Fortifying against failure
Lehigh Valley banks reassured their customers that their money was safe by comparing portfolios.
South Whitehall Township-based American Bank told customers that its investment portfolio is “very liquid” with 20% of total assets in an investment portfolio, 65% of which consists of shortterm U.S. Treasury securities. Also, none of its assets are tied to cryptocurrency or financial technology companies. It noted that 2022 was its sixth consecutive year of record earnings.
“As a community bank, we take pride in building relationships and establishing long-term trust with our customers,” Chair and CEO Mark W. Jaindl said in a statement.
American Bank said the duration of its investment portfolio is extremely conservative at approximately one year. Based upon its current budget, it said, the bank could sell its entire investment portfolio today and still be profitable at the end of the year.
Souderton-based Univest Bank, which has two branches in the Lehigh Valley, sent an alert to its customers to show how it compares with SVB.
“SVB was primarily focused on serving the venture capital community (primarily technology and life science/healthcare start-ups) in the Silicon Valley,” the bank said. “Univest is a regional financial institution with a diversified business model.”
Univest said it had assets totaling $7.2 billion as of Dec. 31, including a diversified loan portfolio of $6.1 billion and a securities portfolio of $508 million. By comparison, SVD’s assets totaled $211.8 billion at the end of 2022 with a loan portfolio of $73.6 billion and a securities portfolio of $117.4 billion.
Furthermore, Univest said its securities portfolio had an unrealized loss of $71.4 million as of Dec. 31, which was about 9% of shareholders’ equity. On the other hand, SVB’s securities portfolio had an unrealized loss of $17.7 billion, which was about 99% of shareholder equity.
Univest had $2.4 billion of available funding sources at the end of last year, which was 45% of demand deposits. SVB had available funding sources of $35 billion, or 21% of demand deposits.