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Silicon Valley Bank (SVB) closed by state regulators

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AndySoCal
Valued Contributor

Re: Silicon Valley Bank (SVB) closed by state regulators

@CreditCuriosity   I read your response.   This article may interest you if have not seen it already

 

https://www.cnbc.com/2023/03/14/sec-and-justice-department-silicon-valley-bank-investigation.html 

 

@coldfusion  The credit union and my internet based bank have not sent me anything email or snail mail wise. The CU has a statemnet on their web site.  Both of them are well capitalized and do not have niche market like Silicon Valley Bank (venture capital)  The venture capital was the vase majority of their business (SVB).

 

All,

 

Here is another article how they invested their money (in long term treasury and mortgage back securities). SVB did this at the same time the Fed was planning on raising interest rates. The last place you want to be is long  bonds when the Fed is or is planning to raise interest rates (my opinion) The longer the maturity the greater the swings in the bond price on the down side.  Here is a related article

 

https://markets.businessinsider.com/news/stocks/silicon-valley-bank-svb-goldman-sachs-bought-bond-po... 

 

 

 

 

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Message 11 of 23
CreditCuriosity
Moderator Emeritus

Re: Silicon Valley Bank (SVB) closed by state regulators


@AndySoCal wrote:

@CreditCuriosity   I read your response.   This article may interest you if have not seen it already

 

https://www.cnbc.com/2023/03/14/sec-and-justice-department-silicon-valley-bank-investigation.html 

 

@coldfusion  The credit union and my internet based bank have not sent me anything email or snail mail wise. The CU has a statemnet on their web site.  Both of them are well capitalized and do not have niche market like Silicon Valley Bank (venture capital)  The venture capital was the vase majority of their business (SVB).

 

All,

 

Here is another article how they invested their money (in long term treasury and mortgage back securities). SVB did this at the same time the Fed was planning on raising interest rates. The last place you want to be is long  bonds when the Fed is or is planning to raise interest rates (my opinion) The longer the maturity the greater the swings in the bond price on the down side.  Here is a related article

 

https://markets.businessinsider.com/news/stocks/silicon-valley-bank-svb-goldman-sachs-bought-bond-po... 

 

 

 

 


you pretty much nailed it.  Many bad decision by them in particular although other banks somewhat in similar situations.  

Message 12 of 23
Traveler101
Established Contributor

Re: Silicon Valley Bank (SVB) closed by state regulators


@coldfusion wrote:

@CreditCuriosity wrote:

Can't believe honestly we are bailing out above 250k...  Treasury and Fed getting involved.  This is sickening, not to mention weeks before C levels selling all their stocks several weeks prior (they need to be all put in prision for that alone)


i'm not surprised either, but elaborating as to why would come dangerously close to crossing boundaries here.

 

I've been getting "your money is safe with us" emails from several of the CUs and banks I have accounts with the last couple of days.

 

Apparently someone spilled the beans that BoA has had an influx of $15 billion in new money but AFAIK the bank hasn't confirmed it, although flights to safety in response to apparent or real risk developing isn't exactly a new trend.

 

https://www.bloomberg.com/news/articles/2023-03-15/bofa-gets-more-than-15-billion-in-deposits-after-...


Hearing this unfold over the last days really makes you think. First Tech was fast on trying to assure me of their solvency. I'm sure SVB was doing the same up until the end. Given the turbulent times we are living in, you have to wonder if banks and credit unions are going to tweak their business models and how will all this affect us as consumers. What the sad part is, not many, if any are accountable for their actions. It's a cycle that never ends. But assuredly people got a big fat bonus.

Message 13 of 23
AndySoCal
Valued Contributor

Re: Silicon Valley Bank (SVB) closed by state regulators

@Traveler101   Below is a link to depositaccounts.com part  of the information about the bank or credit union inlcudes the health of the bank or credit union which is graded. They explain why the grade is given. First Technology is well capitalized you need not be worried about their solvency in my opinion.

 

https://www.depositaccounts.com/banks/first-technology-cu.html#health 

 

There is some misunderstanding on how much and what is covered by the FDIC and  NACU insurance.  If you have any questions use the FDIC link provided earlier in this thread.

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Message 14 of 23
crystal626
Regular Contributor

Re: Silicon Valley Bank (SVB) closed by state regulators


@Traveler101 wrote:

@coldfusion wrote:

@CreditCuriosity wrote:

Can't believe honestly we are bailing out above 250k...  Treasury and Fed getting involved.  This is sickening, not to mention weeks before C levels selling all their stocks several weeks prior (they need to be all put in prision for that alone)


i'm not surprised either, but elaborating as to why would come dangerously close to crossing boundaries here.

