Community banks remain strong

  • March 27, 2023
  • By: CEO Adrian Breen

With the news cycle surrounding the banking industry, many consumers are following the media and wondering about the stability of our economy and what the news means to them personally. As the CEO of a long-standing community bank and chairman-elect of the Missouri Bankers Association, let me assure you that Missouri’s community banking industry remains strong and resilient. I want to take some time to sort through what makes community banks different from the large, niche banks you’re seeing in the headlines. I’ll also explain additional bank services that are available to you as a customer to help you feel confident about your accounts.

Main Street banks are not Wall Street banks

I’ll start first with a bit of The Bank of Missouri story, and I’ll speak somewhat on behalf of other Missouri banks, like us. Our community banks are much different than the banks that are directly involved in the current banking crisis. The Bank of Missouri is a Main Street bank, not a Wall Street bank, and we simply do not conduct some of the business practices that we’ve seen in the banks that are currently struggling.

The Bank of Missouri is a true community bank. We don’t stray from what we know; from our investment policy, to our lending policies, to our customer relationships. We’re embedded in the communities where we do business and that has benefited our employees, our communities and our customers for a long time. We believe relationships are worth more than transactions, and that’s a big difference between a local community bank and these large specialty niche banks.

The crisis we're seeing today in the headlines started because of that “niche” banking model. These were more specific bank models that were functional and may work well in good times, but then as the economy and situation started to change, they did not respond well. These “cutting edge” Silicon Valley and Signature Bank organizations held large amounts of uninsured deposits, which is a practice you don’t see at The Bank of Missouri. Because of the business model of banking, all banks will have some amount of uninsured deposits. However, traditional community bank numbers would pale in comparison to what we’re seeing in the news. At The Bank of Missouri we have a much more diversified base, and we don't invest in cryptocurrency or non-traditional investments. We have avoided that intentionally, by design, to stick to our community bank roots and the business model that’s shown success over our last 131 years as an organization.

How community banks are different

This traditional business model is why, as a consumer in this current economy, you can be assured that a community bank is a safe place to keep an account. First of all, in the communities where we do business, we are embedded throughout those communities’ businesses and economic structure. We know our customers by face and name and we continue to do business with people we can trust, right in our communities. This is why we say we’re a Main Street bank, not a Wall Street bank. Also, the majority of our deposits are covered by FDIC insurance. That's $250,000 per account, and now through different titling (joint accounts, individual accounts), families can have well over $750,000 of insured deposits. The majority of our depositors are well within those ranges.

As you hear the media discuss banks that are “too big to fail,” remember that community banks aren’t included in this concept. However, the idea that a bank is “too big to fail” is not a selling point to those of us who understand banking and financial services and the type of security and services our customers are looking for. Here in the state of Missouri, especially in the communities that The Bank of Missouri is in, we know those people, we know their companies, we know their reputation -- and that gives us a great layer of protection. A community bank that is part of the Missouri Bankers Association will have the policies, procedures, practices, and oversight that help to ensure FDIC insurance isn’t even needed as a fallback position.

The Bank of Missouri is built on strength

Specific to The Bank of Missouri, I assure you we’re considered well capitalized by examiners. We have a liquidity on balance sheet and liquidity position that meets and exceeds regulatory expectations, in addition to having a very diversified income statement and balance sheet. We're well capitalized, with a diverse deposit base of which the overwhelming majority of those deposits are already insured with the FDIC coverage. That's a winning combination.

Being in business for over 130 years means we’ve lived through a lot of different business cycles. When we consider all of the major events that have occurred over the last 130 years, including two World Wars, The Great Depression, The Great Recession, COVID and others, we realize that we were resilient through those times and we will continue to flex that strength and stability in the years to come. For The Bank of Missouri, our strength starts with our employees, customers and communities. We also have a group of very knowledgeable people who serve on our board of directors. Our board of directors is made up of successful people who understand our risk tolerance as an organization, and they put parameters in place for us to follow. This is another reason why we can say we're not a Wall Street bank, we're a Main Street community bank. While being a Main Street bank might not make headlines, our tried and tested approach has weathered storms very well.

