ROCHESTER, N.Y. (WROC) — With the collapse of Silicon Valley Bank and its parent company filing for Chapter 11 bankruptcy Friday, some of our local bank institutions are speaking out on the situation to explain how their community-based approach serves them well, and customers well.
It’s been one week since Silicon Valley Bank, a tech-focused operation, failed in a sudden collapse. News 8 spoke with leaders from ESL and Canandaigua National Bank and Trust to learn more on their policies, and why they differ so much from what happened out of California.
When the news broke that Silicon Valley Bank would shut down, a more than 200-billion dollar institution, it raised questions for those in the banking industry.
“They had dubbed themselves the bank for startups. So, it was actually a pretty concentrated type business or set of businesses they were dealing with especially in the tech sector,” said Frank Hamlin, CEO of Canandaigua National Bank and Trust, “Things are starting to slow down especially in that space. So, there was that kind of activity which was very concentrated in terms of the income stream, in terms of assets, loans they were dealing with, and relationships they were having.”
Both Canandaigua National Bank and Trust and ESL highlight the importance of having a diversified customer base, which they say, brings a stable banking model.
“That sort of diversity, in the way our business is managed, helps to mitigate that so we are able to better handle events such as this that impact the markets and economy,” said Rich Pulvino, vice president of corporate communications for ESL.
Both local banking leaders say the best method customers can practice is communication with their institutions.
“It frankly makes you feel good about the way we have established our model. In terms of being community focused as opposed to industry focused. It’s a stable, robust model that serves the community well and serves the bank well,” said Hamlin.
Meanwhile, the federal government has stepped in to reimburse Silicon Valley Bank customers with their deposits.
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