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BANKING Q & A

If you have questions about your bank's safety today, you should get answers. It's the Platinum standard to make sure our customers and friends feel safe and secure with their banking situation. In that spirit, we have compiled a list of commonly asked questions and provided the answers that can help you make smart financial decisions. Whether you are a Platinum customer or have thought about switching from another bank, call one of our bankers anytime for more information.

How do I know if my bank is safe and secure?

The primary indicator of a bank's safety is its level of capital. Well-capitalized banks should have a minimum capitalization level of 8%. Platinum Bank's capitalization levels are well within that percentage. This information is public record and is reported quarterly. Ask your banker about your bank's level of capital.

How do I know if a bank's credit quality is good and they aren't doing "bad" deals?

The health of a bank's loan portfolio is a leading indicator of credit quality within a bank. Bad loans impact credit and capital levels. By looking at both the level of capitalization at your bank and percentage of nonperforming loans, you can gauge its credit quality. At Platinum, we take special care in our underwriting process to ensure that our customers have enough of their own equity in the deal to protect our bank from unexpected changes to their personal or business situation. We are interested in building long-term relationships with our customers based on sound advice and lending practices. Loan performance is public information.

What does it mean when all these banks are being taken over by the FDIC?

When banks fall critically below minimum capitalization levels, they are at high risk of being taken over by the FDIC. This is because very low capital levels may not support potential losses in the bank's loan portfolio. All deposits in the closed bank are insured up to the maximum $250,000 by the FDIC. In the history of the FDIC, it has never failed to meet its insurance obligations.

What happens when a bank closes?

Almost always, a bank is pre-sold to another financial institution prior to closing. Closings are typically done on a Friday so that the new owners have two days to organize a re-opening by the following Monday. Although the new owners try to minimize disruption to customers, any transition could affect timely direct payments and deposits and other online and automatic banking services. If you are concerned about the security of your bank, talk to your banker. If you are not satisfied with the answers, it is better to change banks on your terms rather than on the FDIC's terms.

What is the difference between a local bank and a large bank in regard to safety?

There is no difference in terms of FDIC insurance levels. The primary benefit of a small bank is that it should be fully transparent — that is, easier to understand the range of services and easier to get answers. Decisions about loans and lines of credit may happen faster because they are made locally. You may be able to speak directly to the decision maker and create a stronger business relationship. You can address concerns and find solutions together.

With all the issues around banks, how does that affect my loan(s)?

Most loans are structured to allow a bank to demand payment in full at any time. The weaker the bank, the more likely that loans could be flagged for early payment. When a bank is sold, the new bank will review the loan portfolio and may demand full payment on loans that exhibit red flags such as late payments. It is important to be a good steward of your loans and lines; if you anticipate a problem, talk to your banker immediately to find an acceptable solution.

Does it matter if a bank is locally owned?

The biggest benefit of a locally owned bank is access to the decision makers. They can provide you with more immediate and quality information. They are typically more invested in the community personally and financially. Relative to their staff and assets, they tend to give more time and spend more money in the community. In other words, local ownership supports stability and quality of life in a community.

As a small business owner, what questions should I ask my banker…or a new prospective banker in regard to the banking environment?

Ask about the decision-making process for loans and lines of credit. Do you deal with the people directly in the bank for underwriting and final decisions? Decisions handled by a remote committee may not be a good fit depending on the size and diversity of your business interests.

Are you just a business bank or do you offer personal banking?

Platinum Bank offers a full complement of personal and electronic banking services. Because our business and personal customer base is so diversified, our products are designed for your flexibility and convenience. You don't have to come to our bank to bank with us. If you do, we offer a drive-through teller and other friendly staff inside to serve you.

What are some of the features of Platinum's online banking service?

Our online banking offers all of the convenient tools you need to pay bills, check balances, make transfers and track expenses. Plus, if you ever have a question about these services, you can talk to a live person at Platinum Bank.

Who makes lending decisions for Platinum?

All of our business bankers are also owners. They have the authority to make underwriting and approval decisions right at our bank.

Do you offer credit cards or other products?

Platinum does offer credit cards and many other banking services that you would expect from a full-service bank.

I have other banking relationships. Can Platinum work easily with them?

Many of our customers have multiple banking relationships. We are accustomed to supporting their unique business and personal needs with our product and service options. Our bankers also frequently consult with customers on the best ways to structure banking relationships to ease time management and reduce unnecessary expenses. For example, for business deposits we offer a remote deposit solution that allows business owners to safely deposit funds into Platinum Bank accounts right from their office.