Dozens of customers lined up outside a First Republic bank in northern California on Saturday to withdraw their money following the collapse of the Silicon Valley bank.
After SVB’s demise, there had been fears for First Republic’s future as analysts pointed out the similarities between the estimated value of its assets and the actual value.
Brentwood is located in the wine-growing community of the Golden State, just south of Napa Valley, with area vineyards, notably Bloomfield, Tamayo and Hannah Nicole, having attracted international attention in recent years.
The news of the collapse of Silicon Valley Bank has rocked the wine industry. It was the premier financial institution for wineries in California for nearly three decades.
The California Department of Financial Protection and Innovation closed the bank on Friday after depositors rushed to withdraw their deposits over concerns about the lender’s financial health. The frenetic two-day run on the bank surprised observers and stunned markets, wiping out more than $100 billion in market value for US banks.
Customers at First Republic Bank in Northern California spend their Saturday withdrawing money after the Silicon Valley bank collapse
After SVB’s demise, there had been fears for First Republic’s future as analysts pointed out the similarities between the estimated value of its assets and the actual value
A First Republic at the bank’s location in Brentwood, in the wine community of the Golden State
First Republic issued a statement on March 10 trying to reassure investors, noting its “continued safety and stability and strong capital and liquidity positions.”
Founded in San Francisco in 1985, First Republic has 80 offices nationwide in 11 states, primarily on the west and east coasts
As of Friday night, thousands of wineries found themselves completely locked out of their accounts with no clear timeline for accessing their funds.
First Republic issued a statement on March 10 trying to reassure investors, noting its “ongoing security and stability and strong capital and liquidity positions.”
Founded in San Francisco in 1985, the bank has 80 branches nationwide in 11 states – primarily on the west and east coasts.
The main difference between the two banks is that Silicon Valley Bank’s liabilities were in securities, while those of the First Republic were in loans.
Similarly, both First Republic and Silicon Valley Bank rely heavily on customer deposits: at First Republic, wealthy individuals, and at Silicon Valley Bank, tech startups and venture capital investors.
With interest rates rising, First Republic customers have plenty of other options to park their money and might try to withdraw money.
California Gov. Gavin Newsom said Saturday he was speaking to the White House to help “stabilize the situation as quickly as possible, protect jobs, people’s livelihoods and the entire innovation ecosystem that has served as a tent pole for our economy.” has”.
US customers with less than $250,000 in the bank can count on insurance from the Federal Deposit Insurance Corp. Regulators are trying to find a buyer for the bank, hoping customers can be recovered with more than that.
A worker is seen Friday telling customers in Santa Clara, California, that the bank is closed
Santa Clara police officers exit the Silicon Valley Bank headquarters in Santa Clara, California on Friday. The Federal Deposit Insurance Corporation (FDIC) today seized SVB’s assets after depositors – mostly tech workers and start-up companies – sparked a run on the bank following the shock announcement of a $1.8 billion loss
Kendra Kawala, co-founder of Maker, a Bay Area-based canned wine company, noted that Silicon Valley Bank is “the gold standard in the wine industry.”
Wineries accounted for 2 percent of the bank’s total lending business, but the impact is wide-ranging, including the inability to pay employees, bills or credit card payments. Pictured: Rows of grape vines growing on a vineyard in Napa, California (file photo)
Kendra Kawala, co-founder of Maker, a Bay Area-based canned wine company, called the news “devastating” and noted that Silicon Valley Bank is “the gold standard in the wine industry.”
When she founded Maker four years ago, choosing the right banking partner was almost child’s play.
“Technology and venture capital are well capitalized, but this could be a really serious reckoning for independent wineries,” Kawala said.
“We have never experienced anything like this. Nobody knows how it will end.’
Wineries accounted for 2 percent of the bank’s total lending business, but the impact is wide-ranging, including the inability to pay employees, bills or credit card payments.
Michael Roffler, President and CEO of First Republic
Silicon Valley Bank, the 16th largest bank in the country, had lent more than $4 billion to wineries and vineyards since 1994.
“This is a huge disappointment,” said winemaker Jasmine Hirsch, general manager of Hirsch Vineyards in Sonoma County, California.
Hirsch said she expects her business to do well. But she’s concerned about the broader implications for smaller winemakers looking for lines of credit to plant new vines.
“They really understand the wine business,” Hirsch said. ‘The disappearance of this bank as a key lender will absolutely impact the wine industry, especially in an environment where interest rates have risen.’
Silicon Valley Bank’s wine division founder Rob McMillan, who would write the annual insights, has so far declined to comment on the situation, but he had built the bank’s reputation as one of the few institutions that really understood the wine industry.
The data collected by the bank was a source of data that wineries would use to make decisions about future sales, marketing and farming.
The bank had a unique perspective on the industry due to the number of clients it assisted in financing.
In particular, the loss of the annual report means wineries don’t have access to the comprehensive analysis that has helped many to make decisions.
A new bank was formed on Friday by the Federal Deposit Insurance Corp., the National Bank of Santa Clara, which will hold Silicon Valley Bank’s remaining deposits and assets.
But only accounts valued at $250,000 or less are insured by the FDIC.
According to an email to Portal staff, employees at Silicon Valley Bank were offered 45 days of employment at one-and-a-half times their pay by the Federal Deposit Insurance Corp, the US regulator that took control of the collapsed lender.
Workers will be enrolled and briefed on benefits by the FDIC over the weekend, and health care details will be provided by former parent company SVB Financial Group, the FDIC wrote late Friday in an email titled “Employee Retention.” At the end of last year, SVB employed 8,528 people.
Staff have been told to continue working remotely, with the exception of essential workers and branch workers.