![]() Fast forward 12 months and interest rates have now greatly increased, those long term fixed rate bonds have dropped in value. This mismatch created serious risk in a rising rate environment resulting in large unrealized losses jeopardizing their capital should those losses have to be realized. What’s even crazier? They purposely invested billions of dollars’ of deposits into long term fixed rate investments when rates were near 0%, leading to a massive mismatch on their balance sheet. Their business was concentrated heavily on startups financed by venture capitalists which is extremely risky in itself. They went without a Chief Risk Officer for 8 months during one of the fastest rate rising environments on record. Top execs sold millions of dollars of shares in the weeks prior to the collapse. Rebeca Romero Rainey argues there’s ‘no reason’ for community banks to pay for the SVB collapseĪs a community bank executive reading the news surrounding the collapse of Silicon Valley Bank on Friday I am appalled. ![]() I will always support and advocate for the community and customers we serve. If you think we as community bankers are going to sit back and idly watch as the media and mega bank executives and board members try to convince people there’s no need for smaller banks, think again. Go to any community bank in your area and ask to speak to the CEO (because you actually CAN) and you will hear authenticity and passion as to why we matter and how important we are to our communities. I am so grateful as a community bank executive to have people like Rebeca Romero Rainey and ICBA in my corner. We take care of our customers with a relationship based model and we manage our risk so to not lose the very trust we have worked to build. I have had many conversations in the past two weeks with these small business owners and other customers who have said they wouldn’t be where they are today without the support of a community bank. Those stats matter.įor the small communities we serve we are the economic backbone that the American dream is built upon. Community Banks (typically considered under $10 billion in size) make over 60% of small business loans under $1 million and over 80% of ag loans.
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