September 2528, 2005 Palm Desert, California

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CDARS and IND
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Promontory Interfinancial Network
Over 2,700 institutions use our services to
enhance their profitability, attract
large-dollar deposits or obtain wholesale
funding.

• Certificate of Deposit Account Registry
• Service (CDARS)
• Offer customers up to 50 million in FDIC
  insurance
• Earn fee income by selling "excess" deposits to
  other network members
• Purchase funds at competitive rates (without
  collateralization or credit limits)
• Insured Network DepositsSM Service (INDSM)
• Tap into another wholesale funding option access
  large blocks of long-term funding (25 million
  up to multi-billions) at floating rates

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What is CDARS?

• The Certificate of Deposit Account Registry
  Service or CDARS is a service that your
  organization can use to provide customers with
  access to up to 50 million in FDIC insurance on
  CD investments.
• CDARS is also a funding and liquidity management
  tool that your organization can use to access
  funds, manage its balance sheet, and enhance its
  profitability.

CDARS is a registered service mark of Promontory
Interfinancial Network, LLC.
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Network Footprint Growth
Only headquarters of our Member Banks are shown
on this map. Additionally, we have network
members in Alaska and Hawaii.
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Put CDARS to Work for Your Bank Today
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Banks Use CDARS to

• Retain and increase deposits. (CDARSReciprocal
  transactionsSM)
• Earn fee income by selling excess deposits to
  other banks while maintaining full ownership and
  control over the customer relationship.
  (CDARSOne-Way SellSM transactions)
• Make a portfolio investment for your banks own
  account and earn a rate that may compare
  favorably to other alternatives. (CDARS One-Way
  SellSM transactions)
• Purchase deposits from other banks without having
  to establish or manage new customer
  relationships. (CDARS One-Way BuySM
  transactions)

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How CDARS Works

• Reciprocal transactions
• Your bank can attract large-dollar customers by
  offering them access to up to 50M in FDIC
  insurance, and the conveniences of one bank, one
  rate and one statement.
• The customer makes a large deposit with your
  bank. You place those funds into CDs issued by
  other members of the Network. Since funds are
  deposited in increments of lt 100,000, both
  principal and interest are eligible for full FDIC
  insurance.
• Other Network Members do the same thing with
  their customers' funds.
• With help from a sophisticated matching system,
  Network Members exchange deposits on a
  dollar-for-dollar basis.

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How CDARS Works

• One-Way Sell transactions
• Your bank can avoid keeping deposits on its
  balance sheet without turning good customers away
  and can earn fee income in the process.
• Depending on prevailing rates, your bank may be
  able to offer higher rate deposits without
  increasing its cost of funds.
• Example
• One Way Sell Rate Sheet
• Given high CDARS reinvestment rates, your bank
  may be able to convert those accounts to
  Reciprocal transactions upon maturity if it wants
  funds at that time.

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How CDARS Works

• One-Way Sell transactions
• Invest for your banks own investment or
  liquidity portfolio in a product that is eligible
  for full FDIC insurance at a favorable spread
  versus alternative investments like Treasuries
  and Agencies.

Treasury Rates are Constant Maturity Yields as
reported by the U.S. Treasury. One-Way Sell APYs
are calculated using a 365-day accrual basis and
daily compounding of interest. The APYs assume
amounts remain on deposit until maturity.
Selection of other available payment options may
result in different amounts earned and different
yield.
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How CDARS Works

• One-Way Buy transactions
• One-Way Buy transactions may represent a
  cost-effective alternative to other funding
  sources. Your bank can bring in large deposits
  and reduce the administrative costs typically
  associated with deposit gathering.
• There are no credit line requirements and no
  collateralization needs.
• Banks looking for funds bid on the maximum
  amounts they are willing to accept at their bid
  rates in six different maturities.
• Results are posted Wednesday and funds are
  available the next business day.
• One Way Sell Rate Sheet

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Why CDARS is Good For Your Bank
BENEFITS TO BANKS - SUMMARY
CDARS Reciprocal
CDARS One-Way Sell
CDARS One-Way Buy

• Offer customers multi-million dollar FDIC
  insurance
• Create a new revenue stream non-interest fee
  income
• Own the customer relationship
• Gain pricing leverage
• Customers receive consolidated statements from
  your bank
• Customers confidential information remains
  protected

• No credit lines needed
• No collateralization required
• No audit fees
• No need to purchase stock
• Quick turnaround bid Wednesday and receive
  funds the next business day

• You can offer customers access to multi-million
  dollar FDIC insurance
• You set the interest rate
• You own the customer relationship
• Customers communicate with your service team
• Customers receive consolidated statements from
  your bank
• Customers confidential information remains
  protected

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Why CDARS is Good For Your Customers
Before CDARS
After CDARS

• Open accounts in multiple names, deal directly
  with multiple banks
• Negotiate interest rates
• Manually consolidate statements every month
• Track changing collateral values for
  collateralized deposits

One bank Your bank
One interest rate
One account statement
No need to track
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Customers Who Can Benefit from CDARS
The authority of institutional customers to
invest through CDARS may be subject to
restrictions under applicable law and/or
investment policies.
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Availability of CDARS for Public Fund Investors
WASHINGTON
NORTH
MAINE
MONTANA
MINNESOTA
DAKOTA
VT
OREGON
NH
WISCONSIN
MASS
SOUTH
IDAHO
DAKOTA
NEW YORK
MICHIGAN
WYOMING
RI
CONN
IOWA
PENN
NEW
NEBRASKA
JERSEY
NEVADA
OHIO
DELAWARE
INDIANA
UTAH
ILLINOIS
COLORADO
MARYLAND
WV
KANSAS
VIRGINIA
MISSOURI
KENTUCKY
CALIFORNIA
NORTH
CAROLINA
TENNESSEE
ARIZONA
ARKANSAS
OKLAHOMA
SOUTH
CAROLINA
NEW MEXICO
MISS
GEORGIA
ALABAMA
TEXAS
FLORIDA
CDARS Enabled
LOUISIANA
ALASKA
Legislation in the Pipeline
HAWAII
If a depositor is subject to restrictions with
respect to the placement of funds in depository
institutions, it is the responsibility of the
depositor to determine whether the placement of
the depositor's funds through CDARS or a
particular CDARS transaction satisfies those
restrictions.
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Becoming a CDARS Member is Easy

