FirstBank expands with help from FHLB's Mission Asset Activity

Liquidity is as basic to banking as safes, night deposit boxes and chains on the pens. When we ask what benefit they get from membership, members say they view FHLB Cincinnati primarily as a reliable source of contingent liquidity, and as a partner to better address the financial needs of their institutions and customers.

We refer to Advances, Letters of Credit and Mortgage Purchase Program as our “Mission Asset Activities,” those products and services we are chartered to provide to the members of our cooperative. These products are most valuable to members when they are competitively priced, flexibly structured to meet members’ needs, and available on demand from a responsive and helpful staff.

Renee “Winnie” Bunch has been with FirstBank in Tennessee for 25 years, from the days when it was a $130 million bank in Lexington. Now it is a $5 billion, publicly traded bank based in Nashville. Ms. Bunch was chief financial officer for 20 years of growth for FirstBank, and today is director of mortgage administration.

In the 1990s, FirstBank’s needs were simple. “We used the Federal Home Loan Bank initially for financing local mortgages, utilizing Mortgage Matched Advances, without taking on interest rate risk,” she said.

As FirstBank grew, its partnership with FHLB Cincinnati expanded. “We use a wide variety of long-term and short-term Advances,” she said. And in 2018, FirstBank began to take advantage of the Mortgage Purchase Program and regard FHLB Cincinnati as a partner in its mortgage business.

Ms. Bunch said the dependability of FHLB staff is key to the relationship. “If we had something that we wanted to try to work through, any kind of problem or issue, they’ve always been readily available and very responsive.” And when the financial crisis hit in 2008, FHLB Cincinnati remained available to provide contingent liquidity.

“It is comforting to know that the Federal Home Loan Bank is there for us as a trusted partner,” Ms. Bunch said.