First Republic line of credit - 100k @ 2.25%, any concerns?

[ray.james]

They are considering options including a sale! Did not expect the last part!

[mentos]

Anybody who has access to this PLOC at 2.25% and hasn't drawn it down completely yet should do so immediately. There's no reason why anybody should be leaving any part of the 100k on the table at this point. You can easily arbitrage the full 100k by putting it in a HYSA for 3-4% interest.

We have this LOC but only used a little over half. Worth bearing in mind that FR wants to see a % of credit in the deposit accounts. So if we pulled the remainder of the LOC, left some in the FR checking account, transferred the rest to Fidelity or wherever, earned 4% on it for a year or so, paid taxes on the 4%, while cashflowing the repayment that kicks in later this year....sounds like too much hassle for a few hundred bucks gain.

Couple points of correction here if you read their actual terms:

- The requirement to keep in deposit accounts is actually based on the approved amount, not the amount you withdraw. So you're technically supposed to have the same amount kept in their account (20k on 100k approved amount) regardless of how much you've actually drawn down.
- The terms actually state that you only need to keep the % required at three points in time (90th day, 1st anniversary, and 2nd anniversary of the Effective Date). As long as you can remember to transfer enough money back on those three dates, you are free the rest of the time to keep as little money in their checking as you want ($3,500 minimum to avoid monthly fees).
- Even if you forget to transfer enough back on those three dates and end up getting dinged on it, you only lose 0.75% of your interest rate (so 2.25% to 3%). Doing the math, you actually still come out ahead as long as you can make at least 3.75% interest on the full amount even if your PLOC interest gets increased to 3%. You can easily beat 3.75% these days in a HYSA or MMF.

I agree that it's a lot of optimizing for a couple hundred bucks, but I've done the math and there is no downside to drawing it all out if you can make at least 3.75% interest elsewhere assuming you have a 100k credit line at 2.25%. Plus, it's not actually that hard to automate all of this. Once I withdraw everything from the loan and put it in something more high yielding, I just direct deposit enough from my paycheck into the FRB checking account to cover monthly payments and that's it. I don't have to worry about it again until the Fed drops interest rates.

Can anyone confirm the rate doesn't go up if you withdraw the 20k between anniversary dates? I thought someone said they lost the rate in this thread. My rate is 2.95% so 3.70% would suck if they dinged me. I'd love to move 20k to a savings account though. So I only need to keep $3500 in there until my anniversary date?

[mentos]

Stock is beaten down again. Just bought 100 shares at 23.44. May not hold long though.

[hachiko]

Stock is beaten down again. Just bought 100 shares at 23.44. May not hold long though.

You just paid for my summer vacation as long as I can sell after this halt at 34.

[mentos]

Stock is beaten down again. Just bought 100 shares at 23.44. May not hold long though.

You just paid for my summer vacation as long as I can sell after this halt at 34.

Congrats! Wish I went bigger LoL. Not sure when to sell, probably should sooner than later.

[Olemiss540]

Stock is beaten down again. Just bought 100 shares at 23.44. May not hold long though.

You just paid for my summer vacation as long as I can sell after this halt at 34.

Congrats! Wish I went bigger LoL. Not sure when to sell, probably should sooner than later.

Agreed. Thanks for the heads up on the share price Mentos. Hoping it gets to triple digits, not worried about selling since it's just fun money!

[mentos]

They got bailed out by the big banks. The stock price is currently around $27 after hours.

"To Our Valued Clients,

Today, First Republic announced we will receive uninsured deposits totaling $30 billion on March 16, 2023, from Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley, Bank of New York Mellon, PNC Bank, State Street, Truist and U.S. Bank.

This support from America’s largest banks reflects confidence in First Republic and our ability to continue to provide unwavering service to you — our clients and communities. You can read more by viewing our press release available on our website.

We continue to stay focused on the core tenets of First Republic: Operating a simple, straightforward business model, and providing exceptional service to our clients and communities. We are here and ready to meet your banking and wealth management needs.

Most importantly, we want to share our sincerest thanks with you for your continued and overwhelming support. We are grateful.

As always, it’s a privilege to serve you.

Jim Herbert
Founder and Executive Chairman

Mike Roffler
CEO and President"

[erp]

They got bailed out by the big banks. The stock price is currently around $27 after hours.

Hopefully you guys sold right after the good news came out and didn't get greedy!

