NEW CASTLE — Farmers National Bank of Emlenton was awarded a three-year banking agreement with Butler County Community College Wednesday at BC3's board of trustees meeting. The agreement may be renewed twice, for a period of two years each.

Farmers was the only bank that offered a floor rate of 1.15 percent interest on every dollar the college deposits, Jim Hrabosky, BC3 vice president for administration and finance, said.

BC3 will deposit about $5 million in the account, Hrabosky said, for a net gain of $52,000 per year.

In addition, Farmers will pledge $1.02 in U.S. Treasury bills for every $1 in deposits to satisfy a banking regulation to secure BC3's deposits in excess of FDIC insurance limits. The bank has $60 million in U.S. treasuries available to pledge as collateral.

One area of concern is Farmers' electronic security, Hrabosky said. The bank does not have a "token" security system, which uses a hand-held device to change a user's online banking code every 30 seconds.

"We cannot move the money (into Farmers bank) without a token system," Hrabosky said. He was told the bank would install the system before BC3's funds are deposited.

BC3 issued a request for proposals for banking services after it learned that Northwest Savings would buy NexTier of Butler, where the college has its account now.

The request for proposals was sent to 10 banks and nine replied. The two other finalists were Northwest Savings Bank of Warren and Dollar Bank of Pittsburgh.

Farmers National Bank is smaller than the other finalists, with $500 million in deposits. Dollar Bank has $5 billion in deposits and Northwest Savings has $8 billion.

In addition to its account at NexTier, BC3 has holdings at Citizens Bank of Pennsylvania, headquartered in Pittsburgh and Philadelphia, and First National Bank in Hermitage.