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Shareholder Profile: Vinings Bank

April 2018 - Economical funding, flexible advance structures, and responsiveness to community banks’ business needs are just a few things Vinings Bank Chief Executive Officer Dan Oliver and Chief Financial Officer Todd Makant value in their relationship with FHLBank Atlanta.

Vinings Bank focuses on commercial and real estate lending to small- and mid-sized businesses in the Atlanta area. The bank offers a range of solutions, including short-term loans for working capital, longer-term C&I loans, personal loans for business owners and principals, as well as construction loans to builders. While short-term lending has been stable, longer-term asset balances have risen over time. Oliver says Vinings Bank relies on FHLBank Atlanta as a source of funding to help manage the balance sheet and support its business growth.

“Previously, we used internet-based CDs for occasional funding, but the terms and balances did not necessarily match well with what the bank needed for asset/liability management,” said Oliver. “It’s easier to go with FHLBank Atlanta as one source that can provide better structured funding to address our needs.”

Makant added that as they acquired new customers with longer-term funding needs, Vinings Bank began to require different kinds of funding on the balance sheet. The bank’s large securities portfolio also makes interest-rate risk management an important challenge.

“Early in our history we used advances for liquidity as we were building deposits,” said Makant. “Now we’re using advances to extend the duration of our liabilities and manage interest-rate risk.”

In addition to advances, Oliver and Makant point to the responsiveness of FHLBank Atlanta to its shareholders’ business needs as a key source of value. One recent example of this responsiveness is FHLBank Atlanta’s expansion of collateral eligibility to include municipal bonds.

Vinings Bank is an active bond investor, holding more securities than loans on its balance sheet. As a result, they view bonds as an important potential source of credit availability with FHLBank Atlanta. Vinings Bank was an early advocate for FHLBank Atlanta’s acceptance of municipal bonds as collateral and one of the first institutions to take advantage of this form of collateral when it became available.

“We were very impressed with the collateral team at FHLBank Atlanta as they worked with us on municipal securities,” said Makant “They are operationally efficient and help us identify specific securities that are eligible to pledge.”

“FHLBank Atlanta was very responsive in the municipal bond area,” added Oliver. “Bonds are easier and more cost effective for us to underwrite, manage, and maintain compared to loans so it is a big plus to be able to pledge them as collateral.”

 

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