2024 Journal of Community Bank Case Studies

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2024 COMMUNITY BANK CASE STUDY COMPETITION

to-maturity securities leaving few securities available to easily liquidate, obscuring their securities’ market value, and liquidity. b1Bank holds all securities available for sale (marked-to-market) allowing greater liquidity and transparency. Using transparent strategies to maintain

Figure 7: Leverage Ratio

B1Bank

Silicon Valley Bank Well-capitalized

First Republic Bank

Signature Bank

10.00% 12.00% 14.00%

0.00% 2.00% 4.00% 6.00% 8.00%

liquidity and capital protection, b1Bank balances between generating interest income through community lending and rate-neutral non-interest income. Part II: Responding to the 2023 Bank Closures Bank Niches Characteristics of Banks Closed in 2023 and Distinctive Features of b1Bank The 2023 bank closures highlighted the importance of diversification in banking operations. Some banks failed due to high concentrations of their deposit base in specific industries, such as technology for SVB, crypto for FRB, and individual real estate for SBNY—when exposed to sector-specific downturns. b1Bank differentiates itself by maintaining a diverse deposit base across geographic locations in LA and TX.

2018

2019

2020

2021

2022

approach to meet more simplified capital requirements during reporting. While using the more simplified framework, b1Bank continued verifying all capital requirements in the background. Liquidity Net Loans and Leases to Deposits ratio (LDR) measures the bank’s liquidity and indicates the percentage of deposits tied up in loans, and the bank’s ability to cover liabilities, such as withdrawals. From 2018 to 2022, b1Bank maintained its LDR between 80 and 90 percent. SVB reported the lowest LDR, 41.97%, in 2022. SVB concentrated their investments in held

Figure 8: Net Loans and Leases to Deposits (LDR)

B1Bank

Silicon Valley Bank