Black Belt bankers say local banks are safe

Two local bankers have a message for their Black Belt neighbors: Relax.

National media is overrun with talk about a banking crisis, with California’s Silicon Valley Bank as its posterchild.

The 40-year-old bank, which catered to the tech industry, collapsed spectacularly earlier this month. Then another bank in New York collapsed, causing talk about another banking crisis like the one that roiled the world’s financial markets in 2008.

But Richard Walters, president and CEO of First Cahawba Bank, and Andy Stewart, market leader for South Alabama for Trustmark, said Alabama’s banks are solid.

“Alabama Banks are rated among the safest banks in America, and First Cahawba Bank rates among some of the strongest in Alabama,” Walters said.

Stewart said Trustmark is also on solid ground. “Trustmark is a sound, profitable, safe and stable financial institution with a 133-year history of serving its customers and communities,” he said.

Both bankers said their banks are “well capitalized,” which means they have more than enough assets to cover their liabilities, even if lots of depositors wanted to withdraw all of their money at once, which is what brought down Silicon Valley Bank.

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Walters and Stewart said their banks serve many types of customers, so it’s less likely that a downturn in one part of the economy would impact their bank. The California bank was heavily invested in the tech market, and turmoil in that sector, plus risky investments in bonds that lost value instead of gaining value, brought the bank down.

“We’re well diversified,” Walters said. “We have offices in Selma, Troy and Baldwin County. We have a deposit base spread throughout the state.”

Trustmark, based in Jackson, Miss., also has a diverse list of depositors, and they have lots of them, Stewart said. The loss of one depositor would not impact the bank as it would a bank that depends on just a few large customers.

“We have a loyal deposit base, with lots of touches,” Stewart said. “We represent a lot of households. We have a well-diversified business mix.”

Walters said Alabama banks “are conservative by nature,” and are therefore less likely to invest in risky ventures that have brought down some banks in other parts of the country.

He said anyone who is uneasy about the banking system can find information on the website of BauerFinancial, an independent rating agency.