MARTINSBURG - Board of Treasury Investment officials and state banks both benefited during a $25 million, on-line certificate of deposit auction Tuesday.
The auction, observed by three contingents of Berkeley County high school students and one House of Delegates member, earned the state $41,000 more than if the state had simply purchased treasury notes at Tuesday's going rate of 4.93 percent.
Del. John Overington, R-Berkeley and Berkeley County Schools Superintendent Manny Arvon watched bids come in on a computer screen projector, along with students from Hedgesville, Martinsburg and Musselman high schools. Mountain State University's Martinsburg campus provided the viewing facility.
"We are very proud and pleased to demonstrate some of the services we provide to the Eastern Panhandle, an area of the state that sometimes feels 'out of the loop' when it comes to state government," State Treasurer John Perdue said. "Interaction with the students was most enjoyable and we had a great auction. We couldn't have asked for more."
Arvon said the day proved a wonderful opportunity for him and the students. "We hear and read about what government does sometimes, but it's wonderful to actually get to sit and watch government at work."
Both Freedom Bank in Belington, Barbour County, and BB&T of Charleston successfully bid on $5 million Tuesday. Through the first five BTI auctions, BB&T has bid successfully on $25 million. Belington, perhaps representing the small bank sector, has taken home $21 million.
The BTI is a five-member board that manages $2.8 billion in state operating funds, all invested in a safe, short-term fashion. Treasurer Perdue serves as chairman.
After five auctions - three last year and two so far this year -- $128.8 million has been awarded to banks with a state presence, according to highest interest rates bid in particular auctions.
Tuesday's auction stood out for total bids and its additional earnings over the going Treasury note rate. Banks bid a total of $66 million, far and above the $25 million available. As for additional earnings, the $41,000 represents nearly half the $84,000 cumulative total. Both were auction bests.
Eastern Panhandle banks have been aggressive throughout the first five auctions. Jefferson Security Bank of Shepherdstown has bid successfully for $10 million.
"On-line auctions are a wonderful way to make use of today's technology," said BTI executive director Glenda Probst, "and offer every bank in competition an even playing field. We can't wait to hold another and put more lending capital into local hands."
Banks that finish "in the money" use state funds to make loans, while in turn paying the state the promised interest rate.
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