Comparison to and conversion from other network providers

Value and ROI

1. What is NBID's value proposition compared to existing reciprocal deposit networks?

   NBID is the first bank-owned reciprocal network. Participating banks are members of NBID LLC. NBID member banks receive preferential pricing and are eligible for a profit share. In addition, NBID member banks form the majority of NBID's Board of Directors, ensuring industry alignment and oversight. The novel structure of NBID drives significant financial benefits for member banks and gives them a voice in how their critical infrastructure is governed.

2. What is the ROI of NBID?

   The ROI of NBID can be significant for institutions that utilize reciprocal deposits. NBID’s current pricing of 2-5 bps allows you to realize significant cost savings and reinvest in your bank. For a $1 billion reciprocal program, savings can be more than $1 million per year. NBID member banks are also eligible for a profit share.

   The ROI for an institution will depend on their usage and utilization of the network, so we expect it to grow over time. The most successful NBID members take a longer-term view of ROI, recognizing it will take time to ramp up their usage of the network. They calculate ROI on a multi-year horizon, and over a 2-3-4-5 year horizon, the ROI of NBID becomes significant compared to not making a change with their existing deposit network.

Rolling out NBID

3. How should we roll out NBID alongside our existing reciprocal network? Do we need to replace our existing network?

   Most NBID member banks already utilize an existing reciprocal deposit network. NBID is intended to be rolled out alongside your existing network, not as a replacement. We anticipate partners will grow volume in NBID over time and transition depositors as they feel comfortable and as the network scales. To reiterate, there's no need to replace or remove your existing network at this time. In terms of rollout:

   • Get onboarded: Execute contracts, complete diligence, onboard and operationalize the program. Ensure everyone is trained, both from the operation side and client-facing side.
   • Start with net new clients: Starting with net new clients is easier than transitioning existing customers.
   • Transition existing clients: Existing clients, including larger commercial, nonprofit, and public funds clients, can be moved with Program Transitions in the Admin Portal. We anticipate NBID partners will transition the majority of their clients over time due to NBID's more attractive financial structure.

4. Which depositors are better suited for NBID versus our existing reciprocal network?

   In the long term, we anticipate NBID member banks will utilize NBID for the vast majority of their reciprocal services. This is because it provides much better financials in terms of lower pricing, eligibility for a profit share, and bank representation for the company. Net new clients are an easy place to start since you don't have to transition existing clients, and existing clients can be moved over time with Program Transitions.

5. Can we run NBID concurrently with our existing reciprocal network and for how long?

   Absolutely. The vast majority of NBID member banks already utilize an existing reciprocal deposit network. NBID is not designed nor intended to "rip and replace" your existing network. It's meant to be implemented gradually alongside your existing network. In terms of how long the programs can run concurrently, they can do so for as long as you would like. However, we expect the vast majority of NBID banks to transition most of their clients to NBID over time due to its more attractive financial structure, including better pricing and eligibility for a profit share.

Moving accounts and operations

6. What exactly is involved in moving an account to NBID? What are the impacts on our depositors?

   Moving an account from an existing reciprocal network into NBID is straightforward. The main action items for you and your customers are:

   • The customer must sign a new terms and conditions document. Your bank can manage the move in the Program Transitions tool in the Admin Portal, including collecting signed terms and conditions digitally with Click to Accept
   • After execution, you will transition their funds from the existing reciprocal network account into the new NBID account structure. Operationally, this means:
     • Fully withdrawing the funds from their existing reciprocal network account back to your institution
     • Moving those funds into their new insured sweep account
     • Moving the funds into the NBID program account at your institution, where they will be pulled into the network and reciprocated or placed as applicable
     • You will also give your customer access to view their balances, statements, and allocations. If your institution is using NBID's integrated approach, your customer will see all information through your existing digital banking experience on web and mobile. If you are using a non-integrated approach, NBID will provide you (and you will provide your customer) with a login to a depositor portal branded to your bank to see this information

7. What kind of ongoing operational differences should we expect between NBID and our existing provider?

   NBID operates very similarly to existing reciprocal deposit networks and was designed to provide familiarity in operational execution while further reducing manual work for both your institution and clients through advanced technology. For your institution, operationally it will look quite similar:

   • Funds are moved from your institution to the network custodian, and from there, placed at receiving institutions
   • Your institution will receive at most one wire or one wire drawdown per day, depending on whether funds are coming into or out of the network
   • If your activity is fully reciprocated that day, no wire needs to be executed
   • Your team will have access to the Admin Portal to manage accounts, view accounts, change accounts, view wire activity, manage transactions, and view statements
   • Money movement, reporting, and accounting (whether automated or manual) will be similar to what you have today

   For clients, the experience can be either similar or improved, depending on your preferences:

   • NBID provides a depositor portal branded to your bank, where clients can see balances, allocations, and statements
   • NBID can also integrate into your existing digital banking setup, so clients can see balances and allocations directly within your existing web and mobile applications

8. If we are using both NBID and an existing network, how do we ensure one customer's funds are not placed at the same member bank?

   Many NBID member banks already utilize multiple network providers, so this is a familiar issue with a well-established approach. The key is ensuring you are not placing the same client in multiple networks because insurance is not additive. To reiterate, you must simply ensure that your clients are either being placed in the NBID network OR your existing reciprocal deposit network, not both. As mentioned above regarding rollout, a clean approach is:

   • Route net new clients to the NBID network by default
   • Transition existing clients over time due to better financials, at your discretion and timeline

   Each depositor's Terms and Conditions also include an exclusion form where the depositor lists any network bank where they already hold deposits, so those banks are excluded from receiving their funds.