ServisFirst Bank wants to expand its Correspondent Banking Division into the Florida marketplace and has hired veteran banker Bill Dacko to lead the charge.
Correspondent banking is one way banks make money without having branches in every hamlet. It involves a larger bank serving as banking partner to a smaller, independent bank for conducting business, in the same way any company might use a bank.
The smaller bank manages its cash, pays bills and makes deposits into the account with the larger bank. At the end of each business day, the remaining balance is swept into an overnight interest-bearing account, with the larger bank taking a cut for its services.
Banking rules also allow the smaller bank to do overline loans, meaning that if its credit limit is $2 million and a responsible local business wants the smaller bank to lend it $3 million, the smaller bank can make the loan by letting its big brother cover the additional million.
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“Florida is a very good market and fits with our next stage of growth, ” according to Rodney Rushing, who runs ServisFirst’s Correspondent Banking Division. Dacko’s first priority will be using his 30 years of Florida banking experience to find new correspondent partnerships, Rushing said.
More than 50 banks have a correspondent relationship with ServisFirst, Rushing said.
In terms of doing business as a community bank, Rushing said technology has allowed smaller banks to be more competitive. Canceled checks no longer have to be bundled and couriered, instead they’re imaged directly to the Fed. With remote capture he can more easily do work across state lines.
“Being a bank of our size, the CEO’s office is two doors from mine. It doesn’t take me long to get an answer from him.”
Text by Dave Helms
