The Eulogy for the SVB Wine Division

    I'm not dead yet!

Fear of the unknown is a real thing. I think it's a self-protection response. Fear puts all of your senses on high alert as if a threat were imminent. In that state, and with an absence of real information, you theorize what's happening, then make up your own story of what you would do if one of the many permutations you imagine came to pass.

When the FDIC took over the bank almost three weeks ago, everyone imagined or feared the worst. It was the unknown in all its glory. 

This has been uncharted territory for all of us - clients and employees alike. How many have experienced a run on a bank? If you operate a business, what are you supposed to do to develop a plan? Google, where all truth is located, had "bank run" trending. There's your answer.

Early on, we were living in the fog of battle and had very few answers. I was open about it on this blog. Without real information, everyone on the outside was left watching the news, which, more typically than not, looks for the most controversial spin that can be produced. That just increases fear and supports the social media rumor mill. But even with the ugly news cycle, from the inside, we started the recovery process.

    Well... you will be dead soon!

As it relates to the demise of my former employer, there has been a lot written about that colossal failure: some of it was accurate, some sensationalized, some made up out of thin air, and some from well-intended competitors who just wanted to help get the news out. 

The acquisition of legacy SVB by First Citizens Bank last Sunday just gave the rumor mill more to slice up. But the real news is we aren't dead yet, and we aren't dying.

At this point, I'm starting to believe the SVB Wine Division will be in a better spot than where we were before the FDIC stepped in. That might be hard for many to believe, but read on.

    Rumors

Let me bring you all current and clear up some rumors I've heard because the imagination presses went into overdrive over the purchase of SVB by First Citizens Bank (FCB). Here are a few rumors that I've heard: 

• Silicon Valley Bank will be assimilated into FCB and never be the same.
• SVB and FCB have totally different cultures that will clash
• The new bank is going to cut people and slash expenses. That's what always happens.
• It's going to take years for SVBs Wine Division to come back, and we're not sure they can.
• FCB is an East Coast Bank that knows nothing of the wine business.
• All SVB's people are interviewing and will leave soon. 
• FCB will change all your loan terms.

The predictions are coming from social media, anonymous people in the know, reporters creating sensationalized stories with click-bait headlines, and some of our competitors who, once again, were just trying to help get the truth out.

Not only are we not dead, we are alive and quickly getting back to normal. 

    The Wine Division is alive and growing

I'll give you a little more about the acquiring bank later, but it's important to know that there will be no eulogy for the Wine Division, formerly known as SVB.

Start with the last rumor. No loan terms will change because of this acquisition. A deal is a deal.

We have 100% of our former staff retained today. No employee has left for another bank. We are all working from the same offices, at the same desks, with the same jobs as before. 

All of our customers who banked with us before are still banking with us. We've even grown and added several new clients since we were taken over by the FDIC!

This acquisition could have gone many ways. Our acquirer could have been a huge bank or hedge fund and just assimilated us. That would have made for a big change. Or the acquirer could have been a buy-and-slash acquirer and gutted the bank. None of those fears came to pass. 

From everything we are seeing at this early stage, we're starting to believe we've somehow landed in the best outcome imaginable for our clients, employees and our community. With the torture we've each endured these past three weeks, we were due for a break!

Another real surprise for me: Our First Citizens Bank colleagues decided to keep our existing name and not change out our brand for theirs. Nearby, you will see the new logo. Can you tell the difference? It's the one on the left. You have to look at the small print. That describes FCB's plans for the Bank and Wine Division. The SVB Wine Division will now be known as... wait for it... The SVB Wine Division!

What is going to change then? 

First Citizens Bank has given us a mandate: "Keep doing what you always do. You are the experts. Not us." They want us to run the business in the manner we always have.

They too place a high value in supporting the communities in which they operate, and are big believers in thought leadership. 

I'm fairly confident that we will be able to resume publication of the Annual State of the Industry Report. We might be able to get the Direct to Consumer survey off the ground this year but we have a tight window to figure that out. 

Beyond that, we also are going to start releasing a quarterly report with financial benchmarks for the industry to use. So it looks like we will increase the thought leadership pieces we've been producing.

As we've started getting to know our new colleagues and benefactors, to a person we've all been bowled over by how similar our cultures seem to be. The commitment to client care, integrity, and even their commitment to Diversity Equity and Inclusion stand out to me. 

FCB also has a large Ag portfolio of family farms. So while they may not know wine, they know family farming. 

Talking to the senior executives today, they are clearly excited about being a part of our wine industry. I'm not sure it could be a better fit. Well, they do talk funny but we can live with that. :O) 

Don't take my word alone for the strength of our benefactors. If you have one minute, watch this short video and competitive analysis from a third party source.

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