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Common-Sense Community Banks Distinct from Silicon Valley Speculators

By Al Vermeer, Peoples Bank CEO


Photo: Welcome! We are OPEN sign
Text: Peoples Bank has been serving consumers, businesses, and farmers since 1945.


The financial sector has been under intense scrutiny after the failure of two large financial institutions that specialized in high-risk industries, such as Tech Company start-ups and the cryptocurrency sector. Some depositors in local communities might be wondering what this means for their hard-earned money. But consumers—and policymakers in Washington—must distinguish between community banks like Peoples Bank, which has been serving consumers, small businesses, and farmers since 1945, and these large banks with a much different business model and risk profile.


The financial institutions recently closed by regulators were nothing like the local community banks that help the nation’s consumers, small businesses and their local communities thrive. Before its closure on March 10, Silicon Valley Bank (SVB) was the 16th largest bank in the nation with $213 billion in assets at the end of 2022.


SVB quadrupled their size in the five years leading up to their closing.  Much of this growth was propelled by tech companies that were flush with cash during the COVID-19 pandemic — depositors who quickly began withdrawing their funds amid concerns about the bank’s liquidity. It was a boom-and-bust cycle fueled by SVB’s heavy concentration in a single sector of the market.


Signature Bank of New York, which failed just two days later, also suffered from a concentrated balance sheet. Fueled by the SVB panic, depositors quickly began to withdraw their funds. Regulators closed the bank to prevent additional bank runs and to ensure that the Federal Deposit Insurance Corporation (FDIC) would be able to make depositors whole.


The Deposit Insurance Fund, which the FDIC uses to insure deposits, has a record high balance. Americans do not have to worry about the safety of their deposits. That is especially true for customers of community banks.

 Photo: Main Street, Sheldon, Iowa
Text: Peoples Bank reinvests in our communities and local economies. 

At Peoples Bank, we believe that banking locally is important. Banking locally means reinvesting in our communities. Not only does banking locally support small businesses (community banks fund more than 60% of small business loans and more than 80% of ag loans), but as locally owned and operated businesses themselves, community banks are part of the economic engines that create 62% of new jobs annually. Additionally, community banks contribute tax dollars that help maintain local municipalities.


Our unique and time-tested model, which is followed by community banks in communities just like ours all across the country, is best suited for U.S. consumers and business owners. We stress one-on-one, face-to-face relationships with the small businesses and residents we serve. We know what small businesses need because we are one. Because Peoples Bank relies on relationships and our reputation, we are dedicated to looking out for our customers’ long-term interests. As a community bank customer at Peoples Bank, you have access to our experienced team, and we stand ready to assist you at all times with any of your questions or concerns.


That outlook means we focus on established banking practices that have served our community for generations. As the FDIC’s latest Quarterly Banking Profile attests, community banks’ asset quality is favorable, total deposits are stable, and capital ratios remain strong.


This isn’t the first time community banks have weathered a financial crisis. We proved stable during the 2008 Wall Street meltdown and the COVID-19 pandemic. We are here for our customers through every stage of the economic cycle, and we have been for decades.


Photo: Man shaking hands
Text: • Honesty, integrity, and respect shall be 
  the cornerstone of all that we do.
• We strive to enrich families and 
  communities through our actions.
• We are committed to excellence.
• Change fuels our progress.
-Peoples Bank Core Values


These bank failures highlight the strengths of banks like Peoples Bank. We’re ready to explain our business model. We’re ready to compete against larger institutions for your deposits. We’re ready to meet you anytime and anywhere to show members of our community that our responsibility is to you, not to Wall Street or Silicon Valley.


We embrace our role as community bankers and financial stewards, and we stand ready to help you with your unique financial needs. Contact any of our bank locations today!