Probably people are realizing that this 30b loan comes at a big cost (eg. goldman sachs had to pay Buffett 10% divs when they got help during the 2008 crisis). The other banks could be making 4-5% in safe treasuries, so asking for 10% again is not out of the question. That's going to hit FRC's profits.

[mentos]

I got greedy LoL. But I bought a relatively small amount. I don't think it's a huge risk.

I'm surprised the PLOC is still offered at 3.95%. That's still an excellent rate in the current environment.

[hachiko]

I got greedy LoL. But I bought a relatively small amount. I don't think it's a huge risk.

I'm surprised the PLOC is still offered at 3.95%. That's still an excellent rate in the current environment.

I may buy again if it drops below 24, otherwise I will jealously watch as you ride it back up to 100. I think it will either go to 0 or back up to the 80 range. It doesn't make sense for it to be around 30.

[Valuethinker]

They can cut the line of credit at ANY time unless you are getting a committed agreement. Are you? Don’t be like those people who got a rude awakening when their lines of credit both personal and HELOCs went the way of the dodo bird back in 2008 and more recently last year when the banks gave a repeat performance. Your idea of an emergency fund is not the same as the banks risk managers. In an emergency they will either freeze it or get rid of it outright. Cash is king for a reason.

12 days later... we know why.

I would not want a LOC with a bank that was in financial distress.

I have a relative who was a corporate Treasurer. After Lehman, any prudent corporate was trying to draw down its full lines - to increase the cash in the bank.

Banks just point blank refused. Yes that meant the banks were in legal violation of their agreements. However there is usually a Material Adverse Change (MAC) clause in these agreements for unforeseen events. So the banks would just delay, go to court, argue MAC. You could be bust as a borrower by the time it came to trial.

Grt2bOutdoors will know far more about this than I ever will -- what the risks are.

But don't count on credit from your bank in times of financial distress for banks.

[Valuethinker]

They got bailed out by the big banks. The stock price is currently around $27 after hours.

"To Our Valued Clients,

Today, First Republic announced we will receive uninsured deposits totaling $30 billion on March 16, 2023, from Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley, Bank of New York Mellon, PNC Bank, State Street, Truist and U.S. Bank.

This support from America’s largest banks reflects confidence in First Republic and our ability to continue to provide unwavering service to you — our clients and communities. You can read more by viewing our press release available on our website.

We continue to stay focused on the core tenets of First Republic: Operating a simple, straightforward business model, and providing exceptional service to our clients and communities. We are here and ready to meet your banking and wealth management needs.

Most importantly, we want to share our sincerest thanks with you for your continued and overwhelming support. We are grateful.

As always, it’s a privilege to serve you.

Jim Herbert
Founder and Executive Chairman

Mike Roffler
CEO and President"

This is anything but a conclusive bailout.

Deposits will be rushing for the exit.

Likely. It survives. But not certain.

This fun ride ain't over yet.

[Valuethinker]

This might be only time I am happy what I owe the bank is significantly more than what the bank owes me.

If they go under, you will still owe the bank what you owe them. The loan will be sold on to another party or held to maturity in the run-out vehicle which will be established (aka "the bad bank"). You will still be paying interest & principal amortisation.

OTOH your deposit is probably safe (if less than $250k), pretty safe (more than that). But not for certain 100% safe.

[Valuethinker]

I have a First Republic LOC that I had not drawn from yet, intending to use it to finance a renovation later this year. Out of the blue yesterday I got an email from the rep assigned to my account “checking in”.

Today I drew the full $100k not wanting to lose access to the rate. It’s sitting in my First Republic checking account now but I can only transfer out $25k a day so we’ll see what happens. I imagine once it’s in my checking account there it should be covered by FDIC if something should happen to First Republic.

Yes it will be covered. Almost 100% certain. FDIC would have to fail for this not to be the case (assuming the account is FDIC insured).

Your entirely rational and prudent behaviour is what causes a bank run. If there's a fire in a crowded theatre, it is worth getting out the door *first* even if you are fairly sure the fire will be suppressed. "Panic" is rational in this case.

Wait. Weren't you going to use this money to buy a Tesla?

[hachiko]

They got bailed out by the big banks. The stock price is currently around $27 after hours.

"To Our Valued Clients,

Today, First Republic announced we will receive uninsured deposits totaling $30 billion on March 16, 2023, from Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley, Bank of New York Mellon, PNC Bank, State Street, Truist and U.S. Bank.

