ABOUT

Community Financial Institutions (“FIs”) are facing substantial challenges in the current economic and regulatory environment. The weakness in the global economy has resulted in a business climate of uncertainty and soft loan demand confounded by declining borrower credit quality. When considering all that is happening, it is no surprise that FIs are experiencing low loan-to-deposit ratios. Further, Federal Reserve policy, combined with too-big-to-fail bank competition, has served to squeeze the net interest margins FIs are able to secure. All of this pressure is occurring in a market where over $5.0 trillion in corporate loans are maturing in the next three years. In this case, challenge becomes opportunity.

 

To meet this market demand and opportunity, BancAssets, LLC offers a nationwide program to serve as the trusted qualified loan source for Community Financial Institutions.

 

Corporate Paper

BancAssets provides a conduit of institutional-quality corporate paper from Fortune 1000 companies. These loans offer FIs the opportunity to participate in what has been, up to now, Wall Street arranged loan syndications funded by the mega-banks. These loans are structured as floating rate notes with short-term maturities ranging from twenty-four (24) to sixty (60) months. The interest rate margin, commensurate with the credit quality of the borrower, typically ranges from 125 bps to 500 bps. BancAssets serves as the administrative, collateral, and servicing agent for these loans. FIs are able to support the economic growth of the US industrial base while borrowers utilize community financial institutions as a way to show their support for communities of America through economic empowerment and job creation.

 

Commercial and Consumer Credit

BancAssets forms multiple loan pools to finance selected collateral-backed credit-worthy borrowers. Each pool will allow Community Banks (“Participants”) to commit to finance the collateral of an undivided interest. Participants receive a return of principal plus interest. The interest rate margin ranges from 350 bps to 600 bps. A Participant may elect to terminate its commitment and withdraw at any time. Upon termination or withdrawal, the Participant will receive whole collateralized loan agreements at a value calculated based on the net-present-value of the instrument and prorated share. BancAssets will serve as the administrative, collateral, and servicing agent for these pools. These pools will offer a new and collective source of income for Participants.

 

Whole Loan Portfolios

BancAssets has formed strategic partnerships with proven institutions to provide FIs a platform for acquiring and selling residential, commercial and consumer whole loan assets.  Individual whole loans in an FI's footprint can be acquired singularly or in groups from our portfolios.  These loans are typically sold "servicing released," giving the purchasing FI the chance to build a relationship with the borrower.  In some cases, the loan will be sold "servicing retained," meaning the selling institution continues to service the customer relationship, receiving payments and forwarding net proceeds to the acquiring institution.  FIs can let us know specific asset classes, types of loans, or regions where they'd like to add customers, and we will find specific loan portfolios to help build a balanced asset strategy.

 

BancAssets can also assist in finding the right buyer when FIs have loans to sell to clear concentration or meet guidelines.

 

Alternative Asset-Backed Lending

BancAssets has a created network of selected specialty finance companies that will work with FIs to provide alternative credit facilities to businesses. This allows the FI to retain the customer, develop a full-service relationship, and limit exposure to the non-traditional credit risk. The types of financing offered through the BancAssets network includes receivable financing, asset-based loans, purchase orders, work in progress billing, inventory advances, medical receivables, equipment leasing, and real estate loans.

 

 

 

 

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