Last week, regulators seized Silicon Valley Bank (NASDAQ: SIVB), the nation’s 16th-largest bank. The bank was declared insolvent after it couldn’t satisfy withdrawals by depositors last Thursday and Friday.

How did a recently thriving financial institution get to this point? There were a number of contributing factors:

  • Silicon Valley Bank works with a large percentage of tech companies, and activity in the tech sector has dropped off over the past year.
  • The bank had its deposits tied up in low-yielding treasuries, which have dropped in value due to higher rates.
  • Silicon Valley Bank tried to raise cash by selling stock. When that didn’t go well, they had to sell treasuries at a loss.
  • Depositors lost confidence in the bank and withdrew their funds, causing the bank to fail.

The FDIC insures deposits up to $250,000, and the majority of Silicon Valley Bank customers had more than that deposited in the bank. The US government has said it will waive the deposit cap and all depositors will get their money, allowing tech companies to pay their bills and payrolls.

Regulators also seized New York-based Signature Bank over the weekend. The government plans to make depositors at that bank whole as well.

Are the activities of the last few days a sign of a bigger banking crisis? We don’t think so. Keep in mind that regulators are watching dozens of banks even in normal times. Additional scrutiny is to be expected in light or recent events.

However, markets don’t like negative headlines. The recent bank events led markets to drop significantly last week, and we expect markets to remain rocky this week as the situation unfolds. The latest inflation numbers are also scheduled for release this week, and could add more market drama.

You should know we’re keeping a close eye on these events and how they impact your investments. If you have questions about what’s happening with your accounts, call our office at (435)773-9444.

We’re here to walk alongside you as we navigate a potentially rough road ahead.


Investment advice is offered through APO Financial Services, LLC (“APO”) 10155 Westmoor Drive, Suite 175, Westminster, Colorado 80021-2627. APO Financial Services is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration with the SEC as an investment adviser should not be construed to imply that the SEC has approved or endorsed qualifications or the services Eric Scott Financial and/or APO Financial Services offers, or that its personnel possess a particular level of skill, expertise or training. Additional information pertaining to APO’s registration status, its business operations, services and fees, and its current written disclosure statement is available on the SECs Investment Adviser public website at