Thursday, March 30, 2023

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 - client 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 that at that time 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 and 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 SVBs 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 is descriptive of FCBs 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.


~~~~~~ The comment section is now closed. Thanks for weighing in.  ~~~~~~~~

22 comments:

  1. Rock it Rob and Wine team.. You add so much value to the industry. First Citizens made a great move. Good on them.

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  2. Thanks Anon 5:32. It's starting to feel normal. But with FCBs strength in leasing, we might be stronger. We'll see.

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  3. Confidence! We have it in you and new entity! Looking forward to continuing business with you and best of class bankers!!

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    1. Thanks Anon 9:44 I can't tell you how great our clients have been to believe in us, give us a chance to show we can come back, and cheer us on. Its been a hellish time for all of us, but we have a chance to be better than before now, with your continued support and encouragement

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  4. Thanks for sharing.

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    1. Anon 10:38. We have a community, many of whom habe gone along on this ride with us. It's been both important, and good therapy to share at least every week how we felt. Some days we felt pretty crappy.

      Today, with our industry supporting thought leadership nearly lost, I hope everyone takes note of what SVB Wine does and considers joining our client base of distinctive wineries.

      The old saying that you don't know what you have until you lost it seemed to bubble up with this, and hundreds of people stepped up on social media to make their feelings known.

      That was the world's longest response for a 2 word comment! Hahaha

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  5. Get up Lazarus. Pick up your bed. You help has been appreciated.

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  6. So glad to read this outcome. It's a win-win-win situation!

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    1. Thank you Anon 7:06. We have a ton of details to sort through, a lot to learn, and a lot of work ahead, but the canvas is there for the Division to be better with this transaction.I don't think you would have found many betting on that outcome 3 weeks ago today when we became FDIC owned!

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  7. Rob, so very pleased for you and your group. Even more pleased for the wine industry! Quarterly reports!!!

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    1. Jim - Thanks for logging in so I don't have to call you Anon X:XX

      We've underutilized a resource nobody possees - the SVB Peer Group Analysis data base. You of all people can appreciate the impact because IIRC, you published a piece using the data 20? years ago? This is something that we were working on before the banks demise, and we stood a chance of losing the information if the acquisition fell in the wrong direction. I'm looking to providing our first edition which will be a look back at fiscal year end 2022 financial data.

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  8. Very good news indeed Rob! I was fairly certain you and your team would come out of this in better shape, and it appears at least this once I was correct. Look forward to more Annual Reports and contributing to the first Consumer report.

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    1. Thanks George for logging in and your support. We are all appreciative of the tremendous outpouring of support we've received for our people who've been through hell, but also for the comments about what the SVB Wine Division does for the industry, and what the industry would be without us. We're pressing through!

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  9. So glad to hear the positive outcome for the SVB wine division. I will continue to respond to the annual surveys. Keep us posted.

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    1. Thanks Anon 10:20

      Getting survey responses has become increasingly difficult. We are so grateful for those that share the invitations and participate.

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  10. As a member of the First Citizens Bank leadership team, I deeply appreciate this message and look forward to working with such a talented, strong, positive leader. Can’t wait to meet the entire team and their clients.

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    1. Thanks Anon 11:16

      As employee #4 in tenure at SVB, I can tell you the company is loaded with great leaders and employees. We're looking forward to getting back to being our normal entrepreneurial selves.

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  11. This is best possible news Rob, here’s to the continued partnership the industry has enjoyed with SVB. We’re all pulling for you.

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    1. I appreciate the encouragement Anon 2:15. It's been a difficult three weeks but we are starting to see the sun!

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  12. Rob, such great news to see. I am glad you have all landed on your feet, but more importantly, as you highlight, I'm glad you landed with a group that shares your values. Their recent growth under 5th(?) generation family ownership has rebuilt a number of other banks. The culture, leadership, and knowledge you and your team will bring is incredible. I'm glad they seem to understand that (Anon 11:16). Your comment about their Ag business is a great one. They understand the long-term nature of the business. You and your team bring an understanding of the sales and marketing side to that. I'll have a great glass of wine to toast you all. Carry on!

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    1. Thanks for logging in Jock. We all appreciate the thoughts and support.

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