 

I've been getting "your money is safe with us" emails from several of the CUs and banks I have accounts with the last couple of days.

 

Apparently someone spilled the beans that BoA has had an influx of $15 billion in new money but AFAIK the bank hasn't confirmed it, although flights to safety in response to apparent or real risk developing isn't exactly a new trend.

 

https://www.bloomberg.com/news/articles/2023-03-15/bofa-gets-more-than-15-billion-in-deposits-after-...


Hearing this unfold over the last days really makes you think. First Tech was fast on trying to assure me of their solvency. I'm sure SVB was doing the same up until the end. Given the turbulent times we are living in, you have to wonder if banks and credit unions are going to tweak their business models and how will all this affect us as consumers. What the sad part is, not many, if any are accountable for their actions. It's a cycle that never ends. But assuredly people got a big fat bonus.


I'm much more comfortable with credit unions than banks honestly. The business models and priorities are completely different. Members vs shareholders. I checked the health of every CU I do business with and they're all rated at least B+. 

Message 15 of 23
coldfusion
Community Leader
Mega Contributor

Re: Silicon Valley Bank (SVB) closed by state regulators

Rumored that Citizens Bank is making a play for what was SVB's private banking arm.

 

https://www.reuters.com/business/finance/citizens-financial-eyes-bid-svbs-private-bank-sources-2023-...

 

Not all that surprising given that Citizens has a history of growth through acquistion both during and after they were owned by RBS.

 

 

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Artist formerly known as the_old_curmudgeon who was formerly known as coldfusion
Message 16 of 23
CreditCuriosity
Moderator Emeritus

Re: Silicon Valley Bank (SVB) closed by state regulators


@coldfusion wrote:

Rumored that Citizens Bank is making a play for what was SVB's private banking arm.

 

https://www.reuters.com/business/finance/citizens-financial-eyes-bid-svbs-private-bank-sources-2023-...

 

Not all that surprising given that Citizens has a history of growth through acquistion both during and after they were owned by RBS.

 

 


Hopefully they don't keep any of the C level people from SVB and put a chief risk officer in place along tons of other things.. Granted it would be under Citizens leadership if they do obtain it.  

Message 17 of 23
Royalbacon
Frequent Contributor

Re: Silicon Valley Bank (SVB) closed by state regulators

@Traveler101 wrote:

@coldfusion wrote:

@CreditCuriosity wrote:

Can't believe honestly we are bailing out above 250k...  Treasury and Fed getting involved.  This is sickening, not to mention weeks before C levels selling all their stocks several weeks prior (they need to be all put in prision for that alone)


i'm not surprised either, but elaborating as to why would come dangerously close to crossing boundaries here.

 

I've been getting "your money is safe with us" emails from several of the CUs and banks I have accounts with the last couple of days.

 

Apparently someone spilled the beans that BoA has had an influx of $15 billion in new money but AFAIK the bank hasn't confirmed it, although flights to safety in response to apparent or real risk developing isn't exactly a new trend.

 

https://www.bloomberg.com/news/articles/2023-03-15/bofa-gets-more-than-15-billion-in-deposits-after-...


Hearing this unfold over the last days really makes you think. First Tech was fast on trying to assure me of their solvency. I'm sure SVB was doing the same up until the end. Given the turbulent times we are living in, you have to wonder if banks and credit unions are going to tweak their business models and how will all this affect us as consumers. What the sad part is, not many, if any are accountable for their actions. It's a cycle that never ends. But assuredly people got a big fat bonus.


Many banks & credit unions came out issuing statements right after it happened. In fact if you look at Facebook pages for random credit unions & banks you'll see comments from people asking them if they were going to do so.

 

Here's a few other examples

Peace of Mind for Your Money: Understanding the Silicon Valley Bank Failure - Utah First Credit Unio...

Your Money Is Safe at ICCU - ICCU - Idaho Central Credit Union

 


@AndySoCal wrote:

@Traveler101   Below is a link to depositaccounts.com part  of the information about the bank or credit union inlcudes the health of the bank or credit union which is graded. They explain why the grade is given. First Technology is well capitalized you need not be worried about their solvency in my opinion.

 

https://www.depositaccounts.com/banks/first-technology-cu.html#health 

 

There is some misunderstanding on how much and what is covered by the FDIC and  NACU insurance.  If you have any questions use the FDIC link provided earlier in this thread.


