Through the investment of political subdivisions for over 35 years, PMA has been able to establish an expansive banking partner network which has allowed the company to be both a consistent funding source for banks as well an investment provider for institutional investors. Typical institutional investors consist of regional banks, community banks and credit unions which look to invest excess funds to respective target need dates in order to earn more meaningful returns than if the monies would remain liquid. The main benefit to PMA’s institutional clients is that they have the ability to access a large array of fixed income CD product options through one trusted PMA advisor.
Who are the issuers?
On a weekly basis, community and regional banks look to raise deposits that can complement their core market and maintain their contingency funding balances for their institution. Since typical core deposits require considerable operational commitment, as well as marketing and collateralizing costs, these institutions look to PMA as an effective route to raise large block funding in a quiet fashion. PMA will work with each institution in matching their specific funding needs with the investment needs of the institutional investor.
Through PMA’s experienced bank funding advisors and efficient investment platform, institutional investors have the ability to generate attractive returns from fixed income investments that are unique to the marketplace and established solely through PMA’s system and network. PMA coordinates with financial institutions each week to place investments based on each institutional investor’s investment horizon and provides product solutions that are relevant for individual investment policy and financial environment.
The greatest benefit to institutional investors consists of the uniqueness of PMA’s product base as well as the company’s capacity to provide an extensive product listing on one investment platform. A problem that many investors face with typical dealers is that their issuer offerings are primarily consisted of regional banks or institutions without a branch presence or issuers that are consistently in the market. These issuer names will often provide above market yields because of their limited overhead, but the investment insurance will still remain under the FDIC insurance of $250,000, so it limits the investment capabilities. The larger institutional investor will have problems with this approach because they will quickly exhaust their FDIC insurance with the top issuer offerings and will be left with limited options for the remaining investments. A consequence they often face is that they will be forced to search for other types of fixed income products besides CD’s, which may result in increased credit risk or reduced liquidity to their investment portfolio. In addition, remaining issuers that are left to invest on the street will consist of institutions that are seeking to raise funds only at a bargain price, which will lower the overall weighted return of the portfolio.
The advantage of working through PMA will be through a customized and tailored portfolio that is provided to the investor as well as the access to the growing network of banks that have been built out for more than 35 years. Through the combination of PMA’s trusted partnerships, technological efficiency and expansive product line, institutional investors have the ability to work with a full service broker deal that has the ability to invest intuitional portfolios of several hundred million dollars in size.
Benefits of working through PMA Funding
Investments provided to institutional investors are stable and flexible to provide the most effective investment solution for their portfolio. Benefits include:
- Competitive rates of return
- Year-round access to a multitude of investment options
- Flexible terms ranging from 3 months to 10 years
- Daily and weekly settlement
- Small- and large-block investment options
- No additional fee above stated rate