A F E

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A F E

• Security for Alabama Funds Enhancement
• Young Boozer, State Treasurer

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History

• That Fateful Call
• The Headlines
• We have a problem
• Get a solution

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The Process

• Pledging Statute
• Under Pledged
• Over Pledged
• Bank Group Organized
• Other States
• Best Result

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The Solution

• SAFE
• Enacted 2001
• Going Strong

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SAFE Description

• Statute Title 41, Chapter 14A, Code of Alabama
  (effective January 1, 2001)
• Participants
• Board of Directors
• SAFE Staff
• Alabama Banks
• Alabama Public Depositors
• Custodian
• SAFE Program Rules
• Monthly Reporting by Banks

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SAFE Board of Directors

• State Treasurer Young Boozer, Chair
• Lucinda Cockrell
• CPA and Sumter County Administrator
• Robert Davis
• President and CEO, RBC Centura Bank
• Ken Givens
• Chief Financial Officer, Aliant Bank
• John Harrison
• Superintendent of the Alabama Department of
  Banking
• Penny Smith
• Deputy Finance Director and Treasurer for the
  city of Auburn
• Alvis Storey
• President, Merchants Farmers Bank of Greene
  County

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SAFE Program Benefits

• Cost/Time Savings
• Increased Efficiency
• Improved Liquidity
• Improved Security
• Triple Insurance Coverage

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SAFE Key Definitions

• Covered Public Entities
• Various governmental units of the state,
  counties, municipalities and other government
  entities or officials
• Funds owned by a covered public entity are
  considered public funds.

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SAFE Key Definitions

• Public Deposits
• Monies of any covered public entity or covered
  public official deposited in a bank, such as
  demand deposit accounts, savings accounts and
  certificates of deposit

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SAFE Key Definitions

• Qualified Public Depository or QPD
• Any bank that has met all SAFE Program
  requirements has been designated by the Treasurer
  to receive and hold public deposits
• By law, a bank must be a QPD to have public
  deposits.

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What defines a QPD?

• Is organized and exists in the U.S.
• Is authorized to conduct the business of making
  loans and taking deposits in the State of Alabama
• Has FDIC insurance
• Executes necessary SAFE Program forms

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What is a Public Entity?

• A state and its political subdivisions
• Counties and their agencies
• Municipalities and their agencies
• Public corporations
• Improvement authorities

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Public Depositor Responsibilities SAFE Rules
892-X-1-.09

• Deposit monies in QPD
• Declare monies are public deposits
• Verify annual account information received from
  bank as of September 30
• Contact bank if no statement is received or
  information is incorrect
• If bank defaults, submit claim form to SAFE

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Public Deposits Not in SAFE

• Act 2009-471 amended 41-14A-3 to allow public
  depositors to place funds in QPDs that are not
  covered by SAFE
• Deposits are managed by an Alabama bank that
  distributes the deposits among several banks and
  each bank deposit is within FDIC limits

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What happens when ?

• A bank is SOLD
• It re-opens on Monday under its new name.
• There is no affect on public deposits.
• It has 90 days to update SAFE documents.

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What happens when ?

• A bank FAILS
• FDIC manages bank affairs
• Public depositor files a SAFE claim form within
  120 days for deposits not covered under FDIC (
  41-14A-9)

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SAFE Stats

• 164 participating Alabama banks
• 4 non-participating banks
• Oakworth Capital (Birmingham)
• Bank of Ozarks (Mobile)
• Beal Bank (Irondale)
• First Progressive Bank (Brewton)
• Net Collateral Pool 7.9 Billion

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Summary Report (as of 12.31.10)
Avg. Public Deposit Pool (in millions) 10,291
Less FDIC 2,361
Net Avg. Public Deposits (in millions) 7,928
Total Public Entities 5,931
Total of QPDs 164
Coverage Ratio - Net Avg. Deposits 115.88
Coverage Ratio - Total Actual Deposits 87.28
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• Questions?
• www.treasury.alabama.gov
• Click SAFE