SVB Financial Group (SVB or SVBFG) is a

financial services Financial services are the Service (economics), economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, acco ...

holding company headquartered in New York City. The company's main business unit was commercial bank Silicon Valley Bank, until the bank failed in March 2023 after a

bank run A bank run or run on the bank occurs when many clients withdraw their money from a bank, because they believe the bank may cease to function in the near future. In other words, it is when, in a fractional-reserve banking system (where banks no ...

. The company was a member of the S&P 500 index until March 15, 2023. According to public filings, as of December 31, 2022, SVB Financial Group had 164 subsidiaries. Until March 2023, the companies subsidiaries included Silicon Valley Bank and SVB Private, a private banking service affiliated with Silicon Valley Bank that, along with its affiliates SVB Investment Services and SVB Wealth, offered client services especially catered to private equity and

high-net-worth individual High-net-worth individual (HNWI) is a term used by some segments of the financial services industry to designate persons whose investible wealth (assets such as stocks and bonds) exceeds a given amount. Typically, these individuals are defined ...

s. Both Silicon Valley Bank and SVB Private were placed in receivership and sold to First Citizens Bank. SVB Securities was sold to its management in July 2023 and renamed

Leerink Partners Leerink Partners LLC is an independent investment bank providing healthcare companies and investors with financial services including M&A advisory, equity and debt capital markets, proprietary research, and sales and trading capabilities. The fir ...

. SVB Capital was sold in May 2024 to a newly formed entity affiliated with Pinegrove Capital Partners.

History

SVB Financial was founded as Silicon Valley Bancshares on April 23, 1982, by Bill Biggerstaff and Robert Medearis over a poker game. Silicon Valley Bank was incorporated as a wholly-owned subsidiary in October 17, 1983. In 1988, the company went public via an initial public offering, raising $6 million. The company's stock price soared through the dot-com bubble but fell 50% when the bubble burst. The company reincorporated as a Delaware corporation in 1999. Ken Wilcox became CEO in 2000 In 2001, the company's

investment banking Investment banking pertains to certain activities of a financial services company or a corporate division that consist in advisory-based financial transactions on behalf of individuals, corporations, and governments. Traditionally associated wit ...

arm,

SVB Securities Leerink Partners LLC is an independent investment bank providing healthcare companies and investors with financial services including M&A advisory, equity and debt capital markets, proprietary research, and sales and trading capabilities. The fir ...

, expanded its business with a $100 million acquisition of Palo Alto Alliant Partners, which was rebranded SVB Alliant. In 2002, it formally entered the private banking business, building on prior experience and relationships with wealthy venture capitalists and entrepreneurs. On May 31, 2005, Silicon Valley Bankshares rebranded as SVB Financial Group, signaling the company's diversification away from commercial banking. SVB Alliant ceased operations in 2007. In December 2008, SVB Financial received a $235 million investment from the U.S. Treasury through the Troubled Asset Relief Program. The U.S. Treasury received $10 million in dividends from SVB Financial and, in December 2009, the company repurchased the outstanding stock and warrants held by the government, funding this through a stock sale of $300 million. In 2015, CEO Greg Becker indicated that SVB had yet to make immediate plans to re-enter the

sector as it had before 2006. In January 2019, SVB Financial acquired

LLC, and renamed the business SVB Leerink. In 2021, SVB acquired Boston Private Financial Holdings and merged its subsidiary Boston Private Bank & Trust Company into Silicon Valley Bank and SVB Private. In 2021, SVB acquired media and telecom research company MoffettNathanson LLC. In February 2022, SVB Leerink was rebranded as SVB Securities.

Collapse of Silicon Valley Bank

In March 2023, Silicon Valley Bank experienced a

and collapsed. Then Federal Reserve Board Vice Chair for Supervision Michael Barr reported its customers tried to withdraw 81% of its deposits ($142 billion of a $175 billion total, as of the end of 2022) over two days. The failure of Silicon Valley Bank was the largest of any bank since the 2007–2008 financial crisis by assets, and the second-largest in U.S. history behind that of Washington Mutual. On March 10, 2023, the California Department of Financial Protection and Innovation closed SVB, Santa Clara, and appointed the FDIC as receiver, which transferred all the bank's assets to a newly-established

bridge bank A bridge bank is an institution created by a national regulator or central bank to operate a failed bank until a buyer can be found. While national laws vary, the bridge bank is usually established by a publicly backed deposit insurance organis ...

. The holding company was not included in the bank closing or resulting receivership. It is no longer affiliated with either Silicon Valley Bank or SVB Private. When the FDIC took over Silicon Valley Bank on March 10, it seized the Santa Clara headquarters shared by the bank and SVB Financial Group; as a result, the holding company moved its headquarters to its offices in New York City. On March 13, 2023, SVB Financial Group began exploring a potential sale of the bank's sister companies SVB Capital and SVB Securities. The latter's founder, Jeffrey Leerink, expressed interest in buying back the firm. SVB Financial Group filed for Chapter 11 bankruptcy protection on March 17, one week after the bank's failure. A group including Centerbridge Partners, Davidson Kempner Capital Management, and

PIMCO PIMCO (Pacific Investment Management Company, LLC) is an American investment management firm focusing on active fixed income management worldwide. PIMCO manages investments in many asset classes such as fixed income, equities, commodities, asset ...

reportedly bought a stake in the company in anticipation of the bankruptcy. On June 18, 2023, SVB Financial Group announced it had agreed to sell SVB Securities in a management buyout, led by Leerink, with funds from the Baupost Group. MoffettNathanson LLC was not included in the sale. In July 2023, the buyout was approved in bankruptcy court, and SVB Securities was renamed to Leerink Partners. On January 9, 2024, SVB Financial Group announced it planned to turn control of SVB Capital over to a new company controlled by its creditors. On 20 March, SVB Financial Group announced that it would sell it Indian subsidiary SVB Global Services India to First Citizens BancShares. On 3 May, SVB Financial Group entered into a definitive agreement to sell its investment platform business, SVB Capital, to a newly formed entity affiliated with Pinegrove Capital Partners and backed by Brookfield Asset Management and Sequoia Heritage.

References

External links

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Bankruptcy website
{{Finance links historical , symbol = SIVB , google = SIVB:NASDAQ , yahoo = SIVB , sec_cik = 719739 1980s initial public offerings 1982 establishments in California American companies established in 1982 Companies based in Santa Clara, California Companies formerly listed on the Nasdaq Companies that filed for Chapter 11 bankruptcy in 2023 Companies traded over-the-counter in the United States Financial services companies established in 1982 Holding companies established in 1982 Holding companies of the United States