UPDATE: The Silicon Valley Bank has been shut down by regulators and the Federal Deposit Insurance Corporation will protect insured deposits.
Silicon Valley Bank has been closed by regulators, which have taken control of the bank’s deposits, the Federal Deposit Insurance Corporation announced Friday.
The California Department of Financial protection and Innovation closed SVB, and named the Federal Deoposit Insurace Corporation as the receiver.
The FDIC released this statement:
Silicon Valley Bank, Santa Clara, California, was closed today by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect insured depositors, the FDIC created the Deposit Insurance National Bank of Santa Clara (DINB). At the time of closing, the FDIC as receiver immediately transferred to the DINB all insured deposits of Silicon Valley Bank.
All insured depositors will have full access to their insured deposits no later than Monday morning, March 13, 2023. The FDIC will pay uninsured depositors an advance dividend within the next week. Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds. As the FDIC sells the assets of Silicon Valley Bank, future dividend payments may be made to uninsured depositors.
Silicon Valley Bank had 17 branches in California and Massachusetts. The main office and all branches of Silicon Valley Bank will reopen on Monday, March 13, 2023. The DINB will maintain Silicon Valley Bank’s normal business hours. Banking activities will resume no later than Monday, March 13, including on-line banking and other services. Silicon Valley Bank’s official checks will continue to clear. Under the Federal Deposit Insurance Act, the FDIC may create a DINB to ensure that customers have continued access to their insured funds.
As of December 31, 2022, Silicon Valley Bank had approximately $209.0 billion in total assets and about $175.4 billion in total deposits. At the time of closing, the amount of deposits in excess of the insurance limits was undetermined. The amount of uninsured deposits will be determined once the FDIC obtains additional information from the bank and customers.
Customers with accounts in excess of $250,000 should contact the FDIC toll-free at 1-866-799-0959.
The FDIC as receiver will retain all the assets from Silicon Valley Bank for later disposition. Loan customers should continue to make their payments as usual.
Silicon Valley Bank is the first FDIC-insured institution to fail this year. The last FDIC-insured institution to close was Almena State Bank, Almena, Kansas, on October 23, 2020.
Read Breitbart News’ original report below:
Trading in shares of the holding company of Silicon Valley Bank was halted for pending news on Friday after premarket price indicators plunged by 63 percent.
SVB Financial Group said on Wednesday that it was issuing $2.25 billion of shares to bolster its capital position after a significant loss in its investment portfolio. Prominent venture capitalists, reportedly including Peter Thiel, have reportedly told portfolio companies to withdraw funds from the bank.
CNBC reported that the attempted capital raise has failed. Instead, the bank is now looking to sell itself, according to CNBC’s David Faber.
The bank said on Wednesday that it would book a $1.8 billion after-tax loss on sales of investments, sparking panic that has led some depositors to withdraw funds.
Rising rates hurt the value of bond portfolios held by banks. What’s more, customers are lured out of bank deposits seeking higher-yields in safe assets such as short-term Treasuries.
Pershing Square CEO Bill Ackman compared the collapse of SVB to Bear Stearns in a tweet on Friday, indicating that the government may need to step in to make sure depositors were safe in order to stem a broader bank run.
The gov’t could also guarantee deposits in exchange for a dilutive warrant issuance and other covenants and protections. If @SVB_Financial is indeed solvent, this would buy time to enable SVB to restore the franchise and raise new private capital.
— Bill Ackman (@BillAckman) March 10, 2023
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