Silicon Valley Bank

Silicon Valley Bank
Company typeDivision
IndustryFinancial services
FoundedOctober 17, 1983; 41 years ago (1983-10-17)[1]
Founders
  • Bill Biggerstaff
  • Robert Medearis
  • Roger Smith[2]
FateFailed after a bank run on its deposits, held in receivership by the FDIC, assets acquired by First Citizens Bank
Successors
Headquarters
Santa Clara, California
,
U.S.
Key people
Number of employees
8,553 (December 2022)[6]
Parent
Capital ratioTier 1 15.26% (2022)
Websitesvb.com
Footnotes / references
[7]

Silicon Valley Bank (SVB) is a commercial bank division of First Citizens BancShares. The bank was previously the primary subsidiary of SVB Financial Group, a publicly traded bank holding company that had offices in 15 U.S. states and over a dozen international jurisdictions.[7][8][9]

As a regional bank in the San Francisco Bay Area, SVB offers services specifically designed to meet the needs of the tech industry, and soon became the largest bank by deposits in Silicon Valley and the preferred bank of almost half of all venture-backed tech startups.[10][11] In March 2023, after central bank–endorsed interest rate hikes during the 2021–2022 inflation spike,[12][13][14][15] there was a bank run on its deposits, which led to its collapse and seizure on March 10, 2023 by the California Department of Financial Protection and Innovation (DFPI), its regulator.[16] Citing inadequate liquidity and insolvency, state officials at the DFPI appointed the Federal Deposit Insurance Corporation (FDIC) receiver of the bank.[17] This was, at the time, the second-largest bank failure in U.S. history, later surpassed by the collapse of First Republic Bank during the March 2023 United States bank failures.[18][19]

On March 12, 2023, a joint statement was issued by Secretary of the Treasury Janet Yellen, Federal Reserve Chairman Jerome Powell, and FDIC Chairman Martin Gruenberg, stating that all depositors at SVB would be fully protected and would have access to both insured and uninsured deposits starting the following Monday, March 13.[20][21] The FDIC then established a bridge bank successor, Silicon Valley Bridge Bank, N.A., which quickly assumed ongoing business.[22] On March 27, 2023, First Citizens Bank & Trust Company, a subsidiary of First Citizens BancShares, assumed all customer deposits and acquired all loans of Silicon Valley Bridge Bank from the FDIC and began operating all SVB branches.[3][4][23][24]

