From the President's Desk...
2023 is nearly in the history books, and what a year it’s been in the banking world! In March the financial sector was rocked by the sudden failure of two extremely large banks, with another similarly large bank failure in May. Two much smaller banks failed later in the year, including the first one in Iowa since 2011. Prior to this year, no banks in the US had failed since 2020, when four banks failed during that calendar year.
While no one can predict the future, there are facts we can rely upon, so allow me to share some here. Nine banks have failed this decade, including five this year; meanwhile it’s also true that well over 4,000 banks remain chartered within the United States. The topic of bank failures (especially among the really large banks) garners significant media attention (as you will remember from earlier this year!), however in reality these events are extraordinarily rare. After all, the math says that roughly 0.1% of all US chartered banks failed this year, and around 0.2% failed during the current decade.
There are several reasons why a bank fails. These typically include significant growth in problem loans, lack of adequate capital, or a “run” on the bank when deposits are withdrawn in large quantities. Quite frequently these events are exacerbated by challenging economic conditions.
With all that said, you can take comfort in knowing a few more facts. First, FDIC insurance exists to protect customers with deposits within federal statutes. Since its founding in 1933, now 90 years ago, no depositor has lost a penny of FDIC-insured funds. If you have questions about your deposits and FDIC coverage amounts, talk to us, or visit the FDIC’s interactive and informative website at this link edie.fdic.gov/, which provides their EDIE (electronic deposit insurance estimator) tool, which you can utilize to gauge your individual circumstances.
Next, WCF Financial Bank is very safe and secure. We are classified by regulatory statute as being a “well capitalized” bank, which is the highest capital classification available. The FDIC defines a well-capitalized bank as one that “significantly exceeds the required minimum level for each relevant capital measure” (refer to this link fdic.gov/regulations/laws/rules/1000-4000.html).
All this simply means you can take comfort in knowing that WCF is strongly protected and extremely well positioned to handle any future economic uncertainty, and that your money is safe with us.