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With the Deposit Insurance Fund (DIF) reserve ratio at its lowest point since June of 1994, the FDIC is currently moving forward on the Restoration Plan that was announced last year. The plan seeks to restore the reserve ratio to the required amount of 1.15 percent within five years; as of September 30, the reserve ratio was 0.76 percent, down from 1.01 percent three months prior.

The Plan involves overhauling the assessment system so that the riskier financial institutions will bear a greater burden in restoring the DIF balance and reserve ratio. As an immediate measure to increase the fund, the FDIC did initiate a 7-basis-point increase to its assessment rates across the board. This change, which created an assessment range of 12 to 50 basis points, was effective only for the first quarter of 2009. The proposed changes for the second quarter are geared towards implementing assessment-pricing calculations that weight an institution’s risk profile appropriately.   

Second quarter brings more robust pricing formulas

The proposed base assessment rate ranges from 10 to 45 basis points. Risk Category I institutions would begin with an initial assessment rate of 10 to 14 basis points; the corresponding assessment rates for Risk Categories II, III, and IV would be 20, 30, and 45 basis points, respectively. Further adjustments would be made to account for the institutions’ unsecured debt, secured liabilities and brokered deposits. The resulting total assessment ranges in basis points by risk category are:

•  I: 8-21
•  II: 18-40
•  III: 28-55
•  IV: 43-77.5

Some points to note regarding the proposed changes to the pricing calculations include:

•  CAMELS component ratings and financial ratios will still be used to determine assessment rates for most institutions. 
•  An additional ratio will be added to increase the assessment rate for institutions that experience rapid asset growth funded by brokered deposits.
•  The pricing calculation used for large Risk Category I institutions will consider the assessment rate from the financial ratios method and other information, in addition to the bank’s weighted-average CAMELS component rating and long-term issuer rating.
•  The FDIC may increase the assessment rate by up to 10 basis points on Risk Category II, III, and IV institutions, when the institution’s ratio of brokered deposits to domestic deposits exceeds 10 percent.
•  Institutions in any category that rely heavily on secured liabilities, such as Federal Home Loan Bank advances, will face an increased assessment rate.
•  Institutions that carry long-term unsecured debt may have their assessment rate reduced as a result.

Bleak outlook

Under this plan, the FDIC expects 2009 assessments to increase to $10 billion, from $3 billion in 2008. The agency had previously estimated bank failure costs of about $40 billion through 2013, but because the economy has worsened since last fall, this estimate is now believed to be too low.

Whether you intend to start a new bank or buy an existing one, you’re going to need some help. That help is found in the form of qualified organizers—the entrepreneurial individuals, who pursue the business plan relentlessly and, eventually, create value in the new banking entity.

The organizer’s responsibilities are varied and time-intensive (usually 10-20 hours per month). A de novo or purchased bank project doesn’t get off the ground well unless the team of organizers is focused and unified. This means the organizers must be ready to contribute productively to committee discussions and assist in making informed planning decisions. Those decisions cover a variety of topics, from branding to operations:  

•    Branding: The organizers build the new bank’s brand from the ground up, deciding what the bank’s mission will be, how it will differentiate itself, what the logo will look like, etc.  

•    Human resources: The organizers must recruit and hire a qualified management team.

•    Project management: A branch location must be selected and modified or built to suit the bank’s purposes. IT systems and other support vendors must be priced and selected, etc.

•    Operations: The team must select the products and services the bank will offer and strategize on how those products and services will be distributed and fulfilled.  

•    Bank Policies: The organizers/new board of directors assist management in drafting and approving the bank’s policies and procedures, a very critical part of banking.

Contributing insights and shaping decisions are just the beginning of the organizer’s responsibilities. However, a pivotal part of what the organizer does is raise capital—both by investing his or her own money and by recruiting more investors to the project. The recruitment process begins with the organizer contributing a sizeable list of names of potential investors. Once the capital campaign gets started, the organizers must be willing participate in their share of the weekly meetings to pitch the investment opportunity.  

