A Denver consulting firm is targeting community and smaller regional banks with the market-tracking CD program it started offering last week.

Risk Analytics said its Index Powered CD program will enable banks to offer certificates of deposit that track the Standard & Poor's 500 index. The company is targeting banks with assets of up to $10 billion, said Robert Colvin, its president.

The program could slow the drain of deposits from such banks by allowing them to provide what amounts to an investment product with no risk, Mr. Colvin said.

Large banks have offered such products to depositors in recent years, but smaller banks cannot afford the risk of offering CDs that offer such potentially high rates of return, he said.

Under Risk Analytics' program, participating banks would manage the risk by purchasing hedging positions from the Federal Home Loan banks, Mr. Colvin said. His company would help them do so.

The certificates offer a way to raise funds at a lower cost, said Edward Williams, vice president and controller at Peoples State Bank in East Berlin, Pa., who plans to introduce the product in October.

Through this system, borrowing for 10 years will cost less than borrowing the same amount for a single year through a traditional certificate of deposit, Mr. Williams said.

The investors' principal is guaranteed by the Federal Deposit Insurance Corp. to the first $100,000, and there are no fees, making the deposits cheaper and less risky to the consumer than mutual funds, Mr. Colvin said. Depositors must hold the CD for 10 years.

While demand for loans remains high, deposits at most banks are growing at only a modest clip, largely because of the stock market's appeal, said Thomas Bailey, president of Brentwood Bank in Bethel Park, Pa. "Banks are just too plain and vanilla" to attract depositors' funds, he said.

Index investing is widely touted as being among the best investing strategies on the market, so the product will likely be attractive to depositors, Mr. Colvin said. The CD will also benefit small communities by keeping deposits in community banks, thereby making consumer loans less expensive, he said.

The CD has been rolled out by a handful of banks in the Federal Home Loan Bank of Pittsburgh district, which covers Pennsylvania, West Virginia, and Delaware. Several banks are already offering it, and 75 to 100 others are considering it, Mr. Colvin said.

Risk Analytics hopes to offer the program in other bank districts within the next year, he said.

Risk Analytics also struck a deal with Standard & Poor's to sublicense the "S&P 500" name to participating banks, Mr. Colvin said. Otherwise, many community banks would be unable to offer the product because licensing the Standard & Poor's name would be prohibitively expensive.

The firm plans to run radio and print ads regionally as new banks pick up on the product, Mr. Colvin said. Ads are already scheduled for about 90 radio stations, he said.

The safety and potential returns offered by the product give it the potential to become widely popular, Mr. Bailey, the Pennsylvania bank president, said. "A piece of it could be in almost everybody's portfolio".

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