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The secure Internet channel for FDIC-insured institutions to conduct business and exchange information with the FDIC.
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This transcript is for clients of Independent Bankers' Bank and is not meant for the media. If representatives of the press access this transcript, there should be no attribution or use of this information in any of your reporting. If you have any questions regarding media issues, please contact Greg Hernandez at (202) 898-6984 at email@example.com.
Independent Bankers' Bank
Client Bank Conference Call
Saturday, December 19, 2009
Dallas Regional Ombudsman
Just I'm thinking she’s going to come back and tell me when it starts.
Welcome and thank you for standing by. I'd like to inform all parties that
this call is being recorded. If you have any objections please disconnect at
this time. I like to now turn the call over to Marvin Payne. Thank you sir. You
Marvin PayneDallas Regional Ombudsman
Thank you. Welcome and we thank you for joining us today on short notice. I'm
Marvin Payne, your Dallas Regional Ombudsman of the FDIC. And I will serve as
the moderator for today’s call to discuss yesterday’s closure of Independent
Bankers Bank Springfield, Illinois.
It is important to us that we share with you as soon as possible what we know
about yesterday’s closure.
Some of the questions that you raise today may need to be researched for further
review. If that occurs, we will provide the questions and the answers as part of
our daily Web site updates.
The purpose of this call is targeted to the client banks that use Independent
Banker Bank’s services.
Also please note that this call is for informational purposes only. If there are
members of the press who are listening to this presentation, please contact Greg
Hernandez for attribution.
Greg’s telephone number is 202-898-6984. Again Greg’s telephone number
202-898-6984. And his email address is firstname.lastname@example.org.
We have established a Web tool and a telephone call center. That number
1-800-451-1093. Again that number 1-800-451-1093 as ways for you to communicate
with us during this call.
We prefer for you to use our Web tool to ask your questions during this call. To
ease your efforts to contact us, we ask that you use your correspondent calling
offices as your primary business contact.
We have established a link to Microsoft Live meeting for today’s call.
Furthermore, a replay of this call will be made available by 7:00 o’clock pm
tonight. The call will be available through January 8, 2010.
I will now provide a brief overview of our agenda. Robert Shaw, an Assistant
Director with our Division of Resolutions and Receivership will provide an
overview of the Bridge Bank.
Joseph Bush Jr. will discuss financial operations. Russell Scott will lead the
asset portfolio discussion. Maurice Faratier will discuss the Trust
Department, and Nancy McGann will cover Capital Markets.
Regulators who are participants on this call but in a nonspeaking role include
M. Anthony Lowe, Chicago Regional Director of the FDIC’s Division of Supervision
and Consumer Protection and Jorge Solis, Division Director of the Illinois
Department of Professional Regulation Division of Banking.
Now I will turn the call over to Assistant Director Robert Shaw.
Robert ShawAssistant Director
Thank you Marvin and good afternoon to everybody. As Marvin said, I am
Assistant Director with FDIC in the Division of Resolutions and Receiverships.
However in this role I'm an Executive Vice President of Independent Banker’s
Bank Bridge Bank National Association.
My goal and the goal of every FDIC employee working on this project is to
continue the delivery of correspondence services on a business as usual basis
while we market the institution.
We will be marketing this bank to other banker’s banks and to commercial banks
with correspondence services over the next few weeks while at the same time we
will operate the bank.
If by chance we are unable to sell the bank, we will give you ample time and
notice to allow you to move your business to another bank of your choice.
I want to assure you that we will make this transition to the new correspondent
bank as seamless as possible with the least amount of disruption to your bank.
I also want to specifically mention that many of our client banks use our trust
department for employee pensions, profit sharings and 401(k) plans.
As successor trustee or investment manager, IBB Bridge Bank will continue to
oversee assets for the public or private organization. Let me repeat, current
trust services will be administered by the Bridge Bank.
There will be no change in the trust services offered, and the trust department
will be marketed along with the Bridge Bank and a new assuming bank will
hopefully take over those trust responsibilities.
Your first question might be what is a Bridge Bank? FDIC has only used this tool
a handful of times over our 76 years of existence.
First of all IBB Bridge Bank is a nationally chartered financial institution.
Sole stockholder is the FDIC. Its board of directors is made up of senior FDIC
Similar to most banks that fail, the FDIC finds an assuming bank. In this
instance IBB Bridge Bank is the assuming bank for Independent Bankers Bank.
The IBB Bridge Bank has assumed all of your insured deposits formally held by
IBB and will perform the same services that its client banks have come to
By its name itself you can tell we were bridging something. The three main items
we are bridging are number one, our client bank into a new assuming bank.
Either we will sell the Bridge Bank or you will find a new correspondent
relationship of your own choosing. In either case, correspondence services will
continue as usual.
