ACB: Press Releases

Contact:	Robert Schmermund (202) 857-3104 Jim Eberle (202) 857-3145	Jim Eberle (202) 857-3145 (work) (703) 893-2593 (home) [email protected]	For Immediate Release September 2, 2003 #03-38
E-mail: [email protected]

AMERICA’S COMMUNITY BANKERS, CITIGROUP PARTNER TO OFFER POOLED TRUST PREFERRED SECURITIES PROGRAM

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WASHINGTON, D.C. — America’s Community Bankers announced today that it has entered into a partnership with Citigroup to offer community banks a cost-effective way to raise capital through the issuance of pooled trust preferred securities.

ACB and Citigroup have entered into an exclusive Pooled Trust Preferred Partnership (TruPS) featuring significant member-advantaged pricing, reimbursement of out-of-pocket administrative fees and a warehouse credit line that will enable immediate funding.

The partnership will give community banks a cost-effective way to raise capital without diluting existing shareholder ownership interest, and provide tax deductibility of the interest paid on the securities. The federal banking regulators currently allow the long-term debt of trust preferred securities to represent up to 25 percent of an institution’s Tier 1 capital.

“This is an extraordinary opportunity for ACB members to raise capital for growth and other strategic purposes at an affordable price,” said William A. Donius, chairman of ACB Business Partners, Inc. “The issuance of TruPS through the ACB-Citigroup program will help community banks achieve economies of scale in raising capital and gain an important tax benefit at the same time.” Donius is also chairman, president and CEO, Pulaski Bank, St. Louis.

David A. Bochnowski, chairman of ACB Business Partners’ Financial and Capital Markets Solutions Committee, which evaluated potential partners, said, “In our search for a partner, we learned that Citigroup pioneered the first issuance of pooled trust preferred securities. Since then, Citigroup has remained a market leader, having executed more than $4 billion of pooled trust preferred securities transactions.” Bochnowski is also chairman and CEO, Peoples Bank, Munster, Ind.

Helen N. Sullivan, senior vice president for financial/capital markets solutions of ACB Business Partners, said, “The partnership responds to requests from members for a program tailored to community banks. ACB has negotiated a ‘best in class’ partnership with Citigroup that provides distinct advantages for our members.”

Citigroup also offers member banks immediate funding once documentation is completed, subject to regional capacity constraints. “This means that banks don’t have to wait for the entire pooled transaction to be completed before they are funded,” said Sullivan.

America’s Community Bankers is the national trade association committed to shaping the future of banking by being the innovative industry leader strengthening the competitive position of community banks. To learn more about ACB, visit www.AmericasCommunityBankers.com.

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