Due to recent news about the collapse of Silicon Valley Bank and Signature Bank, we want to give you comfort about Fenimore’s bank holdings. A hallmark of our investment process is to personally know what we own, and the banks in which we invest are no different.
Our research analysts meet with and know our banks’ management teams, tour their facilities, and have extensive experience in the industry. This gives us long-term confidence during short-term challenges.
While the circumstances that led to the demise of these two banks are somewhat complex, their foundations were built with “hot deposits” whereas Fenimore’s banks are standing on primarily “core deposits.”
Portfolio Manager, FAM Small Cap Fund
Here is a basic summary and what it means to you:
The federal government has stepped in and declared that all Silicon Valley Bank and Signature Bank depositors will have access to all of their money immediately. The Federal Reserve also created a new program that will lend money to banks for up to one year. It’s probable that the government could continue to intervene, as necessary, to calm any fears.
Finally, as we’ve stated in several recent communications, Fenimore believes that we have a collection of quality investments that are positioned well for the long term.
We hope these insights are helpful. Please do not hesitate to contact us at 800.721.5391 with any questions.