INB's success during the early 2023 banking crisis highlights its disciplined approach and strong community relationships. According to an award-winning research paper submitted by University of Illinois-Springfield (UIS) students as part of a competition on the study of INB.
Mark Donovan, INB’s SVP and Chief Operating Officer, praised the bank’s collaborative learning experience with UIS students. “It was a positive learning experience on both ends and produced valuable insights into the topic,” says Donovan. “We extend our heartfelt congratulations to the student team for their persistent dedication and ultimate success. Special thanks to Dr. Karadas and Mr. Weis, whose unwavering enthusiasm and support for the students were instrumental. As a fellow community pillar, we are excited to see what we can achieve together from here!”
UIS students James Aldus, Robert Lassiter, and Kurtis Wagner secured second place in a national competition sponsored by the Conference of State Bank Supervisors. Their research highlighted how INB successfully navigated the 2023 banking crisis, a period marked by the failures of Silicon Valley Bank (SVB) and other regional banks due to poor management and over-reliance on uninsured deposits.
Assisting the students with the research were: Mark; Cayla Keyes, VP, Retail Sales Manager; Nick Newton, AVP, Portfolio Manager & CRA Officer; and Scott Sowers, Assistant Controller.
Excerpts from the students’ research follow. You can find the full report and an interview conducted by the students with INB staff by following this link: UIS 2024 CSBS Video (google.com).
Controlled Growth and Conservative Practices
INB's strategy of steady, controlled growth and conservative asset management helped it avoid the pitfalls that led to the collapse of SVB and First Republic Bank. Unlike these banks, INB maintained short asset maturities, mitigating interest rate risks.
Strategic Use of Insured Deposits
INB leveraged the IntraFi network to convert large deposits into fully insured ones, reducing the risk of sudden withdrawals. This strategy ensured stability during a period of increased market fear.
Diversified Revenue Streams and Community Commitment
INB's resilience is also attributed to its diverse income streams, balancing interest and non-interest income. Strong community ties and exceptional customer service further solidified its depositor base. In fact, the banking crisis “really sparked a renewal in the re-education on how FDIC limits were calculated and how that network worked,” says Donovan, in an interview with the UIS students. The bank's efforts to educate customers on FDIC insurance limits reassured them, reinforcing INB's commitment to their security and the prosperity of its customer base.
Forward-Thinking Risk Management
INB regularly conducts stress tests and scenario analyses to prepare for interest rate changes and potential deposit outflows. Strategic expansions into markets like St. Louis, Tampa, and Miami have diversified its geographic risk as a defense to “one of the inherent weaknesses of being a community bank is investing into those local markets,” says Donovan. The decision to expand into other markets has helped INB to maintain stability.
CSBS Press Release