System and method for analyzing and originating a contractual option arrangement for a bank deposits liabilities base

• US 6,363,360 B1
• Filed: 09/27/1999
• Issued: 03/26/2002
• Est. Priority Date: 09/27/1999
• Status: Expired due to Term

• Current Assignee: FNBC of Lagrange Incorporated
• Original Assignee: FNBC of Lagrange Incorporated
• Inventors: Madden, Martin P.
• Primary Examiner(s): Millin, Vincent
• Assistant Examiner(s): AKERS, GEOFFREY R
• Application Number:
  US09/406,214
• Time in Patent Office: 911 Days
• Field of Search: 705/37, 705/36, 705/26, 345/237
• US Class Current: 705/37
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange

Abstract

A system and method for analyzing and originating a contractual option arrangement for transacting a deposit liabilities base of a financial institution at predetermined prices and time periods.

Claims

1. A method using a computer system for analyzing the value of a deposit liabilities base associated with a financial institution and for providing a deposit liability option contract through which the financial institution obtains an option to sell the deposit liabilities base to a third party at a predetermined price, comprising the steps of:

analyzing external market data, and internal data pertaining to the financial institution, and inputting the external market data and the internal data to the computer system;

calculating an estimated market value or a range of such values for the deposit liabilities base;

generating a minimum potential bid price or a range of such prices for the deposit liabilities base; and

incorporating the generated bid price or the range of such prices into the deposit liability option contract, wherein the contractual documents specify the price or range of prices which the third party will pay during a predetermined term for the deposit liabilities;

whereby the value of the deposit liabilities base may be quantified without the requirement of divesting, the deposit liabilities base from the financial institution.

2. The method of claim 1, further comprising the step of the financial institution exercising its right as specified in the contractual documents to sell the deposit liabilities base to the third party.

3. The method of claim 1, wherein the external market data comprises data relating to deposit pricing practices.

4. The method of claim 1, wherein the internal data relates to the deposit liabilities base of the selling financial institution.

5. The method of claim 1, wherein the deposit liabilities base comprises either or both of non-interest bearing and interest bearing deposit accounts.

6. The method of claim 1, wherein the method of analyzing the value of the deposit liabilities base of the financial institution and originating the contractual documents is incorporated into a purchase accounting acquisition of a selling financial institution.

7. The method of claim 1, wherein the method includes the step of calculating the deposit liabilities base by subtracting an estimated attrition of the deposit liabilities base from an estimated increase of the deposit liabilities base based on newly attracted funds.

8. A method using a computer system for analyzing the value of a deposit liabilities base associated with a financial institution seeking to obtain the right to substitute other deposit funds not originally included in the subject deposit liabilities base, while also seeking to purchase the right to sell a deposit liabilities base, and for providing a deposit liability option contract through which the financial institution obtains an option to sell the deposit liabilities base to a third party at a predetermined price, comprising the steps of:

analyzing external market data, and internal data pertaining to the financial institution, and inputting the external market data and the internal data to the computer system;

calculating an estimated market value or a range of such values for the deposit liabilities base;

generating a minimum potential bid price or a range of such prices for the deposit liabilities base; and

incorporating the generated bid price or the range of such prices into the deposit liability option contract, wherein the contractual documents specify the price or range of prices which will be paid during a predetermined term for the deposit liabilities;

whereby the value of the deposit liabilities base may be quantified without the requirement of divesting the deposit liabilities base from the financial institution.