  1. ^ Silicon Valley Bancshares (March 19, 1999). "Silicon Valley Bancshares Form 10-K" (PDF). EDGAR. Securities and Exchange Commission. p. 3. Archived (PDF) from the original on March 10, 2023. Retrieved March 11, 2023.
  2. ^ Cite error: The named reference Piscione was invoked but never defined (see the help page).
  3. ^ a b Hirsch, Lauren (March 27, 2023). "First Citizens to Acquire Silicon Valley Bank". The New York Times. Retrieved March 28, 2023.
  4. ^ a b Primack, Dan (March 27, 2023). "First Citizens agrees to buy Silicon Valley Bank". Axios. Retrieved March 27, 2023.
  5. ^ "HSBC acquires Silicon Valley Bank UK Limited". HSBC. United Kingdom. March 20, 2023. Retrieved March 22, 2023.
  6. ^ Schubarth, Cromwell (March 21, 2023). "In bankruptcy, Silicon Valley Bank's parent company says it has no employees". Silicon Valley Business Journal. San Jose, California: American City Business Journals. Retrieved March 24, 2023.
  7. ^ a b "SVB Financial Group 2022 Annual Report (Form 10-K)". U.S. Securities and Exchange Commission. March 1, 2022. Archived from the original on March 10, 2023. Retrieved March 10, 2023.
  8. ^ "Silicon Valley Bank Opens in Canada" (Press release). PR Newswire. March 4, 2019. Archived from the original on April 1, 2020. Retrieved January 9, 2020.
  9. ^ SVB Financial Group (February 24, 2023). "Exhibit 21.1-Subsidiaries of SVB Financial Group – SVB Financial Group Annual Report on Form 10-K". EDGAR. U.S. Securities and Exchange Commission. Retrieved March 14, 2021.
  10. ^ Paul, Kari; Bhuiyan, Johana (March 15, 2023). "'Lungs of the startup world': bank fall upends most Silicon Valley industries". The Guardian. ISSN 0261-3077. Archived from the original on March 15, 2023. Retrieved March 15, 2023.
  11. ^ "Large Commercial Banks". Federal Reserve. Archived from the original on July 8, 2021. Retrieved March 11, 2023..
  12. ^ Levitz, Eric (March 14, 2023). "The Fed Might 'Fix' the Economy by Breaking Banks". Intelligencer. Archived from the original on March 15, 2023. Retrieved March 15, 2023.
  13. ^ Stewart, Emily (March 14, 2023). "Did the Fed break Silicon Valley Bank?". Vox. Archived from the original on March 15, 2023. Retrieved March 15, 2023.
  14. ^ Derby, Michael S. (September 7, 2022). "Fed's Mester Says More Rate Rises are Needed Amid Inflation Surge". Wall Street Journal. ISSN 0099-9660. Archived from the original on March 15, 2023. Retrieved March 15, 2023.
  15. ^ Pandolfo, Chris (March 14, 2023). "Silicon Valley Bank committed 'one of the most elementary errors in banking,' Larry Summers says". Yahoo Finance. Archived from the original on March 14, 2023. Retrieved March 15, 2023.
  16. ^ Pound, Jesse (March 10, 2023). "Silicon Valley Bank is shut down by regulators, FDIC to protect insured deposits". CNBC. Archived from the original on March 10, 2023. Retrieved March 10, 2023.
  17. ^ "FDIC Acts to Protect All Depositors of the former Silicon Valley Bank, Santa Clara, California" (Press release). Washington, D.C.: Federal Deposit Insurance Corporation. March 13, 2023. Archived from the original on March 13, 2023. Retrieved March 13, 2023.
  18. ^ "FDIC Creates a Deposit Insurance National Bank of Santa Clara to Protect Insured Depositors of Silicon Valley Bank, Santa Clara, California" (Press release). Washington: Federal Deposit Insurance Corporation. March 10, 2023. Archived from the original on March 10, 2023. Retrieved March 10, 2023.
  19. ^ Levin, Benjamin (March 9, 2023). "Silicon Valley Bank Fails as FDIC Takes Over, Appoints Receiver". Bloomberg Law. Archived from the original on March 10, 2023. Retrieved March 10, 2023.
  20. ^ Cancryn, Adam; White, Ben; Guida, Victoria (March 13, 2023). "How Biden saved Silicon Valley startups: Inside the 72 hours that transformed U.S. banking". Politico. Archived from the original on March 14, 2023. Retrieved March 13, 2023.
  21. ^ "Joint Statement by the Department of the Treasury, Federal Reserve, and FDIC". United States Department of the Treasury. March 12, 2023. Archived from the original on March 12, 2023. Retrieved March 13, 2023.
  22. ^ Ghosh, Kanjyik; Hu, Krystal (March 13, 2023). Aich, Rashmi (ed.). "Silicon Valley Bank 'conducting business as usual', new CEO says". Reuters. Archived from the original on March 14, 2023. Retrieved March 13, 2023.
  23. ^ Thompson, Mark; Enochs, Liz; Isidore, Chris (March 27, 2023). "Silicon Valley Bank has a new owner. What it means for the bank crisis". CNN. Retrieved March 27, 2023.
  24. ^ First Citizens BancShares (March 27, 2023). "First Citizens BancShares, Inc. Form 8-K". EDGAR. Securities and Exchange Commission. Retrieved March 27, 2023.