$106 Billion Swedish Largest Pension Fund Alecta Lost $1.14 Billion in Silicon Valley Bank & Signature Bank with More Exposure in First Republic Bank, Board Initiates Investigations for Narrow Bets on 3 Banks with Swedish Authorities Asking Investment Funds on Exposure to United States Banks
14th March 2023 | Hong Kong
Swedish largest pension fund Alecta with $106 billion has lost $1.14 billion in United States Silicon Valley Bank & Signature Bank with more exposure in First Republic Bank. Alecta board had asked CEO Magnus Billing to initiate investigations for narrow bets on the 3 United States banks with Swedish authorities also asking Swedish investment funds on their exposure to United States banks. Alecta: “ In recent years, Alecta has invested money in the American banks Silicon Valley Bank and Signature Bank, which have now been taken over by the Federal Deposit Insurance Corporation (FDIC). For Alecta, this means losses of approximately SEK 12 billion. This obviously represents a significant loss in a single investment, but essentially, there will be little impact on our customers’ pensions as Alecta manages total capital of over SEK 1,000 billion. Alecta manages capital totalling over SEK 1,000 billion. To grow this capital, we need to invest it in different types of companies, fixed income securities and bonds, and we need to invest outside of Sweden. The two banks that have now been taken over by the FDIC have been in our portfolio since 2017 and 2019 respectively. We have invested in them alongside some of the world’s largest asset managers such as Blackrock, Vanguard and State Street. Until Thursday 9 March, a virtually unanimous global analyst community recommended that investors hold or buy more shares in these banks. In 2022, Alecta learned that the interest rate increases had an impact on the liquidity of Silicon Valley Bank, and, at that time Alecta, together with other investors, engaged in dialogue with the bank to ensure that the bank had a strategy for the future. On Thursday 9 March, the bank announced a new share issue that was not underwritten by any major investors and a sale of bonds at a loss. We consider that this was an error and the trigger for what is known as a bank run, where customers withdraw their money quickly, causing share prices to plummet. The failure of Silicon Valley bank then led to a loss of confidence in US regional banks, and trading in the shares of several banks, in addition to those in which Alecta has invested, was temporarily halted on Friday 10 March and Monday 13 March.” See more info
” $106 Billion Swedish Largest Pension Fund Alecta Lost $1.14 Billion in Silicon Valley Bank & Signature Bank with More Exposure in First Republic Bank, Board Initiates Investigations for Narrow Bets on 3 Banks with Swedish Authorities Asking Investment Funds on Exposure to United States Banks “
At Alecta, we manage the occupational pensions of 2.6 million private individuals and 35,000 companies in Sweden. Our job is to maximise the value of occupational pensions for our corporate and private customers.
- Founded in 1917
- Owned by 2.6 million private and 35,000 corporate customers
- Only collectively agreed occupational pensions like the ITP
- Manages all ITP2 pensions (defined benefit occupational pension)
- Default option for ITP 1 and TPK (defined contribution occupational pension)
- SEK 1,120 billion in assets under management
- One of the biggest investors on the Stockholm Stock Exchange
- One of Sweden’s biggest property owners
- The 5th biggest occupational pension company in Europe
$106 Billion Swedish Largest Pension Fund Alecta Lost $1.14 Billion in Silicon Valley Bank & Signature Bank with More Exposure in First Republic Bank
1) What has happened?
In recent years, Alecta has invested money in the American banks Silicon Valley Bank and Signature Bank, which have now been taken over by the Federal Deposit Insurance Corporation (FDIC). For Alecta, this means losses of approximately SEK 12 billion. This obviously represents a significant loss in a single investment, but essentially, there will be little impact on our customers’ pensions as Alecta manages total capital of over SEK 1,000 billion.
2) How could this happen?
