We recommend that banks considering brokered deposits as part of their wholesale funding strategy implement a written plan as part of their ALCO policies. In general, banks issuing brokered deposits exceeding 15.0% of their core deposit base may attract close regulatory supervision. ABT's CD funding operation will review potential issuers exceeding the 15.0% threshold and may be unable to complete an issuance for the entity.

Special Consideration for Credit Union Issuers
The Credit Union Custodial CD Program from Anthem Bank & Trust empowers credit unions to tap into this valuable funding source. Federal credit unions and eligible state regulated credit unions simply issue a single certificate of deposit for the term(s) needed and ABT distributes the participations to other credit unions. The Program features an affirmation from Anthem, as custodian, that all beneficial owners of the issuing credit unions' deposits are other credit unions.

General Funding Limitations:
Both programs require that issuers be well capitalized institutions under FDIC parameters. A bank shall be deemed to be well capitalized if the bank: (i) Has total risk-based capital ratio of 10.0% or greater; and (ii) Has a Tier 1 risk-based capital ratio of 6.0% or greater; and (iii) Has a leverage ratio of 5.0% or greater; and (iv) Is not subject to any written agreement; order or capital directive, or prompt corrective action directive issued by the OCC pursuant to section 8 of the FDI Act, the International Lending Supervision Act of 1983 {12 U.S.C. 3907}, or section 38 of the FDI Act, or any regulation there under, to meet and maintain a specific level for any capital measure.