A $1 billion bank needed a stable source of funds to supplement loan growth and looked to ladder out maturities to avoid large withdrawals in a single month.
Potential Solutions
FHLB advances
Brokered CDs
IntraFi FundingSM (formerly CDARS®)
Deposit listing services
Other borrowings
Benefits to Bank
Offers flexibility; the bank can:
Bid for a set amount in several terms at or below its alternative cost of funds (e.g., 5 bps below FHLB advances of a similar tenor)
Build a large pool of low-cost deposits over a period of time with laddered maturities
Bid at no cost, and the bank can learn right away which bids were funded and in which terms
Monitor rates, and when it determines pricing is attractive, it can opportunistically bid for additional funds to create value for the bank
Avoid pledged collateral or stock purchase requirements
Bank’s Chosen Path
The bank purchased funding using IntraFi Funding (formerly CDARS) to build a solid wholesale deposit base at attractive pricing.