The ideal organizers and where to find them

Obviously, not everyone is well suited to be a bank organizer. Decisions need to be made, networking needs to be done, and money needs to be raised. These tasks are not easily accomplished by someone who doesn’t have the right characteristics and skill sets. Ideally, your organizers will be:

•    Visible in the community
•    Opportunistic
•    Task-oriented
•    Motivated by challenge
•    Outgoing, enthusiastic
•    Able to juggle several projects at once successfully

Knowing what to look for is half the battle; the other half is knowing where to look to find it. The simplest means of locating potentially suitable organizers is to recruit within professions that typically attract the above qualities; below is a short list of professions:

•    B2C service providers: Contractors, plumbers, dry cleaners, car dealers, insurance agents, general contractors, financial planners, doctors, dentists, real estate agents

•    B2B service providers: CPAs, marketing consultants, real estate brokers, pharmaceutical account representatives, office supply representatives  

•    Niche business owners: franchise owners, hotel operators, ethnic market owners, retail store owners, technology providers

Here’s the big picture to remember when seeking out organizers. The organizers you select should operate successful businesses and have access to and represent the segments of the community your bank will serve. In addition, they must be motivated enough to stick with the project for the long-haul. And finally, it takes the right person to understand that starting a bank, or re-branding a purchased bank, is an enormously challenging, but ultimately rewarding endeavor.

With megabanks struggling to achieve profitability, the opportunity is ripe for savvy banking entrepreneurs to create nimble and modern community banks from the ground up. Unfortunately for banking customers around the country, the pace of bank start-ups has actually slowed down rather than ramped up. Several issues are to blame, but a significant obstacle is the challenge of finding and recruiting willing bank organizers. The same challenge can throw a wrench into an organization group’s plans to purchase an existing bank as well.

The team of organizers provides the de novo bank with insights, contacts, talent, direction and, of course, organization capital. The right team can turn the vision of a banking start-up, or a purchased bank, into a profitable and satisfying local community investment.

When the business plan is solid, the arguments for becoming a bank organizer are compelling: the experience can greatly enhance the organizer’s position in the community as it helps the community thrive and grow. The ability to become part of such a project at the ground level and, ultimately, create a powerful investment are often reason enough for the right personalities to jump on board.

In today’s world, however, potential organizers have been reluctant to commit. In general, they’re nervous about dedicating the time and resources to the project. That nervousness is likely rooted in a few different issues, including:

•  Excessive media coverage about the supposedly unstable state of the banking industry

•  The performance of the prospective organizer’s own business; organizers who are struggling to keep their own businesses afloat in this economy won’t want to dilute their focus by committing to a new bank project

Sweetening the pot

To be successful in recruiting qualified organizers, the individuals spearheading the project must recognize these challenges and address them with prospects immediately. Some talking points that might be helpful in this regard include:

•  The media’s coverage of the banking industry is over-simplified; the majority of community banks and balance sheet lenders are effectively managing through this current economic cycle.

•  The new bank has the opportunity to operate at a significant competitive advantage, because it opens its doors with a clean balance sheet.

•  Devoting time and capital to a new bank project is an investment and, as such, adds diversification to the organizer’s assets.

•  The success of the new bank can add stability to the organizer’s existing business by solidifying that organizer’s position and visibility within the community.

Finally, while it is important to build an organization team quickly, it’s also crucial to select organizers who will be committed and involved throughout the process. Overselling the opportunity and understating the commitment when recruiting organizers is a strategy that’s likely to backfire.

Next week I’ll discuss the primary responsibilities of the organizer and what characteristics might qualify an individual to be an effective bank organizer.

Community banks are constantly looking for ways to improve their operations, manage risk, and save money, all the while looking for ways to gain and strengthen customer relationships. Community banks differentiate themselves through local and personalized service, but face common challenges when competing with larger rivals. Size, influence, and access to resources are challenges you already know come with the territory. Successfully navigating these challenges are what make you a great community banker. 

It comes down to creativity and service execution. Community banks are not unlike the small business clients they covet. Both must be nimble and ready to respond to the dynamic needs of their clients. Technology accelerates this dialog and increases the demand on both sides of the relationship. Bringing smart solutions to the relationship is what a great banker does every day.

One area having a growing impact on small business is on-demand printing. Most of us are familiar with the common offerings when it comes to business printing. On one side you have a large commercial operation with sophisticated requirements and quantities - great for larger projects. And then you have the big box chains offering large quantity color copy services - great for quick, yet acceptable quality. On-demand printing is like a multi-purpose tool small businesses can use to execute highly customizable, commercial quality, print and direct mail campaigns from a web browser.

