California banking regulators shut Silicon Valley Bank on Friday and appointed the Federal Deposit Insurance Corporation as receiver.
The California Department of Financial Protection and Innovation cited the tech-focused bank’s “inadequate liquidity and insolvency” in a statement announcing the acition.
Trading in shares of the bank’s parent company was halted on Friday, after prices tumbled 66% in premarket trading.
Silicon Valley Bank is the first FDIC-insured bank to fail in more than two years, the last being Almena State Bank in October 2020.
The bank headquartered in Santa Clara had about $209 billion in total assets and about $175.4 billion in total deposits as of Dec. 31, 2022.
The main office and all branches of the bank will reopen on March 13 and all insured depositors will have full access to their insured deposits no later than Monday morning, according to the FDIC.
The startup-focused lender has 17 branches in California and Massachusetts, including one on La Jolla Village Drive in San Diego.
The crisis at SVB started earlier this week when the bank, which lends heavily to tech startups, launched a share sale to shore up its balance sheet after selling a portfolio consisting mostly of U.S. Treasuries at a loss.
Sources familiar with the situation said on Thursday that some startups had advised their founders to pull out their money from SVB as a precautionary measure.
Updated at 9:20 a.m., Friday, March 10, 2023
Reuters contributed to this article.