LITTLE ROCK, Ark – Bankers in Arkansas are working to ease the concern of customers in the Natural State following the collapse of a California-based bank.
Silicon Valley Bank announced its closure last week, citing a sudden interest rate hike as the reason for its demise.
“This is not a systemic problem, banks are strong, they are sound, and they are fine,” Arkansas Bankers Association President and CEO Lorrie Trogden said.
In the days after the collapse, bankers in Arkansas are working to pick up the pieces, ensuring local customers that their money is safe.
“I cannot overstate that enough,” Trogden said.
Trogden said a similar demise in Arkansas is unlikely simply because of the people the state serves.
“You just don’t see a heavy concentration in venture, tech start-up, crypto, things like that,” Trogden explained. “Arkansas banks are a lot more conservative typically.”
“You look at Silicon Valley Bank’s business models as perhaps a little bit flawed in the narrow focus that they had,” Simmons Bank President and CFO Jay Brogdon said.
Brogdon said he believes the demise of Silicon Valley Bank is an isolated incident. Still, he is encouraging bankers and customers to take this as a learning opportunity.
“Not only know your banker but know your bank. Understand the markets that it serves, the conservative approach, how long have they been around? Have they proven through long periods of time that they can withstand the uncertainties, the shifting sands of the financial system,” Brogdon explained.
Both companies said Arkansas has security measures in place to ensure something like this doesn’t happen in the state.
Below is a statement issued by Arvest Bank regarding the situation:
“Arvest is a stable and growing bank with a diverse customer and deposit base as well as strong capital levels that exceed regulatory minimums. We carry adequate reserves for any estimated loan losses. If needed, Arvest has diverse funding options and available borrowing capacity with the Federal Home Loan Bank of Dallas, the Federal Reserve, and other private market sources. As an FDIC-insured depository institution, deposits and certain retirement accounts are insured up to $250,000. For complete FDIC coverage information, consumers can visit FDIC.gov for details.” – Jason Kincy CMO, Arvest Bank