To stay competitive and continue providing the vital banking services their communities depend on, community banks need every advantage available to attract and retain high-value relationships. 2023 regional banking crisis. The study also reports that banks with higher insured deposit levels paid lower interest rates on deposits, grew larger and increased their local deposit market share over time.3 In fact, the growth rate for reciprocal deposit balances across banks of all sizes was 131% from 2022 to 2023. Reciprocal balances grew an additional 15% across 2024.4 RECIPROCAL DEPOSITS COMPARE WELL TO OTHER BANK FUNDING CHOICES In addition to helping banks grow wallet share from local customers, reciprocal deposits can offer several advantages when compared to other bank funding options. • Reduced Collateralization Needs: Reciprocal deposits can reduce or eliminate collateralization requirements, freeing up pledged collateral and reducing the burdens associated with tracking collateral. • Alternative to Wholesale Funding: Unlike many forms of wholesale funding, most reciprocal deposits can qualify as non-brokered deposits under the law. • Superior to Listing Service Deposits: When compared to listing service deposits, reciprocal deposits can provide a more stable, relationship-based source of funding that is typically lower cost and less rate sensitive. THE VALUE OF BALANCE SHEET FLEXIBILITY Overall, using deposit placement networks provides meaningful flexibility for balance sheet management. Banks can keep funds on the balance sheet as reciprocal deposits or, alternatively, sell funds into their deposit network and earn fee income (while keeping the customer relationship).5 The ability to move funds on and off the balance sheet on demand can significantly reduce the need for community banks to turn away a valued depositor because of the deposit insurance limits, deepening relationships and giving banks greater control to meet their liquidity needs. Reciprocal deposits also provide a stable funding source that can be used to support lending, while providing the agility needed to respond rapidly to changing market conditions. Using a reciprocal deposit network, banks can grow relationships and deposits from a local customer base — without the added costs or tracking burdens associated with ongoing collateralization requirements and with the ability to lend these funds locally. To learn more about how your institution can use reciprocal deposits to expand its lending capacity and strengthen its local community, visit intrafi.com/grow-reciprocal-deposits. Deposit placement through ICS is subject to the terms, conditions, and disclosures in applicable agreements. IntraFi is not an FDIC-insured bank, and deposit insurance covers the failure of an insured bank. A list identifying IntraFi network banks appears at intrafi.com/network-banks. Certain conditions must be satisfied for “pass-through” FDIC deposit insurance coverage to apply. 1. “U.S. Community Banks: Holding up Well with Strong Asset Quality Despite CRE Exposures,” Morningstar, accessed January 12, 2026, https://dbrs.morningstar.com/research/440556. 2. “Revealed: The Impact of Credit Union Acquisitions,” ICBA, last modified December 1, 2025, https://www.icba.org/w/revealed-theimpact-of-credit-union-acquisitions. 3. Edward T. Kim, Shohini Kundu, and Amiyatosh Purnanandam,“The Economics of Market-Based Deposit Insurance,” published September, 2024, https://www.fdic.gov/system/files/2024-09/kimedward-paper-091124.pdf. 4. S&P Call Report Data 5. With a depositor’s consent, the bank may choose to receive fee income instead of deposits from other participating institutions. Under these circumstances, deposited funds would not be available for local lending. 11 The Community Banker
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