Bank failures should not affect customers in Brookhaven
Published 1:48 pm Wednesday, March 15, 2023
BROOKHAVEN — Two of the biggest bank failures in US history occurred in the last week with Silicon Valley Bank and Signature Bank failing.
The reality is those bank failures should not affect customers in Brookhaven.
Bank of Brookhaven president Shannon Aker said he does not believe any of the banks in Brookhaven are in the situation of failing.
He explained Silicon Valley and Signature Bank grew about 300 percent during the pandemic and invested more than half of their funds in bonds and securities. Aker said the bond market has always been strong but the last year or two the bond market dropped.
Customers at those banks began to withdraw cash and withdrew more than what the banks had in liquidity causing the failures. It was not a wise banking decision and was a perfect storm to cause the second and third largest bank failures in US history.
“We don’t operate like that. I don’t think anyone else here would operate like that,” Aker said. “I had a few people ask me about those banks but we have not had any calls of concerns about our bank. We are liquid and have $40 million available.”
The bank failures should not cause any spikes in interest rates or affect lending, he said.
Is my money safe?
Aker said Mississippi might be last in a lot of things but the banking system is well regulated by the Federal Reserve, FDIC and Mississippi’s Department of Banking and Consumer Finance.
FDIC protects accounts with less than $250,000 in funds if a bank were to fail. It typically takes a few days for the FDIC to get money to those whose deposits are insured.
If you have more than $250,000 in the bank, you can open up a joint account with someone else and be insured on up to $500,000. Another way to keep funds insured by the FDIC if you have more than $250,000 is to open an account with another financial institution and keep funds there.
Aker said the banks in Mississippi are well run so he feels confident about the future. Bank of Brookhaven is conservative in investments and keeps enough liquid money to handle any withdrawals.
“We had our best year last year and January 2023 was our best month. We are thankful,” Aker said. “It was just a crazy thing out there.”