CENTRIX Portfolio Management Program

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CENTRIX Portfolio Management Program A Financial
Strategy for Credit Unions

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Liquidity Control Process
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CENTRIX Solution
PMP Process Liquidity Control Process
(LCP) Trigger CU needs liquidity Stay active
in PMP Desire to increase returns Available
through the sale of all Centrix originated
loans Participation Credit union maintains
control over the dollar amount in the
PMP. Credit union continues to profit from
ongoing strip of income. Centrix continues to
provide servicing and reporting for both the
seller and buyer.
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CENTRIX Solution

• PMP Process Liquidity Control Process (LCP)
• CENTRIX puts together a package of loans
  originated by one of its participating credit
  unions and arranges the sale to a buyer.
• SELLER retains 10 of the portfolio. As CENTRIX
  collects the payments from the borrowers, the
  appropriate amounts of principal and interest are
  passed through to both parties.
• SELLER regains liquidity and retains an ongoing
  strip of income for the lives of the loans sold.
• BUYER strengthens their loan portfolio with an
  instrument that typically produces yield spreads
  of 250 to 400 basis points over an alternative
  security
• Results depend upon the nature of the agreement.

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CENTRIX Solution

• PMP Process Liquidity Control Process (LCP)
• SELLER / BUYER experiences the following
• Regulatory-friendly approach to raise funds for
  loan demand
• Simple application and quick implementation
• Profitable result due to large spread retained by
  CENTRIX PMP loan originator
• Safe investment due to stability of underlying
  capital and quality of the securitization
  experiences the following

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CENTRIX Solution

• PMP Process Liquidity Control Process (LCP)
• Centrix PMP
• Standardized Underwriting
• Insured
• Servicing Retained
• 90 Purchase
• Non-Recourse

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CENTRIX Solution

• PMP Liquidity Control Process (LCP) Purchase
  Options
• Par
• Principal Balance Only/ Premium retained by
  seller
• Pass through is approx 5 above Two Year Treasury
• Default Protection proceeds passed through
• Void of prepayment risk
• Par Plus
• Principal and premium balance is sold
• Weighted Average Pass through is approx 18
• Exposed to prepayment risk

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CENTRIX Solution
PMP Liquidity Control Process (LCP) Yield
Comparison
Actual returns will vary based on the individual
characteristics of each credit union portfolio
and are stated after loss experience and before
fees.
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Summary

• Summary
• Low risk
• Insured upfront for safety
• No additional overhead
• No implementation fees
• Minimal impact on staff
• Process managed by industry experts
• Centrix manages the dealer relationship
• Built in liquidity strategy

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Summary

• Next Steps
• It is CENTRIX policy that all credit unions
  complete a due diligence program at our Denver
  headquarters
• Designed to familiarize credit unions with all
  aspects of our business and program
• Examination of systems, processes and portfolio
  performance
• Presented by our executive team
• CENTRIX will provide requested information