Local Banking Picture Thankfully Differs Greatly From National Attention-Getters

While problems at a few high-profile national and international banks have garnered attention lately, it is quite a different story locally.Haverhill Bank President and CEO Thomas L. Mortimer, a recent guest on WHAV’s “Win for Breakfast” program, points out the differences between the national and local stages.“It appears that Silicon Valley Bank and Signature Bank in New York were the canaries in the coal mine. So, you had the rise in interest rates that basically pointed out the weakness of those banks, and they are unique banks—they aren’t like any banks around here—and I have a feeling that when then forensics are all done, it will come down to poor oversight by the regulators. Something like this should have been caught months, or years ago,” he said.Mortimer says banking regulators should work with their subjects and suggest “best practices” to make sure rules are followed. He notes, what you’ll see in Massachusetts and most parts of New Hampshire are banks that are conservative.“Banks that stick to their knitting—not doing crazy types of leveraged lending, but rather residential mortgages, small business lending, deposits, money markets, certificates of deposits. That’s our bread and butter, that’s what we stick to,” he explains.One of the biggest differences, Mortimer notes, is depositors at those giant banks were not fully insured. In addition to the Federal Deposit Insurance Corporation covering the first $250,000 of deposits, Mortimer says Haverhill Bank carries another layer of insurance.“Haverhill Bank and approximately 74 other banks in Massachusetts have additional insurance called Depositors Insurance Fund. So, 100% of the bank’s deposits are insured. It should give some calm and comfort to the depositors. Back in 1990, approximately 16 banks failed. Of those banks that had DIF insurance, not one depositor lost a penny. Not one customer has lost a dollar being with a DIF insured bank,” he notes.Mortimer says banks that have been following sound financial practices are able to absorb rising federal interest rates and, in his words, “move on to live and fight another day.”Support the show