Alecta manages capital totalling over SEK 1,000 billion. To grow this capital, we need to invest it in different types of companies, fixed income securities and bonds, and we need to invest outside of Sweden. The two banks that have now been taken over by the FDIC have been in our portfolio since 2017 and 2019 respectively. We have invested in them alongside some of the world’s largest asset managers such as Blackrock, Vanguard and State Street. Until Thursday 9 March, a virtually unanimous global analyst community recommended that investors hold or buy more shares in these banks.
In 2022, Alecta learned that the interest rate increases had an impact on the liquidity of Silicon Valley Bank, and, at that time Alecta, together with other investors, engaged in dialogue with the bank to ensure that the bank had a strategy for the future. On Thursday 9 March, the bank announced a new share issue that was not underwritten by any major investors and a sale of bonds at a loss. We consider that this was an error and the trigger for what is known as a bank run, where customers withdraw their money quickly, causing share prices to plummet. The failure of Silicon Valley bank then led to a loss of confidence in US regional banks, and trading in the shares of several banks, in addition to those in which Alecta has invested, was temporarily halted on Friday 10 March and Monday 13 March.
3) How much money was lost?
Since both Silicon Valley Bank and Signature Bank have been taken over by the FDIC, we expect that the full value of our investments in those banks is lost. We expect the total amount to be approximately SEK 12 billion.
4) How much more money could be lost?
Alecta has a holding in a third US bank, First Republic, which is an old and stable bank with a completely different business model and low loan losses, but which has suffered a bank run due to the generalised unrest. They received external funding overnight between Sunday 12 and Monday 13 March. Shares fell sharply on Monday but appeared to recover on Tuesday, according to trading indications. We have invested a total of SEK 9.7 billion in this bank.
As regards Alecta’s remaining portfolio, we do not currently see any contagion effects, and this was confirmed by the Swedish Financial Supervisory Authority, which shares our view.
5) How was it possible for Alecta to invest in the three US niche banks most affected by the crisis?
Given the low interest rate market in recent years, Alecta, like many other investors, has had to find investments that provide better returns. The drawback is that this often means higher risk. We, along with a largely unanimous body of analysts and some of the world’s largest asset managers, concluded that these banks would provide good returns.
6) Has Alecta been investing in crypto banks?
No, these are not crypto banks. These are three separate banks with completely different business models. Silicon Valley Bank works mainly with venture capitalists and companies in the technology and life science/healthcare sectors, ranging from start-ups to more mature companies.
Signature Bank’s main focus is financing rent-controlled blocks of flats and commercial properties, but it also strives to be at the forefront of technological development, and has developed a payment platform where customers can transfer USD in real time. A number of cryptocurrency firms were attracted to the platform and deposited their money there, representing around 15 per cent of the bank’s total deposits. The Bank’s involvement with digital currencies (crypto) is limited to deposits in US dollars. Signature Bank does not invest in, trade, hold or manage digital currencies, or accept digital currencies as loan collateral.
First Republic Bank is approximately 40 years old and focuses primarily on mortgage lending and wealth management to an affluent middle class. Since it was founded, the bank has had extremely low loan losses and high customer satisfaction.
7) Why did Alecta sell holdings in Handelsbanken and Swedbank to invest in US banks?
These are two separate investment decisions. Alecta decided to invest in the US banks in 2017 and 2019. At that time, we had investments in four major Scandinavian banks: Swedbank, Handelsbanken, Nordea and SEB. We started selling off shares in Swedbank and Handelsbanken in 2021 and 2022 and exited the two banks completely in 2022.
The investments in the US banks provided very good returns for several years, but have proved to be unsuccessful, despite the fact that we and a large number of professional investors and analysts judged them to be investments that would provide good returns to our clients.
8) How will my pension be affected?
