Tim Geelan in the North Haven GSB Branch

An Important Message from Tim Geelan, President & CEO

March 28, 2023

“To get right to the point, GSB has ample liquidity, a healthy, diversified, and growing deposit base as well as several backup market sources to tap, if needed. Unrealized losses, temporarily reflected in the bank’s bond portfolio, do not in any way present a material risk to the bank or its clients. Furthermore, unrealized losses do not impair the bank’s “well-capitalized” regulatory capital designation. Translated another way, GSB has no need (or intention) to liquidate these securities at a loss, so it’s a non-issue.”

The financial sector has faced some much talked about market volatility following the failure of Silicon Valley Bank (SVB) and the closing of Signature Bank.  In our commitment to transparency, we have shared our full 2022 Annual Report, and have posted several messages as we seek to keep you well informed.

GSB 1st VP Kyle Eagleson and I were interviewed recently about this exact issue on the Quinnipiac Chamber of Commerce podcast, which you can listen to below:


Unfortunately, as is the case when markets go through some measure of turmoil, there becomes a bit of a feeding frenzy to try and paint an industry, or specific institutions, in a negative light, even if the cause of the turmoil has little to do with banks like GSB.

More recently, there have been negative reporting on ‘unrealized losses’ at banks across the country and in Connecticut. With that context, I want to respond directly to you, our clients.

It’s easy for pundits to take a single metric such as “unrealized losses”, and use it to create a misleading, and inflammatory story. And it’s not just our perspective. Leading experts in the industry agree.

  • The Independent Community Bankers of America (ICBA), which represents community banks across the country said in a statement that it “stands behind the nation’s community banks and denounces any attempts to categorize them in the same manner as the large, risky financial institutions that have made headlines recently. Any attempt to characterize any community bank as unsafe, unsound or a threat to any depositor based purely on a hypothetical set of facts that don’t exist in reality and with a newly contrived financial ratio not consistent with existing regulatory calculations is egregiously misleading.”
  • Hugh Carney, a top executive at the American Bankers Association, said a single metric such as unrealized bond losses “does not accurately capture the risks or health of an individual bank.” “It would be irresponsible to draw conclusions from data that don’t tell a full and complete story of bank health.”
  • Philip K. Smith, a lawyer for ICBA, wrote in a letter to American Banker that the analysis “appears to completely ignore the realities of the current bank regulatory capital framework for community banks.”

The fact is that unrealized gains and losses (assets that have increased or decreased in price but have not been sold yet) are managed and reported through the approved accounting practices, as they have been for many years.

Without getting into the many technical nuances of a bank’s balance sheet, it’s fair to say that GSB, like most banks large and small, has a diversified range of revenue streams that support our capital position.  It’s because of these revenue sources that I can state with confidence  that GSB remains a healthy, well-capitalized, and well-positioned institution. It’s been true for all our nearly 150 years, and it’s true today.

  • A Strong Balance Sheet. Our balance sheet is stronger than ever, supported by high capital ratios, and a broad, diversified, and stable deposit-base.
  • Well Capitalized. As a result of our strong balance sheet, GSB has been able to secure relationships with a wide range of funding partners and has access to an abundant amount of funding should the need ever arise.
  • Disciplined Deposit Growth. GSB has grown our deposit base at an average annualized  rate of 9%, over the last 5 years. People continue to trust GSB, and we have experienced deposit growth in recent weeks.

I understand that these messages and editorials cause you concern, and we believe that it’s important to keep the lines of communication open.

As always, our team is happy to meet with any client or community member to discuss this topic or address any other questions you may have.