Arkansas banks remain confident despite Silicon Valley Bank’s rollercoaster

Artwork: Megan Robinson/Axios

Banks in the Natural State are in good financial shape, several industry experts told Axios Northwest Arkansas on Monday.

Driving the news: Bank of Silicon Valley and New York Signature Bank failed over the weekend. Then, on Sunday evening, the government said it would fully guarantee depositors and unveiled a new bottomless facility to ensure that all banks could access liquidity on favorable terms if they saw their own deposits, Axios’ Neil Irwin reports.

Why is this important: The 114 banks operating in Arkansas handle more than $95 billion in deposits made by individuals and businesses. The Fed’s decision should therefore assure them that all their money is safe.

Details: SVB failed basically because there was a run on one’s deposits late last week. Signature Bank, previously known as one of the most crypto-friendly institutions on Wall Street, failed after Crypto-bank Silvergate collapsed last week.

What they say : “Arkansas banks are in very good financial shape and the sector remains strong,” State Bank Commissioner Susannah Marshall told Axios. She described the state’s banking sector as “stable” and “healthy”.

  • “I think our banks are in great shape,” said Randy Dennis, president of banking advisory firm Little Rock DD&F Consulting. Most state institutions serve the communities where they operate and have not been caught up in cryptocurrency or invested in bonds like SVB.

Enlarge: Phil Libin moved to Bentonville from the San Francisco Bay Area in 2021. The co-founder and CEO of All turtles and video conferencing company mmhmm has been doing business with SVB for 15 years.

  • “We are still not 100% sure that the payroll system has been rewired correctly because everyone is doing it at the same time,” he said. But we’re “totally fine. It was just kind of a weekend from hell.”

Gary Head, President and CEO of Fayetteville Arkansas Signature Banktold Axios NWA that he called his biggest customers over the weekend to assure them that his bank was not tied to Signature Bank.

  • “To most people’s credit, they read the rest of the [news] story” and there was no confusion, he said.

The bottom line: Head added that delinquent loans in the region — a measure of how well people are paying back the money they’ve borrowed — are lower than he’s seen in his 40-year career.

And after: Banks report their quarterly data to the FDIC at the end of March, and it is usually released at the end of April.

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