This support from America’s largest banks reflects confidence in First Republic and our ability to continue to provide unwavering service to you — our clients and communities. You can read more by viewing our press release available on our website.

We continue to stay focused on the core tenets of First Republic: Operating a simple, straightforward business model, and providing exceptional service to our clients and communities. We are here and ready to meet your banking and wealth management needs.

Most importantly, we want to share our sincerest thanks with you for your continued and overwhelming support. We are grateful.

As always, it’s a privilege to serve you.

Jim Herbert
Founder and Executive Chairman

Mike Roffler
CEO and President"

This is anything but a conclusive bailout.

Deposits will be rushing for the exit.

Likely. It survives. But not certain.

This fun ride ain't over yet.

Do the banks that infused the cash lose to depositors if the bank goes under? If so, I'd think those banks would be heavily incentivized to continue infusing cash. Whether that can quell concerns and stop depositors from leaving is up in the air. At the end of the day, even with all the capital in the world available, they could survive a bank run, but end up with no depositor cash, so they'd go under anyway. I tend to think the depositor concern has decreased significantly, but any minor road bump in the banking world could push FRC over the edge.

I agree with you that this definitely isn't over yet. And the stock is likely to have another crazy day as investors try to figure out where it should be priced.

[ncbill]

I got greedy LoL. But I bought a relatively small amount. I don't think it's a huge risk.

I'm surprised the PLOC is still offered at 3.95%. That's still an excellent rate in the current environment.

I may buy again if it drops below 24, otherwise I will jealously watch as you ride it back up to 100. I think it will either go to 0 or back up to the 80 range. It doesn't make sense for it to be around 30.

Isn't the current target $5?

[hachiko]

I got greedy LoL. But I bought a relatively small amount. I don't think it's a huge risk.

I'm surprised the PLOC is still offered at 3.95%. That's still an excellent rate in the current environment.

I may buy again if it drops below 24, otherwise I will jealously watch as you ride it back up to 100. I think it will either go to 0 or back up to the 80 range. It doesn't make sense for it to be around 30.

Isn't the current target $5?

If you're shorting then yes. I don't follow the question.

[ncbill]

I got greedy LoL. But I bought a relatively small amount. I don't think it's a huge risk.

I'm surprised the PLOC is still offered at 3.95%. That's still an excellent rate in the current environment.

I may buy again if it drops below 24, otherwise I will jealously watch as you ride it back up to 100. I think it will either go to 0 or back up to the 80 range. It doesn't make sense for it to be around 30.

Isn't the current target $5?

If you're shorting then yes. I don't follow the question.

No, that a consensus target from an online article I read just this morning.

[hachiko]

I got greedy LoL. But I bought a relatively small amount. I don't think it's a huge risk.

I'm surprised the PLOC is still offered at 3.95%. That's still an excellent rate in the current environment.

I may buy again if it drops below 24, otherwise I will jealously watch as you ride it back up to 100. I think it will either go to 0 or back up to the 80 range. It doesn't make sense for it to be around 30.

Isn't the current target $5?

If you're shorting then yes. I don't follow the question.

No, that a consensus target from an online article I read just this morning.

Oh, I didn't understand you were talking about the price targets from analysts. I don't believe the consensus is $5. I think $5 may be the low. Either way, analyst price targets are basically nonsense. They're often not even internally consistent.

[mentos]

I got greedy LoL. But I bought a relatively small amount. I don't think it's a huge risk.

I'm surprised the PLOC is still offered at 3.95%. That's still an excellent rate in the current environment.

I may buy again if it drops below 24, otherwise I will jealously watch as you ride it back up to 100. I think it will either go to 0 or back up to the 80 range. It doesn't make sense for it to be around 30.

Isn't the current target $5?

Some articles give Bitcoin a price target of $2 million. Anyone can make up a number.

[erp]

Looks like they cut the dividend, but that doesn't save them much compared to the interest on their $30b loan.

[Journeyman510]

They got bailed out by the big banks. The stock price is currently around $27 after hours.

Hopefully you guys sold right after the good news came out and didn't get greedy!

Probably people are realizing that this 30b loan comes at a big cost (eg. goldman sachs had to pay Buffett 10% divs when they got help during the 2008 crisis). The other banks could be making 4-5% in safe treasuries, so asking for 10% again is not out of the question. That's going to hit FRC's profits.

It's not a 30b loan. It was 30b in deposits. There were no special terms.

