Kentucky Finance and Administration Cabinet, Frankfort, hired US Bank Institutional Trust & Custody as custodian for the commonwealth of Kentucky's $2.8 billion general investment pools, said Dwight Price, portfolio manager with the cabinet. The custody contract had been part of the cabinet's depository bank contract, but the cabinet decided to split it into two separate components. Farmer's Bank and Trust remains the depository bank for the investment pools.
"While Farmer's Bank can do an excellent job as depository for the commonwealth, they are not in the custody business," Mr. Price said. As a result, Farmer's subcontracted the custody services to State Street Bank, Mr. Price said, noting State Street bid on the contract.
The commonwealth issued an RFP for custodian services in the first quarter, Mr. Price said.