Overnight & Term Repurchase Agreements
Secured • Competitive Interest • Flexible
A repurchase agreement, or repo, allows Morrill & Janes Bank to use U.S. Treasury or Agency securities, as collateral, to borrow cash from our business depositors at a fixed rate of interest. The Agreement is made with the obligation to repurchase the collateral from you on a specified maturity date with the return of principal and interest earned. We offer two types of Repurchase Agreement investments:
Overnight Repurchase Agreements - next business day maturity.
Term Repurchase Agreements - maturity with a specified end date. A term can range from 1 week to 270 days.
For our business depositor, a repo is an opportunity to invest cash for a customized period of time. It is short-term and safer as a secured investment since the investor receives collateral, and has been designed to address the investment needs of businesses with excess funds. Market liquidity for repos is good, and rates are competitive for investors.
Overnight Repurchase Agreements. Our BankWise® Funds Management program facilitates the safe, convenient, and efficient utilization of excess funds that may be available on a day-to-day basis. Each business day, our BankWise® system analyzes your available funds position and identifies an appropriate investment opportunity in U.S. Treasury or Agency securities for your account. This ensures that your money is always working for your benefit.
Term Repurchase Agreements. If you are interested in a term investment, simply contact your Relationship Officer to arrange the details.
Repo's are considered a secured, or safer, investments because the lender (you) will have perfected interest in the security sold to you during the term of the investment. But, there are always risk to any investment. If anything should prevent us from repurchasing the security you have legal ownership of the collateral and the market-value should be adequate to more than compensate for the value of the loan.
*Overnight repurchase agreements are Not a Deposit • Not FDIC Insured • Not Insured By Any Federal or State Government Agency • Not Guaranteed By the Bank • May Go Down In Value
Amounts placed in repurchase agreements are secured obligations collateralized by securities that are the direct obligation of, or the principal and interest of which are fully guaranteed by, the United States, one of its agencies or one of its government sponsored enterprises. Federal law requires that we prominently disclose to sweep account customers that amounts placed in repurchase agreements (i) are not deposits within the meaning of 12 U.S.C. 1813(l); (ii) are not insured by FDIC; and (iii) are subject to investment risks, including possible loss of principal invested; and that if the Bank fails (i) you will be a secured creditor, but (ii) you may become an unsecured general creditor to the extent that the market value of the securities used as collateral falls below the outstanding amount of our repurchase obligations to you.