October 2019 – IBM Southeast Employees’ Credit Union (IBM SECU) joined FHLBank Atlanta (Bank) as a shareholder in 2013 at a time when contingent liquidity planning was a pressing issue among financial managers and credit union regulators. According to Jeff Kolhagen, Chief Financial Officer for IBM SECU, the credit union began to explore membership with FHLBank Atlanta during this time and recognized that the Bank could serve as a valuable source of funding to support its contingent liquidity planning goals.
In the six years since, IBM SECU has become a regular user of advances to help manage interest-rate risk and occasionally match-fund a large loan. Kolhagen views advances as a valuable supplement to core deposits.
“Advances provide us with a good funding alternative,” said Kolhagen. “We can obtain funds from FHLBank Atlanta quicker than we can raise deposits and oftentimes at a lower cost.”
Although the relationship began as a way to broaden liquidity sources, Kolhagen realized the Bank offered many other benefits besides just a funding source. In addition to advances, IBM SECU utilizes FHLBank Atlanta’s securities safekeeping services for its bond portfolio. Kolhagen says IBM SECU uses the Bank’s safekeeping services because of the high level of service provided by the safekeeping department.
“We’ve found the safekeeping staff to be very responsive, proactive, and good to work with,” said Kolhagen.
Kolhagen also sees value in IBM SECU’s relationship with FHLBank Atlanta in other services the Bank provides. “We just this year had our first Affordable Housing Program application approved. It is a service we can offer our members to help with a down payment on a home. Our members are happy for this grant, which is possible because of our relationship with FHLBank Atlanta.”
The Bank also offers numerous opportunities for shareholders to learn about funding strategies and current challenges and developments in the industry and regulatory landscape through educational and networking opportunities. These events range from small group meetings to large conferences and sometimes offer specialized content for different types of financial institutions.
Kolhagen attended the Bank’s 2018 Credit Union Conference and served as a guest speaker on a panel discussion on current market opportunities.
“It was a good experience meeting other credit union executives at the conference and having this opportunity to share information and ideas,” said Kolhagen.
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