Bank Closures Update

What Happened?

On Sunday, March 12th, a joint statement was released by the Department of the Treasury, Federal Reserve, and FDIC stating that the "U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth." The statement explains:

• The FDIC is enabled to complete its resolution of Silicon Valley Bank (SVB) in a manner that fully protects all depositors. Depositors will have access to all their money, as of Monday, March 13th. No losses associated with the resolution of SVB will be borne by the taxpayer.
• A similar systemic risk exception was announced for Signature Bank, New York, New York, which was closed Sunday, March 12, by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of SVB, no losses will be borne by the taxpayer.
• Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed.
• Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.

If you have any specific exposure to SVB, here is a link where there is more information, including a number to call.

How is the Overall Banking System?

• The banking industry remains strong and a source of strength. The SVB and Signature Bank closures have unique risk factors not representative of the broader banking industry.
• Silicon Valley Bank is the first bank closure in this country in almost three years, a testament to the resiliency of America's banks and their ability to support the economy and the communities they serve despite a global pandemic, rising inflation, and an unprecedented increase in interest rates.
• As FDIC chairman Gruenberg noted in the agency's most recent assessment of the nation's banks just days ago, 'the industry remains well capitalized and highly liquid.' The events of this past week do not change those facts.
• On Friday, Treasury Secretary Janet Yellen expressed full confidence in banking regulators to take appropriate actions in response and noted that the banking system remains resilient, and regulators have effective tools to address this type of event.

Are My Deposits Secure at State Bank?

State Bank is a local, solid, well capitalized bank. Depositors can rest assured that their money is insured by the FDIC. Insurance limits are dependent on the amount and type of accounts, but using various account designations, deposits can be fully insured. You can use the FDIC insurance calculator accessed at fdic.gov, or feel free to drop by any of our offices for a deeper discussion.

FDIC Insurance Protects Bank Customers

• In the FDIC's 88-year history, no one has ever lost a penny of an insured deposit.
• The FDIC is completely funded by the banking industry and insures up to $250,000 per depositor per bank.
• The FDIC is stronger than ever before. The FDIC insurance fund stood at an all-time high of $124.5 billion as of June 2022.
• A strong FDIC and deposit insurance fund are essential to the banking system, and banks stand ready to do whatever it takes to ensure the health of the fund and strength of the FDIC.
• The FDIC has a $100 billion line of credit with the U.S. Treasury, which would, by law, have to be repaid by the banking industry if ever used.