[erp]

They got bailed out by the big banks. The stock price is currently around $27 after hours.

Hopefully you guys sold right after the good news came out and didn't get greedy!

Probably people are realizing that this 30b loan comes at a big cost (eg. goldman sachs had to pay Buffett 10% divs when they got help during the 2008 crisis). The other banks could be making 4-5% in safe treasuries, so asking for 10% again is not out of the question. That's going to hit FRC's profits.

It's not a 30b loan. It was 30b in deposits. There were no special terms.

If you are implying they did this for free, I think you are wrong. Call it whatever you want, but when I put money in a bank, I am essentially loaning them money (and they are paying me interest). If I put it in a savings account, I can take it back anytime. If I open a CD, there are more restrictions or penalties.

I haven't read yet what terms the 30b in deposits have. imo it is highly unlikely to be under 5% or that the banks can take back the money anytime they want to. The market is also voting on this unclarity. If the drop accelerates into the close, then there may be a big Sunday announcement of a takeover or buyout.

[nps]

This is anything but a conclusive bailout.

Deposits will be rushing for the exit.

Likely. It survives. But not certain.

This fun ride ain't over yet.

Do the banks that infused the cash lose to depositors if the bank goes under?

The banks that infused cash are depositors.

[mentos]

I got greedy LoL. But I bought a relatively small amount. I don't think it's a huge risk.

I'm surprised the PLOC is still offered at 3.95%. That's still an excellent rate in the current environment.

I may buy again if it drops below 24, otherwise I will jealously watch as you ride it back up to 100. I think it will either go to 0 or back up to the 80 range. It doesn't make sense for it to be around 30.

Looks like it's heading to 0

[Journeyman510]

They got bailed out by the big banks. The stock price is currently around $27 after hours.

Hopefully you guys sold right after the good news came out and didn't get greedy!

Probably people are realizing that this 30b loan comes at a big cost (eg. goldman sachs had to pay Buffett 10% divs when they got help during the 2008 crisis). The other banks could be making 4-5% in safe treasuries, so asking for 10% again is not out of the question. That's going to hit FRC's profits.

It's not a 30b loan. It was 30b in deposits. There were no special terms.

If you are implying they did this for free, I think you are wrong. Call it whatever you want, but when I put money in a bank, I am essentially loaning them money (and they are paying me interest). If I put it in a savings account, I can take it back anytime. If I open a CD, there are more restrictions or penalties.

I haven't read yet what terms the 30b in deposits have. imo it is highly unlikely to be under 5% or that the banks can take back the money anytime they want to. The market is also voting on this unclarity. If the drop accelerates into the close, then there may be a big Sunday announcement of a takeover or buyout.

Where did I say free? I didn't. I said there were no special terms. This is public knowledge. Google is your friend.

[erp]

Where did I say free? I didn't. I said there were no special terms. This is public knowledge. Google is your friend.

I think they did actually agree to a 120 day term. Not sure about the interest rate though, but maybe you are right and they didn't ask for anything like 10%. The big banks have received a lot of new deposits in the last week, so maybe they are willing to lend it back to FRC at just what they would earn anyway (eg the overnight rate).

If FRC holds the 30b and earns the overnight rate and just pays it to these 11 banks, then it doesn't cost FRC anything and the 11 banks don't lose anything either. But that's the ideal case.

If the withdrawals continue at FRC, then they will have to pay it out of the 30b. This avoids having to sell their underwater assets, but they still have to pay interest to the 11 banks (better than realizing a big loss tho). Furthermore, after 120 days the big banks may ask for their money back - then FRC will still have to sell their assets and realize losses. So this really just defers the problem 120 days (unless withdrawals stop or their assets recover by then).

[Cheez-It Guy]

Sorry, is this Bogleheads.org or r/wallstreetbets?

[Journeyman510]

Where did I say free? I didn't. I said there were no special terms. This is public knowledge. Google is your friend.

I think they did actually agree to a 120 day term. Not sure about the interest rate though, but maybe you are right and they didn't ask for anything like 10%. The big banks have received a lot of new deposits in the last week, so maybe they are willing to lend it back to FRC at just what they would earn anyway (eg the overnight rate).

If FRC holds the 30b and earns the overnight rate and just pays it to these 11 banks, then it doesn't cost FRC anything and the 11 banks don't lose anything either. But that's the ideal case.

