1. FDIC-Insured Deposits

2. Agenda
Investment opportunity
 Full faith and credit US government guarantee
 Yields significantly higher than Treasuries
 Market dynamics that have precluded institutional arbitrage
Structural platform
 Direct and wholesale sourcing
 Automated screening and evaluation
 Crossing
Fiduciary agent
 Regulatory advantage over product model
 Comparison to CDARS
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3. FDIC is backed by full faith and credit federal guarantee
 Guarantees each depositor up to $250,000 of principal and accrued interest per institution
– Guarantee applies across depositor types: individuals and entities, US citizens and foreign nationals
– Multiple accounts with same registered owner at same institution are aggregated for purpose of insurance limit. Entities
formed for the purpose of expanding the insurance of a common owner are likewise aggregated.
– Institution is determined by a unique FDIC identifier; different bank branches are not typically considered separate
institutions, but reference to FDIC number is required to confirm
 Full faith and credit backing affirmed in statute and case law
– Competitive Equality Banking Act of 1987: “it is the sense of the Congress that it should reaffirm that deposits up to the
statutorily prescribed amount in federally insured depositor institutions are backed by the full faith and credit of the United
States.”1
– 1988 United States District Court for the District of Columbia ruling (Massachusetts Credit Union Share Ins. Corp. v.
NCUA): “The Court concludes that it was the clear and unambiguous intention of the Congress to guarantee the
resources of federal depository institutions with the full faith and credit of the United States. Having explicitly done so, it
need not either authorize or appropriate funds for this purpose until it deems it necessary.” 2
– Backing most recently affirmed in Federal Deposit Insurance Reform Conforming Amendments Act of 2005, requiring all
institutions to display signage stating that, “insured deposits are backed by the full faith and credit of the United States
Government.” 3
 FDIC insurance is independent of whether an instrument was issued in a denomination below FDIC Insurance limits
(i.e., jumbo CDs subsequently broken up and sold enjoy full protection)
– FDIC insurance assessments are paid on all deposits, regardless of account or instrument size
– Insurance applies so long as current ownership is within stated limits
– Accounts custodied by intermediary agents are not aggregated for FDIC insurance purposes
– “Funds owned by a principal or principals and deposited into one or more deposit accounts in the name of an agent,
custodian or nominee, shall be insured to the same extent as if deposited in the name of the principal(s).” 4
1 Public Law 100-86, Title IX
2 693 F.Supp. 1225 (D.D.C. 1988)
3 Public Law 109-173
4 12 C.F.R. § 330.7 2

4. Comparison of non-Treasury instruments with explicit guarantee
Explicitly
FDIC-insured FDIC-insured
guaranteed
bank notes deposits
agencies
Example issue PEFCO Citibank N.A. Bridgeview Bank
5/15/2012 5/7/2012 5/15/2012
Incremental yield
vs. Treasuries1 ~11 ~12 60+
basis points
Limits on arbitrage
Effort Moderate Low High
 Sourcing  Sourcing
 Small-lot purchase
 Insurance tracking
Liquidity High High Low
1 Indicative yields as of December 31, 2010
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5. Hurdles to institutional investment in FDIC-insured deposits
 Advantage eroded by intermediaries:
Yield – Wholesale and retail distribution costs (new issue)
– Inter-dealer and retail markups (secondary market term deposits)
 Per entity/per bank insurance limit of $250,000 (principal + accrued interest)
Capacity
 Challenge of sourcing from wide array of issuing banks
 Instrument-by-instrument analysis of economics
 Screening for:
Effort
– Duplicative FDIC certificate numbers
– Client-specified parameters (e.g., term, excluded banks)
 Human error in manual implementation
Risk of error
 Unlike names associated with same FDIC certificate
Liquidity  Bid-ask reflects small size of each holding (term deposits)
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6. Structural sourcing avoids markups embedded in retail yield
Illustrative supply chain for 12-month new-issue term deposit, 1.00% coupon
Structural sourcing
Price Wholesale Retail
Issuing bank Originator Purchaser
99.65 99.75 distributors 99.83 distributors 100.00
Yield 1.35% 1.25% 1.17% 1.00%
 Negotiate terms  Distribute to brokers,  Sell through full
 Register CUSIP, other sales channels service and
DTC eligibility discount brokers
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7. Structural manages two types of deposit instruments
Demand Term
Yield
Current yield 1.05% - 0.25% Varies by instrument term
Term Daily reset Fixed for instrument term
Liquidity
Redemption Every Thursday 1 None prior to maturity
Tradability - T+3 settlement
Instrument form MMDA deposit DTC eligible security
Custody Huntington Bank Client-specified custodian
Capacity [In process] >$100 million
- Hinges on client parameters
1 Structural only guarantees clients’ ability to redeem each Thursday. In practice, clients can often redeem on other days as well. If Thursday of a given week is not a
business day, guaranteed redemption is on Wednesday.