Customers with an ITP 2 defined benefit pension (applies to those born in 1978 or earlier)
Your pension is not affected by this in any way. The value of your pension is determined by your salary level and the number of years in which you have had the ITP 2, not by Alecta’s returns. Those who currently receive ITP2 payments are not affected either. Your pension will be paid at the same rate as before. This is because Alecta’s managed assets far exceed what we will be paying out to our customers in the future. This is known as the collective funding ratio and is a measure of the size of Alecta’s assets in relation to future payments. Our current collective funding ratio is 173 per cent, which in simple terms means that for every SEK 100 we have to pay out, we currently have SEK 173.
9) Customers with an ITP 1 or ITPK defined contribution pension
Your pension will be paid at the same rate as now for the remainder of the year. While returns are a factor when calculating your new pension amount at the end of the year, the impact of the US banking collapse will only marginally affect your pension. The losses in Silicon Valley Bank and Signature Bank correspond to 1 per cent of the total pension capital, and despite the write-down of the assets in the US banks, Alecta has generated a positive return on your pension capital so far this year. After setting the value of both US banks at zero, the return so far this year has been 1.4 per cent.
10) What steps is Alecta taking to save as much money as possible?
Intensive work is currently under way to ensure that Alecta’s customers’ rights are safeguarded. We have legal representation on-site in the US to manage the legal process.
11) What steps is Alecta taking to restore customer confidence?
We work to gain our customers’ trust every day. We have conducted interviews with virtually every media outlet available to explain what has happened, what is happening now and how it affects our customers’ pensions. We are regularly updating our website and our customer service team is available to assist our customers.
United States Leading Private Bank & Wealth Management Firm First Republic Bank Received $30 Billion Uninsured Deposits from 11 Banks Including Citigroup, JP Morgan, Goldman Sachs, Morgan Stanley, Bank of America, Wells Fargo, Bank of New York Mellon & State Street
18th March 2023 – United States leading private bank & wealth management firm First Republic Bank has received $30 billion of uninsured deposits from 11 banks including Citigroup, JP Morgan, Goldman Sachs, Morgan Stanley, Bank of America, Wells Fargo, Bank of New York Mellon and State Street. First Republic Bank: “This support from America’s largest banks reflects confidence in First Republic and its ability to continue to provide unwavering exceptional service to its clients and communities.” Jim Herbert, Founder, Executive Chairman, and Mike Roffler, CEO & President of First Republic Bank: “We would like to share our deep appreciation for Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley, Bank of New York Mellon, PNC Bank, State Street, Truist, and U.S. Bank. Their collective support strengthens our liquidity position, reflects the ongoing quality of our business, and is a vote of confidence for First Republic and the entire U.S. banking system. In addition, we want to share our sincerest thanks to our colleagues, clients, and communities for their continued and overwhelming support during this period.”
United States Leading Private Bank & Wealth Management Firm First Republic Bank Received $30 Billion Uninsured Deposits from 11 Banks Including Citigroup, JP Morgan, Goldman Sachs, Morgan Stanley, Bank of America, Wells Fargo, Bank of New York Mellon & State Street
16th March 2023 – First Republic Bank, a leading private bank and wealth management company, today announced it will receive uninsured deposits totaling $30 billion on March 16, 2023 from Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley, Bank of New York Mellon, PNC Bank, State Street, Truist, and U.S. Bank.
This support from America’s largest banks reflects confidence in First Republic and its ability to continue to provide unwavering exceptional service to its clients and communities.
Jim Herbert, Founder and Executive Chairman, and Mike Roffler, CEO and President of First Republic Bank said, “We would like to share our deep appreciation for Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley, Bank of New York Mellon, PNC Bank, State Street, Truist, and U.S. Bank. Their collective support strengthens our liquidity position, reflects the ongoing quality of our business, and is a vote of confidence for First Republic and the entire U.S. banking system. In addition, we want to share our sincerest thanks to our colleagues, clients, and communities for their continued and overwhelming support during this period.”
As previously announced, First Republic (the “Bank”) obtained additional liquidity through additional borrowing capacity. It has since drawn on this borrowing capacity following recent industry events.
