A $200 million bank is involved in real estate warehouse lending that causes them to have daily balance sheet fluctuations of $15-20 million.
FHLB overnight advances
Fed Funds purchased
Correspondent line of credit
IntraFi FundingSM (formerly Insured Overnight Funding®)
Benefits to Bank
Is cost effective compared to other options
Counts as a deposit, not a borrowing (enhances loan-to-deposit ratio)
Is available without collateralization or stock purchase requirements
Frees up capacity if it needs to tap FHLB
Diversifies overnight sources of funding, a positive for a contingency plan
Bank's Chosen Path
The bank decided to use IntraFi FundingSM (formerly Insured Overnight Funding®) to manage the daily fluctuations.