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Visualizing the Assets and Liabilities of U.S. Banks

by Niccolo Conte
This post is by Niccolo Conte from Visual Capitalist

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Voronoi diagram of the assets and liabilities of U.S. banks

Understanding the Assets and Liabilities of U.S. Banks

This was originally posted on Elements. Sign up to the free mailing list to get beautiful visualizations on real assets and resource megatrends each week.

The U.S. banking sector has more than 4,000 FDIC-insured banks that play a crucial role in the country’s economy by securely storing deposits and providing credit in the form of loans.

This infographic visualizes all of the deposits, loans, and other assets and liabilities that make up the collective balance sheet of U.S banks using data from the Federal Reserve.

With the spotlight on the banking sector after the collapses of Signature Bank, Silicon Valley Bank, and First Republic bank, understanding the assets and liabilities that make up banks’ balance sheets can give insight in how they operate and why they sometimes fail.

Assets: The Building Blocks of Banks’ Business

Assets are the foundation of a bank’s operations, serving as a base to provide loans and credit while also generating income.

A healthy asset portfolio with a mix of loans along with long-dated and short-dated securities is essential for a bank’s financial stability, especially since assets not marked to market may have a lower value than expected if liquidated early.

ℹ Mark-to-market means current market prices are being used to value an asset or liability on a balance sheet. If securities are not marked to market, their value could be different once liquidated.

As (Read more...)

Visualizing the Assets and Liabilities of U.S. Banks

by Niccolo Conte
This post is by Niccolo Conte from Visual Capitalist

Subscribe to the Elements free mailing list for more like this

Voronoi diagram of the assets and liabilities of U.S. banks

Understanding the Assets and Liabilities of U.S. Banks

This was originally posted on Elements. Sign up to the free mailing list to get beautiful visualizations on real assets and resource megatrends each week.

The U.S. banking sector has more than 4,000 FDIC-insured banks that play a crucial role in the country’s economy by securely storing deposits and providing credit in the form of loans.

This infographic visualizes all of the deposits, loans, and other assets and liabilities that make up the collective balance sheet of U.S banks using data from the Federal Reserve.

With the spotlight on the banking sector after the collapses of Signature Bank, Silicon Valley Bank, and First Republic bank, understanding the assets and liabilities that make up banks’ balance sheets can give insight in how they operate and why they sometimes fail.

Assets: The Building Blocks of Banks’ Business

Assets are the foundation of a bank’s operations, serving as a base to provide loans and credit while also generating income.

A healthy asset portfolio with a mix of loans along with long-dated and short-dated securities is essential for a bank’s financial stability, especially since assets not marked to market may have a lower value than expected if liquidated early.

ℹ Mark-to-market means current market prices are being used to value an asset or liability on a balance sheet. If securities are not marked to market, their value could be different once liquidated.

As (Read more...)

SVB, a week later

by Om Malik
This post is by Om Malik from On my Om

It is hard to imagine that it has already been a week since the start of the tumultuous events that led to the FDIC taking over Silicon Valley Bank, and coming to the rescue of the depositors. The rancor that has followed the takeover has been sobering and should be a wake-up call for Silicon Valley — but it won’t be because SV has become a loose collection of competing self-interested factions.

SVB’s failure also exposed Silicon Valley to the harsh reality: the larger world hates the tech industry and what it has come to represent. The outsized nature of the success, matched by the outsized bravado and machismo of its fake prophets, has eroded all goodwill for one of the most critical sectors of the US economy. As I pointed out earlier,

“Whether politicians and media like it or not, the technology sector is one of the few engines of growth that we have in the US. The long-term war with our new geopolitical rivals will continue to be fought on the technology front. I can understand that the general population, populist politicians, and media have faint regard for Uber-rich tech giants, blowhard billionaires, and the lack of empathy and morality in emergent technologies — but that’s missing the forest for the trees.”

A big reason for this growing apathy is that the industry is starting to be represented by voices that lack the empathy to understand the real world and the emotional impact of the intersection of technology and (Read more...)

Yellen offers (some) clarity on SVB

by Om Malik
This post is by Om Malik from On my Om

There seems to be light at the end of the tunnel, even though it isn’t clear as to when founders and wider Silicon Valley community can exhale, even for a minute. The US Treasury Secretary Janet Yellen spoke to the Face the Nation this morning. Her comments reveal that the government doesn’t want it to become a contagion that spreads to other banks. As many have said, this could undermine the faith in US banking system from the point of view of depositors. 

TL:DR from a Silicon Valley point of view — there won’t be a bailout of the bank. Instead, the focus is going to be entirely on the depositors. She and other federal reserve regulators understand the gravity of the situation and need of the hour. 

Here are the bits from her comments that I found relevant. 

  • Whenever a bank, especially one, like Silicon Valley Bank with billions of dollars in deposits fails, it’s clearly a concern. From the standpoint of depositors, many of which may be small businesses, they rely on access to their funds, to be able to pay the bills that they have, and they employ tens of thousands of people across the country. 
  • We’ve been hearing from those depositors and other concerned people this weekend. So let me say that I’ve been working all weekend with our banking regulators to design appropriate policies to address this situation. 
  • We want to make sure that the troubles that exist at one bank don’t create contagion to (Read more...)

