October 2019 – Beacon Community Bank opened its doors for business on East Bay Street in downtown Charleston in early 2018. The bank was the first de novo institution to be issued a state charter in South Carolina in the decade since the financial crisis.
The Beacon Community Bank organizers saw an opportunity in the Charleston market after a wave of industry consolidation left a void of smaller community banks. The bank has grown rapidly since its founding. In 2019, it opened a second branch across the Cooper River in Mount Pleasant and has plans for further expansion in the Charleston metro area.
As a locally owned institution, Beacon Community Bank is focused on serving entrepreneurs, small businesses, and real estate developers with small- to mid-sized projects as well as individuals looking for a relationship-oriented experience.
Relationship with FHLBank Atlanta
Beacon Community Bank became an FHLBank Atlanta shareholder as a de novo institution in 2018.
Clay Heslop, Executive Vice President and Chief Financial Officer for Beacon, says that their relationship with FHLBank Atlanta provides value in a number of important ways, particularly for an institution that is new and growing. FHLBank Atlanta serves as a stable, reliable funding source and provides a credit line that can grow as Beacon grows.
“Access to a guaranteed off balance sheet funding source is an important part of liquidity management,” said Heslop. “Additionally, the ability to increase the amount of our FHLBank Atlanta credit line as we grow our loan portfolio helps to ensure our continued ability to fund future growth.”
FHLBank Atlanta Products
While Beacon Community Bank has not drawn on its credit line for advances to date, it has used FHLBank Atlanta’s Letter of Credit product to collateralize deposits from public entities that exceed the level insured by the FDIC. Heslop says that Beacon pursued public deposit business because the scale of these deposits is large and they provide a meaningful source of funding. The Letter of Credit serves as a flexible alternative to collateralizing these deposits with securities.
“We did not have sufficient eligible free collateral in our bond portfolio to securitize the uninsured portion of the public funds that we were looking to bring in. For a nominal fee, the letter of credit allowed us to provide the collateral needed,” said Heslop.
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