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| Public funds deposits are derived from a variety of political subdivisions such as school districts and municipalities. These entities are a vital part of their communities and often rely on PMA Financial Network, Inc. (PMA) and their local financial institutions to aid in the development and implementation of sound, proven investment strategies. |
| Through its financial planning and cash flow programs, PMA helps more than 1,300 school districts and municipalities match their assets to their liabilities, creating a predictable, defined investment plan. The benefit of this is a school district or municipality can invest available resources until the day it is needed to meet expenditure obligations and local financial institutions have a stable source of attracting deposits to be loaned to customers, which keeps the community's economic engine moving in a positive direction. |
| The Problem: Occasionally, local financial institutions are restricted or prohibited from participating in deposits of political subdivisions due to the cyclicality risk commonly associated with public funds deposits. That is, their deposit base decreases as liabilities come due, and increases as assets (tax dollars) are received. This does not typically provide a steady, core deposit base for banks. |
| The Solution: When these situations arise, PMA Funding™ may be able to provide a solution to cyclicality risk through its vast network of public funds deposits that spans beyond your local community. Because these entities have varied revenue cycles, banks can now take a laddered approach to their portfolio planning. This laddered approach gives banks the ability to mitigate the "sawtooth effect" of public funds deposits by replenishing diminished public funds with those from other political subdivisions. (See chart below.) |
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| Diversifying a bank's funding plan across various political subdivisions with different revenue streams provides what we believe is an optimal, predictable public funds strategy that mitigates the volatility of deposits. |
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- Over the past 15 years, deposits by political subdivisions have increased by more than 243%.
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- Year-round access to one of the largest pools of municipal deposits in the country.
- Defined cash flows and known revenue streams.
- Varied revenue cycles allow for a laddered approach to portfolio planning.
- Flexible terms ranging form 30 days to two years with same-day settlement.
- Small- and large-block deposit options.
- No additional fees above stated rate.
- Deposits opened and titled in the name and tax ID number of the school district or municipality.
- FDIC insured and collateralized.
- Streamlined issuing through standard letters of credit and other instruments.
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Click here to complete
a New Deposit form, or
download the PDF and
fax it to 630.718.8701. |
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