Admission to the Pool

Admission to the Pool. A. Application by Public Depository. 1. Applications for Participation. To be considered for admission to the public funds guaranty pool, Financial Institutions maintaining a deposit-taking facility in this state whose accounts are insured by the Federal Deposit Insurance Corporation shall submit a completed Application Package to the Board. The Application Package shall include a completed application form and required supplemental information and documents. 2. Application Form. The State Treasurer shall prescribe an appropriate form which solicits from applicants the following information: a. the legal name of the financial institution; b. the address of principal offices of the institution; c. the institution’s transit routing number; d. the institution’s FDIC insurance certificate number; e. the institution’s tax identification number; f. the date the institution was chartered; g. the date the institution commenced banking operations in Mississippi; h. a list of the applicants three (3) senior officers, including a resume’ of their experience and qualifications; i. a list of public depositors by account held by the applicant at the end of the preceding calendar quarter; j. for the twelve (12) months preceding the date of application, the average monthly balance of public depositors held for each month; k. the legal name and address of the principal offices of all trustee custodians proposed to safekeep eligible collateral pledged to the pool; and l. for the eight (8) quarters immediately preceding the date of the application, a schedule of financial information to be taken from the institution’s Report of Condition to the FDIC (call report) as determined by the Board. 3. Supplemental Information and Documents Required. The Application Package shall include the following executed documents: a. copies of the Collateral Security Agreement; and b. copies of the Contingent Liability Agreement. 4. Completion of Application Form. The application form shall be executed by the president or chief executive officer of the applicant and the individual responsible for preparing the application and contain all the prescribed information to be considered complete. The applicant may withdraw the application at any time prior to the Board taking final action on the application. B. Admission Criteria. 1. Admission Criteria Generally. To be admitted to the public funds guaranty pool, each applicant must meet or exceed and maintain standards established by Miss. Code Ann. Sections 27-105-5 (2) and 27-105-6 (4) and any additional criteria established by the Board pursuant to its authority at Section 27-105-6 (6) in the area of financial standards as set forth below. 2. Evaluation of Financial Standards. a. The Board may consider any one, all, or any combination of the following guidelines for evaluating financial standards. The guidelines include, but are not limited to, benchmark levels as shall be determined by the Board from time to time calculated by the following ratios taken from the schedule submitted by the applicant pursuant to rule 1.03 (1) (b) 13. The ratios shown below are required by MS Code Sections 27-105-5 and 27-105-6. The Capital Adequacy Ratio and two of the three other ratios in the code must be met before the remaining ratios established by the Board are considered. i. Capital Adequacy Ratio: (MS Code 27-105-5) a) Primary Capital to Assets - 6.5% or more ii. Asset Quality Ratio (MS Code 27-105-6) a) Loans 90+ Days Past Due to Total Loans – less than 2% iii. Earnings Ratio (MS Code 27-105-6) a) Return on Average Assets (average of most recent 4 quarters)- more than .75% Total Equity Capital Total Assets Total Loans Past Due 90 Days Total Loans iv. Liquidity Ratio (MS Code 27-105-6) a) Loans to Total Assets - 80% or less b. The five ratios shown below were established by the Board as criteria for acceptance and continued participation in the pool. The Earnings Ratio and the Liquidity Ratio were taken from the MS Code. The Asset Quality Ratio from the MS Code was expanded to allow further analysis of the applicant’s credit quality. Three out of five of these ratios must be met and maintained for acceptance and continued participation in the pool. i. Asset Quality Ratios a) Loan Loss Allowance to Non-Performing Loans - 100% or more b) Total Non-Accrual Loans and Loans 90 + Days Past Due to Total Loans - less than 2% c) Non-Performing Assets to Total Assets - less than 1.5% ii. Earnings Ratio a) Return on Average Assets (average of most recent 4 quarters)- more than .75% iii. Liquidity Ratio a) Loans to Total Assets - 80% or less The Board may consider such other financial information, including interim reports requested by the Board or the State Treasurer, as it deems necessary or appropriate. However an applicant must pass and maintain Net Income (annualized four quarter average) Average Assets Total Loans Total Assets Allowance for Loan Losses Total Loans Past Due 90 Days + Total Non-Accrual Loans Total Non-Accrual Loans + Total Loans Past Due 90 Days Total Loans Total Loans Past Due 90 Days + Total Non-Accrual Loans + Other Real Estate Owned Total Assets Net Income (Annualized four quarter average) Average Assets Total Loans Total Assets the ratios required in the MS Code plus three of the five ratios described above as established by the Board. 3. Evaluation of Other Factors. The Board may further consider such other information bearing on the applicant’s appropriateness for participation in the pool as in the opinion of the Board may be relevant including, but not limited to, the applicant’s mode of conducting and managing its affairs, the action of its directors, the investment of the applicant’s funds, the safety and prudence of the applicant’s management, and any administrative proceeding or court action initiated against the applicant. C. Processing of Application. 1. Processing by the State Treasurer. Upon receipt of an Application Package, the State Treasurer shall review the contents of the Application Package to ensure completeness. In the event that an Application Package is found to be incomplete, the State Treasurer shall notify the applicant of the deficiency and provide the applicant with sixty (60) calendar days in which to cure the deficiency. If the deficiency is not cured within this time, the State Treasurer shall return the Application Package to the applicant. Upon determining that an Application Package is complete, the State Treasurer shall notify the Chairman that the application is complete and all qualifications are met. 2. Notice to Applicant. The Secretary of the Board shall notify an applicant in writing of any action taken by the Board or by the Treasurer within ten (10) calendar days of such action.