Unfortunately the health ratings don't mean much, and by the time Depositaccounts gets the numbers they're already like a quarter old. And Silicon Valley had an A rating up until it collapsed. Can't see on the archived page what they're capitilization was though sadly. Silicon Valley Bank Reviews and Rates - California (archive.org)

 

I know the NCUA for credit unions considers credit unions above 7% to be "well capitalized"

 

 

Chapter 7 Bankruptcy Filed-September 2020 Discharged-December 2020
Kohl's Credit Card $3000 Limit (Opened October 2016) Survived Bankruptcy for whatever reason
Closed Capital One Venture One $3000 Limit (Opened December 2020, Closed by me September 2022 since I wanted the SavorOne and couldn't product change to it)
Capital One Auto Loan (Opened March 2021)
Capital One Cabela's $5000 Limit (Opened December 2021)
America First Credit Union Visa $1000 Limit (Opened December 2021)
Capital One SavorOne $5000 Limit (Opened September 2022)
Sam's Club Mastercard Synchrony Bank $2500 Limit (Opened March 30 2023) (Burned Synchrony in my CH7 BK, One card with a $745 balance)
Idaho Central Credit Union ICCU Visa $10,000 Limit (Opened April 2023)
Message 18 of 23
AndySoCal
Valued Contributor

Re: Silicon Valley Bank (SVB) closed by state regulators

@RoyalbaconDepositaccounts.com has an overall grade but you want to look at the capitization grade for SVB which is a C-.  I do this with any bank or credit union I am thinking of joining or have joined.You add to that the approximate 1.8 billion dollar loss on the sale of the SVB bond portfolio. Bond portfolio was invested in medium to long term bonds at a time when the fed was / is raising rates. This is not where you want to be as investor the longer the term the greater the volitility in the price on the down side.   And per a report I read they were hit with upto 43 billion dollars in a day for withdrawl requests at the worst of it.  Edited to add  Here is Michael Barr of the FDIC opinion on how well SVB was managed

 

https://www.cnbc.com/2023/03/27/feds-barr-calls-silicon-valley-bank-failure-a-textbook-case-of-misma... 

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Message 19 of 23
Royalbacon
Frequent Contributor

Re: Silicon Valley Bank (SVB) closed by state regulators


@AndySoCal wrote:

@RoyalbaconDepositaccounts.com has an overall grade but you want to look at the capitization grade for SVB which is a C-.  I do this with any bank or credit union I am thinking of joining or have joined.You add to that the approximate 1.8 billion dollar loss on the sale of the SVB bond portfolio. Bond portfolio was invested in medium to long term bonds at a time when the fed was / is raising rates. This is not where you want to be as investor the longer the term the greater the volitility in the price on the down side.   And per a report I read they were hit with upto 43 billion dollars in a day for withdrawl requests at the worst of it.


Yep Capitalization is the big important number and thats why I said unfortunately you cant see the capitalization number on the archived page and brought up I know the NCUA has come out and said they considered 7% for credit unions to be well capitalized. And no where can you factor in to the numbers or letter grades about the possibility of having a ridiculous bank run like what happened to SVB. I too keep track of all my banks & credit unions I do business with and those can change wildly from quarter to quarter. Also by the time they get last quarter's numbers they're also already outdated.

 

Depositaccounts came out with an article right after SVB collapsed.

Silicon Valley Bank Is Shut Down - Second Largest Bank Failure in History (depositaccounts.com)

 

The individuals that maintain site do a fantastic job with the data that they're able to get. It's not perfect nor does it always mean much but they're doing the best they can with what they can get.

 

I also religilously read the annual reports all my credit unions put out every year, and do so for any credit union that I ever consider joining.


 

Chapter 7 Bankruptcy Filed-September 2020 Discharged-December 2020
Kohl's Credit Card $3000 Limit (Opened October 2016) Survived Bankruptcy for whatever reason
Closed Capital One Venture One $3000 Limit (Opened December 2020, Closed by me September 2022 since I wanted the SavorOne and couldn't product change to it)
Capital One Auto Loan (Opened March 2021)
Capital One Cabela's $5000 Limit (Opened December 2021)
America First Credit Union Visa $1000 Limit (Opened December 2021)
Capital One SavorOne $5000 Limit (Opened September 2022)
Sam's Club Mastercard Synchrony Bank $2500 Limit (Opened March 30 2023) (Burned Synchrony in my CH7 BK, One card with a $745 balance)
Idaho Central Credit Union ICCU Visa $10,000 Limit (Opened April 2023)
Message 20 of 23
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