A local bank will be paying extra attention to the scoreboard at VCU’s basketball games this season.
In its latest bid to attract new deposits, C&F Bank is hitching its wagon to the Rams by offering a certificate of deposit with a rate of return that increases after each victory tallied by the VCU men’s basketball team.
The 11-month CD starts with a 0.45 percent annual percentage yield. That rates increases 0.02 percent with every VCU men’s regular season victory.
It follows a similar deposit promotion the West Point-based bank has run since 2008, in which customers’ returns rise in conjunction with the performance of the William and Mary football team. The VCU-themed CD’s return is lower than the 0.05 percent per-victory increase offered in the W&M promotion.
“With a 20-game winner, you’re talking about 40 basis points or half a point [increase in the yield],” said Matthew Steilberg, C&F’s head of retail banking. “It will end up being a very good, essentially one-year CD. And they have fun with it.”
The program gives customers a chance to quickly increase their return in a time when CD rates remain low amid interest rates that are keeping banks’ margins tight.
VCU’s men’s basketball team plays almost 30 regular season games and will begin the season ranked 15th in the nation and projected to win Atlantic-10 conference. C&F will also donate the equivalent of 0.05 percent of the money taken in through the promotion to the VCU Athletics Department.
“It’s like legalized gambling, except you can’t lose,” Steilberg joked, as the rate does not decrease with a VCU loss.
A minimum of $2,500 is required for the Rams CD, $1,000 of which must be funds that are new to the $983 million bank.
The bank sets a Dec. 15 cutoff to get in on the CDs. That’s a way to hedge against customers who might try to jump in late in the game after the season begins Nov. 8.
“It’s a very high profile way for us to call attention to the bank,” Steilberg said. “A lot of people follow VCU basketball in Richmond.”
Tying itself to the Rams also helps the bank target customers more directly in Richmond, which has been its busiest market of late.
“We see the opportunity in Richmond,” Steilberg said. “Our fastest growth market this year easily has been Richmond. Growth in loans and deposits has been twice as fast [in Richmond] as anywhere else.”
C&F also has a wider deposit base to chase thanks to its recent acquisition of Central Virginia Bank. That deal, which closed Oct. 1, gave C&F an increased geographical reach in the southwestern part of the Richmond market.
C&F reported $685 million in deposits as of Sept. 30, up about $20 million from a year ago but down almost $1 million since the end of 2012.
Steilberg declined to say how much in new deposits the bank is hoping to attract with the VCU product.
He said the W&M promotion has been successful, bringing in several million dollars in deposits since C&F started it a few years ago. He predicts the VCU CD will double that.
Customers won’t immediately get a bump should the Rams make another March Madness run. The per-victory increase only applies to regular season games.
But C&F’s head of marketing Maureen Medlin said the bank might introduce a tournament CD.