- As of March 15, 2023, the Bank had a cash position of approximately $34 billion, not including the $30 billion of uninsured deposits from Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley, Bank of New York Mellon, PNC Bank, State Street, Truist, and U.S. Bank with an initial term of 120 days at market rates.
- From March 10 to March 15, 2023, Bank borrowings from the Federal Reserve varied from $20 billion to $109 billion at an overnight rate of 4.75%.
- Since close of business on March 9, 2023, the Bank has also increased short-term borrowings from the Federal Home Loan Bank by $10 billion at a rate of 5.09%.
Insured deposits from close of business on March 8, 2023 to close of business on March 15, 2023 have remained stable. Daily deposit outflows have slowed considerably. The Bank is focused on reducing its borrowings and evaluating the composition and size of its balance sheet going forward. Consistent with this focus and during this period of recovery, the Bank’s Board of Directors has determined to suspend its common stock dividend.
12th March 2023 – First Republic Bank further enhanced and diversified its financial position through access to additional liquidity from the Federal Reserve Bank and JPMorgan Chase & Co. The additional borrowing capacity from the Federal Reserve, continued access to funding through the Federal Home Loan Bank, and ability to access additional financing through JPMorgan Chase & Co. increases, diversifies, and further strengthens First Republic’s existing liquidity profile. The total available, unused liquidity to fund operations is now more than $70 billion. This excludes additional liquidity First Republic is eligible to receive under the new Bank Term Funding Program announced by the Federal Reserve today.
About First Republic Bank
Founded in 1985, First Republic and its subsidiaries offer private banking, private business banking and private wealth management. First Republic specializes in delivering exceptional, relationship-based service and provides a complete line of products, including residential, commercial and personal loans, deposit services, and private wealth management, including investment, brokerage, insurance, trust and foreign exchange services. Services are offered through preferred banking or wealth management offices primarily in San Francisco, Palo Alto, Los Angeles, Santa Barbara, Newport Beach and San Diego, California; Portland, Oregon; Boston, Massachusetts; Palm Beach, Florida; Greenwich, Connecticut; New York, New York; Jackson, Wyoming; and Bellevue, Washington. First Republic is a constituent of the S&P 500 Index and KBW Nasdaq Bank Index. For more information, visit firstrepublic.com.
United States Signature Bank with $110 Billion Assets Placed in Federal Deposit Insurance Corporation Receivership on 12th March 2023, All Assets to be Transferred to New Signature Bridge Bank
14th March 2023 – United States Signature Bank with $110 billion assets had been placed in Federal Deposit Insurance Corporation (FDIC) receivership on 12th March 2023, with all assets to be transferred to the newly setup Signature Bridge Bank. United States FDIC: “Signature Bank had 40 branches across the country in New York, California, Connecticut, North Carolina, and Nevada. Banking activities will resume Monday, March 13, 2023, including on-line banking. Depositors and borrowers will automatically become customers of Signature Bridge Bank, N.A. and will continue to have uninterrupted customer service and access to their funds by ATM, debit cards, and writing checks in the same manner as before. Signature Bank’s official checks will continue to clear. Loan customers should continue making loan payments as usual … … These actions will protect depositors and preserve the value of the assets and operations of Signature Bank, which may improve recoveries for creditors and the DIF.” Signature Bank had total assets of $110.4 billion and total deposits of $88.6 billion as of December 31, 2022. As receiver, the FDIC will operate Signature Bridge Bank, N.A. to maximize the value of the institution for a future sale and to maintain banking services in the communities formerly served by Signature Bank. Earlier, United States 16th largest bank Silicon Valley Bank (SVB) founded in 1983, named by Forbes as one of America’s Best Banks, Nasdaq listed with $212 billion assets & $342 billion client funds collapsed and was placed into receivership (2nd largest in history, largest is 2008 Washington Mutual collapse with $300 billion assets). On 10th March 2023 (Fri), Silicon Valley Bank (SVB) was put under receivership by the Federal Deposit Insurance Corp. See below for full statement.
