Solutions and Strategies for Utilizing Excess Liquidity

Embrace an agile mindset, protect your margins and encourage loan growth.

Community banks have been on a liquidity roller coaster for the past few years. Not so long ago, we were talking about a lack of liquidity. Now, the challenge is having too much. 

During the pandemic, community banks funded nearly $150 billion in PPP loans, the proceeds of which many borrowers simply turned around and deposited into their accounts. Now that the loans have been (or are being) forgiven, a large portion of these funds remain on deposit, and community banks face several challenges:

• Finding ways for that money to work for banks during the pandemic has been difficult.
• Traditional loan demand has not returned in many markets.
• Excess liquidity and low loan demand leads to low loans-to-deposits ratios.
• Yields are still low on investment options.
• NIMs are at historic lows.

All of this adds up to a need for banks to adopt an agile performance banking culture to minimize that excess liquidity and encourage loan growth. 

In a new white paper, Deluxe's financial performance strategists share their top three solutions and strategies for utilizing extra funds and combatting NIM compression. Download your complimentary copy of Solutions and Strategies for Utilizing Excess Liquidity today.