Interest Bearing Checking for Business

​I think that we are still trying to work this out. We have one multi-million dollar relationship that more or less demanded that we pay some interest on their corporate accounts, and we complied. This relationship is in the ICS program with demand option, so we do have the option of selling their deposits one-way and collecting a fee in lieu of paying them interest. We have done this largely to reduce  our funding dependency on this one large customer, but also in an attempt to keep other lower cost deposits on the balance sheet.

If your balance sheet growth is somewhat restrained by you capital base as is ours, the ICS program allows you to continue to actively pursue more deposits, and then sort out how much and which ones you want on the books and which to sell off.


------------------------------
Dwayne Kolly
Chief Financial Officer
Business Bank of Texas, N.A.
------------------------------
-------------------------------------------
Original Message:
Sent: 04-05-2018 13:45
From: Scott Yeoman
Subject: Interest Bearing Checking for Business

​At about the same time regulations changed to allow interest on business checking the banking crisis occurred; and then interest rates went to zero and paying interest on business accounts became a non-event.  Now, with rates higher and competition heating up, what new strategies are bankers using to defend their business transaction accounts without unduly increasing their funding costs, and what incentives are being used to have businesses pay for service fees with balances?

------------------------------
Scott Yeoman
President and COO
First American State Bank
------------------------------