Insights Report: Driving Core Deposit Growth With Data

Around mid-2023, BancPlus Corp. in Belzoni, Mississippi, found itself in a position familiar to many of its peers. Competition for core deposits was stiff, with the federal funds rate hovering around 5% or higher for most of that year. In the wake of Silicon Valley Bank’s failure that spring, examiners were scrutinizing banks’ liquidity more closely.

That’s when Rob Armour, chief marketing and product development officer with the $8.1 billion company’s subsidiary BankPlus, reconnected with a long-time industry friend who had once pitched some different ideas about deposit pricing. Rather than pricing deposit products to keep up with local competitors, many banks would be better served by identifying customer segments most likely to grow their relationships with the institution and then selectively marketing more modest price points to those customers.

Working with OptimaFI, previously known as Infusion Marketing Group, BankPlus got strategic about how it reached out to customers to grow core deposits. The bank’s deposit pricing philosophy has historically depended upon wholesale funding rates, its current need for core deposits and what its competition is doing, Armour says. BankPlus still sticks to essentially that philosophy, but through its work with the analytics firm OptimaFI, it refined its marketing to its depositor base.

“You have to be careful about shouting high-rate products from the mountaintop or you reprice everything you’ve just put on the books, and it creates an unending cycle of repricing,” Armour says. “You get some new money, but you’re shooting yourself in the foot from an earnings standpoint; even though you’re solving a liquidity problem, you’re causing an earnings problem because you’re repricing existing deposits.”

To learn more about core deposit strategies, download the report, sponsored by OptimaFI, here.