Number two, our goal is for all former IBB employees to move into a new entity
over the next few months. In the meantime they will be performing the same
services for you that they have in the past.
And finally, our third goal is to move the loans back into the private sector. I
do want to mention that the loans remained with receiver and did not pay us to
the Bridge Bank. You will hear more about loans shortly from (Russell Scott).
As I have said more than once that we’re going to bridge the client banks into a
new correspondent relationship.
Either we will sell the Bridge Bank or we will remain open for sufficient time
for you to move your relationship.
We plan to market the Bridge Bank for the next few weeks. If we are unsuccessful
in our sales effort, we will continue to operate the Bridge Bank for as long as
it takes for our client banks to move into a new correspondent relationship.
After that we will then self liquidate the Bridge Bank's, the Bridge Bank excuse
me, as the client banks move into another correspondent bank.
During this time we’ll retain most of the employees from the former bank and
they will perform the same services as they did for IBB.
They are the ones who will assist you in whatever your needs may be. IBB clients
can be assured that the daily operation will remain the high quality that you
have come to expect.
The Bridge Bank has hired an individual who’s well known to the industry as our
President and CEO. I know many of you are familiar with Mr. Gayle Earls who has
a 40 year career in banking.
He held leadership roles at TIB, The Independent Bankers bank including CEO,
President, and then Vice Chairman from 1986 to 2006.
Additionally he served on the Federal Advisory Council of the Board of Governors
of the Federal Reserve System representing the Federal Reserve Bank of Dallas.
He also served two three-year terms as Director of the Federal Reserve Bank of
Finally, the Former Director of the Independent Community Bank of America where
many of you on the phone worked with him.
He wanted me to tell you that he’s anxious to speak with you. Feel free to
contact him at any time with your concerns or questions. His email address is
Now let me talk one more time about the bank employees that you have been
working with over the years. As I said, we have retained a vast majority of
them. And they will perform for you the same services that they have in the
Assuming we’re able to find another banker’s bank to purchase our Bridge Bank
many of the employees will transition over to them.
If we are unable to find a new assuming bank then we will employ them for as
long as required by the Bridge Bank or until they are able to find a new job.
I can assure you that the operational side of IBB Bridge Bank will remain
functional and you will not be lacking experienced employees to work with.
With that I would now like to turn this over to Joe Bush who is the Chief
Financial Officer for the new Bridge Bank. Joe?
Joseph BushChief Financial Officer
Rob thanks. Good afternoon. As Mr. Shaw said, my name is Joe Bush. I’m a
Financial Manager for the FDIC’s Division of Resolutions and Receiverships in
I have been with the FDIC in various accounting roles for over 24 years. My
current assignment will be serving as the Chief Financial Officer and Executive
Vice President of Independent Bankers Bank Bridge Bank National Association.
The Bridge Bank will provide these services while the FDIC continues to market
IBB to another acquirer.
With respect to corresponding banking services, currently IBB bank provides
account clearing and (ATH) services for over 220 banks nationwide with average
daily wires totaling 450 transactions for well over $400 million.
The Bridge Bank has established a business relationship with Federal Reserve
Bank of Chicago to ensure all clearings and settlements occur without any
In addition, the Bridge Bank has established a line of credit with the FDIC
corporate to ensure liquidity of the Bridge Bank is not an issue.
Again, the Bridge Bank will provide uninterrupted correspondence services during
the marketing timeframe and use - the correspondent bank should continue to work
with your correspondent calling officials.
With respect to Fed funds, IBB Bridge Bank will continue to accept funds as
agent and upstream those funds to client bank’s preapproved banks.
In addition to IBB Bank Bridge Bank will continue to loan funds overnight to
client banks that have a preapproved secured line subject to the limits of the
value of that collateral.
Also IBB Bridge Bank will handle unsecured funds again overnight to client banks
with preapproved unsecured lines on an individual basis. And this is subject to
a review by the Bridge Bank and this review is ongoing at this time.
With respect to participated loans, even though the loans have been retained by
the receiver, the Bridge Bank will continue to service these loans and provide
the downstream payments to the participants using the client bank’s existing
The Bridge Bank will no longer sell participations on behalf of the client banks
nor will the Bridge Bank be a purchaser of loans from client banks. And with
that I want to pass the mic over to our post-closing Asset Manager, Russell
Thank you Joe. Hello everyone. My name is Russell Scott and I will be
serving as the post-closing Asset Manager better known as the PCAM overseeing
the receivership, asset, and loan function.
The FDIC Asset Team is actively reviewing and evaluating all loan relationships
in particular, the receiver’s portfolio of participation loans.
I'd like to reiterate some points that were already made.
The bank staff will be retained to assist in working with borrowers.
As Robert mentioned our activities will reflect business as usual. And I'm
also available on an ongoing basis to answer questions and hopefully resolve any
concerns you may have.