• Implementation is simple and quick. A four-step
  process
• Our team provides
• Financial goal-setting support
• Accounting and operations training
• Turn-key marketing assistance (including a
  complementary initial supply of marketing
  materials and templates)
• On-going support

Set Your Banks Goals
On-Board Your Bank
Receive Training
Begin Marketing CDARS
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What is IND?
Insured Network DepositsSM, or INDSM, is a new
offering from Promontory that provides banks with
a brand new way to acquire stable, wholesale,
floating-rate funding. It enables broker-dealers
and other financial institutions to offer their
customers a multi-bank, FDIC-insured deposit
sweep account.
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How IND Works

• Funding comes from hundreds of thousands of
  brokerage account cash balances being swept
  into your bank.
• Amounts range from 25 million up to multiple
  billions of dollars.
• Rates are based on a set spread above the daily
  Federal Funds Effective Rate.
• Terms range from 3 to 5 years.
• Funding is similar to taking out a multi-year
  floating rate advance from your Federal Home Loan
  Bank without the collateralization and
  stockholding requirements.

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Benefits of IND to Banks

• Your bank can receive a cost-effective, stable
  source of deposit funding from IND.
• The overwhelming majority of deposits comes in
  the form of MMDA balances, which are not subject
  to reserves.
• There is no setup fee.
• You account for IND deposits on an omnibus basis.
• We handle all the individual records.
• You work with an industry leader known for its
  regulatory experience and emphasis on compliance.

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Founders, Board of Directors, and Bank Advisory
Board
Board Members Bank Advisory Board Representation
Founders
Donald G. OgilvieChairman, American Bankers
Association InternationalFormer President and
CEO, ABA Warren RudmanPartner, Paul, Weiss,
Rifkind, Wharton GarrisonFormer U.S.
Senator Jeffrey B. SchreierManaging Director,
The Bank of New York L. William SeidmanChief
Commentator of CNBC-TVFormer Chairman, FDIC J.
Michael ShepherdPresident COO, Bank of the
West O. Jay TomsonChairman, First Citizens
National Bank, Mason City, IA Former President,
Independent Community Bankers of America Frank
G. ZarbChairman, Frank Zarb AssociatesFormer
Chairman CEO, NASD William Isaac, Chairman,
Bank Advisory BoardChairman, The Secura
GroupFormer Chairman, FDIC
Eugene A. LudwigChairman CEO, Promontory
Interfinancial NetworkFormer Comptroller of the
Currency Anne L. ArmstrongChairman, Executive
Committee of the Board of Trustees,Center for
Strategic International StudiesFormer U.S.
Ambassador to the United Kingdom Alan S.
BlinderVice Chairman, Promontory Interfinancial
NetworkFormer Vice Chairman, Federal Reserve
Board James M. CulbersonChairman Emeritus, First
National Bank TrustFormer President, American
Bankers Association Art CertosimoVice Chairman,
Promontory Interfinancial NetworkEVP and Head of
Broker Dealer Services, The Bank of New
York Kenneth M. DubersteinChairman CEO, The
Duberstein GroupFormer White House Chief of
Staff Mark P. JacobsenPresident COO,
Promontory Interfinancial NetworkFormer Chief of
Staff, Comptroller of the Currency and
FDIC Edward W. Kelley, Jr.Former Governor,
Federal Reserve Board Frank N. NewmanChairman
CEO, Shenzhen Development Bank, China Chairman
Emeritus, Bankers Trust Company
Eugene A. Ludwig Chairman CEO Former
Comptroller of the Currency
Alan S. Blinder Vice Chairman Former Vice
Chairman of the Board of Governors of the Federal
Reserve System
Mark P. Jacobsen President COO Former Chief of
Staff of the FDIC and Office of the Comptroller
of the Currency
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Contact Information
North Great Lakes Mark Martello x3444
North Plains Lance Caldwell x3487
Northeast Phil Pratt x3485
Promontory Interfinancial Network, LLC 1515 N.
Courthouse Road Arlington, VA 22201 1.866.776.642
6 www.promnetwork.com For IND specific
information, please contact H.D. Barkett,
Managing Director of our Treasury Desk
1.866.776.6426 x 3447 hdbarkett_at_promnetwork.com
South Great Lakes Mark Martello x3444
WA
MT
ME
ND
VT
OR
MN
NH
ID
MA
WI
SD
NY
MI
CT
WY
RI
NJ
IA
PA
NE
IN
OH
NV
DE
UT
IL
CO
CA
WV
MD
KS
MO
VA
Pacific Reg Truman x3448
KY
Mid-Atlantic Erich Buckenmaier x3354
NC
TN
OK
AZ
AR
NM
SC
GA
MS
AL
TX
LA
Rocky Mountain Reg Truman x3448
South Central Chuck McBrayer x3432
South Atlantic Danny Capitel x3476
FL
Deep South Kenny Heredia x3486
Florida Danny Capitel x3476
South Plains Lance Caldwell x3487