Hudson

I first ran into complex escrow while exiting my previous company. The sale process was fairly intricate, and funds sat in attorney escrow accounts for months and years. The disbursements often caught me by surprise. Out of the blue, an attorney would call to discuss distributions. We'd dig into old contracts and check dozens of stipulations and conditions to figure out who’d get paid and who wouldn’t. Armies of attorneys, accountants, and assistants representing sellers and buyers exchanged dozens of spreadsheets, wire instructions, sign-offs, and release documents. I kept thinking there had to be a better way. It shouldn't take this many people, emails, and spreadsheets to figure out who gets the funds and when. And that’s how Hudson was born.

In the last week, I've been booked by: → 2 title companies → 3 QIs / 1031 exchange firms → 2 law firms → 1 company looking to set up corporate escrow All looking for help moving, holding, and managing hundreds of millions of dollars in operational deposits. Their operations make them harder to fit into traditional treasury suites, so even when the money sits at the bank, they're often left with workarounds outside it to track when and how their money can move and reconcile everything against their accounts. On top of that, a lot of their ops are tied to specific events: a closing, an exchange deadline, a settlement, etc. they need to track. Be the bank that solves that for them, and they will tell their friends!! Let's talk about how we can help.

Loan demand outpaces deposits, so banks plug the gap with FHLB advances or CDs. Both are expensive, and both show up on a call report as a red flag. After money stopped being “free” in 2022 and Fed rates spiked ~450bps, banks had to get a lot more creative about building a strong deposit base to lend out. Which made cheap, sticky deposits pretty valuable. There are billions of dollars of deposits that cost almost nothing to hold: * Title & 1031 exchange funds * Attorney trust accounts * M&A escrow * Property management funds * Municipal reserves They’re non-interest-bearing, sticky, and tied to a client’s business on top of rates. We put together a calculator to see how much it costs to fund with FHLB advances vs. investing in building a specialty deposit portfolio: https://lnkd.in/g46MxuRv Try it out and let me know how it goes!

Huge news in the property management banking world. AppFolio and Column Bank have announced a partnership to finally integrate proptech and banking. Through this partnership, AppFolio customers will get access to banking and money movement capabilities specifically built for property managers. On the surface, that sounds like a pretty natural evolution of proptech. But what does this mean for the community banks that currently serve AppFolio customers? If AppFolio starts pulling more of the banking relationship into Column, smaller and mid-sized property management companies may eventually have to think about where their deposits sit and what role their bank plays in that workflow. And that creates an interesting opportunity for community banks. Think about what AppFolio is solving for property managers with this partnership: Easier money movement, fund segregation, easy reconciliation, and property-level account structures. Now ask yourself: Can your bank solve those same problems? I’m curious how other banks and property management companies are thinking about this. Is embedded banking in PM platforms the inevitable next step, or is there a strong case for keeping the banking relationship with the community bank? https://lnkd.in/gYQFZS2d

Win and manage specialty deposits. Without growing headcount.

Win and manage specialty deposits. Without growing headcount.