We recognize many of you have loans and participations here. All participants
will be contacted starting Monday morning to discuss specifics on your
With respect to borrowers and participating banks, our message will be
consistent. We will continue to honor terms of each loan agreement. All requests
will be reviewed on a case by case basis to determine the status and merits of
It is FDIC’s intention to market all of the loan portfolio of IBB with the
exception of the banks stock loan portfolio. Information will be provided once
the marketing plan is developed.
You may have some questions on the mechanics of this process. Let me try to
answer a few. If you have other questions please email or contact your
correspondent calling officer.
We will continue to accept all documentation statements and process them in a
normal IBB manner.
Requests for the advance of loan funds will be reviewed individually to
determine the current status of each loan and the purpose for the advance.
We will determine if inspections have been completed, verify work has been
performed as billed and that all necessary documents are current.
With any loan advances we will continue to request a proportionate share from
Any IBB legal actions, lending will be stayed until an independent review can be
completed by our legal.
The receiver will continue to independently review any loan extension request
and any loan approaching maturity and process accordingly.
The receiver will maintain the same IBB process for adjustments of loan interest
rates as contracted in - well in the loan notes.
Pending IBB loan participation commitments will require an additional
independent review. However, it is likely that if a loan has not been booked on
the records of IBB prior to the closing of the bank the receiver will not
advance funds for any new loans.
Once again, if a loan has not been booked on the records of IBB prior to the
closing of the bank the receiver will not advance funds for any new loans.
The Post Closing Asset Team will remain on-site to discuss any issue or concern
further. And the team looks forward to working with you.
With that I would like to introduce you to Maurice Faratier, Trust - of the
Okay. Thank you Russell. Good afternoon. My name is Maurice Faratier and
I will be working in the trust area.
I’m an Examiner with the FDIC and have more than 20 years of experience in
evaluating trust departments for compliance with the Statement of Principles for
Trust Department Management.
The department will continue to provide the same level of products and services.
And the department will continue to collect and distribute income, maintain
accounting records, and provide all reports that are consistent with prior
client bank agreements.
In short, the department will continue to be open in a business as usual manner
for the duration of the Bridge Bank.
Employees from the department will be contacting you shortly to provide
assurances on the status of your accounts.
I will now turn you over to Nancy McGann from Capital Markets.
Thank you Maurice. Good afternoon. I'm Nancy McGann and I’m the
Functional Manager for the capital related areas of the Bridge Bank.
As my colleagues have stated, it will be business as usual with no
interruptions. In this area the transition to a Bridge Bank should be
transparent to your institution.
You can continue to rely on the same caliber of services provided today by IBB’s
security services area.
If your institution has securities trades that have not yet settled, we expect
to complete the settlement of those trades. Security trades and delivers going
forward will continue to settle as they do today.
Business as usual also extends to the safekeeping services provided by the bank.
Your institution can continue to contact and submit requests to Kathy Bryant
and her team, the same team that you contact today. Thank you. And now I'd like
to turn this discussion back to Marvin Payne.
Marvin PayneDallas Regional Ombudsman
Thank you Nancy, excuse me. Now we will commence the question and answer
session of the call. I will read the questions and the appropriate panel member
will provide the answer.
As a reminder, you can continue to submit your questions to us via the Web tool.
The first question is for Joe Bush and is as follows. We are considering moving
our correspondent accounts. Do we need to move the account now?
The answer is no Marvin. The client bank does not need to move their
accounts. We will continue to provide world class customer service for the
duration of the Bridge Bank.
In the unlikely event there is a not a successful purchaser, we will provide
more than adequate time for them to find an alternate service provider of their
choice, in other words to create an environment for which they have a soft
landing to a new service provider.
Thank you Joe. The next question is for Maurice. Maurice as a result of
Independent Bankers Bank failure, we are considering moving our trust business
elsewhere. Can you provide us with the names of companies that we should
consider for our services?
Well first we will continue to provide trust services during the operation of
the Bridge Bank. However if you decide to move your account, we do not recommend
companies for you to conduct business with.
You need to do your own due diligence for that. Those are management decisions
that should be made by the bank.
Thank you Maurice.
The next question is for Joe Bush. If I discontinue my customer relationship
with the Bridge Bank, how can I be assured of the confidentiality of my customer
You can be assured Marvin that the bridge will only move customer files at
the respondent bank’s discretion and duration. The FDIC takes PIA matters very,
Okay Joe I have a follow-up question for you.
My bank has been utilizing Independent Banker’s Banks to provide
substantially all of our funding. Can we continue to rely on broker deposit
All broker deposits have been transferred to the receivership. To continue
any broker deposit activity the client bank will need to contact their broker
Thank you Joe. The next question is for Russell. Russell, my bank has
several loans in process with Independent Banker Bank. How soon can we find out
whether they will be funded?
