Directors & Senior Management

Build America Bonds were created as part of the 2009 American Recovery and Reinvestment Act. BABs are federally taxable municipal bonds issued during 2009 and 2010 for which up to 35% of the borrowing costs are federally subsidized either through payments to the issuer as Direct-Pay BABs or through payments to bondholders as Tax Credit BABs. The IRS estimates that more than $181 billion of BABs were issued by state and local governments, and Bloomberg data suggests that about $116 billion of BABs were still outstanding as of March 2024.

In the late 1990s, the internet was rapidly commercializing and becoming a fixture in households. As a fintech entrepreneur, I saw an excellent opportunity. I launched First Internet Bank in 1999 to address the needs of forward-thinking consumers who were beginning to demand greater access and convenience from financial services.

The financial crisis of 2008 brought a slew of new banking regulations and guidance – more specifically, guidance related to best practices for liquidity risk management. As loan-related asset quality problems occurred during that crisis, many institutions were left in a less-than-desirable liquidity position. As a result, many of their off-balance sheet or contingent liquidity sources became impaired or unavailable as asset quality problems were severe enough to negatively impact their earnings and capital positions. The lack of access to readily available secondary liquidity sources left many banks scrambling for balance sheet funding. The need for a comprehensive, well-developed contingency funding plan (CFP) that sufficiently addresses potential liquidity events and emergency cash flow requirements soon became a regulatory requirement.

Bond refinancings or “refundings” are used by municipalities to save debt service costs on outstanding bonds or to modify certain bond covenants or financing terms. During the decade preceding 2022, refunding bonds represented over 49% of the annual issuance of municipal bonds, on average, according to SIFMA.