One bank customer said this has been "the worst 18 hours of my life."
On Friday, the New York Police Department were called by a branch of the Silicon Valley Bank (SVB) as nearly a dozen investors showed up at the bank to withdraw money as federal regulators seized the institution following a run on deposits at the bank.
According to the Daily Mail, SVB called the cops on "about a dozen" financiers, including Dor Levi, a former Lyft executive, who arrived at the Park Avenue branch location, only to be blocked from entering and then having two police units arrive to secure the SVB building.
SVB, a significant banking institution for venture-backed companies, was seized by the Federal Deposit Insurance Corporation (FDIC) Friday after a run on the bank.
A "run" on a bank occurs when people who have deposited money with the bank begin withdrawing their cash all at the same time. It usually follows fears that the bank will collapse or would be otherwise unable to cash out their deposits in full and in a timely fashion.
The run occurred after following an announcement on Wednesday, that SVB was looking to raise more than $2 billion in capital because of a $1.8 billion loss on asset sales.
SVB's collapse is the biggest bank failure since the 2008 Great Recession fall of Washington Mutual.
According to a press release, the FCIA said they were appointed by the California Department of Financial Protection and Innovation after they closed SVB.
Per depositor, per bank, the FDIC’s standard insurance only covers up to $250,000. The Daily Mail reports there have already been "horror stories" such as that of the CEO of Boston wellness firm FarmboxRx, Ashley Tyrner, who "had at least $10m deposited with SVB" and said this has been "the worst 18 hours of my life."
No later than Monday morning, insured depositors will have full access to their insured deposits according to the FDIC, who created the Deposit Insurance National Bank of Santa Clara to hold the insured amounts.
The Wall Street Journal reports that those who have balances that exceed the insured $250,000 will be given receivership certificates for their uninsured balances.
SVB's assets were previously reported on December 31, 2022 at $209.0 billion with roughly $175.4 billion in total deposits.
Prior to the run on the bank, shares of SVB's parent company fell 60 percent on Thursday and another 60 on Friday before the FDIC stepped in.
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