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8. Structural’s systematized platform for portfolio construction
New Secondary
issues market
Crossing  Source deposits from multiple channels, avoiding fees embedded by intermediaries
– New issues sourced directly from banks and originators
Crossing – Secondary market inventory sourced from proprietary network of wholesale
dealers and wirehouses
Sourcing
– Crossing of client sales to benefit both buyer and seller
 Ensure entity exposure by FDIC certificate number is within applicable limits
 Apply client-specific restrictions, including:
Screening – Issuer
– Instrument term
 MMDA: optimize yield by evaluating daily all available rates
Execution
 Term: capture best values through automated parsing and evaluation
 Reinvest (roll) according to client parameters
Liquidity  Provide liquidity as required
management – Daily reallocation (crossing) and weekly redemption of MMDA deposits
– Crossing or sale of term deposits at best wholesale bid
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9. Pricing
Structural charges all clients the same fees:
Deposits1 First $10 million 0.250%
$10-100 million 0.200
$100-500 million 0.175
Beyond $500 million 0.150
Treasuries 0.050%
Money market funds No fee
Breakpoints are applied to aggregate of all accounts in a relationship
Structural does not accept commissions, soft dollars or other inducements
– Client fees are our sole source of revenue
1 Structural waives its fee, basis point for basis point, to the extent that, at time of purchase, yield to maturity on a given instrument is less than 30bps above that of
comparable term Treasuries.
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10. Agency role enables capture of highest yields across banks
Illustrative deposit yields offered by banks
2.00%
 Banks differ widely in the yields they will
1.50%
pay for deposits
Agency
yield
Product vendor capture  Structural, as fiduciary agent, seeks out
yield received the highest yields across all issuer banks,
1.00% Network and both directly from banks and in the
distribution fees secondary market
Product net yield
Bank  By law, product-based alternatives cannot
0.50% willingness pay higher yield than that offered by
to pay
lowest-paying participant bank.
0.00%
Maximum product
capacity Market-clearing
yield at full
product capacity
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11. Comparison: Structural and CDARS
Structural CDARS
Yield1
110-125 65
Basis points
Approach  Fiduciary management of short-term  Bank network for bulk purchase of CDs
instruments  Pays network clearing rate, less network and
 Consider all market yields and distribution fees
purchase highest offered
Tailoring  Term structure tailored to client  Only available in specified maturities
specifications
Cost of early Crossing at midpoint of wholesale Term Penalty
liquidity bid/ask spread2 4-13 weeks 100% of interest to term
If crossing is not available: ≥26 weeks 50% of interest to term
Sale at best wholesale bid
Compliance  Regular valuations  Valuations not provided
 Tradable: CUSIPs, DTC-eligible  Non-tradable
 Exposure report by FDIC certificate  FDIC certificate numbers not provided
1 Indicative yields as of December 31, 2010 for two-year term. Yield range shown for Structural is net of fee. CDARS rates are illustrative “one-way” rates; individual
participant banks may offer different yields.
2 Ability to cross hinges on the needs of other clients and is not guaranteed.
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12. About Structural
Overview Structural was founded in 2005 by leaders in financial markets and technology. Our mission is to build
the next generation of passive investment management. We do not attempt to “beat the market”
through security selection or market timing. Rather, we use separate accounts, managed to client-
specified parameters, to achieve benefits not available through commingled funds. We use technology
to ensure that the large number of routine tasks required to obtain these benefits are executed
flawlessly and at low cost.
Principals Joel Hornstein Ed Nicoll
Founder, Chief Investment Officer Founder, Chairman Emeritus
Aaron Kessler Matthew Pollock David Slusarski
Client Service Marketing & Business Development Trading & Operations
Clients  Corporations – We serve publicly-traded and privately-held companies. We offer the convenience of FASB-
compliant accounting in addition to the higher yields and safety provided by FDIC-insured CDs.
 Family offices – We manage cash to meet commitments including capital calls, pledges, and other planned
outflows.
 Financial advisors – We partner with financial advisors to provide a cash management solution that is
differentiated, convenient and provides real safety and yield benefits to their clients.
 Financial services firms – We offer cash management for a range of liability-driven financial services
applications (e.g., escrow accounts, reinsurance commitments, and collateral management).
 Institutions – We provide cash and fixed income management to foundations, endowments, and other tax-
exempt institutions.
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13. Appendix

14. CD spreads to Treasuries: 1964-2010
6-month secondary CDs
Quarterly average Quarterly average
spread to Treasuries 6-month Treasury yield
3.00% 15.00%
2.50%
2.00% 10.00%
1.50%
1.00% 5.00%
0.50%
0.00% 0.00%
1964 1969 1974 1979 1984 1989 1994 1999 2004 2009
Source: Federal Reserve Statistical Release H.15: Selected Interest Rates. Chart reflects data from June 12, 1964 (time series inception) through December 31, 2010.
