We have been in operation since 1959 and have weathered many storms including recessions, the Global Financial Crisis of 2008/09, and more recently, a global pandemic.
This breadth of experience tells us that tomorrow will always bring new challenges but we stand confident, knowing that Community First is a strong and viable financial institution. This strength reflects our efforts to protect our balance sheet throughout the pandemic while navigating significant regulatory change and a period of record low interest rates, which are now increasing.
We have been operating under Australia’s Banking Act since 1959. Community First is member-owned and does not have any external shareholders which means profits are reinvested for the benefit of members in the form of fairer fees, higher standards of service and competitive interest rates.
Is there any exposure to Community First as a result of the Silicon Valley Bank collapse?
Community First Bank does not invest in overseas institutions that do not have an Australian ADI licence and the Australian market and legislation is different to the United States. Hence, we have no direct exposure to the downfall of the Silicon Valley Bank. Our conservative investment policy means we invest a portion of our liquidity portfolio in floating rate notes with Australian licensed institutions which reprice every 90 days. Plus, all of our investments are held to maturity.
Is my money safe with Community First?
As an Authorised Deposit-Taking Institution (ADI) regulated under Australia’s Banking Act 1959, member deposits are protected under the Federal Government’s Financial Claims scheme (FCS) which is exactly the same as Australia’s Biggest Banks. The FCS is a government-backed safety net for deposits of up to $250,000 per account holder per ADI. Put simply, your deposit money is guaranteed by CFB’s 105 million dollars in net assets and the Federal Government up to $250,000.
Also, Community First carries significantly more than the statutory minimum capital requirements which ensure it can meet all commitments at all times.
How does Community First fund its loans?
Around 94% are funded by retail deposits and 6% are wholesale deposit funded.
The traditionally high retail funding exposure represents a very stable, conservative and secure source of funds. The Bank also has various lines of credit to increase wholesale exposures at any time if required which include the Reserve Bank of Australia.
What is the impact of recent interest rate increases on Community First?
Our assets are repriced faster than liabilities in a rising interest rate environment which means profits will increase quickly in the first year. Demand for Community First products and services, and our overall performance is very strong. However, as a member owned institution, we will try and minimise any impact on our members regardless of where interest rates land.
Is Community First Bank and Community First Credit Union considered the same entity under the Financial Claims Scheme?
Yes. “Community First Credit Union” is our registered name but we trade under the name “Community First Bank” simply because it explains what we do.
Community First Credit Union is registered as an Authorised Deposit-Taking Institution (ADI) and thereby covered by the Government’s Financial Claims Scheme (FCS) Guarantee, exactly the same as the Big 4 Banks which are also ADI’s, even though we currently hold more capital as a percentage of assets.
As a registered ADI, referring to ourselves as a bank also helped to avoid any confusion with non-ADIs which are not covered by the government guarantees.