If the withdrawals continue at FRC, then they will have to pay it out of the 30b. This avoids having to sell their underwater assets, but they still have to pay interest to the 11 banks (better than realizing a big loss tho). Furthermore, after 120 days the big banks may ask for their money back - then FRC will still have to sell their assets and realize losses. So this really just defers the problem 120 days (unless withdrawals stop or their assets recover by then).

The 120 days was just the agreement. There were no special terms. This wasn't a loan. They are being treated like any other depositor.

I'm happy to be proven wrong. Just post a link to back up your claims.

[erp]

Where did I say free? I didn't. I said there were no special terms. This is public knowledge. Google is your friend.

I think they did actually agree to a 120 day term. Not sure about the interest rate though, but maybe you are right and they didn't ask for anything like 10%. The big banks have received a lot of new deposits in the last week, so maybe they are willing to lend it back to FRC at just what they would earn anyway (eg the overnight rate).

If FRC holds the 30b and earns the overnight rate and just pays it to these 11 banks, then it doesn't cost FRC anything and the 11 banks don't lose anything either. But that's the ideal case.

If the withdrawals continue at FRC, then they will have to pay it out of the 30b. This avoids having to sell their underwater assets, but they still have to pay interest to the 11 banks (better than realizing a big loss tho). Furthermore, after 120 days the big banks may ask for their money back - then FRC will still have to sell their assets and realize losses. So this really just defers the problem 120 days (unless withdrawals stop or their assets recover by then).

The 120 days was just the agreement. There were no special terms. This wasn't a loan. They are being treated like any other depositor.

I'm happy to be proven wrong. Just post a link to back up your claims.

you seem to be fixated on the term "loan" like they took out a car loan with collateral or something. Let me just change that to "lend" if that will appease you. And to say the 120 days is just an "agreement" and not a "special term" is just weird. (I'm definitely voting you in charge of the deck chairs on the titanic)

You are intent on worrying about your definitions but ignoring the bigger picture. I was trying to understand how this 30b was supposed to work, but why it apparently hasn't. 120 days doesn't seem to be long enough to give depositors the confidence they need. (It'd be funny if the money continued to flow in a loop this way until the big banks eventually just owned all of FRC's deposits and essentially absorbed it)

I also don't see how regional banks can be as profitable going forward if they can't invest their deposits in longer term assets if they have to constantly worry about bank runs. I would have thought their customers have all seen "It's a Wonderful Life" multiple times by now.

[Journeyman510]

Where did I say free? I didn't. I said there were no special terms. This is public knowledge. Google is your friend.

I think they did actually agree to a 120 day term. Not sure about the interest rate though, but maybe you are right and they didn't ask for anything like 10%. The big banks have received a lot of new deposits in the last week, so maybe they are willing to lend it back to FRC at just what they would earn anyway (eg the overnight rate).

If FRC holds the 30b and earns the overnight rate and just pays it to these 11 banks, then it doesn't cost FRC anything and the 11 banks don't lose anything either. But that's the ideal case.

If the withdrawals continue at FRC, then they will have to pay it out of the 30b. This avoids having to sell their underwater assets, but they still have to pay interest to the 11 banks (better than realizing a big loss tho). Furthermore, after 120 days the big banks may ask for their money back - then FRC will still have to sell their assets and realize losses. So this really just defers the problem 120 days (unless withdrawals stop or their assets recover by then).

The 120 days was just the agreement. There were no special terms. This wasn't a loan. They are being treated like any other depositor.

I'm happy to be proven wrong. Just post a link to back up your claims.

you seem to be fixated on the term "loan" like they took out a car loan with collateral or something. Let me just change that to "lend" if that will appease you. And to say the 120 days is just an "agreement" and not a "special term" is just weird. (I'm definitely voting you in charge of the deck chairs on the titanic)

You are intent on worrying about your definitions but ignoring the bigger picture. I was trying to understand how this 30b was supposed to work, but why it apparently hasn't. 120 days doesn't seem to be long enough to give depositors the confidence they need. (It'd be funny if the money continued to flow in a loop this way until the big banks eventually just owned all of FRC's deposits and essentially absorbed it)

I also don't see how regional banks can be as profitable going forward if they can't invest their deposits in longer term assets if they have to constantly worry about bank runs. I would have thought their customers have all seen "It's a Wonderful Life" multiple times by now.

You made the claim that they received special terms like a 10% interest rate. That was not my understanding so I asked you to provide proof to your claim. You failed to do so because you can't.

