Local bankers attempt to calm fears during Defiance County CIC meeting

Board members Mark Klein of State Bank and Trust Company, and Dave Figley of Premier Bank — both located in Defiance — said the local situation remains good. Some concerns have arisen following the collapse of Silicon Valley Bank in California and Signature Bank in New York.

CIC Executive Director Erika Willitzer told the board that “some of the smaller businesses are nervous” because of these failures although she said local banks are “so very much strong.” She asked that Klein and Figley confirm this strength.

“The local banks are probably in a lot better shape than what you’re seeing on the news,” said Figley, Premier’s vice president commercial lending. “I don’t know specifically what happened there, but there was some liquidity issues ... .

“I don’t know the percentages, but I’m guessing a large percentage of the local depositors at the local banks are probably insured deposits,” added Figley. “So, if you’re insured you have nothing to worry about, right? If your bank fails, the government’s going to assure that you’re going to get your money.”

Klein noted that State Bank officials members talked in-depth Thursday morning about the matter, observing that “when you have zero interest rates for so long and trillions of dollars in stimulus money (placed in the economy by the federal government) banks were flooded with cash they didn’t know what to do with.” When this money couldn’t be loaned out, it was put into bonds, but the banks had to “take a haircut” on them, continued.

“The differences in us and them and many other banks,” explained Klein, State Bank’s president and CEO, is that only 15% of State Bank depositors over $250,000 are uninsured. But the banks that failed had 90% of large depositors that were uninsured, he added.

Too, he said “they had a major, major security portfolio that was underwater.”

State Bank had issued a public statement earlier this week — published in Thursday’s Crescent-News — to reassure customers about the local situation.

“So what are we doing now?,” asked Klein rhetorically. “We’re calling all municipalities, we’re calling all of our public funds individuals and (making) sure that they know that there is a plethora of insurance through CDARS and ICS that you don’t have to move money anywhere. There’s no reason to move money anywhere. ... it’s all about trust and confidence, and as long as we got that you’re probably good.”

In other business Thursday, the board:

• was informed by Paige Johnson, the CIC’s business development operations manager, that 123 nominations have been received for the eight business awards that will be announced at the board’s annual meeting from 9-10:30 a.m. on April 14 at Family Christian Center in Defiance. Nominations can be submitted until March 31.

• approved changes to board bylaws that will be voted upon by members during the annual meeting on April 14. Among other things, the bylaw changes would increase board terms from three to four years to ensure more continuity with officer terms.

• heard Willitzer explain that a “lot of interest” is being shown in the former Credit Adjustments headquarters building on Geneva Boulevard in Defiance. The new office building has been empty since Credit Adjustments closed its doors last year.

• authorized $2,500 for Willitzer to acquire software that will allow the CIC office to study the potential impacts of economic development projects.

• learned from Hannah Waterman, CIC workforce/marketing manager, that the agency’s next business roundtable will be held virtually on March 28 with Ohio Treasurer Robert Sprague making an appearance.

• approved financial reports for February.

• was informed by Willitzer that she has made 36 business visits this year.

• met in non-public session to discuss sensitive economic development matters.