How a Community Bank Uses ICS to Manage Deposit Inflows and Reduce Collateralization

Serving a close-knit community can be a challenge for any community bank. Add in managing funds for a large number of public unit deposit (PUD) entities, many of which have significant seasonal in- and out-flows, and that challenge multiplies.

Casey County Bank, headquartered in Liberty, Kentucky, is a longstanding pillar of its community. With over $425 million in assets and five local branches, the bank has been serving residents and local government entities with a commitment to trust, innovation, and responsive customer service for over 85 years.

As a community bank, it faces unique challenges—particularly in maximizing efficiency and liquidity while maintaining the security and service levels that its clients demand.

Improving Deposit Management

Like many community banks, Casey County Bank has to handle cyclical cash flows from public entities. These clients can generate substantial deposit inflows during tax season, only to withdraw significant amounts in subsequent months. Like others, Casey County Bank has also had to manage significant deposit growth over the course of the COVID pandemic. The bank needed a solution that would

• maximize access to FDIC insurance coverage for growing numbers of large deposit holders;
• help the bank manage its own liquidity efficiently without exposing the bank to undue risk or excess collateralization; and
• ensure seamless customer service for public-sector clients whose needs are highly cyclical.

The bank required a platform that could scale with deposit inflows, provide access to robust amounts of insurance, and allow for simple management without burdening staff or clients.

Reducing Collateralization and Rightsizing the Balance Sheet

As Casey County Bank took on increasingly large public deposits, its collateralization needs skyrocketed. As Taylor Rousey, Chief Financial Officer and Executive Vice President at Casey County Bank, recalls: “When those public deposits started raising and raising and raising, we had to buy more collateral. I had a couple of call reports where we were at 99% pledged—nearly all of our available securities were tied up as collateral, leaving us with lower liquidity to support new deposit growth or other funding needs.”

Rousey found ICS®, or the IntraFi Cash Service®, and specifically its One-Way Sell® feature—which allows banks to sell excess deposits in exchange for fee income while keeping them eligible for FDIC insurance¹— instrumental in reducing Casey County Bank’s collateralization burden. “IntraFi’s services let us offer access to FDIC coverage and we no longer have to pledge or get a bond from the Federal Home Loan Bank.”

Importantly, ICS One-Way Sell also allows banks to reduce the overall cost of deposits, while maintaining the customer relationship. Notes Rousey, “Moving our most-expensive deposits off balance sheet via One- Way Sell lowers our interest expense, and effectively gives us another contingency source of funding.”

Managing Seasonal Flows from the Public Sector

A local government organization was among the first to benefit from Casey County Bank’s adoption of IntraFi’s services. “Like many public entities, they see a lot of fluctuations in their accounts, which balloon when their budget gets allocated and drop dramatically during tax season,” Rousey says.

IntraFi’s ICS One-Way Sell feature allowed Casey County Bank to

• effortlessly accept large, cyclical deposits from public sector clients;
• provide access to FDIC insurance coverage across network banks for aggregate amounts of deposits well above the standard limits; and
• simplify the management of public funds and stabilize bank operations by offloading the tasks related to cyclical deposit outflows.

The government organization’s experience became a template for other public entities and businesses in Liberty, Kentucky, that required similar solutions. Instead of

spending resources tracking, insuring, and managing these funds, the bank could rely on IntraFi’s robust platform.

More than Liquidity Management

Rousey has found value across multiple IntraFi services, and for more use cases beyond liquidity management. They include

• Asset Liability Management (ALM) Modelling: Rousey found IntraFi’s reporting useful in improving its required ALM modelling. “I include ICS One-Way Sell files with our standard ALM files so we can use it as another source of contingency funding in liquidity analysis.”
• Deposit Inflow Testing via ICS One-Way Buy®: Casey County Bank doesn’t need to purchase additional deposits today—but they know it’s important to plan for the future. Rousey likes to use ICS One-Way Buy to run test transactions to ensure things run smoothly if Casey County Bank needs those funds, and to verify availability for federal examiners.

Customer Service: A Foundation of Success

For Taylor Rousey and Casey County Bank, the value provided by IntraFi extended beyond the immediate financial benefits. “I can’t say enough good things about you guys. I just can’t,” Rousey remarks. “And I can’t say enough good things about your customer service, specifically. It’s A-plus.”

IntraFi’s team worked closely with Casey County Bank to ensure every aspect of the service—from onboarding to a core processor change, and ongoing operations—was seamless and responsive. This partnership mentality resonated deeply with the bank’s own service-oriented values and became a driver for its willingness to adopt and expand the use of IntraFi’s offerings.

Results: Tangible Benefits for Casey County Bank

Since adopting IntraFi’s services, Casey County Bank has observed several measurable benefits:

• Efficient Management of Large Deposits: With over $60 million in deposits placed through IntraFi’s services, the bank is able to securely accept and manage funds from public entities and large depositors that would otherwise exceed FDIC insurance limits.
• Improved Liquidity Management: The ability to switch between reciprocal and One-Way Sell with ease means the bank does not need to worry about seasonal deposit “ballooning” and outflows associated with the tax cycle.
• Enhanced Customer Satisfaction: Public sector clients enjoy streamlined processes and peace of mind knowing their funds are eligible for FDIC insurance at network banks.
• Operational Simplicity: By leveraging IntraFi’s platform, Casey County Bank can focus on client relationships and business growth instead of manual oversight and administrative headaches.

As the bank continues to serve its community, the partnership with IntraFi positions it to offer leading-edge deposit solutions—ensuring that public and private depositors alike receive the care, access to insurance coverage, and convenience they expect. Rousey says, “We couldn’t do what we’re doing without IntraFi.”

By addressing the complexities of cyclical deposits and large-balance management, Casey County Bank has broadened its service capabilities and reinforced its foundational commitment to the community of Liberty, Kentucky. They have modernized their deposit operations while never losing sight of what matters most: the trust and satisfaction of their customers.

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