By Thomas J. Inserra
CEO & Founder – Integro Bank

Don’t Panic!

The recent failures of two large banks surprised a lot of people.  My prior experience managing 780 bank failures in two prior economic recessions, perhaps, afford me an opportunity to offer unique insights.

In my view, while information is still emerging, these deposit-run bank failures are likely the result of perceived risk exposures of banks engaged in one or more of the following:

  1. Aggressive and risky cryptocurrency, marijuana, or similar high-risk business activities;
  2. Large investments in bonds/securities, leading to heavy investment losses;
  3. Reliance on high-priced brokered deposits;
  4. Large portfolios with loans priced at 2-4% with borrowers who can’t afford 6-8% rates;
  5. Publicly traded banks with unreasonably high valuations that did not account for risks.

Eighteen months ago when we decided to launch Integro Bank, our business plan forecast that there was going to be a recession, interest rates would rise and risky activities would result in increased bank failures.  

In contrast with these 5 high-risk factors, Integro Bank has zero risk exposure to any of those 5 items because, in our conservative business plan, we purposely avoided all five activities.

  1. Integro Bank has zero clients in cryptocurrency, marijuana, or similar high-risk businesses.
  2. Integro Bank today has zero bonds and securities while other banks have billions.
  3. Integro Bank today has zero brokered deposits.
  4. Integro Bank today has zero loans below 5% and our borrowers demonstrate the ability to repay at 6-8%.
  5. Integro Bank today is not publicly traded and thus has no inflated valuation.

Conclusion:  Now is not the time to panic, but rather to take the time to evaluate the risk profile, financial strength, and management experience of your banking partner.