FDIC Prefers Banks Over Other Entities as Silicon Valley Bank Bidders

The pool of potential buyers of Silicon Valley Bank may be narrower than previously thought.

The Federal Deposit Insurance Corporation (FDIC), which took over the failed bank Friday (March 10) and created a “bridge bank” to replace it, will probably only sell it to another bank, The Information reported Wednesday (March 15), citing unnamed sources.

The situation is fluid and could change, the report added.

The FDIC did not immediately reply to PYMNTS’ request for comment.

Private equity and venture capital (VC) firms have been trying to put together deals to buy Silicon Valley Bank in the days since its collapse, according to multiple media reports.

The FDIC would prefer to sell the bridge bank that replaced Silicon Valley Bank to another bank because that would make the transition smoother for customers and would ensure that the buyer meets the regulatory requirements, according to the Wednesday report by The Information.

The regulator may have more time to sell Silicon Valley Bank because by creating the bridge bank, it gained the ability to operate the entity for up to two years, the report said.

At the same time, though, the FDIC may prefer to make a quick sale of the entire bank.

The Information reported Tuesday (March 14) that private equity firm Apollo Global Management had talked with Andreessen Horowitz, General Catalyst, Redpoint Ventures and other VC firms to help finance a bid for the assets of Silicon Valley Bank.

That news followed a Monday (March 13) report by the Financial Times that said a group of VC firms — including Andreessen Horowitz, General Catalyst and Khosla Ventures — were working to reclaim parts of Silicon Valley Bank.

In the meantime, the depositors of Silicon Valley Bank started accessing their funds Monday from the new bridge bank.

A day later, on Tuesday, Silicon Valley Bridge Bank CEO Tim Mayopoulos said in an update posted on the bank’s website that the bank is open for business, opening new accounts and making new loans, and that the deposits held with it “are among the safest of any bank or institution in the country.”