Arkansas' banks remain ready for business
Natural State banks are in good financial shape, several industry experts told Axios Northwest Arkansas on Monday.
Driving the news: Silicon Valley Bank and New York's Signature Bank failed over the weekend. Then, on Sunday night, the government said it would fully guarantee depositors and unveiled a new, bottomless facility to ensure all banks can access cash on favorable terms should they see deposit runs of their own, Axios' Neil Irwin reports.
Why it matters: The 114 banks doing business in Arkansas manage more than $95 billion in deposits made by individuals and businesses, so the Fed's move should assure them all their money is safe.
Details: SVB failed essentially because there was a run on its deposits late last week. Signature Bank, previously known as one of the most crypto-friendly institutions on Wall Street, failed after crypto bank Silvergate crumbled last week.
What they're saying: "Arkansas banks are in a very good financial position and the industry remains strong," state Bank Commissioner Susannah Marshall told Axios. She called the state's banking industry "stable" and "healthy."
- "I think our banks are in great shape," Randy Dennis, president of Little Rock bank consulting firm DD&F Consulting, said. Most institutions in the state serve communities where they operate and haven't gotten caught up in cryptocurrency or investing in bonds like SVB.
- "We're still not 100% sure that the payroll system got rewired correctly because everyone's doing this at the same time," he said. But we're "absolutely fine. It was just kind of a weekend from Hell."
Gary Head, chairman and CEO of Fayetteville-based Signature Bank of Arkansas, told Axios NWA he called his largest clients over the weekend to assure them his bank isn't tied to Signature Bank.
- "To the credit of most people, they read the rest of the [news] story" and there wasn't any confusion, he said.
The bottom line: Head added that past-due loans in the region — a measure of how well people are paying back money they've borrowed — are lower than he's seen in his 40-year career.
What's next: Banks report quarterly data to the FDIC at the end of March and it's usually public in late April.
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