We really enjoy working with bankers who get excited about using a smart solution in a smart way. Working with a team of accomplished partners from the banking, print, and marketing industries we created an on-demand print solution for bankers simply called - ePrint. 

ePrint is an on-demand print and direct mail solution giving you the ability produce, ship, or mail quality print materials when and where you need them. Printed items can be personalized by staff and sent directly to bank customers as approved by management. The solution gives you the ability to manage multiple direct mail campaigns - simply upload files, an address list, schedule fulfillment, and complete your order. The service it creates is convenient and the print is competitively priced.

Although you can upload your own print-ready files you can also leverage several marketing templates, such as:

    * Birthday, Holiday, Thank You Cards
    * Invitations
    * Postcards
    * Announcements
    * Letterhead and Envelopes
    * Business Cards
    * Customer Welcome Kit
    * Brochures, Flyers, and more

ePrint delivers the customization and personalization needed to control your branding, marketing, direct mail, and budget more efficiently… you get the big bank capability on a community bank budget.

Learn more about ePrint at EmpoweredBanking.com.

Andrew Anson
EmpoweredBanking.com
planning + marketing + sales

The FDIC’s most recent Quarterly Banking Profile (QBP) confirms the continuation of problems for the banking industry, as several key metrics showed further deterioration in the fourth quarter. These are some highlights:

•    Quarterly earnings declined, swinging industry profitability to a net loss.
•    Loan loss provisions, net charge-offs, defaults and noncurrent loan balances increased.
•    Aggregate outstanding loans and leases decreased.
•    Total deposits increased.
•    Average net interest margin generally improved for larger institutions, but declined for community banks that fund most of their assets with interest-bearing deposits.

Degradation of earnings performance

For the first time since the fourth quarter of 1990, insured commercial banks and savings institutions reported a net quarterly loss. The aggregate loss, which exceeded $26 million, was fueled by a combination of loan loss provisions, trading losses and asset write-downs. Roughly half of the aggregate loss was driven by results at only four banks. But, 32 percent of all insured institutions reported a net loss. The industry’s quarterly return on assets (ROA) was a negative 0.77 percent, the worst quarterly ROA performance since 1987.  

Full-year 2008 net income was slightly more than $16 billion, vs. $100 billion in the year earlier. The full-year ROA was a meager 0.12 percent. These figures were somewhat inflated due to the accounting entries related to failures and mergers; excluding those impacts, the industry would’ve reported a loss for the year.

Loan loss provisions, charge-offs and defaults

Credit quality continued to be problematic. The industry’s loan loss provisions for the quarter were in excess of $69 billion, or more than half of aggregate net operating revenue. Net loan and lease charge-offs were nearly $38 billion, which is more than double the amount recorded in the year-earlier period. Charge-offs for real estate loans, both construction and development loans and residential mortgages, increased more than $10 billion on a combined basis.

At year-end, the industry was strapped with $230.7 billion in noncurrent loans. This compares to $186.6 billion at the end of the third quarter. The sharp increase does not bode well for a near-term lending or housing recovery, particularly since nearly 70 percent of that increase was related to mortgage loans—residential mortgages, C&I loans, home equity loans and other loans secured by real estate.

Trading losses, asset write-downs, declining equity capital

Trading losses in the fourth quarter were large at $9.2 billion, but down from last year’s level of $11.2 billion. Charges associated with goodwill impairments and factors jumped more than $4 billion from last year, to $15.8 billion.

The disappearance of $39.4 billion in goodwill, along with a reduction in other comprehensive income, led to another consecutive reduction in total equity capital.

Total regulatory capital, however, notched an increase of 2.2 percent. At year-end, 97.6 percent of insured banks matched or beat the highest regulator capital standards.

Restructuring reduces loans outstanding

Net loans and leases outstanding slipped by 1.7 percent. The decline was largely attributable to portfolio restructuring by several large institutions.

Mergers and failures shrink the industry

During the fourth quarter, the number of insured institutions shrank by 79. There were 12 failures in the quarter and 15 new charters. The rest of the decline was related to merger activity and FDIC assistance transactions. For the year, 25 banks failed and 98 institutions were chartered.  

As of December 31, the FDIC’s bad bank list contained 252 insured institutions, representing total assets of $159 billion. 

The FDIC has just released the results of a national survey pertaining to banks’ efforts to reach unbanked and underbanked individuals and households. This demographic is widely recognized as untapped potential for the banking industry—but industry efforts to move unbanked customers into traditional checking, savings and credit products have not been consistently successful.

