State of the Bank

State of the Bank

A statement from Summit Bank’s President, CEO and COO

March 15th, 2023

Right now there is a lot of focus on banking practices because of the collapse of Silicon Valley bank and others.

According to the regulators, their problems were a lack of liquidity and a bond portfolio which they sold at a tremendous loss.

Their investment in the bond portfolio was US Treasuries purchased with a very low yield and with the increase in interest rates over the past year, the value declined substantially resulting in a requirement to write down the values.

Summit Bank does not carry a bond portfolio as an asset. Our only purpose in investing in a bond is for the sole purpose of collateralizing deposits from public entities. Currently we have $1.4 million in bonds which has a short term maturity, which is the end of March. In this situation we carry them as Hold to Maturity.

Our liquidity ratio year to date is 47.23% and our capital ratio is 18.43% — the regulatory ratio for a well capitalized bank is 10%.

The board of directors of the bank has lead us through a number of downturns and economic cycles and several interest-rate cycles with a constant focus on liquidity and short term investments.

It’s also important to note that although the FDIC has limits on the amount of the deposits they insure no depositor has ever lost a nickel from a bank closure.

We appreciate our clients and their long time confidence in us for all these 41 years in business.

Steve Nelson
President, CEO and COO