Now you are trying to move the goal posts instead of just acknowledging you were engaging in baseless speculation.

Again, I'm happy to be proven wrong. Just post a link.

[erp]

You made the claim that they received special terms like a 10% interest rate. That was not my understanding so I asked you to provide proof to your claim. You failed to do so because you can't.

Now you are trying to move the goal posts instead of just acknowledging you were engaging in baseless speculation.

Again, I'm happy to be proven wrong. Just post a link.

Ha!  I guess yes and no.  I didn't make any claim that the rate was definitely 10%, but I did wonder if it "could be" 10% or "maybe" only the overnight rate.  Guesses, yes, but did not claim anything imo.

Anyway, you first seemed fixated on the word "loan" and when you lost that argument switched to gaslighting about claiming the 10%.  Please go harass people somewhere else if you have nothing useful to say here.

I'm still interested to see what happens with FRC as a proxy/leading indicator of some regionals I do own (looks like one of them just bought most of Signature in fact).  I also know people working at another hard hit regional, so I'm definitely hoping for a good outcome over a bad one.

[mentos]

Sorry, is this Bogleheads.org or r/wallstreetbets?

Where else can we discuss this information? I bet people on wsb have no idea this bank offered an unsecured PLOC. Plus we were just having some fun with play money, gotta live a little sometimes.

[Cheez-It Guy]

Do what you want.

[4th and Inches]

First Republic is in Trouble per the article below. Does anybody know of any other bank with PLOC terms like they have with Colorado availability?

https://www.cbsnews.com/news/first-repu ... king-fdic/

[Silk McCue]

First Republic is in Trouble per the article below. Does anybody know of any other bank with PLOC terms like they have with Colorado availability?

https://www.cbsnews.com/news/first-repu ... king-fdic/

No.

Cheers

[mentos]

I'm thinking of moving 16.5k from the checking account (keep 3.5k to avoid fees) to Ally 4.75% no penalty CD, then moving it back before my anniversary date assuming this bank is still alive by then.

According to the terms, the PLOC rate should not go up. Can anyone who has done this confirm the rate does not go up?

[Startled Cat]

I'm thinking of moving 16.5k from the checking account (keep 3.5k to avoid fees) to Ally 4.75% no penalty CD, then moving it back before my anniversary date assuming this bank is still alive by then.

According to the terms, the PLOC rate should not go up. Can anyone who has done this confirm the rate does not go up?

It does not go up if you adhere to the terms in this way.

[mentos]

I'm thinking of moving 16.5k from the checking account (keep 3.5k to avoid fees) to Ally 4.75% no penalty CD, then moving it back before my anniversary date assuming this bank is still alive by then.

According to the terms, the PLOC rate should not go up. Can anyone who has done this confirm the rate does not go up?

It does not go up if you adhere to the terms in this way.

Thanks. You have done it?

They sent another email.

"To Our Valued Clients,

The events of the past two weeks have been unprecedented, and we want to take a moment to provide an update.

Our commitment to client service is unchanged, and we remain well-positioned to continue to manage deposit activity. Today, as every day, we are processing transactions, opening accounts, funding loans, answering questions, and serving clients’ overall banking and wealth management needs.

We are grateful for your ongoing advocacy for the value of our relationship-based, exceptional service. We keep hearing from you, and the overwhelming theme is this: “We love our bank.” We want to extend our sincerest thanks for your continued and unwavering support.

If you have any questions, please don’t hesitate to reach out to your banker or wealth manager.

As always, it’s a privilege to serve you.

Jim Herbert
Founder and Executive Chairman

Mike Roffler
CEO and President"

[Startled Cat]

Thanks. You have done it?

Yes

[hachiko]

They're considering selling some of their loans; wonder if these would be in there.

[mentos]

They're considering selling some of their loans; wonder if these would be in there.

Would the loan terms change if sold?

[hachiko]

They're considering selling some of their loans; wonder if these would be in there.

Would the loan terms change if sold?

If there's any provision in the loan agreement which would allow for FRC to stop additional draws, that would probably be exercised by the buyer given the current interest rates. They can't change the terms of the loan, but if there are terms which would allow them to issue a demand for full payment, that could be a concern that the buyer would exercise that option as well. Even without those occurring, there is risk that the servicer changes, which could be remarkably annoying for FRC customers (which makes me think that FRC would likely still want to continue to service the loans).