State’s banks remain optimistic
CASPER — The recent collapse of Silicon Valley Bank has roiled the U.S. banking and financial industries and sent ripples across the world. In Wyoming, not so much.
Though some banks have experienced trouble, Wyoming’s banking industry has reported stability over the past week as fears of a much larger crisis have eased somewhat.
Those in the industry attribute the relative tranquility to fewer risks and the distinctive banking landscape of Wyoming.
“Everybody’s sitting pretty well,” said Scott Meier, president and CEO of the Wyoming Bankers Association.
As the run on Silicon Valley Bank has captivated national attention, Meier has been talking with banks across the state. They have raised little concern about the possibility of the current banking upheaval spreading to Wyoming.
“Every one of them has told me, ‘Yeah, we’ve gotten two or three calls asking us what’s this about?’” Meier said. “Nobody is shifting money from the small banks to the big banks that I know of. Nobody’s worried about how we’re going to survive any of this stuff. Everybody’s fine.
“I don’t think there’s any banks in Wyoming right now that are on the edge of failing, so I don’t think it really is that big of a deal,” he said.
When Silicon Valley Bank failed on March 10, due to the mismanagement of interest rate risk, among other issues, it sent off a panic that quickly spread, consuming New York’s Signature Bank and raising fears that other regional banks could similarly crash. It sent bankers in Wyoming scrambling to their balance sheets to look at their own risks.
“I would guarantee you every community banker in Wyoming was reading everything they could and then making sure that internally within our banks we don’t have those same risks,” said Kim DeVore, president and CEO of Jonah Bank of Wyoming. “I would tell you this Friday I feel way better than I felt last Friday because I’ve gone through that process. … It is very apparent that we are very different banks.”
Silicon Valley Bank and other larger banks are distinctly different from many of those in Wyoming, such as Hilltop or Jonah banks. The former are investment banks whereas the “community banks” of Wyoming are more traditional, taking in deposits, lending out money and investing the rest conservatively, DeVore said.
“Banks in Wyoming by nature keep more capital than most banks. We keep more liquidity than most banks. And we are extra conservative and sensitive to risks,” she said.
The boom and bust cycles Wyoming experiences and the global financial crisis of 2008 have made that approach a necessity, and in cases like the current banking turmoil, it pays off.
“It didn’t take very long as a banker to realize we don’t have those concerns here in Wyoming and we can rest easier,” DeVore said. “I think our customers feel the same way.”
Wyoming’s smaller banks tend to focus less on aggressive growth, something the banks that have collapsed shared in common, making them more stable, said Larry Hatheway, an economist and financial advisor who co-founded Jackson Hole Economics, a nonprofit economic research and analysis group.