Association Banking: What You Need to Know | Cogent Bank

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Inside Cogent        Blog        Association Banking: What You Need To Know
Association Banking: What You Need To Know
November 1, 2023

Association Banking: What You Need To Know

Are you looking for an experienced banking partner for your community association? Our Association Banking team specializes in banking services and products for homeowners’ associations, country clubs, and co-ops. For this blog, we sat down with Sean Friend, SVP, Commercial Relationship Manager to learn more about the association banking experience at Cogent Bank.

What kinds of associations do you partner with?

Community associations thrive in Florida, and Cogent Bank is proud to specialize in services that cater to them, from banking for homeowners’ associations and condo associations to products for effective country club financial management. 

We work with just about any type of Florida not-for-profit corporation. We can work with HOAs and Master Associations–whether they are self-managed or work with a management company, there’s no size too small or community too complex. 

For example, there are many golf communities in Southwest Florida. As each phase of homebuilding is completed, sub-associations are created. You can end up with five different HOAs in the same community, but there is still one master clubhouse, pool, and playground that everyone uses.  We can assist all of them. 

There are also nuances in the way associations bill and collect dues from homeowners, as well as with restaurants, pro shops, and other fee-generating businesses within country clubs.  We have all the technology and partnerships to keep money moving. 

Which accounts or products do you often suggest to associations that partner with you?

Each association needs to have an operating account for paying regular operating expenses such as landscaping, cable/Internet, insurance on the building, and other common elements. You also need to keep a reserve account (usually a Money Market or CD) to save for replacing aging items, as well as routine maintenance on roofs, pressure washing, repaving, etc. 

All the associations we work with are concerned about FDIC insurance. Cogent Bank offers Insured Cash Sweep or ICS to provide additional FDIC insurance up to $50 million.

Homeowners have to pay dues monthly or quarterly. Cogent Bank provides the technology needed to collect dues payments through an ACH facility and lockbox. We can also set you up with owner portals to collect dues using automated ACH or any card-based transactions.

If your association uses one of the community association management software’s, we can tie into that with API or SFPT to automate some of the manual processes. Basically, we provide all the technology associations need to carry out regular tasks, save for the future, and safeguard homeowners’ funds. Fraud is a big issue everywhere now, so we offer view-only online portals for board members to check accounts and make sure the management company isn’t mismanaging funds.

Also, we offer our clients a remote desktop check scanner without additional cost. Many other banks either don’t offer this benefit or only at a higher premium.

How can associations finance repairs and improvements?

We can provide loans for just about any need that an association has such as roofs, concrete, paver deck, car ports, railings, etc. Whether it’s for repair, betterment, or reconstruction, associations create a cash flow within their budget either by increasing regular dues or by Special Assessment to pay that debt service.  We then structure the loan around the assessment the association passes. We can also provide insurance premium financing in the event that your insurance premium increases unexpectedly.  We always are available to work and meet with the management firm or board to make the loan application, approval, and closing process as consultative as possible.

How does Cogent help associations grow and manage their finances?

I teach continuing education to both licensed CAMs (Community Association Managers) and association board members. In addition to those educational lunches, industry events, seminars, and formal meetings, I spend a lot of time meeting with boards and management companies to strategize on how they can streamline processes.

There are also new requirements for condos in response to the 2021 condo collapse in Surfside. Condo buildings 25/30+ years old must have a structural inspection done by an engineer and then make any recommended repairs. These new laws will have a financial impact on both condo boards as well as their residents. Cogent Bank can help you plan and save for future improvements, as well as provide financing for repairs that need to happen now. We’ve also helped communities rebuild after Hurricane Ian with construction-to-perm loans and other financing that provides the difference between insurance premium, insurance shortfall, and uninsured items like landscaping.

Do you offer tools for reporting?

The technology we provide to our association clients comes with a lot of reporting capabilities and ease of access to data. That can make managing your association easier, more automated, and more streamlined.

Meet Our Association Banking Team!

Sean and the rest of our Association Banking Team are dedicated to providing the personalized attention your association needs and deserves. Contact us to learn more about our approach to association banking and how we can help you with local decision-making and local flexibility on pricing.