NCIF, the FDIC Minority, Community Development and Non-Branch Banking Task Force, the National Bankers Association, and ShoreBank Corporation (fund advisor of NCIF) join in requesting support for Liberty Bank & Trust, Dryades Savings Bank and United Bank & Trust. These New Orleans, African American owned banks are regulated, FDIC-insured banks that are also certified by the U.S. Department of Treasury as Community Development Financial Institutions (CDFIs). Long before the hurricanes struck, these banks focused in New Orleans’ low income and minority communities, and they are fully engaged in emergency response now. We thank you in advance for your interest and participation.

Liberty, Dryades and United bring almost $500 million in aggregate assets as well as distinguished track records of serving low to moderate income (LMI) communities in New Orleans and portions of Mississippi. While operating as regulated, conventional banks, each is a certified CDFI with a primary mission of community development and has since inception served the communities hardest hit by Katrina that were widely seen in the national media. These communities and their residents will continue to have the greatest challenges as the area rebuilds. Their ability to come back and/or "re-group" depends heavily upon Liberty, Dryades and United having the resources to make loans and service the range of resident and small business needs.

Liberty Bank & Trust. Created in 1972, Liberty had $350 million in assets and 13 branches in New Orleans, Baton Rouge and Jackson, MS at June 30, 2005. Based in New Orleans’ east side, Liberty has for over three decades provided small business, commercial real estate, church, mortgage and consumer loans and retail financial services throughout the area’s LMI communities. In 1993, the Bank created Liberty Foundation, a 501(c)(3) public charity, to support community-based endeavors that improve the quality of life, expand access to secondary and higher education, and increase the availability of affordable housing in the New Orleans and Baton Rouge areas of Louisiana and in Jackson, Mississippi. Post Katrina, Liberty Bank & Trust is serving customers in person and through its ATM network from temporary headquarters in Baton Rouge and its Foundation is providing relief to hurricane victims. Most of the Bank’s New Orleans branches are seriously damaged and remain closed. CEO Alden McDonald is serving on Mayor C. Ray Nagin’s 17 member “Bring Back New Orleans” task force.

Dryades Savings Bank. Created in 1994, Dryades had $115 million in assets and 4 branches in New Orleans at June 30, 2005. Dryades provides small business, commercial real estate, church, mortgage and consumer loans and retail financial services throughout New Orleans’ LMI communities and mortgages in Mississippi’s Gulf Coast. Dryades has a partnership with the Housing Authority of New Orleans in which LMI renters use Section 8 vouchers to become homeowners. Post Katrina, Dryades has re-opened two of its New Orleans branches and is serving customers in person and through its ATM network. CEO Virgil Robinson is serving on Governor Kathleen Blanco’s Task Force on rebuilding Louisiana.

United Bank & Trust. Created in 1990, United had $24 million in assets and 4 branches in New Orleans at June 30, 2005. United provides primarily first mortgage loans and retail financial services in New Orleans’ LMI communities. Following Hurricane Katrina, United has re-opened three of its branches.

Disaster recovery and longer-term restoration for the banks will carry hundreds of thousands of dollars of unanticipated expense and forgone or deferred revenue, including deferral on interest payments they have offered their hurricane affected borrowers at the request of the FDIC and restoring delivery systems. In addition, the banks face greatly reduced workforces, and management is called upon to assist remaining employees with crisis needs. Alden McDonald, Liberty Bank & Trust’s president, recently purchased three houses for employees, assigning one room per family. Virgil Robinson, president of Dryades Savings Bank, sought rental apartments for employees and was put on a waiting list of 1,000; Dryades will now try to lease land and obtain mobile homes for employee housing.

The banks have reported their needs in three phases: (1) Crisis Response/Getting Operational, (2) Operating Needs Assessment/Portfolio Review and (3) Rebuilding in a Changed Market. The range of needed support includes both Grants and Liquidity:

Grants. In the Crisis Response phase, one time, six-month housing and/or personal emergency assistance of up to $4,000 per affected employee is greatly needed. At this time, Liberty Foundation, a 501c3 public charity affiliated with Liberty Bank & Trust, has agreed to receive donated funds and provide individual grant assistance to affected employees of Liberty Bank & Trust, Dryades Savings Bank and United Bank & Trust. Liberty Foundation will provide grant assistance based on an evaluation of the needs of affected employees at the three institutions by an independent committee and will maintain a record of assistance provided. Liberty Foundation’s Tax Identification information, exemption letter and a legal opinion regarding the tax deductibility of Katrina response grants are available upon request

Grant funds may be wired to Liberty Bank and Trust Company, Baton Rouge, LA ABA # 065 002 108; for further credit to: Liberty Foundation, Account Number 2225832. Attention: Julius E. Kimbrough, Jr., phone 504-236-7989. Reference: NCIF Katrina Response. Mailing address: Mailing address: 7990 Scenic Highway, New Orleans, LA 70807.

