I write to you today following news of the recent failures of Silicon Valley Bank in California and Signature Bank in New York. These were both large banks, with Silicon Valley Bank being the largest to fail since the financial crisis of 2008. Their failures were due to bad investment strategies, accepting crypto assets, and a heavy concentration of large tech company depositors that pulled their money from the bank as soon as signs of potential problems arose.
What is particularly worrisome about these events is that neither bank had roots in the communities they served, and both had mismanaged their customers’ deposits. This is reminiscent of the financial crisis in 2008, when larger financial institutions took unnecessary risks to maximize their returns and own pocketbooks, leading to a “flight to safety” by customers. Historic amounts of money moved from Wall Street to Main Street as customers went back to the community banks they knew and trusted.
At Richwood Bank, we are proud to have grown 34% in 2009 following the financial crisis crash and have grown steadily ever since. We welcome additional customer deposits today. Our success is tied directly to the success of our communities, and we are built on the premise of trust. We lend to our service area, donate to organizations in our backyard, and serve on boards and committees in the towns where we all live. Our local depositors ensure that everyone in our communities has access to the financial services the big banks will not provide.
As Jim Burke, the Former Chairman and CEO of Johnson & Johnson said, “You can’t have success without trust.” Trust is a key factor in all human relationships, including business relationships, especially those that deal with the public. We thank you for investing not only your money with Richwood, but also your trust in our character and competency.
Our Vision is To Inspire, Protect, and Celebrate Anything That Helps Communities Thrive. We have an incredible team ready to serve, and we will continue to invest back in the least risky investment we know…you.
Sincerely,
Chad Hoffman
President/CEO
Richwood Bank is not part of this story or headline. We cannot stress enough the importance of understanding the community banking model of serving our customers and communities. We’d like to point out the key differences of Richwood Bank.
Points to know:
- Our deposits are primarily derived from the local communities where we operate, reside, and offer support. These local deposits serve as a crucial source of funding that facilitates the protection, inspiration, and celebration of local businesses.
- Richwood Bank remains well capitalized and well positioned to continue to serve our customers and community. We were chartered more than 155 years ago and expect to serve this community for generations to come.
- We have no involvement with cryptocurrency or cryptocurrency stock.
- As a community bank, we take pride in our relationship-based business model focused on building long-term trust with our customers. After all, we live in your community too, and your success is our success.
- SVB was not well positioned from a risk perspective to handle the rapidly rising rate environment we’re currently experiencing. Richwood Bank considers our future carefully and conservatively, giving ourselves the flexibility to weather financial disruptions.
- As active members in our larger community banking collectives, we strive to ensure community banks are well-represented with policymakers and regulators and accurately characterized in the media, to differentiate community banks from other financial institutions.
- We’re prepared for the long game and always have been. Richwood Bank has weathered the great depression, the farm crisis, the 2008 recession and will continue to serve the communities we call home.
Thank you for your continued support and confidence in Richwood Bank.
Further information regarding FDIC:
Since its inception in 1933, no depositor has lost a dime of FDIC insured Funds. FDIC currently insures deposits up to $250,000. If you have questions about additional insurance coverage, we are ready to assist you to determine whether more coverage is necessary. Richwood Bank provides additional services for significant balances and municipalities.
If you would like to learn more about FDIC insurance and how it works, we encourage you to access the following resources or give us a call directly 740-943-2317.
