Friday, June 21, 2024

Can you trust your bank? Local bankers speak on strength of community banks

by BIZ Magazine

As uncertainty lingers over the banking industry, local financial institution leaders are easing fears and explaining there is no need for northwest Louisiana depositors to worry.

Since the collapse of Silicon Valley Bank in California and Signature Bank in New York last month and the rise in interest rates to battle spiraling inflation, many people may feel the urge to withdraw deposits.

Joe Arnold, president/CEO of Carter Credit Union in Shreveport, was quick to note that none of the local financial institutions have anything in common with the problems that existed with SVB and Signature Bank.  

“Our deposits are actually higher today than just before the SVB failure,” he added.

Jason Smith, president/CEO of Citizens National Bank, explained that community banks have very transparent and simple balance sheets. 

“We focus on investing in our communities and supporting local economic development efforts. The larger the bank, generally the more complex the strategy – we prefer simple and transparent,” he said.

Smith urged consumers to take a look at what conservative practices/philosophy and risk/investment practices your financial institution employs in contrast to those that caused the recent bank closures.  

“Most community banks invest their depositors money in assets with a relatively short maturity. This investment and lending strategy helps manage the risk associated with longer term assets,” Smith explained. “A good mix of maturities provides a balance of liquidity and return.”

CNB is taking additional steps to make customers feel more comfortable in view of the current banking climate.

“We have sent email correspondence to all our customers explaining the significant differences between our bank, as well as most community banks and Silicon Valley and Signature Bank,” Smith said.

Jayce Simpson, president and CEO of Community Bank of Louisiana, said that Community Bank of Louisiana is committed to serving its communities and is built on the principles of great asset quality, high liquidity, and sound conservative management principles.  

“These conservative principles are why we have been a strong local bank for 122 years,” Simpson said. “Even before the collapse of Silicon Valley Bank and Signature Bank, we anticipated the effect of higher rates and economical challenges. Because of these factors, we were already increasing our liquidity positions, maintaining sufficient levels of cash at the Federal Reserve, and growing ample levels of additional sources of liquidity.”

He added that Community Bank of Louisiana recently ranked as the top bank in the state based on metrics by Financial Management Consulting Group and continues to expand their footprint in northwest Louisiana with recent expansion to Sabine Parish. 

“Our doors are always open and we value your questions because great communication is important in uncertain economic times. That is what a locally-owned, community bank offers that the larger out-of-state banks cannot,” Simpson said. “We will continue to provide great customer service and look forward to serving northwest Louisiana for decades to come.”

While the assets of Silicon Valley Bridge Bank were bought by First Citizens BancShares, Inc. and Flagstar Bank, a subsidiary of New York Community Bank, acquired $38.4 billion of Signature Bank’s assets, community banks shouldn’t leave customers with concern about their future.

Comments from leadership shows the national banking climate looks solid overall, and any temporary market fluctuations appear to have mostly vanished. All of which leaves our northwest Louisiana banks on very solid footing.

— Stacey Tinsley, BIZ. Magazine

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