Banking your 1031 exchange in uncertain markets

There has been a great deal of turmoil in the financial markets and banking industry as several large and well known financial institutions have stumbled. With so much unease in the marketplace, and wondering who will be next in the news, I wanted to take a moment to talk about 1031 escrowed funds. During the exchange, the Qualified Intermediary you select has control of the funds. While they make accept your "input" into where the deposit is placed, it is ultimately up to them to determine where to place the money. It is important to know where the money is being banked. I wanted to spend a bit of time to discuss what is important and how 1031 Corporation - as a subsidiary of FirstBank deposits the funds.

Each account is segregated from all other exchange accounts. That means, the exchange we facilitate for you will have an account number that can be viewed 24/7 on FirstBank's website. You know exactly where the money is and when you awake to the sound of CNN talking about turmoil in the Asian stock exchange causing fears at 2 a.m., you can get online and view your account. Segregation is very important if there are issues with your Qualified Intermediary.

But what if there is an issue with the bank that your QI places the funds? It is worth checking to find out the stability, strength and customer service the bank provides - particularly in times of uncertainty. 1031 Corporation, as a subsidiary of FirstBank, deposits all client escrow accounts at FirstBank.

Here are some highlights of this respected institution.

Solid History FirstBank was founded in Lakewood, Colorado in 1963. It is employee owned with a long term focus. Over 100 officers and nearly 600 employees have more than 10 years of service with FirstBank.

Strong Financial Position FirstBank is viewed as "well capitalized" under regulatory guidelines. With assets totaling $9.2 billion and deposits of $7.8 billion, FirstBank continues to experience solid growth.

Record EarningsWhile others are reporting large losses, FistBank's net income was up to over $67 million thru the first half of 2008. This represents a 41% increase over the comparable period last year.

Unique FDIC Insurance Options While most banks can only insure up to $250,000 of your exchange funds, FirstBank's 26 separate bank charters make it possible to be insured for up to $6.5 million. No longer is there a need to "spread the risk" around by opening multiple accounts at various financial institutions.

No Subprime Involvement FirstBank does not originate, hold or purchase subprime mortgage loans or security. Continued focus on credit quality enables them to succeed in all ecomnomic cycles.

Open For Business With 126 branch location in three states (Colorado, Arizona and California) FirstBank serves more than 60,000 customers. Along with internet banking and 24 hour customer service, you can always speak to someone about your exchange account.

You should speak with your Qualified Intermediary and determine where your exchange funds are held. It is extremely important in these times of uncertainty!