The sudden collapse of two U.S. banks on each coast has left some people wondering if their own deposits are at risk, either now or down the road.
The worries are understandable. A bank run that hit Silicon Valley Bank forced a takeover by federal regulators, and a similar run hit New York-based Signature Bank. Bankrate lists those failures as two of the three biggest in U.S. banking history.
Federal regulators stepped in to guarantee all the deposits of both banks, beyond the $250,000 insured by the Federal Deposit Insurance Corp. That calmed worried depositors and investors briefly, but fresh fears emerged again this week as Credit Suisse, a large European bank, appeared vulnerable. It were granted a $54 billion loan by the European Central Bank as part of a stabilization effort.
And in the U.S. on Thursday, a group of financial institutions agreed to deposit $30 billion in First Republic Bank — which saw its share price slide in recent days — in an effort to ensure confidence in the financial system here.
Many bank experts believe Silicon Valley and Signature faced a unique set of circumstances that led to their failures and that are unlikely to be replicated in the same way at other institutions.
A number of financial institutions in this region — largely smaller banks and credit unions — are assuring customers that they need not worry, that their deposits are safe and that they do not engage in risky behavior that could put depositors’ money in peril.
Among them, Geneva-based Lyons National Bank, led by President and CEO Tom Kime.
“For over 170 years, The Lyons National Bank (LNB) has served local consumers and area small businesses under an entirely different business model than other banks across the nation and especially those currently in the headlines,” he said in a statement. “Our conservative approach to hometown banking keeps us financially strong and well positioned. LNB’s high-quality loan portfolio is diversified without concentrations in any one business or industry, adding an additional level of stability. The bottom line is that our customers rely on us to make sound decisions with their money. It’s a responsibility we’ve always taken very seriously at LNB.”
Barbara Hennessy, senior vice president and marketing director for LNB, expanded on Kime’s remarks.
“As noted by Independent Community Bankers of America President and CEO Rebeca Romero Rainey, community banks continue to be the backbone and foundation of the banking system in New York state and in the country,” she said. “Ours is a banking model that’s based locally and is relationship focused, and it is intentionally a business model that focuses on our dedication to serve the needs of those who count on LNB for financial stability and prosperity.”
At Dewitt-based Community Bank, N.A., another financial institution that has many branches in the Finger Lakes, the approach is similar to LNB.
“The good news is that Community Bank’s 157-year commitment to traditional community banking has allowed us to remain strong, stable and resilient in our financial ability to support our customers,” the bank said in a statement. “Community Bank has consistently been ranked among the top-performing U.S. banks in America by Forbes magazine for our financial performance and was recognized as one of America’s Most Trusted Companies 2022 by Newsweek, ranking sixth in the banking industry category.”
The view from a credit union
Sodus-based Reliant Credit Union President and CEO Pam Heald issued a message to customers echoing the same themes as LNB and Community Bank.
“Reliant is more than our name,” she said. “With the recent events that have been reported regarding the banking industry, we want to reassure you that Reliant is financially sound.”
She pointed to the reasons why:
• “Reliant’s capital position is strong and continues to grow.”
• “Reliant’s liquidity position is strong. We have a well-diversified deposit base and multiple other sources of liquidity available.”
• “Reliant’s asset quality is excellent. Our balance sheet remains strong and well managed.”
She also noted that Reliant’s deposit accounts are covered by the National Credit Union Share Insurance Fund, managed and administered by the National Credit Union Administration.
CNB assures customers
Canandaigua National Bank and Trust also is assuring its customers that it is in good shape and in no danger of failure.
“You may have seen recent news stories regarding the challenges of a couple of financial institutions, one in California with a concentration in funding tech start-ups, and a New York bank with a focus on a narrow lending market,” Frank Hamlin III, president and CEO of Canandaigua National Bank and Trust, said. “Canandaigua National Bank and Trust remains well-capitalized and well-positioned to continue serving our customers and community.”
He explained that CNB is a community bank that reinvests deposits back into the communities it serves. Hamlin said it has a diversified approach to deposits, lending and funding sources, reducing its risk to impacts of a single industry or investment.
As an FDIC member, all deposits up to $250,000 are protected by the FDIC. Additionally, he said the bank has significant liquidity through multiple funding sources. Deposits over $250,000 are insured by the federal government, he added.
And the Bank of the Finger Lakes, owned by Wayne Bank, based in Honesdale, Pennsylvania, also is assuring customers that their funds are safe. President and CEO Jim Donnelly addressed the issue in a message to employees and customers on Monday.
“I want to assure you that Wayne Bank is strong, secure and stable,” he said. “We have been so for over 151 years. We are here to help our customers and communities. We are in the business of taking in deposits from local people and lending them out to local people who are buying homes, cars and starting businesses. These are the things that help our communities grow. The risks we take are in our friends and neighbors. Our track record in doing this is exceptional. ...We will keep your deposits safe and make good loans.”
Times staff members Louise Hoffman Broach and Dave Shaw contributed to this story, which also includes reporting from the Baltimore Sun.