As a community bank that serves rural areas in southeast Kansas, Bank of Commerce knows the importance of quality water supply.

“The communities we serve are farm-oriented,” explained Ken Lickteig, a senior vice president at Bank of Commerce. “We have also noticed a growing trend that many of our clients want to live in rural areas that are outside the reach of city water facilities.”

Aging infrastructure and increased demand for a quality water supply means rural water districts will need help finding solutions to finance improvements. When the local water district was unable to accept new clients due to its inefficient infrastructure, Bank of Commerce knew they had to fund this community need.

The local rural water district required a long-term loan, and Bank of Commerce wanted to match the loan with long-term funding. That’s where their relationship with FHLBank Topeka came into play.

Bank of Commerce secured a Community Development Program (CDP) advance to fund their loan to the rural water district. CDP advances are priced below FHLBank’s regular advance rates to help members finance qualifying commercial loans, farm loans and community and economic development initiatives in the areas they serve.

The CDP advance funded two phases of improvement for the Rural Water District #4 in Neosho County, Kansas. The first phase built a new water tower, a new pumping station and expanded distribution to more patrons in the two-county area. The second phase was to improve infrastructure by replacing, enlarging and repairing the existing system. Bank of Commerce has found other ways to use discounted advance funding to support their community. They have used CDP funds to finance land purchases for local agricultural producers by consolidating several agricultural land purchases into one CDP advance from FHLBank.

FHLBank Topeka’s Community Housing Program (CHP), which provides advances below FHLBank’s rates to finance over-55 rental housing and various terms, is another important tool for Bank of Commerce. They used a CHP advance to fund assisted living centers in their market area, providing a safe, affordable housing option for local seniors.

“CDP and CHP advances offer a good discount,” Ken said, “which helps our bank’s margins while also allowing us to offer a competitive rate to fund important and worthwhile projects for our community.”