Silicon Valley Bank Shut Down By California Regulator

It appears we’ve reached the end of the line for Silicon Valley Bank (NASDAQ: SIVB), who was halted at the open this morning prior to trading during regular market hours. The Federal Deposit Insurance Corporation this morning issued a release, indicating that the bank has been shut down by the California Department of Financial Protection and Innovation.

As a means of protecting depositors, FDIC has established the Deposit Insurance National Bank of Santa Clara, which has seen all insured deposits of Silicon Valley Bank transferred to it. Depositors of the bank will regain access to their insured deposits by March 13, 2023, which is Monday morning.

Uninsured depositors meanwhile will receive an advance dividend over the course of the next week, along with a receivership certificate for the remaining amount of any uninsured funds. As assets of the bank are sold off, future dividend payments may be made to such depositors.

The newly established Deposit Insurance National Bank of Santa Clara meanwhile will maintain the normal hours of Silicon Valley Bank, with services provided set to include on-line banking and other services. Official checks from Silicon Valley meanwhile will continue to clear.

The FDIC insures deposits up to a figure of $250,000.

As per FDIC, the bank was said to have assets of $209 billion and liabilities of $175.4 billion as of December 31, however the figures as of the time of the bank being forced to close are currently unknown.

The revelation by the FDIC that the bank had been shuttered follows Silicon Valley Bank being halted this morning pending news, before market open. Employees meanwhile were reportedly told to work from home for the day.

The downfall of the bank began earlier this week, when on Wednesday evening the firm indicated it would be taking a $1.8 billion after-tax loss on investment transactions, and at the same time was seeking to raise $2.25 billion through equity financings. At the same time, the firm indicated that it expected to see net interest margins decrease by up to 30 basis points.

A day later, it was reported that at least four clients of the bank were experiencing difficulties with wire transfers, while support lines were unavailable. This is believed to have caused a run on the bank, which culminated in its closure by the Californian regulator.


Information for this briefing was found via Edgar, FDIC, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply

Video Articles

Endeavour Mining Q1 Earnings: Cash Flow Is King

G Mining Oko West Feasibility: Move Fast, Break.. Nothing?

New Gold Q1 Earnings: What’s Behind The Market’s Surprising Reaction?

Recommended

First Majestic Posts Record Cash Flows In Q1 As Production Costs Fall

Brazil Potash Secures Funding In Support Of US$2.5 Billion Autozales Project

Related News

Sweden’s Top Pension Fund Fires CEO After SVB, Signature Bank Losses

In a move to regain investor faith, Sweden’s biggest pension fund has kicked out its...

Friday, April 14, 2023, 10:46:47 AM

Bank Failures: Is Deposit Insurance The Answer?

In the months leading up to Silicon Valley Bank’s (NASDAQ: SIVB) demise, the bank’s lobbying...

Thursday, March 16, 2023, 04:30:00 PM

Regional Banking: Will There Be A Failure After Silicon Valley Bank?

The rapid collapse of SVB Financial Group (NASDAQ: SIVB), the 16th biggest bank in the...

Sunday, March 12, 2023, 09:00:00 AM

Panic! at the Discount Window: SVB Collapse Tanks Banks

The US banking sector was staggered last week in a reaction to SVB Financial Group...

Saturday, March 11, 2023, 07:00:00 AM

Roku Reveals $487 Million In Cash Is Held At Shuttered Silicon Valley Bank

Roku Inc (NASDAQ: ROKU) evidently is one of the depositors impacted by the implosion of...

Friday, March 10, 2023, 05:49:52 PM