. · Concurrently, Bank B issues an Irrevocable Stand-by Letter of Credit to Bank A for the same amount of $250,000. 2. Contingency Trigger: · The Letters of Credit (LOCs) can only be drawn on in the event that a beneficiary bank experiences a Liquidity Event.

The Interbank Contingent Liquidity Funding Exchange is designed to provide a strategic and efficient method for community banks to bolster their Contingency Liquidity Pool while also enhancing their profitability. This mechanism is built on the mutual exchange of Irrevocable Stand-by Letters of Credit between participating banks. How it works Step-by-Step Process 1. Issuance of Letters of Credit: · Bank A issues an Irrevocable Stand-by Letter of Credit (SBLC) to Bank B for an amount of $250,000. · Concurrently, Bank B issues an Irrevocable Stand-by Letter of Credit to Bank A for the same amount of $250,000. 2. Contingency Trigger: · The Letters of Credit (LOCs) can only be drawn on in the event that a beneficiary bank experiences a Liquidity Event.

Additional Considerations · Common Instrument: Letters of Credit are widely used in banking and are well-understood instruments for managing liquidity and credit risk. · Accounting Treatment: The accounting treatment for these Letters of Credit is supported by an accounting opinion provided by the accounting firm BDO. This endorsement ensures that the financial impacts of these instruments are properly recorded and compliant with relevant accounting standards. NO collateral requirements & NO fees to draw on the letters of credit which are IRREVOCABLE.

The Interbank Contingent Liquidity Funding Exchange is designed to provide a strategic and efficient method for community banks to bolster their Contingency Liquidity Pool while also enhancing their profitability. This mechanism is built on the mutual exchange of Irrevocable Stand-by Letters of Credit between participating banks. How it works Step-by-Step Process 1. Issuance of Letters of Credit: · Bank A issues an Irrevocable Stand-by Letter of Credit (SBLC) to Bank B for an amount of $250,000. · Concurrently, Bank B issues an Irrevocable Stand-by Letter of Credit to Bank A for the same amount of $250,000. 2. Contingency Trigger: · The Letters of Credit (LOCs) can only be drawn on in the event that a beneficiary bank experiences a Liquidity Event.

Additional Considerations · Common Instrument: Letters of Credit are widely used in banking and are well-understood instruments for managing liquidity and credit risk. · Accounting Treatment: The accounting treatment for these Letters of Credit is supported by an accounting opinion provided by the accounting firm BDO. This endorsement ensures that the financial impacts of these instruments are properly recorded and compliant with relevant accounting standards. NO collateral requirements & NO fees to draw on the letters of credit which are IRREVOCABLE.