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Complement FHLB Advances and Diversify Funding Sources

A $20 billion bank was trying to diversify its wholesale funding by supplementing its FHLB advance position. It began laddering brokered CDs with maturities inside of one year and was having trouble finding cost-effective volume.


Potential Solutions

  • Rate specials

  • Internet deposits

  • Brokered sweep program

  • IntraFi FundingSM overnight or CD offering (formerly Insured Overnight Funding® and CDARS®)

  • Deposit listing services

  • Brokered CDs

  • FHLB advances

Benefits to Banks

  • Incurs no cost to bid

  • Brings in funds at a cost below the alternative

  • Helps to lower the bank’s loan-to-deposit ratio

  • Attracts deposits from a different customer type (local) than traditional brokered CDs

  • Settles next day with IntraFi Funding CD solution and same day with the overnight one

  • Is available without collateralization or stock purchase requirements

Bank’s Chosen Path

  • Bid opportunistically in the IntraFi Funding CD auction every week at rates below FHLB advances and brokered CD postings

  • Used IntraFi Funding overnight option leading up to peak needs, then obtained fixed-rate funding for a 1-month term with an option to renew into another 1-month term at maturity