The survey, conducted by Dove Consulting, was designed to quantify the efforts of banks to meet the needs of the unbanked/underbanked demographic, to identify the challenges associated with serving this market, and to identify innovative products and services which appeal to this target customer.

Outreach plays pivotal role

More than 25 percent of respondent banks recommended the use of outreach programs to bring unbanked households into the conventional banking system. The bank employees tasked with designing appropriate outreach programs can turn to local employers, labor unions and community organizations to gain deeper insights into the needs and motivations of the targeted group. Alliances with these local organizations can also be leveraged by the bank to build awareness and trust quickly within the community.

Improved access

The traditional bank branch, with its limited hours and relatively formal setting, may be off-putting to this customer demographic. To address these concerns, banks might consider broadening customer access via kiosks, extended hours, web access and phone service. Some banks also reported success with hiring staff members who are fluent in foreign languages.

Specialty products and services

Banks nationwide recognize the importance of the check-cashing service to unbanked customers. Many institutions, unfortunately, are reluctant to take on the risk associated with offering this service. A secondary barrier is the inability for many unbanked individuals to produce acceptable forms of identification.

Money orders, international remittances and bill payment services were also identified as service offerings that would appeal to unbanked individuals. Of the banks that responded to the survey:

•  49 percent offer check-cashing to non-customers.
•  37 percent offer bank checks and money orders to non-customers.
•  6 percent offer international remittances to non-customers (32 percent of respondents cited regulatory concerns as a barrier to offering this service.


Downsized credit products

Entry-level credit products are useful in helping the unbanked individual enter or re-enter the economic mainstream. Prepaid cards and debit-card accounts are two services that often resonate well with this customer segment. Secured credit cards, tax refund anticipation loans and other advances on funds that are due to arrive were also recommend, although these services are not widely offered by mainstream banks.

Banks’ interest in providing these alternate services varies widely. There is a perception that the costs and risks associated with catering to the unbanked group will fall outside the bank’s strategic parameters. The FDIC’s survey did reveal, however, that 77 percent of banks had not conducted any research on the potential unbanked customers in their areas—which could mean that the reluctance to provide tailored products and services to this group is largely based on unproven assumptions.

The FDIC’s survey did not delve specifically into the long term value of the unbanked customer—but it is generally believed that these individuals, once obtained, can be transitioned into conventional banking services over time.

Survey methodology

The surveys were sent out by mail to a nationally representative sample of 1283 banks with brick-and-mortar branches. Six hundred eighty-five surveys were returned; at the time the survey was conducted, the respondent banks represented $8.3 trillion in assets or 70 percent of the total assets within FDIC-insured institutions.

The FDIC Advisory Committee on Economic Inclusion (ComE-IN) will hold a public meeting this week to discuss ways that the banking community can reach out to currently underserved households. The meeting will be held on February 5, 2009, between 8:30 a.m. and 4:00 p.m. in the FDIC Board Room; it will also be viewable via webcast at http://www.vodium.com/goto/fdic/advisorycommittee.asp.

 

The topic of underserved or “unbanked” customers has been a prominent discussion point in the banking industry for several years. These are individuals or households that rely on non-banking institutions, such as check-cashing stores or even retailers, to conduct regular monetary transactions. Generally, these unbanked customers absorb considerably higher transaction costs than if they maintained a traditional depositor relationship with a bank.

 

Sizeable market opportunity

The Center for Financial Services Innovation estimates that there are nearly 10 million unbanked households, spending roughly $13 billion per year on non-bank financial transactions. Clearly, this represents a sizeable market opportunity for traditional banks. Unfortunately, understanding how to reach these customers with a compelling service offering continues to be something of an unsolved mystery.

 

Research indicates that many of the unbanked group have previously had traditional banking relationships. At some point, these individuals became disgruntled with the banking system and chose to leave it voluntarily. Key Bank learned this in 2004 through a series of focus groups—respondents indicated they’d had bad experiences with banks, often involving high fees for minor transactions.

 

A research report based on the PaymentDynamics 2007 Preferred Payments Study makes a similar conclusion, but adds that the unbanked group is not one homogenous demographic, but “a collection of smaller segments, each with its own unique demographics and financial characteristics.” That conclusion supports the notion that effectively pursuing unbanked households as a customer segment demands a multifaceted approach. The PaymentDynamics report is available here: http://www.edgardunn.com/uploads/100030_english/100243.pdf.