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15. Secure web interface provides convenience and control
 Through the secure online
interface, clients can:
– Specify eligible instruments
– Exclude individual banks
– Establish liabilities and set
liquidity preferences
– Schedule wires
– View daily portfolio holdings
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16. Account-specific parameters provide granular control
Permitted issuers Minimum yield
 Minimum rating (premium to par)  Spread to Treasuries (pre-tax), by term
 Minimum rating (discount to par)  Spread to Treasuries (after-tax), by term
 Excluded names  Penalties on premium to par securities
– By rating
– By term
Size Term structure
 Minimum per issue  Date-specific requirements
 Maximum by issuer  Rolling cash reserves (e.g., <3 months)
 Ladder
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17. Crossing reduces cost of term deposit liquidity
 Midpoint of bid-ask, if meets
criteria for one or more accounts
Purchasing
clients  Else, highest price above highest
wholesale bid at which suitable to
one account
Selling client Matching
engine
 ~15bp round-trip transaction
Competitive cost on instruments <9 months
wholesale
bids
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18. Mechanics of MMDA deposit custody
Custodian
Ownership records  Structural sources and
Bank A – MMDA negotiates money market
Client 1 - $249,000 deposit accounts (MMDA) with
Client 2 - $249,000 Bank A - MMDA each bank
Client 3 - $249,000 $19.5 million  Bank records deposit owner as
Structural
... “Custodial entity, for benefit of
client
Structural clients”
Bank B - MMDA
Client 1 - $249,000  Custodian maintains records of
Client 2 - $249,000 Bank B - MMDA ownership for client interest in
Client 3 - $249,000 $7.0 million each deposit
...
 Ownership allocations may be
Bank C - MMDA adjusted daily, if deposit
Client 1 - $249,000 inflows match or exceed
Client 2 - $249,000 Bank C - MMDA outflows
Client 3 - $249,000 $14.3 million  Deposits may be redeemed
... any bank business day, subject
to Federal Reserve limit of 6
Bank D - MMDA
withdrawals per month per
Client 1 - $249,000
bank
Client 2 - $249,000 Bank D - MMDA
Client 3 - $249,000 $5.2 million
...
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19. Tax posture of bank deposits owned by foreign subsidiaries
 Purchase of U.S. bank deposits is not deemed repatriation of dividends
– Investment by foreign subsidiaries in “United States property” may give rise to
“deemed dividends.”1
– U.S. bank deposits (and U.S. Treasury obligations) are explicitly excluded from
definition of “United States property.”2
 Interest paid on U.S. bank deposits to foreign corporations is not subject to U.S. tax
– Interest paid on registered obligations owned by a foreign corporation is considered
“portfolio interest.”3
– Portfolio interest is explicitly exempt from U.S. taxation:
“In the case of any portfolio interest received by a foreign corporation from
sources within the United States, no tax shall be imposed . . .”4
1 Internal Revenue Code § 965
2 Internal Revenue Code § 956(c)(2)
3 Internal Revenue Code § 881(c)(2)
4 Internal Revenue Code § 881(c)(1) 18

20. Process to retrieve funds in the event of bank failure
Acquiring bank does not assume liabilities
 Acquiring bank has the option to call the CD at par
 Requires payment of principal and accrued interest by
the earlier of maturity date and 60 days (although
typically much faster)
Bank taken over by another
institution (typical)
– 95% of banks and 99.4%
Acquirer assumes liability as its own
of total deposits among
banks where FDIC has  Continues paying interest and returns principal at term
intervened since 19791  Acquiring bank can reset interest rate
– Holder has the option to put the CD to the acquiring
Bank fails bank if rate is reset
 For the term of any CD, failed and acquiring banks are
considered separate institutions for the purposes of
calculating deposit insurance limits
Bank placed in receivership Need to file claim with FDIC
– 5% of banks and 0.6% of  Principal and accrued interest through day bank is placed
total deposits among into receivership are paid (up to FDIC limits)
banks where FDIC has  Structural monitors all bank failures and immediately
intervened since 1979 contacts custodian to confirm form filing
 FDIC stated intent to make payments within two business
days of bank closing2, as a practical matter brokered
deposits held through a fiduciary take slightly longer
– Risk: opportunity cost of lost interest accrued after
date bank enters receivership
 Clients can borrow against CD if cash is needed earlier
1 FDIC: Failures & Assistance Transactions: http://www2.fdic.gov/hsob/
2 FDIC: When a Bank Fails: http://www.fdic.gov/consumers/banking/facts/payment.html
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