Your Trust is Our Purpose
As you have seen and heard in the news - last Friday, March 10th, Silicon Valley Bank experienced a bank failure. The California-headquartered institution experienced a run-on deposits and state regulators seized the bank and made the Federal Deposit Insurance Corporation (FDIC) its receiver in an effort to stop the continued downfall. In addition, the New York-based institution, Signature Bank, failed on Sunday.
Why did these banks fail?
Silicon Valley Bank was unique by servicing almost exclusively the technology industry and venture capital-backed companies. This sector has been hit hard this past year due to the downturn in tech stocks and a rapid increase in interest rates to help the nation combat inflation. Bonds that Silicon Valley Bank had bought over recent years were typically safe, but the value of the investments fell because they paid lower interest rates than what a bond would pay today in the higher-rate environment. Customers of Signature Bank, which had ties to the cryptocurrency industry, were alarmed by the collapse of Silicon Valley Bank and withdrew more than $10 billion in deposits, which led to its failure.
Are my deposits safe?
This recent news may have you questioning the safety of your deposits. I want to assure you, Touchstone Bank is strong, diversified, and well-capitalized. Our capital strength is well above what is required by federal regulation. For over 117 years, we have made decisions that support our communities. We are proud to be a community bank with a well-diversified deposit base and loan portfolio that meet the unique needs of our community. We also hold a Superior 5-Star rating from Bauer Financial, an independent financial rating company for financial strength and performance amongst banks nationwide.
Our conservative operating philosophy and relationship banking model make us significantly different from Signature Bank and Silicon Valley Bank. In fact, our net deposits have grown during the first quarter of 2023 and have grown further since the announced failures of Signature Bank and Silicon Valley Bank.
We are monitoring the status of the Bank’s $1.0 million subordinated debt investment with Signature Bank. Regardless of the outcome of this investment, Touchstone Bank will continue to hold capital well in excess of regulatory standards for well-capitalized status and will have ample liquidity to ensure our customers have the financial resources to meet their obligations and grow their businesses. We have no other direct exposures to Signature Bank or Silicon Valley Bank.
I assure you that we will continue to keep you updated on market conditions and provide helpful information as it comes available. Please know we take the relationship with you very seriously. We are here to help you and answer any questions you have, including FDIC insurance coverage. Please do not hesitate to contact us either by phone at 1.888.478.4434 or email us at [email protected].
Sincerely,
James R. Black
President and CEO