What Is Correspondent Banking?
Financial institutions are constantly looking for better ways to improve the products and services they offer to their clients and the communities. In its simplest form, correspondent banking is when banks provide services or engage in mutually beneficial transactions with each other. These relationships can take the form of deposit accounts, credit opportunities, and more.
Correspondent banking typically results from an institution having excess cash they need to invest for growth. Their primary goal is to protect the principal while gaining a return on it. Banks place deposits with another bank for a period of time and interest rate. These deposit accounts offer safety, premium returns, and growth.
The Advantages of Correspondent Banking
Partnerships are vital to the growth of any business. Banks are no different. At Atlantic Capital, we partner with other financial institutions with solutions that help them grow and serve their clients better. Cory Burdette, Senior Vice President of Atlantic Capital’s Financial Institutions Group, serves as the bank’s primary contact and relationship manager of correspondent banking partners all over the country.
For community banks, the relationship often extends beyond deposits. By partnering with other banks, they are able to create larger credit solutions for clients by inviting their banking partners to participate in lending opportunities. These relationships enable smaller banks to increase their ability to lend money while minimizing their risk.
Why partner with Atlantic Capital?
Community banks benefit from correspondent banking relationships in three particular ways:
- Premium Returns. Atlantic Capital Bank offers community banks a liquidity management program that offers a premium return on their deposits. These correspondent deposit accounts are secure, easy to manage and grow at a premium rate.
- Competitive Banking. Community banks often feel ill-equipped to compete with larger institutions in their market. Their balance sheet limits their ability to bid for commercial lending opportunities. A correspondent banking partnership with Atlantic Capital expands the credit capacity of community banks.
- Expanded Services. Atlantic Capital Bank can provide expertise and technologies that help community banks compete on a larger scale. With a correspondent banking relationship, community banks are able to access these tools to expand their services.
Having benefited from healthy relationships with other banks, Atlantic Capital is committed to developing new and continuing relationships with community banks to leverage excess cash for growth. With over ten years of industry experience, Cory understands the value of prioritizing the service Atlantic Capital provides to its Financial Institution clients.
According to Cory, “Primarily, we help our banking partners leverage their excess liquidity by offering our financial strength and industry experience. When we partner with community banks, we assess their situation, determine the best channel of investment, and then offer an alternative to the federal reserve. Even better, many community banks draw upon our expertise in SBA lending to bring value to their clients.”
At Atlantic Capital, we create unique solutions for financial institutions. For further information on Atlantic Capital’s Financial Institutions Banking services, contact Cory Burdette to begin banking in the right direction.