Lock in now to stay ahead of rate hikes
“We had a feeling rates were going to rise. When the lending officer at FHLBank Topeka suggested a Forward Settling Advance and the rate was cheaper, it was a no brainer!” said Homer Green, cashier at Citizens Bank of Kansas in Kingman, Kan.
FHLBank Topeka began offering bullet and amortizing advances with a forward settling feature in 2013. Since that time, 27 members have requested over 75 advances totaling
$345 million. More and more members, just like Homer, are seeing the benefi of the For- ward Settling Advance (FSA) commitment.
The FSA is a good funding choice when you are:
–Locking in a rate today for future funding
–Protecting against rising rates
–Replacing maturing advances or bro- kered CDs
–Preparing for future loan growth
FSAs can be bullet or amortizing advances where the proceeds of the advance disburse (settle) up to two years in the future. Collateral and stock aren’t required until the settlement date.