Business
Update of the Financial Strength of Columbia Financial, Inc.
FAIR LAWN, N.J., March 12, 2023 (GLOBE NEWSWIRE) -- Silicon Valley Bank’s and Silvergate Bank’s problems have attracted nationwide attention. As such,
About this update from Columbia Financial, Inc.
[{"type":"text","content":"FAIR LAWN, N.J., March 12, 2023 (GLOBE NEWSWIRE) -- Silicon Valley Bank’s and Silvergate Bank’s problems have attracted nationwide attention. As such, Columbia Financial, Inc. (the “Company”) the holding company of Columbia Bank and Freehold Bank, want to assure clients and shareholders that the Company’s risk profile continues to be prudently managed in order to ensure a safe and secure environment. The below statement demonstrates that the Company’s risk profile vastly differs from both Silicon Valley Bank and Silvergate Bank. We believe that Silicon Valley Bank’s and Silvergate Bank’s distress was caused by high exposure to undiversified lines of business. In particular, we understand that Silvergate maintained significant exposure to cryptocurrencies, while Silicon Valley maintained significant exposure to the venture capital and start-up companies. Cryptocurrency is extremely volatile and venture capital and early stage companies rely on new capital to fund early-stage cash burn. While unrealized losses on bonds (due to the rise in interest rates) appears to have contributed to Silicon Valley Bank’s failure, we believe that a lack of liquidity and capital to realize those losses played a key role in the closure of that bank. Columbia Bank is a community bank with a diverse depositor base with over 210,000 accounts serviced through 64 branches with an average depositor account balance of approximately $37,000. Columbia Financial does not have any significant depositor concentrations. The Company is neither exposed to cryptocurrency loans, deposits or services in any way, nor is the Company involved with the venture capital or early stage company space. The Company has a community bank strategy by way of gathering in-market deposits and lending to local consumers and businesses in a conservative manner. Columbia Financial does have unrealized losses on its available for sale bond portfolio, just like almost every other bank in America. At December 31, 2022, the additional other comprehensive income (“AOCI”) impact of the available for sale securities portfolio was $135.5 million. The other material component of AOCI is related to the Company’s defined benefit plan of $44.3 million, which is currently 83% overfunded. A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/53aa...