SVB Shuttered. FDIC Takes Over

Now it’s official.

California regulators closed Silicon Valley Bank on Friday, the FDIC said. The lender, may it rest in peace, had “about” $209 billion in assets as of December 31, for whatever that’s worth.

The FDIC was appointed receiver, and “immediately” transferred all insured deposits to the newly-created Deposit Insurance National Bank of Santa Clara or, the “DINB.” I’d say it has a nice ring to it, but it really doesn’t.

Assuming you didn’t have a balance at SVB that exceeded levels consistent with federal guarantees, you’ll have access to your funds “no later” than Monday morning.

As for uninsured depositors, they’ll get “an advance dividend” at some point next week and a nice receivership certificate. The FDIC is selling SVB’s assets and will make a determination about future dividend payments as that process unfolds.

All of the bank’s branches will reopen on Monday as “DINB,” which will maintain the same hours of operation.

The Wall Street Journal reported that SVB’s management was working with Centerview Partners, Sullivan & Cromwell to explore options. That was about an hour before the FDIC announcement.

The government said the amount of deposits in excess of insurance limits at the time SVB was shuttered remains “undetermined.”

If you didn’t read the writing on the wall, and came into Friday with more than $250,000 in an SVB account, you can call the FDIC at 1-866-799-0959.

It’s toll-free, which’ll help a little if you’re out a lot.

For Immediate Release

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 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.