Updated March 14
With the collapse of California-based Silicon Valley Bank, local banks are reassuring customers that their money is safe. Martha’s Vineyard Bank and Cape Cod 5 both sent letters to their customers notifying them that the shutdown will not impact their operations.
“These failures involved banks that operate very differently from Martha’s Vineyard Bank,” MVB president and CEO James Anthony wrote in a letter. “Indeed, their collapse emphasizes the importance of entrusting your deposits with a bank that provides the maximum possible protections.”
Anthony’s letter states that Silicon Valley Bank, once the 16th largest bank in America, with $209 billion in assets, experienced a run on deposits, and was taken over by the Federal Deposit Insurance Corporation (FDIC) within 48 hours. The bank provided services focused on high-technology companies, and this is the second largest bank failure in U.S. history, after the Washington Mutual collapse in 2008.
Martha’s Vineyard Bank spokesperson Christine Conrad told The Times that operations at the bank were “business as usual,” and nobody tried to pull out money because of fear. “Our balance sheet is strong,” she said. “We’re a community bank. We don’t have a lot in common with a bank like Silicon Valley.”
Cape Cod 5 CEO Matt Burke told The Times it was also business as usual at his bank. “We thought it was important to proactively communicate with our customers, given the nature of the news, to assure them of the strength and soundness of Cape Cod 5 and the safety of their deposits,” he said.
Both letters emphasized each bank’s financial strength and stability. Each bank won the highest rating for financial strength from Bauer Financial, and Martha’s Vineyard Bank also received an “outstanding” Community Reinvestment Act rating from the Federal Reserve.
“We have been operating since before the Civil War, and have weathered many events since then, including recessions and the Great Depression, and we intend to continue serving our customers and communities well into the future,” Burke wrote in the letter.
The banks are covered by the FDIC.
Anthony’s letter also states Martha’s Vineyard Bank is one of the few banks in the country with full deposit insurance for 100 percent of all deposits through the FDIC and the Depositors Insurance Fund (DIF), which its website describes as a “private, industry-sponsored insurance fund” that insures all deposits above the FDIC limit. All of the DIF member banks are in Massachusetts, and Martha’s Vineyard Bank is the only financial institution to provide this coverage on the Island.
“If you are concerned about the security of your deposits, Martha’s Vineyard Bank is your safe harbor,” Anthony wrote. “We are committed to act as responsible stewards of our 114-year-old institution, and to serve our customers and community into the next century.”
Although not with the DIF, Burke told The TImes in an email that Cape Cod 5 participates in an insured cash sweep program through IntraFi Network Deposits, which can also cover for funds in excess of the FDIC limit. “With IntraFi, our customers can access multimillion-dollar FDIC insurance to fully cover all of their deposits and earn interest on their funds, all through their relationship with Cape Cod 5,” Burke said.
Emily McDonald, spokesperson for Rockland Trust, a regional bank serving Massachusetts and Rhode Island, shared a statement with The Times on Monday afternoon. “Rockland Trust manages for the long term by prioritizing sustainable banking practices,” the statement reads. “We continue to be in a strong financial position, and we are here to care for and support our customers and our communities in the meaningful way we have for the past 115 years.”
Although the Silicon Valley Bank failure did not greatly impact Martha’s Vineyard, the same cannot be said for the rest of Massachusetts. The State House News Service reported that the collapse of the bank, which had several locations in the state, sent “shock waves” through the Boston-area tech sector. Gov. Maura Healey and her team have been in contact with the White House, federal regulators, Congress, and business leaders regarding the bank closure’s impact.
“Our administration is actively working to support individuals and businesses affected by SVB’s closure, and to find solutions to help them address immediate needs, including putting supports in place to ensure that small businesses and employees do not experience significant disruptions,” Healey was quoted. “We will continue to be in dialogue with decisionmakers, and support all efforts to preserve the strength and stability of our markets and protect jobs, businesses, nonprofits, and our economy. We have confidence in the strength of our regional banks and banking operations.”
The fallout at Silicon Valley Bank has renewed fears of the market crash in 2008. CNN reported that the panic was set off after Silicon Valley Bank announced on Wednesday, March 8, that it sold securities at a loss, and that it would sell $2.25 billion in new shares to “shore up its balance sheet.” In a joint statement on Sunday, the federal government announced that all depositors would be fully protected through the FDIC, without levying a burden on taxpayers. Shareholders and some unsecured debt holders will not be protected, and senior management has been removed.
Silicon Valley wasn’t the only financial institution to be shuttered recently. Silvergate Capital Corp. announced on Wednesday, March 8, it would liquidate its cryptocurrency-friendly Silvergate Bank. Also, New York–based Signature Bank closed its doors; regulators stated it will be receiving a treatment similar to Silicon Valley Bank.
…..we just have to worry about the banks being robbed while we are inside by armed persons.
The Biden economy has failed everything everywhere all at once.
Yes– in 2 years, Biden wrestled the control of the world wide price of oil out of the hands of the free market, and raised it so the 5 biggest oil companies could make a collective $360 Billion dollars in 2022. They should be able to create a lot of jobs with all that money.
But it seems the job market is doing pretty well. In Biden’s first 2 years the unemployment rate went from 6.3 to 3.4 % —
In terms of actual jobs created , in the first 2 years of the Biden administration, 12 million jobs were created– to put that in perspective, in the 3 years before the pandemic 6.3 million jobs were created. I am purposefully leaving 2020 out, which had dramatic job losses due to the pandemic.
In Biden’s first 2 years Inflation rose quite quickly . one could argue that it was because of pent up consumer demand from the pandemic, the record breaking number of jobs added to the economy and the fact that the economy was booming with citizens spending all that cash from all that stimulus money that was pumped into the economy in the 2 years before Biden took office. But, the inflation rate has dropped for the last 8 months in a row.
Concerning the bank failures that this article addresses, I have heard some economist talking about the possibility that the repeal of parts of the Dodd Frank act in June of 2017 could have played a part in these failures. We don’t know for sure– like we don’t know for sure if railroad safety regulations that were repealed in 2018 may have prevented or at least mitigated some of the damage caused by the derailment of a train carrying toxic chemicals in Ohio last month.
Yes, it’s tough to handle the truth sometimes.
Much easier just to blame it all on “woke” liberals and say catchy things that just aren’t true.
Andy, can you explain how this Bidens fault? And please use credible and verifiable sources. Thank you
Ridiculous as usual. Your beloved Trump presided over the rollback of the oversight that would have prevented this. The entirety of the Republican Senate voted for it and 17 corporate Democrats joined in. You can’t blame Biden but of course you do cause like all conservatives facts don’t matter.
Not sure how many Islanders have more than $250,000 in the bank. The federal government ensures all banks up to that amount and that includes the local banks. The SVB bank should be allowed to fail, and we should not be spending one penny to help them out. That’s how a capitalistic society should respond to that problem. This was a bad designed for speculators, and sometimes speculators fail.
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