As you are most likely aware, the banking industry has been in the news since last Friday when the news broke about the regulatory takeover of Silicon Valley Bank (SVB). Last night, the regulators announced that all deposits at SVB as well as Signature Bank, in New York will be protected.
This is significant news and has created volatility and uncertainty in the financial markets and I wanted to clarify some of the differences between the business models of these banks and Salisbury Bank:
SVB focused on tech startups and venture capital, and Signature Bank served the cryptocurrency industry. As you know we are a traditional community bank, we take deposits locally and make loans locally – we are not heavily weighted in any one industry and have no exposure to the industries served by these two banks. We are well capitalized, and we have significant sources of liquidity. Our loan portfolio is well diversified and our credit quality is excellent. For these reasons we are confident that your deposits are not at risk from the issues that impacted these banks.
Because where you bank matters you should know:
- Salisbury Bank is a strong, well capitalized bank
- We have a traditional, community bank focus
- Our customers live, work, and do business in the markets that we serve
- We have various sources of liquidity and we continuously monitor and manage risks within the bank
- Our focus remains on providing you, our customers, with outstanding service and providing you with the products, services and advice you are accustomed to
Additionally, here is some important information on how FDIC Insurance protects depositors:
- Customers’ deposits are protected by FDIC insurance. In the 88-year history of the FDIC, no one has ever lost a penny of an insured deposit
- The FDIC insures up to $250,000 in eight separate account categories per depositor per bank. The FDIC is completely funded by the banking industry
- The FDIC insurance fund and all the agency’s costs come entirely from premiums paid by banks. The industry knows that a strong FDIC and deposit insurance fund are essential to the banking system
- Banks stand ready to do whatever it takes to ensure the health of the fund and strength of the FDIC. The FDIC is stronger than ever before
As a reminder, the banking system is much more resilient and in better shape since the 2008 financial crisis. Enhanced regulations required banks to shore up capital, reserves, and liquidity, which will allow banks to successfully navigate through these current issues. Please feel free to reach out to your banker if you have any questions.
President and CEO
Salisbury Bank and Trust Company