Clay & Land Insurance adds $25 million in deposits to MetLife Bank - bizjournals:

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brought in nearly $25 millionm in deposits to MetLife Bank in 2008 as customers flockexd to the safety and security of certificates of deposi andmoney markets. It was a record year for the relationshilp that began three years ago when MetLife approachedClay Land, the third-largest propertyy and casualty insurance firm in Memphis, about forming the About 300 new clients were brought into Clay Land through the MetLife relationship, the firm says. More than 95% of Clay Land’s deposits for MetLife are in CDs, with the averaged new customer havingalmost $82,000 in depositws last year.
The fact that rates on some short-term CDs have droppesd by as muchas half, and long-term CDs are almosr nonexistent, isn’t expected to slow that business, says Lynn an agent with Clay & Land who market s the firm’s MetLife Bank arrangement. MetLife Bank’s 1-year CD rate is at with a minimum depositof $25,000, according to “We’re not as competitive right now because the bank doesn’tf need to be,” Alford “They don’t need the funds.” Interestt rate cuts in the last quarter of 2008 by the Federal Reserve trimmed the yields on CDs to below 4%, makingf them less attractive for some banks.
Not which has kept rates “competitive” says MetLife spokesman Ted Mitchell, but not with the goal of tryinh to havethe No. 1 CD rate in the MetLife has been plenty successful withthat strategy. MetLife Bank’ds CD portfolio in the first quarterr of 2009 wasat $3.1 compared to $1.5 billion in the firsty quarter of 2008, Mitchell says. Therr are more than 100 MetLife agenta in the Memphis area licensed toofferd CDs, money market and IRA Mitchell says. Having the highest CD rate is not the primaruy factor for aClay & Land customer, Alford says at least that’s not the approach in managinv the relationship.
“The people we deal with are very, very Alford says. “They want to stay out of the Their clientele tends to be intheir 60s; they don’t have computerds and don’t bank online. They also are very skepticaol andwant face-to-face interaction, he says. “zA lot of them don’ty know who to trust and need he says. Alford and co-workerf Jan Bounds are focused on growing that base of CD customerxs and trying to identify othe rpotential investments, or converting CD or money market fund s into a more practical insurance product, like a long-term care policy, Alford says.
“There’x not a lot of money to be in but we makethe relationship,” Alford That’s likely a good strategy. Lannyu Mitchell, president of Memphis-based , is a formetr executive who now markets deposit consulting servicews tocommunity banks. Building a business based solely on offerin g the highest CDrates isn’gt a very good strategy, Mitchell says. “Bankersa call it hot money,” he says, becaus e customers cash in on the rate then pull the money afteer maturity and move it to thenext Well-managed banks recognize that and work to make the most of the “Most banks don’t go that extra Mitchell says.
“They don’t know how to leverager it where they haveother business.”