A Tough Weekend

by Om Malik
This post is by Om Malik from On my Om

After three decades of being part of the Silicon Valley ecosystem — as a reporter, writer, entrepreneur, and investor — I thought I had seen it all. The boom-bust cycles, stock market manias, startup insanity, attack on America itself, and the most significant financial calamity in nearly a century — living through history prepares you for every eventuality. Your own struggle with mortality prepares you for the unpredictability of everything. You embrace the impermanence and become one with it. And despite all that, you experience what Silicon Valley has experienced this weekend — a sense of helplessness, a feeling of dread, and, more importantly, a sadness about the fragility of our community.

This past week, the federal regulators took over Silicon Valley Bank. I won’t repeat what has been reported in the media (Insider and Axios have ongoing coverage.) I won’t share how we got there — these two links explain the problem quite well. However, what I will do is share what I am feeling — this might be the worst weekend I have experienced as part of the technology community. 

The bad news was like a marionette outside a car dealership when the dot bomb hit, swaying, falling, and rising with the shifting winds. The exodus, painful as it was, played out over a long period. It was quickly superseded by the American Tragedy of 9/11 when we as a country lost ourselves. The 2008 financial crisis was another rude reminder that Silicon Valley wasn’t as (Read more...)

Orum raises $56M to help speed up intrabank transfers

by Mary Ann Azevedo

Orum, which aims to speed up the amount of time it takes to transfer money between banks, announced today it has raised $56 million in a Series B round of funding.

Accel and Canapi Ventures co-led the round, which also included participation from existing backers Bain Capital Ventures, Inspired Capital, Homebrew, Acrew, Primary, Clocktower and Box Group. The financing comes barely three months after Orum announced a $21 Series A, and brings its total raised to over $82 million.

Orum CEO Stephany Kirkpatrick launched the company in 2019 after working for several years at LearnVest, a personal finance site founded by Alexa von Tobel that was acquired by Northwestern Mutual in 2015 for an estimated $375 million. Tobel went on to form Inspired Capital, a venture capital firm that put money in Orum’s $5.2 million seed round last August. Prior to that, the firm also provided Orum with an “inspiration check” that was the first money into the business.

“Most Americans are not familiar with the intricacies of ACH [automated clearing house) or why it takes multiple business days to move money between accounts,” Kirkpatrick said. “But none of us can allow money to wait 5-7 days to hit our accounts. It needs (Read more...)

Upsie’s direct-to-consumer swing at the warranty space nets $18.2M

by Mary Ann Azevedo

Upsie, a consumer warranty startup, has raised $18.2 million in a Series A round led by True Ventures. 

The financing brings the total raised for the St. Paul, Minnesota-based startup to $25 million since its 2015 inception.

A large group of investors participated in the round, including Concrete Rose VC, Avanta Ventures, Kapor Capital, Samsung Next, Massive, Backstage Capital, Awesome People Ventures, Draft Ventures, Matchstick Ventures, M25, Silicon Valley Bank and Uncommon VC, among others. A number of angels also put money in the round. 

Clarence Bethea (pictured below) founded Upsie after realizing the significant markup that retailers were placing on warranties.

His goal was to focus not on the retailer, but rather the end user and making the process more transparent, more affordable and simpler. For example, Upsie claims that it saves its customers anywhere from 50% to 90% compared to competitor warranty plans. Most other companies in the space, such as SquareTrade, offer warranties at the point of sale via retailers.

Image Credits: Upsie

“I’m sure you’ve walked into a Best Buy or a Target, and when you’re checking out somebody at the register is offering you a warranty. But what most customers don’t know is that you’re paying as much as 900% more for that warranty than you should,” Bethea said. “There’s no transparency at the register and you never get to ask what’s covered and what’s not covered, or what should you do if you need to make a claim.”

Just like many other companies, (Read more...)

Tribal Credit, which provides credit cards to startups in emerging markets, raises $34.3M

by Mary Ann Azevedo

The B2B payments space has seen an explosion in demand, and investor interest, in the wake of the COVID-19 pandemic as businesses try to figure out how to pay each other digitally. The challenges become even more complex when dealing with cross-border payments.

Startups that were formed before the pandemic stand to benefit from the shift. One such startup, Tribal Credit, launched its beta in late 2019 to provide payment products for startups and small to medium-sized businesses (SMBs) in emerging markets.

Today, Tribal Credit announced it has raised $34.3 million in a combined Series A and debt round led by QED Investors and Partners for Growth (PFG). Existing backers BECO Capital, Global Ventures, OTG Ventures and Endure Capital also participated in the round, along with new investor Endeavor Catalyst. The raise follows “10x” year-over-year growth, according to CEO and co-founder Amr Shady.

As part of the investment, Tribal received $3 million from the Stellar Development Foundation, a nonprofit organization that supports the development and growth of the open-source Stellar blockchain network. 

Tribal uses a proprietary AI-driven underwriting approval process to evaluate businesses and approve them for credit lines. Those businesses can then use those credit lines to spend on Tribal’s products, Tribal Card and Tribal Pay. Tribal Card is a business Visa card that allows users to create physical and virtual multi-currency cards. Tribal Pay allows them to make payments to merchants and suppliers that don’t accept credit cards. 

The company says its value proposition lies (Read more...)