Repurchase Agreement

As a business or commercial customer of First South Bank, you also have the option of investing in Repurchase Agreements*.

Repurchase Agreements are overnight investments with the Bank that are secured by pledged interest in U.S. Treasury Instruments. Excess funds are swept into an overnight investment account and swept back, as needed, to your checking account.

Terms and Structures

Maturity
From one to 90 days.

Issued
When a repurchase agreement is initiated, the bank issues a confirmation of the sale of the securities to the customer and a second confirmation of the bank’s obligation to repurchase them at the maturity date.

Form
The securities involved in a Repurchase Agreement can be maintained as a "hold in custody" agreement in Wachovia’s Institutional Trust Services Custody Department or can be delivered to the customer through the Federal Reserve system.

Quoted
Repurchase agreements are quoted on a yield basis.

Rate Structure
Yields vary according to money market conditions.

Interest
Paid at maturity.

Denominations
Normally issued with a minimum denomination of $100,000.

Security
Securities used in repurchase agreements are typically direct obligations of the U.S. Government or federal agencies.

Tax Status
Fully taxable on the federal and state level.

For more information on Business Finance Options, click here to send us your questions, or contact us at 1-800-946-4178.

*Repurchase agreements are not FDIC insured or Bank guaranteed and may lose value.