Teachers Mutual Bank has achieved some tangible benefits from its decision to become a mutual bank. Strong growth in wholesale deposits during the 2012/13 financial year helped the bank improve its margin and allowed it to reduce its liquid holdings.Yesterday, Teachers issued its annual report and financial statement for the year to June. The most notable line item was its wholesale deposits, which rose from A$51.1 million in 2011/12 to $184.9 million in the year to June.Teachers' chief executive, Steve James, said the bank was now able to sell certificates of deposit to superannuation funds, semi-government bodies and financial institutions whose investment mandates allow them to hold CDs issued by banks but not by credit unions.The interest rate Teachers is paying on the CDs is lower than the rates it is paying on retail deposits, and, as a consequence, the bank's margin increased from 2.47 per cent in 2011/12 to 2.53 per cent in the year to June.James said: "The new funding arrangements have allowed us to reduce our liquidity holdings and become more efficient, which has also helped our margin."Teachers made a net profit of $28 million for the year to June - up 21.7 per cent on the previous year. Net interest income was up 10.2 per cent, to $99.2 million, while fees, commissions and other income fell 2.9 per cent.The impairment loss was $2.2 million - down from $2.5 million the previous year. The value of impaired loans rose from $11.2 million to $13.4 million.Loans and advances to members rose 8.7 per cent, to $3.3 billion. The bulk of these loans ($3.04 billion) were secured by mortgages over real estate.Retail deposits rose 4.3 per cent, to $3.5 billion, and wholesale deposits rose more than three-fold.