Pub. 6 2016-2017 Issue 3

O V E R A C E N T U R Y : B U I L D I N G B E T T E R B A N K S - H E L P I N G C O L O R A D A N S R E A L I Z E D R E A M S November • December 2016 15 This shift has created an opportunity for community banks that have the ability to attract and efficiently manage these deposits. A community bank in the Midwest succeeded in capturing significant value from these deposits by using the Insured Cash Sweep, or ICS, service integrated with the bank’s core processor. When it started using ICS, the bank was holding a large amount of public funds deposits in its business portfolio and was allocating collateral to protect those deposits. This added to the bank’s administrative tracking burden and reduced its capacity to use the deposits to fund lending activities which could earn the bank higher yields. Using ICS, the bank reduced the need for collateral and its associated costs while keeping the full amount of the govern - mental deposits available to use for lending. The funds that were previously used to invest in collateral were repurposed, giving the bank more flexibility to: • Increase the rate paid to customers on deposits (often up to 20 bps higher)—making it easier for the bank to attract more public funds deposits even while increasing bank profitability; • Lend more within the local community; and • Spend less time tracking changing collateral values. The bank adopted ICS as an integrated service through its core processor, which made the operational process even easier. ICS is integrated with major providers and offers integrated online banking and enhanced reporting. In the two years since the bank adopted ICS, it has grown its ICS deposits to over $500 million. Additionally, branches were able to be more competitive on price, resulting in new customers and additional volume coming in from the branch network. Overall, the bank was able to significantly enhance its deposit base, fundmore lending, reduce its noninterest expenses, and enhance the value it was offering to its government depositors. Integrated ICS banks conduct approximately 4x more ICS volume and have approximately 2x more ICS customers than nonintegrated ones. Contact us for innovative ways to increase your bank’s profitability and efficiency. Thinking Success? Think Stonier. First. Best. Next. Apply today - abastonier.com 1-800-BANKERS University of Pennsylvania | June 1-8, 2017 ABA Stonier Graduate School of Banking In partnership with the Wharton School. About Promontory Interfinancial Network. Promontory is the leading provider of FDIC-insured deposit placement services. Their services include Insured Cash Sweep, CDARS, IND®, and Yankee Sweep®, which enable banks and other financial institutions to build strong, multi-million-dollar relationships; replace higher-cost deposits; reduce collateral - ization; and purchase cost-effective funding. n 1 FDIC Statistics on Depository Institutions For more information about Promontory and its services, contact Glenn Martin, Regional Director, at (866) 776-6426, ext. 3462 or gmartin@promnetwork.com . The bank adopted ICS as an integrated service through its core processor, which made the operational process even easier. ICS is integrated with major providers and offers integrated online banking and enhanced reporting. In the two years since the bank adopted ICS, it has grown its ICS deposits to over $500 million.