September 2020 - Carter Bank & Trust (CB&T) is a $4.2 billion community bank operating more than 90 branches in its home state of Virginia and North Carolina. CB&T offers a full-range of deposit accounts along with competitive commercial, small business, and personal loan products and services. CB&T strives to be the preferred lifetime financial partner for its customers and shareholders, and the employer of choice in the communities it serves. The institution became an FHLBank Atlanta member in 2019.
Brad Langs, President and Chief Strategy Officer for CB&T, recently shared insights into why CB&T became an FHLBank Atlanta member and how the community bank is leveraging this new relationship to manage its balance sheet and serve its customers.
Becoming an FHLBank Atlanta shareholder
We joined FHLBank Atlanta for numerous reasons. The primary driver was increased liquidity. By pledging eligible loans, we have been able to increase our liquidity by over $1 billion. Additionally, we wanted the ability to borrow short, intermediate, and long term at favorable market rates and the ability to match fund longer-dated, fixed-rate commercial loans. We also wanted to participate in FHLBank Atlanta’s homebuyer grant programs.
Benefits of using advances
We utilize advances for numerous reasons: diversification of our liquidity levers, a trusted borrowing partner/source during all economic cycles, funding short-term liquidity needs, laddering longer-term borrowing needs, and match funding fixed-rate commercial loans.
Serving customers and communities through homeowner assistance products
We have a significant number of low- to moderate-income and first responder bank customers at CB&T. Many had been in need of down-payment assistance to purchase a home. Additionally, we have several non-customers within our community who fit that profile, and we want to help them.
Historically, the bank has not offered low down-payment mortgage solutions. In 2018, we took strategic steps to launch secondary market mortgage program solutions. While those newer programs have low down-payment options, by offering the FHLBank Atlanta programs, we can now go the extra mile for our borrowers and help more people realize the dream of homeownership.
We launched the grant program in 2020 as the pandemic was occurring and have secured approximately $150,000 in down-payment assistance grants. This initiative helps us deliver on our promise of CARE and fits in with our goal of becoming the preferred lifetime financial partner for our customers.
Accomplishing a company goal
The biggest goal FHLBank Atlanta helped us accomplish was increasing our liquidity profile. Prior to becoming a member, our liquidity was largely cash and the investment portfolio. By leveraging our balance sheet, and in particular eligible loans, we have expanded our liquidity profile by over $1 billion. Capital and liquidity are critical during all economic cycles.