The answer Marvin, the Post Closing Asset Management team is in the process
of reviewing all IBB’s loans in process before any funding may take place.
Thank you Russell. Robert I have a question for you sir. The
(unintelligible) indicated that key personnel from the former bank will be
retained. What does that mean?
Robert ShawAssistant Director
Well it simply means that personnel will be retained in order to facilitate
the proper continuation of services.
If for whatever reason we cannot retain some key employees then we’re simply
going to replace them.
As I said earlier, the client bank’s should have no concern about us being able
to continue servicing their needs.
Thank you Robert. My next question is for Joe. Our bank has arranged for
disaster recovery services to be provided through Independent Banker Bank. What
is the status of the contingency planning?
Again, the services that are being currently provided by IBB will continue to
be provided by IBB Banker’s Bank National Association without interruption.
Thank you Joe. My next question is for Russell. The question is as follows.
The question and answer document indicated that bank stock loans will be held
until they are resolved. Our loan matures within the next 60 days. How will the
FDIC handle matured loans?
Marvin, the receiver will be independently reviewing loans that are maturing.
Thank you Russell. My next question is for Maurice. The FDIC will be
operating Independent Bankers Bank Trust function. While its role as deposit
insurer possibly be in conflict with this new fiduciary role?
The answer to that is no. The trust function will pass to the Bridge Bank
with the other assets. Operations will be conducted as usual.
Thank you Maurice. Nancy I have a question for you.
Will there be any changes in the procedures for delivering securities?
Marvin the answer to that is no. We expect institutions to continue to follow
the procedures that have been established earlier by Independent Banker’s Bank.
It will be business as usual in the security services area.
Okay thank you Nancy. My next question is for Joe. Are transaction accounts
that exceed the $250,000 insurance limit insured under the Transaction Guarantee
Program through the expiration date?
Yes. The expiration date is currently June 30, 2010. And effective Monday,
December 21, TLGP coverage will be in place.
Thank you Joe. Joe I have a follow question for you.
Client bank wishes to invest excess Fed funds overnight. Will this continue to
Yes. The IBB Bridge Bank will continue to accept funds as agent and upstream
those funds to the client bank’s list of preapproved banks.
Thank you Joe. Joe you tend to be a popular guy today I have another question
Client banks have preapproved limits secured and unsecured to borrow funds
overnight to a client bank. This is Fed funds person. Will this continue to be
With respect to secured lines the, IBB Bridge bank will continue to fund
those secured lines again subject to the limits of the value of the collateral.
But with respect to unsecured funds, we’re undergoing a review at this present
time of IBB’s review and to see, because they’re going to be on a case by case
basis with respect to the unsecured lines.
Thank you Joe. Robert.
Will the Bridge Bank continue to participate in the Transaction Guarantee
Yes it will as Joe just mentioned. Effective Monday participating through all
transaction accounts over $250,000 are fully insured.
Thank you Robert.
I have a follow question for you sir.
What is the status of any Fed funds sold to Independent Banker’s bank?
I think the client banks will be happy to know there were no Fed funds sold
to IBB last night. Had they been sold, those client banks would have become
general trade creditors of the failed bank.
Under the instruction of the regulator, Fed funds ceased last night to be sold
to the IBB. But as Joe said, that will continue again on Monday.
Thank you Robert. I have another question for you Robert.
Apparently the intention is to sell the bank. Therefore I assume for the time
being the FDIC will like us to remain customers of the new bank.
If this is correct but the sale fails to materialize how long after the FDIC,
excuse me, abandon the sales attempt will we have to move our relationships?
Well that’s a very good question. We will start marketing the Bridge Bank
next week. That due diligence process I'm guessing will go on for at least a
month. And we would hope to know by the end of January whether we have been
successful in selling the Bridge Bank.
I can tell you I can relate to another Bridge Bank called Silverton which I
think many of our client banks perhaps remember. And Joe and I were there.
And it wasn't that they had - they took that long to walk up to a new
correspondent bank and sign a signature card. There’s other restraints, mainly
the AT&T’s of the world and getting your lines set up to correspond with your
new assuming bank. So that’s what took so long.
But we remained open there for about four months. And if that’s what it takes
here that’s how long we’ll stay.
Okay again we are accepting calls. Excuse me, we are accepting questions for
this - for today’s call. Thank you.
As I called this presentation, the FDIC would like to remind you that it is
business as usual for Independent Bankers Bank Bridge Bank National Association.
The Web site will be updated daily for questions and answers that we could not
address during this call or for questions that are submitted after this call.
Finally we provide our assurances to you that it is business as usual at the
Bridge Bank. Thank you and have a good evening.
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For more information: www.fdic.gov/bank/individual/failed/ibb.html