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Jun 11, 2023 Chip Mahan, CEO of Live Oak Bank, shares insights about the evolving banking landscape in the wake of the Silicon Valley Bank collapse. He discusses the critical communication breakdown between regulators and SVB, and how Live Oak is carving out a niche for small businesses. Mahan highlights potential margin challenges facing traditional banks and the importance of innovative technology and personalization in customer service. Despite recent market fears, he remains optimistic about small banks capturing market share through exceptional service.
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Uninsured Deposits
- The average bank in the US has 44% of its deposits uninsured.
- This average has been 60% since the FDIC's creation in 1933, highlighting a historical trend.
Live Oak Bank's Approach
- Live Oak Bank's average uninsured depositor rate is 18%.
- They secured four times the uninsured deposits in a checking account if clients wanted their money.
Silicon Valley Bank's Collapse
- Silicon Valley Bank's rapid growth from $100 billion to $300 billion in two years contributed to its downfall.
- This, combined with rising interest rates and social media panic, led to a massive $43 billion withdrawal.