Here is what the second-largest bank failure in U.S. history looks like in graphics
By Peter Santilli and James Benedict
March 11, 2023 at 8:27 pm ET
Bank failures, 2001-23
SEPTEMBER 2008
Washington Mutual Bank
Assets: $307 billion
Deposits: $188 billion
MARCH 2023
Silicon Valley Bank
Assets: $209 billion
Deposits: $175 billion
DEPOSITS (BILLIONS)
More than 500 banks failed
from 2008 through 2014
Note: Figures for assets and deposits are estimates.
Source: Federal Deposit Insurance Corp.
Silicon Valley Bank’s collapse was the second-biggest bank failure in U.S. history in terms of assets. Deposits at the tech-focused lender’s parent, SVB Financial GroupSIVB 0.00%, had declined in three consecutive quarters and the situation worsened on March 9 when clients tried to withdraw $42 billion.
SVB Financial deposits, quarterly net change
Inflows turned to outflows in the past year as clients burned cash amid the tech slowdown.
$42 billion in attempted withdrawals on March 9
Sources: company filings (quarterly); California regulators (March 9)
The Federal Deposit Insurance Corp. took control of the bank, creating a new entity it called the Deposit Insurance National Bank of Santa Clara. All of the bank’s deposits have been transferred to the new bank, the regulator said.
Insured depositors will have access to their funds, the FDIC said. Depositors with funds exceeding insurance caps will get receivership certificates for their uninsured balances. The majority of SVB’s deposits are uninsured.
Silicon Valley Bank’s deposits
*Estimate
Source: Federal Financial Institutions Examination Council
SVB was flooded with cash during the pandemic tech boom—startups and their investors were taking in huge sums, which swelled SVB’s coffers. SVB in turn used a lot of that money to buy Treasury bonds and mortgage-backed bonds.
But as interest rates rose, those securities declined in value.
That wasn’t a problem at first—SVB said it would never sell the lion’s share of those bonds—a designation that meant it could ignore any losses from the declining value. But in early March, it had to face up to the losses—the flood of withdrawal requests was more than it could satisfy by selling the bonds.
Bonds Silicon Valley Bank said it would hold until they matured
Source: Federal Financial Institutions Examination Council
Write to Peter Santilli at peter.santilli@wsj.com and James Benedict at james.benedict@wsj.com
