When FineMark National Bank & Trust opened its doors for business in 2007, its leadership team had simple, yet powerful guiding principles: treat clients like family and give back to the community. With a large private wealth management division, FineMark emphasizes close client relationships that go beyond the financial aspects of the individual’s life. The institution has also developed a strong culture of community giving, granting paid time off to employees for charitable work and partnering with local organizations for community development.
These values have resonated strongly with FineMark’s client base and community, fueling the institution’s organic growth to more than $1 billion in assets in just over eight years.
The Fort Myers, Florida-based institution is not your typical retail bank, according to Chief Financial Officer Brian Eagleston. “It’s a dynamic organization that’s experienced 25-30 percent annual growth,” says Eagleston. “We are truly relationship-oriented and value our clients like you would value a family member.”
From FineMark’s beginning, Eagleston knew that FHLBank Atlanta could be a partner in the institution’s success. Eagleston had prior experience with FHLBank Atlanta at another Florida institution and upon joining FineMark’s management team, set the process in motion to become a shareholder of the cooperative as a de novo. Initially, FineMark relied on FHLBank Atlanta as a source of liquidity and as a safekeeping agent for its securities portfolio. As FineMark grew, their use of FHLBank Atlanta products and services also expanded.
“As Federal Home Loan Bank of Atlanta has introduced new products and services, we have taken advantage of them,” says Eagleston. “Today, we use most of what the Bank has to offer.”
FHLBank Atlanta advances have been a core source of value for FineMark, particularly in the extended low interest-rate environment of the last eight years. The institution has used a number of different advances for various purposes, including Fixed Rate Credit and Principal Reducing Credit advances to fund lending, and Floating-to-Fixed, Forward Starting, and Convertible advances to hedge asset positions on the balance sheet. FineMark has also used advances to help determine loan pricing and manage interest-rate risk. Today, as the institution finds itself flush with retail deposits and a limited need for wholesale liquidity, advances continue to serve as an effective asset hedge.
“FHLBank Atlanta advances have been the best mechanism to hedge the balance sheet, and we benefit from the option to pay off advances if interest rates move,” says Eagleston.
In additional to advances, FineMark has found value in FHLBank Atlanta’s Letters of Credit product to collateralize public entity deposits. As FineMark’s loan portfolio expanded, Eagleston says that they made a tactical decision to shrink their investment portfolio. As a result, FineMark needed additional collateral sources to support their deposit relationship with the state of Florida. “The letter of credit was the most cost-effective means to provide this collateral,” says Eagleston.
The relationship between FineMark and FHLBank Atlanta is not confined to financial solutions to manage the balance sheet. The two institutions share a common goal of building strong communities. Eagleston says that FineMark is a huge proponent of Habitat for Humanity, and as the bank has grown, they have allocated more resources toward community-focused programs.
In 2015, for example, FineMark ramped up its usage of FHLBank Atlanta’s Affordable Housing Program Set-aside Products, delivering $55,000 in down-payment and closing-cost assistance to 11 first-time homebuyers. Eagleston says that the First-time Homebuyer Product aligns well with FineMark’s community outreach efforts and is a great way to deliver funds to people who need them to purchase a home.
“FHLBank Atlanta provides products that really help our business and community,” says Eagleston. “Whatever the Bank has to offer, we will look for opportunities to take advantage of it.”
The Federal Home Loan Bank of Atlanta is not a registered investment advisor. Nothing herein is an offer to sell or a solicitation of an offer to buy any securities or derivative products. You should consult your own legal, financial, and accounting advisors before entering into any transaction. Interest and advance rates presented in this article are for illustrative purposes only.