United States Signature Bank with $110 Billion Assets Placed in Federal Deposit Insurance Corporation Receivership on 12th March 2023
Dear Clients,
As stated in a press release issued by the Federal Deposit Insurance Corporation (FDIC) on Monday, March 13, Signature Bridge Bank, N.A. is open for business and we will continue to provide you with loan, deposit, and other bank services as we always have. You can expect, and will receive, the same high level of service you are accustomed to, driven by our single point of contact model. Further, I want to reiterate one key point: your deposits, and all obligations of Signature Bridge Bank, N.A are backed by the FDIC and the full faith and credit of the U.S government. Rest assured that you may continue to make deposits and withdraw funds as you normally would.
As Signature Bridge Bank, N.A. we remain fully committed to ensuring that our clients are financially well cared for. Do not hesitate to reach out to your Private Client Groups with any additional questions; they are willing and ready to serve you.
Regards,
Greg D. Carmichael |Chief Executive Officer
SIGNATURE BRIDGE BANK, N.A.
565 Fifth Ave, 8th Floor, New York, NY 10017
Federal Deposit Insurance Corporation (FDIC) receivership
12th March 2023 – Signature Bank, New York, NY, was closed today by the New York State Department of Financial Services, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect depositors, the FDIC transferred all the deposits and substantially all of the assets of Signature Bank to Signature Bridge Bank, N.A., a full-service bank that will be operated by the FDIC as it markets the institution to potential bidders.
Signature Bank had 40 branches across the country in New York, California, Connecticut, North Carolina, and Nevada. Banking activities will resume Monday, March 13, 2023, including on-line banking. Depositors and borrowers will automatically become customers of Signature Bridge Bank, N.A. and will continue to have uninterrupted customer service and access to their funds by ATM, debit cards, and writing checks in the same manner as before. Signature Bank’s official checks will continue to clear. Loan customers should continue making loan payments as usual. The transfer of all the deposits was completed under the systemic risk exception approved earlier today. All depositors of the institution will be made whole. No losses will be borne by the taxpayers. Shareholders and certain unsecured debt holders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund (DIF) to support uninsured depositors will be recovered by a special assessment on banks, as required by law.
The FDIC, as receiver for Signature Bank, has also transferred all Qualified Financial Contracts (as defined in 12 USC 1821(e)) of the failed bank to the bridge bank. These actions will protect depositors and preserve the value of the assets and operations of Signature Bank, which may improve recoveries for creditors and the DIF.
Signature Bank had total assets of $110.4 billion and total deposits of $88.6 billion as of December 31, 2022. As receiver, the FDIC will operate Signature Bridge Bank, N.A. to maximize the value of the institution for a future sale and to maintain banking services in the communities formerly served by Signature Bank. A bridge bank is a chartered national bank that operates under a board appointed by the FDIC. It assumes the deposits and certain other liabilities and purchases certain assets of a failed bank. The bridge bank structure is designed to “bridge” the gap between the failure of a bank and the time when the FDIC can stabilize the institution and implement an orderly resolution. The FDIC named Greg D. Carmichael as CEO of Signature Bridge Bank, N.A. Mr. Carmichael recently served as president and CEO of Fifth Third Bancorp.
