PowerPoint Presentation2
StoneCastle Partners, LLC (“StoneCastle”) was founded in 2003 to
connect investors with the $3 trillion community banking
industry. Our industry experience and proprietary processing and
analytical systems have made us one of the leading providers
of cash management strategies.
from two world-class financial partners with experience in
asset
management and financial services.
record, disciplined investment strategy and long-standing
commitment to
the middle market.
CIBC is a leading global financial institution, providing
a full range of financial products and services to retail
and institutional clients around the world.
*Assets are quoted as of December 31, 2018. Assets quoted include
Bulk Insurance Deposit Services (“BIDS”), a program where
StoneCastle Cash Management, LLC (“SCCM’) acts as a consultant and
introduces banks to third party administrators. Assets
in BIDS are not included in the calculation of SCCM’s regulatory
assets under management noted in its Form ADV.
Today StoneCastle Cash Management has senior level relationships
with approximately 1,300 banks, of which 800+ are deposit
taking banks.
Bank Relationships
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Source: Federal Reserve Bank of St. Louis (FRED)
Quantitative Tightening and the Fed Funds Target: Hot, Cold or Just
Right?
Quantitative Tightening Is Not Quantitative Tightening
--FX Street (James Bullard)
--Wall Street Journal
--Wall Street Journal
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Employment and Wage Growth: Tight Labor Markets Continue at What
Cost?
Private Payrolls up 183,000, but Moody's Economist says
Jobs May Have Peaked
Tight Labor Market
--Wall Street Journal
Still on the Rise
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US: Annual core PCE Price Index Stays Unchanged at
1.9% in December
18-Year High
--Bloomberg News
--Wall Street Journal
8
Dusting off the Phillips Curve: Is it Dead or Alive?
The Fed Needs to be Especially Watchful for Awakening
of the Phillips Curve
--MarketWatch.com
on Interest Rates
--Wall Street Journal
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US Treasuries and Deficit Spending: Bond Market Liquidity and
Supply, Supply, Supply?
Liquidity Crunch Is the New Bubble Gripping Credit
Investors
--Wall Street Journal
Looming Trillion-Dollar Deficits
--Wall Street Journal
10
A $4 Trillion Scapegoat for Market Volatility: the
Fed’s Shrinking Portfolio
Bond Portfolio Runoff
--Wall Street Journal
Ineffective, Economists Say
--Wall Street Journal
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LIBOR Phase Out and SOFR Implementation: What to Expect Next?
Libor’s Replacement Is a Little Too Real
--Wall Street Journal
Volatility Spike
Shadow
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Cooling Housing Market Prompts Closer Scrutiny of Some
Lenders
Families
--WealthManagement.com,
Survey Shows
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The Age of the Economic Cycle, An Inverted Yield Curve and Other
Geopolitical Concerns?
What’s the Yield Curve? A Powerful Signal of Recessions Has
Wall
Street’s Attention
--New York Times
--Bloomberg News
The $7.9 Trillion Pile of Negative-Yielding Debt Is Growing
Fast
--Bloomberg News
-- Wall Street Journal
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US Federal Agency Obligations (FNMA, FHLB, FFCB, etc.)
Repurchase and Reverse Repurchase Agreements
Commercial Paper
Corporate Obligations
Municipal Obligations
Bank Deposits
Bankers Acceptances
Bank Deposit: Time Deposits or Structured Bank Deposits
A Permitted Investment Review
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A Permitted Investment Review: 3mo T-Bills Yields & the 2-10’s
Curve
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A Permitted Investment Review: 3mo CP & 3mo CP vs. Fed
Funds
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Understanding Dealer Inventory and Liquidity Through the Bid/Ask
Spread
Building Portfolio Liquidity and Diversification with Today’s
Limited Options
A Review of the Restricted: Prime MMF, ABS CP, and the Return of
Sub-Prime
Benchmarks for Success in the Evolving Money Markets
Cash Investment Portfolio Positioning
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Direct ownership of underlying insured bank deposits No customer
has lost a penny in FDIC insured accounts No credit, principal, or
market risk
Cash Investment Portfolio Positioning
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Structured bank products are not pooled investments that are
affected by the behavior of other investors
Money Fund, Hurt by Debt Tied to Lehman, Breaks the Buck
-- Wall Street Journal
-- Wall Street Journal
-- NY Times
-- NY Times
StoneCastle Cash
Management, LLC
• $100+ million of federally-insured deposit coverage
• Deposits are backed by the full faith and credit of the U.S.
government
• Highly diversified–no single bank holds more than $250,000 per
depositor
• No market, credit or principal risk
FICA® is a proprietary cash management vehicle that offers
multi-million dollars of federally-insured deposit coverage via
a
single, convenient account.
