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Silicon Valley Bank - Shutdown!

BingerFang

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Dayum!!!!!



WASHINGTON – 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 at1-866-799-0959.

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.

 

EmpirE231

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posted this in the hold on to your hats thread... will be interesting to see what it does to the market and other banks.

definitely not a good day for you and your business if you had over 250K in SVB
 

LazyLavey

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Screenshot 2023-03-10 at 9.39.02 AM.png
 

Waterjunky

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Is this just a bad week or is there more going on in the economy as a whole? GM, this, job losses, inflation? Not being a chicken little but it might be time to start some real damage control in our lives. Not trying to make wild claims, just thinking out loud and asking questions.
 

wzuber

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Is this just a bad week or is there more going on in the economy as a whole? GM, this, job losses, inflation? Not being a chicken little but it might be time to start some real damage control in our lives. Not trying to make wild claims, just thinking out loud and asking questions.
Yes!!
 

BingerFang

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posted this in the hold on to your hats thread... will be interesting to see what it does to the market and other banks.

definitely not a good day for you and your business if you had over 250K in SVB

Beat me by 2 minutes, shit! 😂
 

bowtiejunkie

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I can’t believe this is happening. What’s that quote Bigbore500r here has said “everything is fine until it isn’t”? Two days ago it was great. Now FDIC has to rescue the bank. Damn.
 

BingerFang

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Per zerohedge:

As we noted before, while the FDIC noted that SVIB had $175BN in deposits as of Dec 31, note that some $151.5BN of these are uninsured, which means they get exactly zero although a sizable number of them likely pulled their deposits in the past few days.
 

bilz

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And jb is laughing all the way to his mexican bank
 

DrunkenSailor

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This is affecting other banks as well. First republic, signature bank, etc... Svb wasn't big into crypto. They held billions in long term bonds that due to fed rate hikes were rolling into unrealized losses on the balance sheet. Due to increased capital requirements many banks are facing similar balance sheet losses and this could just be the beginning or it could be just an isolated incident as svp's exposure was much more than others. Once a run starts it's hard to stop.
 

Havasu blue label

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This is affecting other banks as well. First republic, signature bank, etc... Svb wasn't big into crypto. They held billions in long term bonds that due to fed rate hikes were rolling into unrealized losses on the balance sheet. Due to increased capital requirements many banks are facing similar balance sheet losses and this could just be the beginning or it could be just an isolated incident as svp's exposure was much more than others. Once a run starts it's hard to stop.
Correct
 

DrunkenSailor

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If you read between the lines of post #10. This is personally effecting me. It’s a sad and shocking day.
Sorry man. This is a tough deal. I am hoping that the feds will force a sale to another bank and deposits will be protected above the FDIC 250k minimums. I don't think this will be another lehman. Best of luck to you moving forward.
 

Havasu blue label

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250 and then a letter that pretty much says iou it’s a bad day for a lot of investors . Stay positive
 

samsah33

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This is affecting other banks as well. First republic, signature bank, etc... Svb wasn't big into crypto. They held billions in long term bonds that due to fed rate hikes were rolling into unrealized losses on the balance sheet. Due to increased capital requirements many banks are facing similar balance sheet losses and this could just be the beginning or it could be just an isolated incident as svp's exposure was much more than others. Once a run starts it's hard to stop.
That's what I've been hearing all morning, rate hikes causing their collateral to tank. The issue with SVB and FRB (not sure about other banks tho) is that their credit lines are sticky, eg they give you good rates on debt but also compel you to give them your treasury services so that they can get the fees on the back end to make up for the low cost debt. This results in a lot of companies having exposure at these banks, and nobody want to be the last client standing when the music stops...
 

Singleton

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This is going to end up in court.
IMO, he knew of the risk and potential operational issues months ago.
Unless these sales were scheduled 6+ months ago, this is BS and 100% executive Fraud.

Hell, when I was a director at my last company, all my stock, RSU, ESPP‘s etc., had to be schedule 9+ month before executed. Total PIA, but a very transparent process to the street.
 
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Orange Juice

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Is this just a bad week or is there more going on in the economy as a whole? GM, this, job losses, inflation? Not being a chicken little but it might be time to start some real damage control in our lives. Not trying to make wild claims, just thinking out loud and asking questions.

It only going to get worse, until the federal reserve stops hiking interest rates.

It‘s a flight to US treasuries….2 year got hammered today.

 

PaPaG

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I posted this in the HAT LOSS THREAD, it is spot on information about the WHY IT HAPPENED.

Why did SVB's stock price crash?

There are two reasons – both tied to the Federal Reserve's aggressive interest-rate hikes as it bids to crush soaring inflation in the US.

The Fed's tightening campaign weighed on SVB's bond holdings, and it disclosed a $1.8 billion loss Thursday after completing a $21 billion fire sale of its fixed-income portfolio. The company tried and failed to raise $2.3 billion through stock sales to cover those losses.

In addition, startups find it more difficult to access funding with borrowings turning costlier – and that's fueled a high level of deposit outflows from SVB, analysts say. This sparked fears of a bank run, prompting several of the SVB's clients to limit their exposure to the institution.

SVB's "unique niche in the tech world is a real boon when that business is booming, but a problem when it's not," Interactive Brokers chief strategist Steve Sosnick said.

How is it affecting other bank stocks?

Crypto-friendly bank Silvergate Capital announced Thursday it would shut down – and the crisis at two financial institutions ignited fears of contagion effects across the entire sector, fueling a sharp selloff across banking stocks.



Wall Street's four biggest banks – JPMorgan, Bank of America, Wells Fargo, and Morgan Stanley – shed $55 billion in combined market value Thursday with investors rattled by the implosion of SVB and Silvergate, according to data from Refinitiv.

The KBW Bank Index – which tracks the price of the US's leading publicly-traded banks – plunged 7.7% Thursday for its worst day in almost three years.

On Friday, bank stocks offered a mixed picture. JPMorgan's stock price recovered some, while First Republic Bank saw its stock drop 20%.
 

WhatExit?

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About one-fourth of Roku’s cash and equivalents — nearly half a billion dollars — has been held in Silicon Valley Bank (SVB), which was shut down by financial regulators Friday after it collapsed. And the streaming platform company said it’s unsure the extent to which it will be able to recover that cash.

Roku disclosed in an SEC filing that about $487 million of its $1.9 billion in cash and equivalents is held at SVB, or about 26% of the company’s cash and cash equivalents balance as of March 10. The remaining $1.4 billion is “distributed across multiple large financial institutions,” Roku said in the filing.

The company’s deposits with SVB are largely uninsured. At this time, the company does not know to what extent the company will be able to recover its cash on deposit at SVB,” Roku said.
 
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