FDIC: PR-18-2023
HSBC Acquires Silicon Valley Bank UK for £1 with Deposits of £6.7 Billion & Loans of £5.5 Billion, Excludes Assets & Liabilities of Parent Companies from Transaction
13th March 2023 – HSBC, one of the world’s largest financial institution, has acquired Silicon Valley Bank UK for £1 with deposits of £6.7 billion & loans of £5.5 billion (net tangible equity £1.4b billion, 2022 profit before tax £88 million), excluding the assets & liabilities of parent companies (Silicon Valley Bank) from transaction (13/3/23). United States 16th largest bank Silicon Valley Bank (SVB) founded in 1983, named by Forbes as one of America’s Best Banks, Nasdaq listed with $212 billion assets & $342 billion client funds collapsed and was placed into receivership (2nd largest in history, largest is 2008 Washington Mutual collapse with $300 billion assets). On 10th March 2023 (Fri), Silicon Valley Bank (SVB) was put under receivership by the Federal Deposit Insurance Corp. Noel Quinn, HSBC Group CEO: “This acquisition makes excellent strategic sense for our business in the UK. It strengthens our commercial banking franchise and enhances our ability to serve innovative and fast-growing firms, including in the technology and life-science sectors, in the UK and internationally. We welcome SVB UK’s customers to HSBC and look forward to helping them grow in the UK and around the world. SVB UK customers can continue to bank as usual, safe in the knowledge that their deposits are backed by the strength, safety and security of HSBC. We warmly welcome SVB UK colleagues to HSBC, we are excited to start working with them.” See below for more info of Silicon Valley Bank collapsed.
HSBC UK serves over 14 million customers across the UK, supported by 18,500 colleagues. HSBC UK offers a complete range of retail banking and wealth management to personal and private banking customers, as well as commercial banking for small to medium businesses and large corporates. HSBC Holdings plc, the parent company of HSBC, is headquartered in London. HSBC serves customers worldwide from offices in 62 countries and territories in its geographical regions: Europe, Asia, North America, Latin America, the Middle East and North Africa. With assets of US$2,967bn at 31 December 2022, HSBC is one of the world’s largest banking and financial services organisations.
Silicon Valley Bank UK Limited was a subsidiary of Silicon Valley Bank, a Delaware corporation and subsidiary of SVB Financial Group. Silicon Valley Bank UK entered the UK market in 2004, and specialised in serving the UK technology and life-sciences sectors, assisting entrepreneurs, investors and innovative companies, building a portfolio of loyal customers. It has used deep sector knowledge, expertise and capabilities to serve and grow this critical part of the economy.
Rishi Sunak, Prime Minister of the United Kingdom:
HSBC Acquires Silicon Valley Bank UK for £1 with Deposits of £6.7 Billion & Loans of £5.5 Billion
United States 16th Largest Bank Silicon Valley Bank Founded in 1983, Named by Forbes as One of America’s Best Banks, Nasdaq Listed with $212 Billion Assets & $342 Billion Client Funds Including Providing Private Banking & Wealth Advisory has Collapsed, CEO Greg Becker Filed to Sell $3.6 Million Shares in 26th Jan 2023 & Selling on 27th Feb 2023
11th March 2023 – United States 16th largest bank Silicon Valley Bank (SVB) founded in 1983, named by Forbes as one of America’s Best Banks, Nasdaq listed with $212 billion assets & $342 billion client funds has collapsed and placed into receivership (2nd largest in history, largest is 2008 Washington Mutual collapse with $300 billion assets), with reports on SVB CEO Greg Becker filing to sell SVB shares in 26th January 2023 and selling $3.6 million of SVB shares on 27th February 2023. Silicon Valley Bank (SVB) has 4 core businesses, providing commercial banking, private banking & wealth advisory, investment banking, venture capital investing. Silicon Valley Bank (SVB) is focused on providing banking services to United States startup, doing business with almost half of United States venture-backed startups with clients including e-commerce giant Shopify and leading venture capital firm Andreessen Horowitz. On the 8th of March 2023 (Wed), Silicon Valley Bank (SVB) announced it had sold $21 billion of securities and to raise $2.25 billion in new share issuance to strengthen its balance sheet. These actions prompted clients to withdraw their cash in the bank, and triggered a bank run. On 10th March 2023 (Fri), Silicon Valley Bank (SVB) collapsed and was put under receivership by the Federal Deposit Insurance Corp. Immediately, a new bank Deposit Insurance National Bank of Santa Clara was created to hold the assets of Silicon Valley Bank (SVB). Silicon Valley Bank (SVB) customers with less than $250,000 will have full access to their money by 13th March 2023. The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by Congress to maintain stability and public confidence in the nation’s financial system. To accomplish this mission, the FDIC insures deposits; examines and supervises financial institutions for safety, soundness, and consumer protection; makes large and complex financial institutions resolvable; and manages receiverships. More info below.
