Local Banks Reassure Customers Amid 2 Failures, Uncertainty
A sign in a local bank drive-thru indicates that the bank is insured by the Federal Deposit Insurance Corporation (FDIC).
Brandon Hull
Tommy Burns
Paige Hull
In the wake of two major bank failures late last week and ongoing uncertainty in the nation’s banking industry, local banks are reassuring customers that they are in good standing.
The failures of Silicon Valley Bank and Signature Bank were the second- and third-biggest bank failures in U.S. history, the Associated Press reported.
They occurred last week when too many depositors tried to withdraw their money from Silicon Valley Bank in Santa Clara, California, which is known as a bank run, AP explained.
The bank had to sell treasury bonds and other securities at a steep loss and more people kept trying to withdraw money as word of the situation spread, causing the bank to fail. Regulators took control of New York-based Signature Bank soon after, saying it was necessary to protect depositors after too many people withdrew money, according to AP.
In response, regulators guaranteed all deposits at the two banks and created a program to help shield other banks from a run on deposits, AP reported.
Treasury Secretary Janet Yellen told the Senate Finance Committee on Thursday that the nation’s banking system “remains sound” and Americans “can feel confident” about their deposits, AP reported.
Brandon Hull, president and CEO of Greeneville Federal Bank, said the Tennessee banking community is in great shape.
“Greeneville Federal Bank is not involved in the type of lending that those banks were involved in, and our capital ratios are more than double of what a well-capitalized bank is considered,” Hull said. “No depositor should be concerned as all deposits in those banks were covered 100% by FDIC insurance in our understanding. Those banks invested in high risk investments that we do not invest in. We focus our loans and investments in our community.”
Tommy Burns, president and CEO of Heritage Community Bank, expressed similar sentiment, describing Heritage as “a true community bank.” In that capacity, Heritage Community Bank focuses on receiving deposits and making loans, instead of investing in the bond market that caused the larger banks to fail.
“We are coming off our best year ever,” Burns said, noting that Heritage Community Bank has no diliquencies and no charge-offs. “Everything we’ve got is positive.”
Paige Hull, president and CEO of Andrew Johnson Bank, also stressed the difference between locally owned and operated banks and those that recently failed.
“Customers of Andrew Johnson Bank can be assured of the safety of their deposits with our bank, which is locally owned and operated. Our banking profile is vastly different from those of the banks that were seized by the FDIC. Our clients are local consumers and small businesses, and are not involved with new-technology startups, venture capital or crypto currency.
“We are a ‘recommended’ bank of Bauer Financial, an independent bank rating and research firm, as evidenced by the award of their highest ‘5-star Superior’ rating (see www.bauerfinancial.com for more details). This rating considers capital ratios and other criteria such as level of delinquent loans, charge-offs, repossessed assets, market versus book value of our investment portfolio, regulatory supervisory agreements, our Community Reinvestment Act rating, historical data and liquidity.
“Our team is dedicated to a conservative management philosophy and we continue to be inspired by the value of community banking. We invite anyone to call or stop by one of our eight locations for more detailed information or to review your personal or business financial needs,” she concluded.
At Apex Bank, “We understand that our local communities may be concerned about the recent news regarding the banking industry, and we want to reassure our customers, and the public in general, that the issues that led to the failure of Silicon Valley Bank (SVB) are not applicable to Apex Bank,” said Santiago Cuccarese, senior vice president.
“Apex Bank’s business model allows us to maintain a diversified balance sheet, with strong capital and liquidity positions, and a healthy mix of assets and liabilities. Apex Bank is in position to cover all its depositors without extra help,” Cuccarese said. “This, combined with our extremely loyal and well-established customer base, puts us in a unique position to be able to satisfy all the banking needs of our markets.”
Accounts with less than $250,000 in a bank insured by the Federal Deposit Insurance Corp. (FDIC) are safe.
Nearly all banks are FDIC insured. You can look for the FDIC logo at bank teller windows or on the entrance to your bank branch.
Here are some tips, reported by AP, for those who may be concerned about the future of their bank:
- Watch the stock price of your bank.
- Keep an eye on the quarterly and annual reports from your bank.
- Start a Google alert for your bank in case there are news stories about it.
Despite the recent uncertainty, experts don’t recommend withdrawing cash from your account. Keeping your money in financial institutions rather than in your home is safer, especially when the bank is insured, according to AP.
For more information on the FDIC, visit www.fdic.gov .
