Louisiana bankers see few parallels between Silicon Valley Bank collapse, local market

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Louisiana bankers see few parallels between Silicon Valley Bank collapse, local market

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The collapse Friday of Silicon Valley Bank, which sent shares of many regional banks tumbling Monday as it sent shockwaves through financial markets, overtook New Orleans' First NBC Bank as the largest U.S. bank to fail since the financial crisis of 2008.

But even as the failures of SVB and New York-based Signature Bank, which collapsed over the weekend, inevitably recalled the $1 billion collapse of First NBC, Louisiana bank executives and economists said there were few parallels between the local bank failure in 2017 and the recent demise of SVB and Signature.

More importantly, they said there is little reason to worry about the viability of Louisiana’s community and regional banks.

Compared to Silicon Valley Bank and many other lenders, they conduct far less business with the San Francisco startup and venture capital world that pulled millions of dollars from SVB, have fewer uninsured deposits, manage more balanced portfolios and have different investment philosophies than did SVB and Signature.

“We’re just a totally different type of company than SVB and Signature,” said Jude Melville, president of Baton Rouge-based B1Bank. “Most community banks are very different than SVB and Signature.”

Melville and his counterparts at other local financial institutions said they spent time Monday reaching out to customers in emails and phone calls to reassure them that all is well.

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