 

Reaching out, improving access

Both the banks and unbanked consumers stand to benefit from the development of products and services that will appeal to this customer group. The customers will save money on their financial transactions and begin moving down a more traditional path of wealth-building. Banks will enjoy a larger customer base, and many of those new customers can be directed into conventional banking services over time. The challenge lies in creating products and services that meet the bank’s profit hurdles while addressing the needs and lifestyles of this customer group.

 

To learn more about this underserved market and the role it will play in the banking industry going forward, log-on to the FDIC Advisory Committee meeting webcast on Thursday. Scheduled discussions will include an overview of the FDIC’s Unbanked Survey and a review of the banking industry’s successful efforts to date in reaching the unbanked customer.

2008 was a year most bankers would rather forget. Around the country, twenty-six banks failed, mostly on the tide of rising loan defaults. Seemingly, the FDIC scrambled all year to sell off bank assets and continue to fulfill its promise of deposit insurance. It wouldn’t be unreasonable to think that all of this activity has left a bad taste in regulators’ mouths.

A recent article in American Banker suggests that this ‘bad taste’ has resulted in an unofficial suspension of insurance application approvals for banks in certain states or banks that intend to focus on certain types of lending. The article references the FDIC’s unexpected denial of Perimeter First’s insurance application—the Georgia bank’s business plan emphasizes commercial and industrial lending. The FDIC has denied that any type of moratorium is in place.

Georgia banks face uncertain future

Given the record-poor performance of Georgia banks in 2008, it isn’t too far of a stretch to assume that regulators denied Perimeter First’s application on the basis of industry conditions. Of the twenty-six bank failures last year, nearly 20 percent of them were located in Georgia. According to Atlanta Business Journal, Georgia banks were holding out for a real estate recovery in the first half of 2008. That, of course, didn’t happen, and the consequences were disastrous. All five of Georgia’s bank failures occurred in the second half of the year.

Atlanta Business Journal also estimates that as many as 50 Georgia banks could collapse in 2009, citing rising unemployment and a foreclosure crisis that just won’t quit.

Other states likely to be under scrutiny

The combination of bank failures, rising unemployment and massive foreclosures isn’t exclusive to Georgia. If FDIC is unofficially proceeding with caution with respect to Georgia insurance applications, it’s likely to be doing the same for de novo banks in California, Florida and Nevada—all three states have higher than average unemployment and top-ten foreclosure rates. Here are the stats:

•  California experienced six bank failures in 2008. And, the state’s foreclosure rate, according to RealtyTrac, ranked fourth in the country at 3.97 percent. The golden state’s unemployment rate in November was 8.4 percent, versus a national average of 6.8 percent.

•  Florida had two bank failures last year, to go along with 7.3 percent unemployment in November and a 2008 foreclosure rate of 4.52 percent.

•  Nevada had three bank failures (including WAMU), 8 percent unemployment in November, and a nation-leading 2008 foreclosure rate of 7.29 percent.

Whether FDIC has suspended approval for certain states, or has simply adjusted its standards to fit a new and more difficult environment, the end result is the same: de novo banks will have to be more careful about how they proceed with their organization process. Now, more than ever, it’s crucial to have the right programs, plans, timelines and management teams in place to be successful.

The OCC, Federal Reserve Board, FDIC and OTS have collectively approved a final rule that permits banking organizations to reduce the goodwill deduction to tier 1 capital by the amount of any associated deferred tax liability. Banks, savings associations and bank holding companies are allowed to adopt this rule for the reporting period ending December 31, 2008.

 Prior to the adoption of this rule, the tier 1 capital calculation required banking organizations to deduct the full carrying amount of goodwill and other intangible assets resulting from a taxable business combination. This full deduction, however, was inconsistent with other aspects of the tier 1 capital computation. Other intangible assets acquired in nontaxable transactions, for example, could be deducted from tier 1 capital net of any associated deferred tax liability.