This tried and tested approach has also contributed to our receiving a 5-Star Rating from BauerFinancial, Inc., an independent bank rating company. Bauer’s 5-Star Rating, their highest performance ranking, represents an independent, unbiased analysis of a financial institution’s safety and soundness position. Bauer has been analyzing and reporting the financial condition of the nation’s banking industry since 1983. The Bank of Missouri has received this 5-Star rating every quarter since December 2011.

The Bauer rating is based on a complex analysis of financial criteria including capitalization, asset quality, profitability, liquidity and risk. The 5-Star Rating indicates The Bank of Missouri is financially sound and has the resources to deal with a variety of adverse economic conditions. No institution pays BauerFinancial to rate it, nor can any choose to be excluded.

FDIC Insurance and CDARS®

As you follow our economic news and research what works best for you financially, know that there are coverage options in addition to FDIC insurance. FDIC insurance may be enough security for many customers, considering that spouse accounts can have up to $750,000 per couple depending on how those accounts are titled. But for those customers with higher balances, there are additional options.

The Bank of Missouri offers a program called CDARS. Institutions that offer CDARS are members of the IntraFi® network. When a member institution places your deposit through CDARS, that deposit is divided into amounts under the standard FDIC insurance maximum of $250,000. The funds are then placed into deposit accounts at other network banks. CDARS has over 3,000 banks in its network that work together to provide extra coverage for large depositors. We appreciate that CDARS is a reciprocal deposit relationship, meaning that for any money we put into the program to provide additional FDIC insurance to our depositors, someone else pledges money back to The Bank of Missouri. This means you can access FDIC coverage from many institutions while working directly with just The Bank of Missouri. Receive one statement from our bank detailing all your CDARS placements.

Be confident

I’ll wrap up by encouraging you to not follow the national headlines unless you bank at one of those too-big-to-fail banks. We have a number of outstanding organizations and great bankers within the state of Missouri that you can turn to. A lot of them participate in the same networks that we do. A lot of them have the same discipline and approach to doing business the way we do. So, realize that the national headlines don't necessarily pertain to what's going on locally. Here, we are very fortunate in the state of Missouri to have great banks and great bankers that we know and trust. The best thing you can do as a consumer is to get to know your local bank and just go talk to your banker if you have questions. That's part of the advantage of banking at a great community bank like The Bank of Missouri. We’re accessible to our customers, all the way up to the CEO. In banks across the state of Missouri, there are lots of great people who stand ready to answer your financial questions.

Live Well, Bank Well!

Your Community Banker,
Adrian Breen
President and CEO

See the full conversation with Adrian

Bank and Credit Union data compiled from financial data for the period noted, as reported to federal regulators. The financial data obtained from these sources is consistently reliable, although; the accuracy and completeness of the data cannot be guaranteed by BauerFinancial, Inc. BauerFinancial relies upon this data in its judgment and in rendering its opinion (e.g. determination of star ratings) as well as supplying the data fields incorporated herein. BauerFinancial, Inc. is not a financial advisor; it is an independent bank research firm. BauerFinancial is a registered trademark. Any unauthorized use of its content, logos, name, and/or Star-ratings is forbidden.

Deposit placement through CDARS or ICS is subject to the terms, conditions, and disclosures in applicable agreements. Although deposits are placed in increments that do not exceed the FDIC standard maximum deposit insurance amount (“SMDIA”) at any one destination bank, a depositor’s balances at the institution that places deposits may exceed the SMDIA (e.g., before settlement for deposits or after settlement for withdrawals) or be uninsured (if the placing institution is not an insured bank). The depositor must make any necessary arrangements to protect such balances consistent with applicable law and must determine whether placement through CDARS or ICS satisfies any restrictions on its deposits. A list identifying IntraFi network banks appears at The depositor may exclude banks from eligibility to receive its funds. IntraFi and ICS are registered service marks, and the IntraFi hexagon and IntraFi logo are service marks, of IntraFi Network LLC.