In the wake of two recent bank collapses, Silicon Valley Bank in California and Signature Bank in New York, banking customers are understandably concerned about the security of their deposits.
In response, many Pennsylvania banks are reaching out to their customers to assure them “that won’t happen here.”
One of the first area banks to reach out to customers with reassurance was Embassy Bank for the Lehigh Valley. Chairman, President and CEO David Lobach pointed out that Embassy is a very different type of institution.
“As a community bank with over 21 years of growth and stability, our focus is (and has always been) on locally sourced deposits and loans,” said Lobach. “Our business model and balance sheet position are vastly different than that of SVB, and we have not engaged nor invested in industries such as fintech startups and crypto currency.”
Noting that in 2022 the bank had its sixth consecutive year of record earnings, American Bank Chairman and CEO Mark Jaindl said he had no concerns over stability.
“We have a history of staying the course during difficult times in our industry as evidenced by the Great Recession of 2008 to 2013 when we had no non-performing loans,” Jaindl said. “We are very liquid with 20% of our total assets in an investment portfolio, 65% of which consists of short-term U.S. Treasury securities. None of our assets are tied to cryptocurrency or financial technology companies.”
American Heritage Federal Credit Union, a Philadelphia-based institution with locations in Upper Bucks County was also among those reaching out to depositors.
“American Heritage is a safe, sound, and well-capitalized institution. Our liquidity ratio is twice the amount of peer institutions, and our capital position is well above the regulatory thresholds for well-capitalized institutions, set by our regulatory agency, the NCUA,” said Bruce Foulke, president and CEO of the credit union.
FirstTrust Bank, which has branches in Allentown and Doylestown, had similar sentiments in a letter to its customers.
“Firstrust does not invest in crypto or high risk fintech investments,” the bank assured in the letter. “Firstrust Bank remains well capitalized, with strong operating results, strong loan loss reserves, and ample sources of liquidity. Since our founding nearly 90 years ago, we’ve been focused on serving our customers and keeping their deposits Safe and Sound. This commitment is reinforced by the fact that we are a privately held, family-owned bank that does not have the same pressures of a publicly traded bank.”
In the past week, Silicon Valley Bank, which is the country’s 16th largest bank and is popular with tech entrepreneurs, collapsed after depositors rushed to withdraw money over concerns about the bank’s health.
Following that, concerned customers at Signature Bank in New York, followed suit and withdrew a reported $10 million in deposits causing the third-largest bank failure in U.S. history.