Liquidity
The banks have faced varying levels deposit outflow in the Crisis Response phase. Investors can provide immediate support by placing FDIC insured jumbo certificates of deposit at below market rates of interest. The banks’ aggregate need is for $30 million of such deposits, which directly fuel new lending and help bear the cost of disaster response. Rates of 0 — 2.5% are available, depending upon deposit balance and term and investor flexibility. Investors can obtain up to $100,000 of FDIC insurance for deposits per Tax ID number in any of the banks. For example, if an investor has three affiliated organizations with separate Tax ID numbers, it can place up to $900,000 in deposits that are fully insured—one for each of the Tax ID numbers in each of the banks.

Investors can also obtain insurance over $100,000 on deposits in a particular bank under a single Tax ID number through the Certificate of Deposit Account Registry Service (“CDARS”) sponsored by the Promontory Financial Network LLC at 703-292-3400 or http://www.cdars.com. To use the CDARS program:

1. Investor contacts Bank and agrees to an amount, term and rate (contact information is below).


2. Investor wires funds to Bank (wire instructions are below).


3. Investor completes and submits a CDARS Deposit Agreement.


4. Bank "clears" funds through Promontory and investor’s funds are broken up into individual deposits that are less than $100,000, which are placed with other banks; those banks place deposits with Bank, which gives Bank a net increase in deposits equal to the total amount placed by Investor.


5. Promontory provides written confirmation of opened deposits in a single statement for Bank to provide to Investor.

Wiring instructions and contact information for the banks:

Liberty Bank & Trust (for opening deposit accounts). Wire funds to Liberty Bank and Trust Company, Baton Rouge, LA. ABA # 065 002 108. For further credit to: Name of New Account. Attention: Julius E. Kimbrough, Jr., phone 504-236-7989, juliokimbrough@yahoo.com. Reference: NCIF Katrina Response. Mailing address: 7990 Scenic Highway, New Orleans, LA 70807.

Dryades Savings Bank (for opening deposit accounts). Wire funds to Federal Home Loan Bank Dallas. ABA#: 111 040 195. Credit to: Dryades Savings Bank, Account # 2273608. For further credit to: Name of New Account. Attention: Liz Johnwell, phone 504-394-8888, virgil@mycingular.blackberry.net. Reference: NCIF Katrina Response. Mailing address: Post Office Box 56009, New Orleans, LA, 70156-6009.

United Bank & Trust (for opening deposit accounts). Wire funds to Federal Home Loan Bank Dallas. ABA#: 111 040 195. Credit to: United Bank and Trust Company, Account # 2386100. For further credit to: Name of New Account. Attention: Mike Wallace, phone 504-827-0060, michaelubt@aol.com. Reference: NCIF Katrina Response. Mailing address: 323 S. Academy Street, Suite A, Opelousas, LA 70570.


Beyond Grants and Liquidity provide during the period of Crisis Response, assistance in the following areas is needed for the Operating Needs Assessment and Rebuilding Phase:

Loan Sales and Origination
The banks seek to purchase a significant volume of loans to buffer the anticipated loss of income from existing loans, and to provide income that will be lost due to the shut down of the New Orleans economy. The banks are also actively originating new loans and appreciate qualified referrals to local and national borrowers.

Capital
Post Katrina, the banks will need additional capital to buffer losses and support new deposits that fuel loans for residential and commercial customers to rebuild. New capital would ideally come in the form of non-cumulative perpetual preferred stock or trust preferred securities.

Risk Management and Staffing Assistance

• Risk Management. The Operating Needs Assessment phase will include assessment of repayment capacity of all borrowers. The banks would welcome risk management specialists to advise or participate in this work.


• Staff Recruitment and Training. A very significant number of employees of each institution—in some cases in excess of sixty percent—have made the decision to relocate. All institutions will suffer from loss of key staff, such as commercial lenders, loan operations staff and accountants. Given greatly increased competition for qualified banking professionals in the marketplace, the banks may be unable to find individuals with banking experience. They will greatly appreciate any support for recruitment, training and potential lending of new hires.

Benefits for Participation
Any of the support above offered by banks should be eligible for CRA consideration. Certain support may be eligible for Bank Enterprise Awards (BEA)—potential monetary awards from the CDFI Fund. Banks seeking BEA for their support would need to provide it by year-end 2005 and apply for a BEA award by February 14, 2006 (details and an application form are at http://www.cdfifund.gov; we note that BEA awards are competitive and qualifying for a BEA award for deposits requires taking a maturity of at least three years and placing funds in materially below market rate accounts or in uninsured accounts). Finally, certain forms of investing with New Orleans bank CDFIs could be eligible for the New Markets Tax Credits (NMTC). Liberty Bank & Trust, in particular, may be able to offer current NMTCs for investment in local revitalization projects.

National Community Investment Fund is a nonprofit trust and certified Community Development Financial Institution (CDFI) created in 1996 to invest equity and debt in banks, thrifts and credit unions with a primary mission of community development. NCIF's mission is to increase the number and capacity of domestic, depository institutions that are both effective agents of local community development in distressed communities and sound financial institutions. NCIF has helped to direct over $620 million to the depository CDFI sector, including $20 million of its own capital, $77 million in Bank Enterprise Awards, over $4 million in other CDFI Fund awards, and $519 million in New Markets Tax Credit allocations.

For further information: Please contact the banks directly or contact Saurabh Narain, National Community Investment Fund, snarain@ncif.org or 312-881-5826.