• Competitive yield when compared to
money market funds, U.S. Treasuries,
commercial paper, CDs, time deposits and all other money market
instruments
PerformanceSafetyLiquidity
• Next day liquidity with same day purchase credit2
• Unlike a money fund, liquidity is not adversely affected by other
investors
Control
• Ability to opt out of specific depository institutions
• Transparency– Ability to view location of all deposits on any
day
Assigned AAAkf rating by Kroll Bond Rating Agency (KBRA)¹
About FICA® | Federally Insured Cash Account
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Corporations
Corporations
FICA® has been recognized in the 2013-2017 AFP Liquidity
Survey
-AFP Liquidity Survey, 2018.
Who Uses FICA®?
Over 1,500 of your peers entrust FICA® for their short-term
working capital needs.
screened banks, ensuring full
deposit amount.
Open Discussion
Question & Answer
All information contained herein is for informational purposes and
should not be construed as investment advice. It does not
constitute an offer, solicitation or recommendation to purchase any
security. Some information contained in this presentation has been
obtained from sources believed to be reliable, but it cannot be
guaranteed by StoneCastle Partners, LLC or any of its affiliates.
The views presented are as of the date of this document and subject
to change.
Past performance does not guarantee future results.
Interest rate earned may vary within a particular program based on
the size of the account balance and the introducing party
StoneCastle Cash Management, LLC (“SCCM”) is not a bank, nor does
it offer bank deposits and its services are not guaranteed or
insured by the FDIC, NCUA or any other governmental agency. SCCM)
is an investment advisers registered with the United States
Securities and Exchange Commission (SEC). For more information
regarding the firm, please see its Form ADV Part 1 and 2A on file
with the SEC. Registration with the SEC does not imply a particular
level of skill or training.FICA®
FICA® satisfies the Federal Deposit Insurance Corporation’s (FDIC)
requirements for agency pass-through deposit insurance coverage.
Program banks in the FICA® network are FDIC-insured “banks” and
“savings associations” as those terms are defined in the Federal
Deposit Insurance Act. The FDIC Limit is $250,000 per depositor per
bank. The NCUA operates the National Credit Union Share Insurance
Fund (NCUSIF) to protect accounts at federally insured credit
unions up to $250,000.
U.S. Bank, N.A. is not affiliated with SCCM and is not responsible
for, and does not guarantee the products, services or performance
of its affiliates and third-party providers.
FICA® is not a member of FDIC or National Credit Union
Administration (NCUA), but the depository banks where your money is
placed are FDIC and NCUA members. FDIC and NCUA are independent
agencies of the U.S. government that protects the funds depositors
place in FDIC and NCUA insured institutions. FDIC and NCUA deposit
insurance is backed by the full faith and credit of the U.S.
government.
Balances held in your deposit account may not receive FDIC and NCUA
insurance. If you have any cash at any depository institution that
is in the FICA® network then you may not receive full FDIC or NCUA
insurance coverage on your deposits at those institutions. Funds
may be submitted for placement only after a depositor enters into a
FICA® agreement. The agreement contains important information and
conditions regarding the placement of funds.
1 Kroll Bond Rating Agency “(KBRA)” is registered with the SEC as a
Nationally Recognized Statistical Rating Organization (NRSRO). In
addition, KBRA is recognized by the National Association of
Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).
The AAAkf rating assigned to FICA reflects the Program’s Primary
Quantitative Rating (PQR) as measured by the KBRA Funds Credit
Quality Rating Matrix, which is based on the credit quality of the
underlying instruments that comprise the portfolio. Additionally,
the fund rating is influenced by the results of the qualitative
assessment of SCCM. The qualitative shadow rating (QSR) was found
to be strong.
2 Liquidity is on a next business day basis. Same day purchase
credit and next day liquidity redemptions are subject to a 3:00 PM
ET cut-off. Please read the FICA® Program Terms and Conditions for
more complete information and the governing terms of the account
(including liquidity, terms, etc.). This can be found at
www.ficaaccount.com.
FICA® is a service mark of StoneCastle.
For Institutional Use Only.