5.105.040 Procedure.
(a) Eligibility Requirement.
(1) Community banks that maintain their headquarters in Maryland or the District of Columbia and have a branch or loan production office in Prince George’s or Montgomery County are eligible for the BIG program.
(2)
(i) At the time of application to participate in the BIG program, the community bank must have assets less than $15 billion based on asset levels as reported in the most recent Federal Financial Institutions Examination Council (FFIEC) Call Report or Thrift Financial Report (TFR).
(ii) The most recent report will be supplied to WSSC by the bank with the acknowledgment form.
(3) Ratings must fall within the top rating categories as reported by the VERIBANC Rating System, i.e., the rating must be Green* or better for two of the last four quarters.
(4) The bank may not be subject to any agreement with any regulatory agency.
(5)
(i) Participating banks will agree to make and maintain business loans, commercial real estate loans or both in an aggregate amount equal to at least 200 percent of the deposits placed in the bank by WSSC under the program.
(ii) Eligible loans must be to businesses located within either or both Prince George’s and Montgomery Counties and shall be originated within 12 calendar months of the commitment by WSSC to the participating bank to make deposits under the program.
(b) Administrative Process.
(1) WSSC will communicate with all eligible banks, notify them of the BIG program, provide them with a copy of all documentation required by WSSC, respond fully to all questions from eligible banks, request a written indication of each eligible bank’s intent to participate and request the execution of an acknowledgment to adhere to the program procedures set forth herein.
(2) The participation level of each bank will be based on the percentage of its capital to the total capital of all participating community banks.
(3) The allocation will be adjusted annually based on the data in the year-end (December 31st) FFIEC Call Report or TFR Report.
(4) WSSC Finance Department staff may make adjustments to the allocation of deposits by participating banks consistent with the economic development goals of the program.
(c) Investment Process.
(1) At the inception of the program, and upon execution of acknowledgments from all participating banks, WSSC will entertain an offer from all participating banks to accept IDS, Certificate of Deposit Account Registry Service (CDARS) certificates of deposit for various maturities.
(2)
(i) In no event can the yield offered by participating banks be inconsistent with WSSC’s investment policy.
(ii) WSSC will place deposits with the participating banks up to each bank’s maximum participation level based on a total BIG program investment to be determined by the Chief Financial Officer (CFO) consistent with the WSSC investment policy.
(3)
(i) As the CDARS deposits mature, WSSC will renew the maturing deposits among the participating banks unless the liquidity needs of WSSC, as determined by the CFO, would require a reduction or suspension of this program.
(ii) WSSC shall consider maintaining IDS investments at existing levels based on liquidity needs and available investment yields.
(4)
(i) Participating banks will agree that rates paid on the renewal CDARS of staggered maturities will be based on the United States Treasury bill rate with maturities of 13 weeks, 26 weeks, or 52 weeks as of a date to be mutually agreed to by the participating banks and WSSC or Monday’s closing United States Treasury constant maturity rate.
(ii) For example, the rates would be the:
1. Twenty-six-week CDARS rate: six-month U.S. Treasury constant maturity; or
2. Fifty-two-week CDARS rate: 12-month U.S. Treasury constant maturity.
(5) Rates paid to WSSC on CDARS or IDS investments may also be based on a rate mutually agreed to by WSSC and participating banks and will be reevaluated on an annual basis.
(6) WSSC may consider expanding the amount invested in the BIG program based on liquidity needs, diversification of assets and institutions, investment return potential from other asset classes and other factors consistent with WSSC’s investment policy.
(d) Reporting Process.
(1) One month after the maturity of a CDARS investment each participating bank will provide the following information to WSSC for the prior six- or 12-month period:
(i) Total amount of WSSC deposits under the program including the average balance and the ending balance at maturity;
(ii) Total dollar value of Prince George’s and Montgomery Counties business and/or commercial real estate loans held at maturity;
(iii) Total number and outstanding amount of such loans originated in the prior six- or 12-month period as a result of the program; and
(iv) For each loan, the bank will also report the location and the type of business. Business type to be identified by the two-digit North American Industry Classification System (NAICS) code.
(2) The information in subsection (d)(1) of this section shall be provided by participating banks offering IDS investments over the same time period.
(3) The WSSC Finance Department will use the data provided by the participating banks to produce an annual report documenting the performance of the BIG program from the prior calendar year including:
(i) Investment income earned from the investments;
(ii) Estimated jobs created in the local economy by the loans made from deposits; and
(iii) Total amount of loans made to local businesses from BIG program deposits made over the prior calendar year by business type according to NAICS code.
(e) Copy to State Treasurer. The Chief Financial Officer shall provide a copy of this investment policy and any amendments to the investment policy to the State Treasurer’s office in accordance with state law requirements.
(f) Authority. The General Counsel certifies that the statutory authority for the adoption of the standard procedure codified in this chapter is the Public Utilities Article, § 17-403(a)(1), Annotated Code of Maryland, and the Local Government Article, §§ 17-204 and 17-205, Annotated Code of Maryland. (Res. 2023-2353; Res. 2022-2296; Document dated July 1, 2021; FIN-FI-2018 § IV)