Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Brett Rabatin - Sterne, Agee & Leach, Inc.
Brett Rabatin - Sterne, Agee & Leach, Inc.
First, I know last quarter you had a reclass from deposits from non-interest bearing to interest bearing and obviously really strong growth in DDA this quarter. The interest bearing was mixed with averages down, but ending period strong. Can you guys walk through A) no one else is really seeing these kind of deposit trends, what that was a function of, and then B) was there anything unusual in the quarter that we should be aware of?
Allan R. Landon
Well, a couple of things I would say were going on. Continued promotion of our free checking, which we think is the most attractive free checking product in the market and I think our customers are picking up on that as well.
The second is that I think as concern in the marketplace increased regarding the safety of some short-term investment vehicles, such as money market mutual funds, we found customers were giving strong consideration to bringing their money into an institution they felt comfortable with and knew. We put a little bit of yield enhancement in that - there was some room in our margin to do it - and made, I think, what was a pretty attractive on balance sheet product available for customers and they responded pretty nicely.
The third thing I would say is that as we watched what unfolded late fall, early winter, it became clear to us that a focus on deposits was going to be a pretty important aspect of our business. Lending demand had slowed down in many of our product sets, and so we asked our people to put a special out there on deposit gathering. And you saw as the quarter went on a pretty nice momentum build for putting deposits on our balance sheet.
As we got down to then looking at whether to participate in the government funding program, the ability to raise deposits and generate liquidity internally was an element of our decision.
So, Brett, that's kind of four features that went into it and that's what I would say in summary.
Peter, Kent, either of you want to add anything to that?
Peter S. Ho
I would just add on the management piece, we really turned all of our management metrics deposit focused, both on the consumer side as well as on the commercial side, and we've shifted a good amount of talent within the organization into deposit gathering parts of the company.
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