Complete the enclosed application and return with your check payable to FMSI

ESTABLISHED ♦ PROFITABLE ♦ GROWING

1. BACKGROUND:

Financial Management Services, Inc. (“FMSI”) is a leading provider of financial and business services to wholesale distributors and their customers.  Since 1973, FMSI has assisted distributors with products such as private label credit cards, consumer job financing, installment loans, credit management services, investment and treasury management tools and distributor marketing strategies designed to enhance cash flow, increase sales and maximize bottom-line profits.  With a history of strong financial performance and controllership, FMSI continues to provide innovative and diverse business solutions for its Member-Distributors.

FMSI has a diversified loan portfolio in the form of secured installment, floor plan, and revolving notes and unsecured revolving charge accounts with terms ranging from three months to thirty-six months.  All revolving accounts have interest rates that adjust monthly with prime with a floor of 21.5%.  Installment loans may have a fixed rate if the maturity is less than one year.  Any installment loans with maturities greater than one year are adjustable.  This price-setting philosophy reduces interest rate exposure for FMSI and provides an average annual net margin of at least 15%.

FMSI maintains reserves on the loan portfolio far in excess of charge off experience and also requires Member guaranties on many of the loan products.  By partnering with the Member, FMSI is able to assist the Member and the customer by providing financing options with limited risk to the portfolio.  Typically, at least 60% of the loan portfolio is recourse meaning that it has an additional guaranty provided by the distributor which provides another layer of protection to the already heavily reserved portfolio.  FMSI performs a financial analysis on all Members at least annually to assess all recourse lending limits and maintain proper reserves.

FMSI works solely within distribution markets and typically within the building trades.  FMSI is a service provider for many trade groups and buying groups including Embassy Group Ltd., WIT, Affiliated Distributors, HARDI, ASA and many more.

FMSI utilizes a variety of funding sources to maintain liquidity.  While day-to-day operations provide a constant cash flow, FMSI also relies on its strong working relationship with Associated Banc-Corp for additional working capital and treasury management.  In addition, FMSI uses alternative sources of funding provided by Investment Notes, Commercial Paper, Member Deposits and Subordinated Debt.

Investors in the variety of FMSI funding sources include individual investors, businesses, Member-distributors, Trusts, and IRA’s.

5. INVESTMENT OPTIONS:

FMSI provides a variety of investment maturities to suit all investment needs.  All investment options provide the investor with online access to their account information.

• ON-DEMAND:

The FMSI On-Demand Account provides liquidity and a higher return for investors.  Currently, the On-Demand Note provides a 4% return and allows the investor unlimited deposits and withdrawals via ach access online.  Monthly statements are issued and may also be viewed online.  If the ability to withdraw funds at any time is of maximum importance, then the FMSI On-Demand Account is the right choice.


• COMMERCIAL PAPER PROGRAM:

FMSI offers businesses and individual investors a unique investment program that provides predictable and higher-than-market returns.  The minimum investment amount is $100,000 and the range of maturities is from 1 to 270 days.  The interest rate is locked on the investment date and is calculated at the Prime Rate plus a margin based on the maturity date.  Monthly statements are provided and may be viewed online.


• COMMERCIAL PAPER RATES:

Prime Rate plus:

Term	Margin	Prime at 3/31/09	FMSI Rate at 3/31/09
1-30 days	100 b.p.	3.250%	4.250%
31-60 days	125 b.p.	3.250%	4.500%
61-90 days	150 b.p.	3.250%	4.750%



• INVESTMENT NOTE PROGRAM:

The FMSI Investor Note program provides a stable and reliable investment opportunity with above-market interest rates for businesses and individual investors.  Daily compounding of interest; interest may be reinvested or paid quarterly; interest rate is fixed for the term of the investment; penalties for early withdrawal.  Quarterly statements are provided and may be viewed online. Minimum investment is $1,000.
               

• INVESTMENT NOTE PROGRAM RATE:

6. FMSI FINANCIAL STABILITY:

While FMSI investment options are neither insured nor guaranteed, FMSI has been profitable, stable and secure for over 36 years.  FMSI is audited annually by RSM McGladrey, the fifth largest accounting, tax and business consulting firm in the world.  FMSI has a geographically diversified portfolio with multiple layers of protection guarantying repayment.

7. KEY FINANCIAL STATISTICS:

-back to top-