March 10 (UPI) -- The California Department of Financial Protection shut down Silicon Valley Bank on Friday, making it the first FDIC-insured bank to fail in more than two years, federal officials said.
The Federal Deposit Insurance Corp. said it was appointed as the receiver to protect insured deposits. The FDIC said in a statement it created the Deposit Insurance National Bank of Santa Clara to assist bank customers.
It is the first FDIC-insured institution to fail since the Almena State Bank in Almena, Kan., closed on Oct. 23, 2020. Silicon Valley Bank had about $209 billion in total assets and about $175.4 billion in total deposits at the end of the year. The number of deposits at closing in excess of the insurance limits was undetermined.
The number of uninsured deposits will be determined once the FDIC obtains additional information from the bank and customers.
The FDIC said Silicon Valley Bank, which has 17 branches in California and Massachusetts, will reopen on Monday under the DINB at normal business hours.
"The FDIC will pay uninsured depositors an advance dividend within the next week," the FDIC said in a statement. Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds."
On Thursday, shares of SVB Financial, which Silicon Valley Bank uses to make loans to tech startups, said it would raise $2 billion in capital off offset losses on bond sales.
Signature Bank, one of the main banks handling cryptocurrencies, saw its shares drop 32% on Friday and at one point saw trading stop because of volatility. First Republic Bank, PacWest Bancorp, and Western Alliance Bancorp also saw trading in their shares halted, as well.