10th March 2023 – FDIC Creates a Deposit Insurance National Bank of Santa Clara to Protect Insured Depositors of Silicon Valley Bank, Santa Clara, California
10th March 2023 – 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.
8th March 2023 – SVB Financial Group Announces Proposed Offerings of Common Stock and Mandatory Convertible Preferred Stock
8th March 2023 – SVB Financial Group (“SVB”) (NASDAQ: SIVB), announced today that it intends to offer $1.25 billion of its common stock and $500 million of depositary shares, consisting of 10 million depositary shares each representing a 1/20th interest in a share of its Series F Mandatory Convertible Preferred Stock (“Preferred Stock”), liquidation preference $1,000 per share (equivalent to a liquidation preference of $50 per depositary share), in separate underwritten registered public offerings. In addition, prior to commencing the offerings, SVB entered into a subscription agreement with General Atlantic, a leading global growth equity investor, to purchase $500 million of common stock at the public offering price in the offering of common stock in a separate private transaction. The subscription agreement with General Atlantic is contingent on the closing of the offering of common stock and is expected to close shortly thereafter. SVB also intends to grant (i) the underwriters in the common stock offering an option to purchase up to an additional $187.5 million of common stock and (ii) the underwriters in the Preferred Stock offering an over-allotment option to purchase up to an additional $75 million, or 1.5 million depositary shares in the Preferred Stock offering. SVB intends to use the net proceeds from the offerings for general corporate purposes. The consummation of each offering is not contingent upon the consummation of the other offering.
Additionally, earlier today, SVB completed the sale of substantially of its available for sale securities portfolio. SVB sold approximately $21 billion of securities, which will result in an after tax loss of approximately $1.8 billion in the first quarter of 2023. Goldman Sachs & Co. LLC and SVB Securities will act as book-running managers for each offering. Each offering is being made pursuant to an effective shelf registration statement, including a prospectus and a separate prospectus supplement, filed by SVB with the U.S. Securities and Exchange Commission (“SEC”). Investors should read the prospectus in that registration statement, the applicable prospectus supplement and other documents SVB has filed with the SEC for more complete information about SVB and the relevant offering before investing. These documents may be obtained for free by visiting the SEC website at www.sec.gov. Alternatively, for each offering, SVB, any underwriter or any dealer participating in the offering will arrange to send you the prospectus contained in the registration statement, together with the applicable prospectus supplement, if you request it by contacting Goldman Sachs & Co. LLC at 200 West Street, New York, NY 10282, Attention: Prospectus Department, telephone: 1-866-471-2526, facsimile: 212-902-9316 or by emailing [email protected]. This press release is for informational purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy, these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About SVB
SVB is the financial partner of the innovation economy, helping individuals, investors and the world’s most innovative companies achieve their ambitious goals. SVB’s businesses – Silicon Valley Bank, SVB Capital, SVB Private and SVB Securities – together offer the services that dynamic and fast-growing clients require as they grow, including commercial banking, venture investing, wealth planning and investment banking. Headquartered in Santa Clara, California, SVB operates in centers of innovation around the world. SVB Financial Group (SVB) (Nasdaq: SIVB) is the holding company for all business units and groups. © 2023 SVB Financial Group. All rights reserved. SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, SVB SECURITIES, SVB PRIVATE, SVB CAPITAL and the chevron device are trademarks of SVB Financial Group, used under license. Silicon Valley Bank is a member of the FDIC and the Federal Reserve System. Silicon Valley Bank is the California bank subsidiary of SVB Financial Group. [SIVB-F]
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