As startups and VCs scramble to get their money into safe hands following the collapse of Silicon Valley Bank, they’ve turned to a Wall Street stalwart: Bank of America.
SVB imploded late last week after depositors tried to withdraw $42 billion from the institution, with the Federal Deposit Insurance Corporation (FDIC) taking over the bank over the weekend. Meanwhile, the New York Department of Financial Services took possession of Signature Bank on Sunday, saying the corporation had “failed to provide reliable and consistent data, creating a significant crisis of confidence in the bank’s leadership.”
But as the saying goes, from chaos comes opportunity. It seems in this case the opportunity has fallen into the lap of Bank of America, which brought in more than $15 billion in deposits as SVB sunk.
Sources familiar with the matter told Bloomberg the inflows came from fearful customers moving their money to an institution—the second biggest bank in the States—that is seen as simply too big to fail (and is considered to be so by the Federal Reserve). Indeed, the business’s latest annual report for 2022 reveals the company brought in $27.5 billion after tax and holds $3.05 trillion in assets.
Bank of America isn’t the only giant bank seeing an influx of new trade. According to reports from the Financial Times, JPMorgan is supporting its raft of new customers by shortening the waiting time for opening an account. It is also speeding up the rate at which new customers can access funds in order to ensure they can pay staff this week, confirmed a source briefed on the matter.
Citigroup has also reportedly scrambled to onboard customers, with all the large financial institutions seeing a particular push from account holders with holdings above the $250,000 threshold that is guaranteed by federal insurance—despite the government pledging they would still be covered.
One senior banker compared calls coming into the institution as akin to Chicago’s O’Hare airport on a sunny day, as other sources confirmed staff have been reassigned from their roles to deal with the mass onslaught of inquiries.
Among those desperately trying to set up new accounts is billionaire Mark Cuban, who said on a Twitter Space over the weekend he is scrambling to save his “baby”—affordable medicines platform CostPlusDrugs.com—by hitting the phones, setting up new accounts and “writing checks” for the business’s payroll.
Bank of America, Citigroup, and JPMorgan did not immediately respond when contacted by Fortune for comment.
The reasons touted for SVB’s collapse range from “idiot management” to a run on the bank, to losses from a bond portfolio sold to a mystery buyer on March 8.
According to Reuters SVB was forced to recognize a $1.8 billion loss on a $21 billion bond portfolio consisting largely of U.S. Treasuries. The portfolio was yielding well below the current 10-year Treasury yield of around 3.9%, bringing in just 1.79%.
It has now been confirmed by SVB that Goldman Sachs was the buyer of the troublesome portfolio. A spokesperson told Reuters the transaction had been carried out “at negotiated prices” and netted SVB $21.45 billion in proceeds.
Goldman Sachs declined Fortune’s request for comment.
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