In a taxable business combination, the deferred tax liability arises from differences between tax treatment and book treatment of the asset. And, that deferred tax liability is not routinely settled for financial reporting purposes; it remains until the goodwill is written down, written off or otherwise derecognized. If the entire amount of the goodwill is impaired, the banking organization would also derecognize the associated deferred tax liability for financial reporting purposes. Therefore, the banking organization’s maximum exposure to loss with respect to the goodwill asset would be the full carrying value of that goodwill less the deferred tax liability. The spirit of this rule change is to improve the tier 1 capital computation by reflecting the banking organization’s actual exposure to loss with respect to goodwill arising from taxable business combinations. Also, the banking organization that deducts goodwill net of the associated deferred tax liability from tier 1 capital may not net that deferred tax liability against deferred tax assets for the computation of regulatory capital limitations on deferred tax assets.

 Comments largely positive

 On September 30, 2008, the regulatory agencies published a notice of proposed rulemaking requesting comments on this change. Of the thirteen comments received, only two opposed the change. Five comments suggested that the rule be adopted and available to banking organizations for the reporting period ending on December 31, 2008. The agencies have agreed with this request.

 Some of the comments also requested that the change be applied to other intangible assets as well, but did not provide sufficient data or analysis to support that request.

 

Other miscellaneous changes

 The OCC is also adopting other miscellaneous changes as noted in the proposed rule, including:

 

·         Clarification of the current treatment of intangible assets acquired due to a nontaxable purchase business combination

·         Replacement of the term “purchased mortgage servicing rights” with “servicing assets”

·         Clarification of OCC’s interpretation of existing regulatory text

·         Amendment of the goodwill definition to conform to GAAP

 

To review the full text of the final rule, please click here (http://www.fdic.gov/news/board/08DEC15rule4.pdf).

From Hunton and Williams, LLP

The Treasury Department and the IRS have issued favorable guidance under Internal Revenue Code Section 382 for banks engaging in merger and acquisition activities, as well as certain capital raising efforts. Given the current state of the economy, banks engaging in such transactions are likely to hold financial assets that have decreased in value. Traditionally, bank investors’ and acquirers’ use of these unrealized losses after an acquisition would be significantly limited. Under the new guidance, no such limitation would be imposed. This shift is no doubt part of a larger policy initiative to encourage the capitalization and acquisition of troubled banks in the wake of the current financial crisis.

Code Section 382 generally imposes limitations on the use of existing unrealized losses and net operating loss carryforwards against income earned after a corporation has had a change in ownership of 50 percent or more. The policy behind this rule is to prevent the development of a market where taxpayers could buy and sell tax losses. This loss limitation rule effectively prevents one corporation from buying another corporation with significant losses for the primary purpose of using those losses to offset the acquiring corporation’s future taxable income.

Generally, unrealized losses and net operating loss carryforwards can be used after an ownership change only up to the amount of the “Section 382 limitation.” The Section 382 limitation is equal to the fair market value of the corporation on the date of the ownership change multiplied by the long-term tax-exempt rate, which is published each month by the IRS. (4.65 percent in October 2008.) Notice 2008-83, however, provides that for a bank, losses on loans or bad debts that are recognized after an ownership change will not be treated as built-in losses or deductions that are attributable to periods before the change date. Practically speaking, the impact of this new rule is that acquiring banks may be able to fully utilize any unrealized losses held by target banks if the acquisitions are otherwise properly structured.

In addition, the Treasury Department and the IRS have relaxed the presumption of a tax avoidance motive for contributions made within two years of an ownership change. These “anti-stuffing” provisions attempt to disallow the arbitrary inflation of a corporation’s value when capital contributions are made in anticipation of a change in ownership, as increases in value would result in a higher limitation amount under Section 382. Currently, any contribution made within two years of a change in ownership is presumed to be part of a plan for the avoidance of tax
and is subtracted from the value of the corporation for purposes of calculating the Section 382 limitation, thus reducing the amount of losses that can be utilized after the change date. Notice 2008-78 removes this presumption altogether and provides four safe harbors under which contributions will not be deemed to be part of a plan for the avoidance of tax. This notice also makes it clear that failure to fall within one of the safe harbors is not evidence of a plan for tax avoidance. This change in the antistuffing rules is not limited to banks.


CIRCULAR 230 DISCLOSURE
TO ENSURE COMPLIANCE WITH REQUIREMENTS IMPOSED BY THE INTERNAL REVENUE SERVICE, WE INFORM YOU THAT THIS ADVICE WAS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, FOR THE PURPOSE OF AVOIDING UNITED STATES FEDERAL TAX PENALTIES.
© 2008