California regulators closed Silicon Valley Bank on Friday. The FDIC was named receiver.
Via Market Watch:
Silicon Valley Bank has been closed by the California Department of Financial Protection and Innovation, and the Federal Deposit Insurance Corporation (FDIC) has been appointed receiver, becoming the first FDIC-backed institution to fail this year. The news comes amid a crisis at parent SVB Financial Group SIVB, , which lost a record 60% of its value on Thursday, after it disclosed large losses from securities sales and announced a dilutive stock offering along with a profit warning. The FDIC said all insured depositors will have full access to their accounts no later than Monday morning. Uninsured depositors will get a receivership certificate and may be entitled to dividends once the FDIC sells the bank’s assets.
Silicon Valley Bank Collapses and Enters FDIC Receivership
Silicon Valley Bank collapsed into Federal Deposit Insurance Corp. receivership on Friday, after its long-established customer base of tech startups grew worried and yanked deposits.
The https://t.co/Si9k0vQ3RW… https://t.co/6HiqURIOcs pic.twitter.com/RgkHlh7lPc— SANTINO (@MichaelSCollura) March 10, 2023
The bank reportedly holds $173 billion in deposits.
The crash could cause a recession.
The company provided funding to 44% of all venture capital-backed tech and healthcare companies that publicly listed on a stock exchange last year, according to its website.
Silicon Valley Bank holds $173B of deposits.
Fed interest rate is at 4.57%
SVB's $117B of securities (MBS) yield 1.56-1.66%
This is causing a bank runIf enough VC / tech cos pull their money,
—SVB may be bankrupt
—Many startups may be wiped out
—Crash may cause a recession! pic.twitter.com/wA38Mx1edb— Deedy (@debarghya_das) March 10, 2023
Customers tried to pull millions of dollars out and can’t. Online banking and mobile services showing unavailable for some customers.
The Feds shut it down.
Good Morning Everyone! Silicon Valley Bank is getting worse. Customers trying to pull millions of dollars out and can’t. Online banking and mobile services showing unavailable for some customers.
Stock down 60% pre-market.
If the bank fails, it would be the second largest… https://t.co/dCnew8tzAP pic.twitter.com/h7YcocnvZX
— Genevieve Roch-Decter, CFA (@GRDecter) March 10, 2023
The CEO of Silicon Valley Bank sold $3.5 million in stock in the last two weeks!
CEO of Silicon Valley Bank sold $3.57 million of stock within the last two weeks.
Did he know something? pic.twitter.com/l4PbA6WWbG
— Genevieve Roch-Decter, CFA (@GRDecter) March 10, 2023
It should have been obvious when Jim Cramer started propping it up last month.
Jim Cramer said a month ago Silicon Valley Bank was a buy.
He also said Bear Sterns was fine in 2008.
This man deserves an Oscar.
— Genevieve Roch-Decter, CFA (@GRDecter) March 10, 2023
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