As a very small asset rural bank in West Texas we opened our first outside market branch in 2017 due to the "mortality risk" of our existing core deposits and shifting from a bond bank to a loan bank. We have utilized broker deposits to "match fund" our new loan growth in our new lending areas until our new branch is able to develop its own core deposits. Our utilization of broker deposits has been implemented over the past three years and when prudently managed and engaged by our bank board, is indeed a very viable funding strategy. At the time, the one to five year brokered deposit rates were actually less than the Federal Home loan advance rates. Recent regulatory relief that now deems our CDARs reciprocal deposits to not be considered as brokered deposits has aided our bank. Brokered deposits are not the devil, but has truly been a blessing!
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Quinn Alexander
Chief Executive Officer
The First National Bank of Paducah
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Original Message:
Sent: 11-18-2018 14:10
From: Mary Fowler
Subject: Brokered deposits are the devil.....
Please share this link and spread the word that there are still strong forces fighting against the use of brokered deposits. We all need to work together to assure regulators and legislators that brokered deposits are NOT inherently bad.
Go to American Banker on Twitter and Facebook and find this post. BankThink also tweeted this article. Comment, reply, tweet, "like" contrarian posts and tweets, etc. We're all in this together!
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