The collapse came after its tech start-up clients grew worried about the company’s finances and decided to withdraw their deposits.

In an announcement on Friday, California Financial Regulator said it took possession of Silicon Valley Bank, citing “inadequate liquidity and insolvency”.

“The DFPI appointed The Federal Deposit Insurance Corporation (FDIC) as receiver of Silicon Valley Bank”, the regulator said in a press release.

Earlier this Wednesday, SVB attempted to raise capital by selling $1.75bn worth of shares. The bank said the sale would help shore up its balance sheet after it lost $1.8bn due to the sale of a $21bn loss-making bonds.

The bond portfolio comprised mainly US Treasures and yielded an average 1.79% return. That is far below the current 10-year Treasury yield of approximately 3.9%.

SVB Financial Group, which sells investment solutions through Silicon Valley Bank, reported an interest income of $5.67bn for FY2022, 72.5% more than in FY2021. However, higher operating and non-operating costs have affected the bank’s operating margin.

Last year, the operating margin stood at 35%, significantly below the 46% margin in FY2021.

As a result, the bank recorded a net margin of just 22.6% in FY2022, compared to a net margin of 30.4% in FY2021.