After a tumultuous few days, Silicon Valley Bridge Bank, N.A. and Signature Bridge Bank, N.A. are open to deposit and loan customers.
Early on Friday, March 10, 2023, bank regulators closed Silicon Valley Bank, the preeminent bank for technology companies, and placed the bank into federal receivership. The Federal Deposit Insurance Corporation (FDIC) took control of the bank’s deposits (over $175 billion at year end). The following Sunday, regulators took similar actions at Signature Bank (with over $80 billion of deposits at year end). Days of significant deposit withdrawals over fears of bank illiquidity preceded the closures, prompting the dramatic regulatory actions.
Many bank customers were reportedly concerned that blocked access to funds at the closed banks, whether from their deposit accounts or lines of credit, would result in missed payroll and vendor payments, and their own financial distress. Further, only a small percentage of the failed banks’ deposits were under the $250,000 deposit cap insured by the FDIC.
A flurry of regulatory action, and fear of financial contagion across the banking industry, resulted in an equally dramatic re-opening of the closed banks as bridge banks chartered by the Office of the Comptroller of the Currency. These “bridge banks” provide full-service banking, including extending new lines of credit, while regulators oversee the institutions.
Key information that customers need to know:
We are pleased that the re-opening of business allows access to funds and banking services for our many clients impacted over the past few days. We will continue to monitor SVB, Signature and other distressed banks. Please reach out to us if you have any questions.