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Delivering Value through Innovation
2018-12-10
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wes-headshotDecember 2018 - When we describe the value of the partnerships between FHLBank Atlanta and our shareholders, we often talk about reliability, stability, and strength. These attributes are critical to ensuring that the cooperative can meet shareholders’ funding needs and the credit needs of communities through all business cycles. However, it’s important to recognize that reliability and stability do not mean that the Bank is unchanging. To be a reliable partner, the Bank must be flexible and adaptable to an evolving financial marketplace and the changing business needs of shareholders.

Innovation remains a top priority for the Bank as we continue to focus on supporting our shareholders’ success as trusted advisors. From my perspective, there are three key areas where the Bank can deliver value through innovation:

  • Making incremental enhancements to existing products 
  • Developing new products to address unmet needs in the marketplace 
  • Adapting with shareholders to changes in the broader financial services industry

New products and services are often top of mind when thinking about innovation. However, incremental changes to existing products frequently can serve a business need with lower costs and less risk. At the Bank, we regularly review our product offering to ensure we are effectively meeting shareholders’ funding needs, and we adapt these products when we see opportunities.

For example, in early 2018, we introduced enhancements to the Fixed Rate Credit advance – the Bank’s most popular funding product – including simplified pricing, lower prepayment costs, and an option for fully symmetrical prepayment. These enhancements were designed to provide shareholders additional options and flexibility to fund loan growth and manage the balance sheet.

We also recognize that in a changing market, sometimes challenges arise that cannot be addressed with existing solutions. As a result, we look for opportunities to innovate with new products or services to help shareholders meet emerging needs in their businesses or communities.

An example of this is the Bank’s recently launched Community Heroes initiative. Community Heroes is a grant funding opportunity that creates partnerships between the Bank and local governments or housing finance agencies to provide home purchase assistance to educators, law enforcement officers, firefighters, and other first responders. Importantly, Community Heroes targets homebuyers with income profiles that are generally not served by existing affordable housing initiatives but who still face significant challenges purchasing a home. Funding will be available exclusively through our shareholders, which will help them build business relationships with their local governments while addressing an important housing challenge in their communities.

The decade since the financial crisis has been a time of rapid change in the financial services industry. As a cooperative, it is incumbent upon the Bank to support shareholders as they manage regulatory changes, emerging risks, as well as new business opportunities. We are committed to adapting and innovating with our shareholders to serve their changing business needs.

Along these lines, the expected phase out of the London Interbank Offered Rate as a benchmark interest rate will be a key challenge for all financial institutions. The FHLBanks are active in this transition, as participants in industry working groups and as an issuer of Secured Overnight Financing Rate (SOFR) debt in the capital markets. The Bank will be here as a partner to shareholders during this transition, helping them plan, providing reliable funding that is relevant to the market, and keeping them informed of important developments.

As we look ahead, innovation will continue to be a foundation of our shareholder relationships and our efforts to deliver greater value to their institutions. We look forward to partnering with shareholders to meet the challenges of our evolving industry, help our communities thrive, and achieve mutual success.


Wes McMullan
President and Chief Executive Officer

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