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    Summary of Deposit Reclassification


    Summary of Program


    Interest Checking and Non Interest Checking Accounts can be restructured so that a certain portion of each account is maintained in a linked Savings sub-account.  The Savings portion of the total account balance is not subject to a 10% reserve requirement at the Federal Reserve Bank.  Funds are automatically transferred to the transaction portion of the combined account on a daily basis if required to cover check activity within the transaction portion of the account.  Concurrent with the sixth such transfer during a calendar month, the entire balance is transferred to the transaction portion to remain in compliance with Regulation D.


    This change will be transparent to the customer and will not affect their statement or any terms and conditions of their existing account.




    We have received confirmation from the Federal Reserve Bank that they have no objection of our intent to move forward with this modification. Several banks in our market area have implemented this modification.


    Systems and Accounting are in the process of developing the required systems modifications.  It will be transparent to the customer.


    We have worked with Compliance to determine the form and manner of disclosure to our existing and new account holders.  This will take the form of a statement insert for existing accounts and an additional paragraph in our Deposit Terms and Conditions for new accounts.


    Questions and Answers


    Potential customer service questions and answers have been attached for review and distribution to the customer service individuals.  Experience from other organizations indicates that few, if any, responses will be received from our customer base.


    Potential Questions and Answers for Customer Service


    Q:  What are you doing to my account? Why are you doing this?


    A: Under federal law, we are required to classify our deposits a certain way for regulatory reporting purposes.  We are simply changing the way we report deposit accounts to the government and the government requires that we notify you of this change.  It does not affect you in any way.


    Q: Has my availability of funds been changed?


    A: No, funds are still immediately available from Non Interest Checking Accounts.


    Q: Is my account still insured by FDIC?


    A: The FDIC insurance on your account will remain as it is today.


    Q: Okay, how is Bloomfield State Bank benefiting?


    A: This change will lower the amount of funds that we have to keep on deposit at the Federal Reserve Bank, providing more funds for lending and investment purposes.


    Q: Will you adjust my analysis credit rate or change my marginal reserve requirement on analyzed business account?


    A: No, our already competitive analysis prices will be unchanged. This change is allowing these prices to remain competitive. The marginal reserve requirement will remain because our marginal reserve requirement is unchanged.


    Q: Will you increase your rate on my Interest Checking Account?


    A: No, but the change will allow us to continue to pay competitive rates on all of our deposit products.


    Q: Will my fees go up?


    A: No, this change will not affect your account in any way.


    Q: Will you pay interest on my corporate account?


    A: No, federal law precludes us from paying interest on your regular corporate checking accounts.

    Page Created:  1/31/2007


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    Bloomfield State Bank
    48 N. Washington
    Bloomfield, IN  47424