Coinbase, BILL among financial and crypto-related firms disclosing SVB, SBNY exposure

In recent days, a number of companies in the financial and cryptocurrency sectors have disclosed their (largely modest) exposure to failed lenders Silicon Valley Bank ( SIVB ) and Signature Bank ( SBNY ), as market participants digest federal the regulators’ actions to stop the damage from the bank collapses.

However, recall that the US government had said that all depositors of the venture capital-linked SVB, which was officially closed on Friday, will have access to their funds on Monday. The SBNY closed just two days after the SVB, spurring the Federal Reserve to create a new lending facility for banks to support their liquidity.

Economy:

Payoneer Global (NASDAQ: PAYO), a provider of cloud-based software for financial operations, said it held $20 million of the $6.4 billion cash pile at SVB, as of December 31, 2022, through a combination of cash deposits and money market funds purchased through SVB but managed by a third-party asset manager, it said in a recent SEC filing.

Financial automation software provider Bill Holdings (NYSE: BILL) revealed that about $300 million of the company’s $2.6 billion in corporate cash is held at SVB, warning that “it is unclear how much of this cash will not be recoverable” as a large portion of corporate deposits are uninsured. In addition, $370 million of the cash held in trust on behalf of customers was parked at SVB, it said, noting that “a significant portion will ultimately be recoverable.”

Insurtech firm Root, Inc. (NASDAQ:ROOT) reported that they have ~$1.3 million on deposit with SVB, calling it an “insignificant” amount of cash relative to the total cash position.

SoFi technologies (NASDAQ:SOFI), known for refinancing student loans, said it has no assets at SVB, although it has a ~$40 million lending facility offered through SVB.

Digital marketplace bank LendingClub (NYSE:LC) has $21 million on deposit with SVB, an SEC filing said, compared to $8 billion of total assets as of Feb. 28.

Lemonade (NYSE:LMND), another insurtech, said only $7K in cash was held at SVB.

Other financial firms seeking to capitalize on the failure of SVB and SBNY include Hercules Capital (NYSE:HTGC), which has “earmarked up to $50 million in capital to provide select companies in our ecosystem with secured short-term financing to meet payroll and other related obligations as a result of the closure of SVB,” said Scott Bluestein, the business development company’s managing director and investment manager.

John Marshall Bancorp (NASDAQ:JMSB), which serves small and medium-sized businesses, also said it is prepared to get new business from SVB customers.

Crypto related companies:

Bitcoin (BTC-USD) miner Marathon Digital Holdings (NASDAQ: MARA) said Monday that it held about $142 million in cash deposits with Signature Bridge Bank (SBNY) and that it has access to its funds for financial management purposes. It has no direct business ties to SVB.

Crypto exchange Coinbase Global (NASDAQ:COIN) said Sunday that it had a cash balance of ~$240 million in Signature Bank as of Friday, all of which is expected to be recovered.

Ripple Labs CEO Brad Garlinghouse took to Twitter and noted that the crypto company has “some exposure” to SVB without mentioning how much capital is held in the bank. We expect NO disruption to our day-to-day operations, and already had a majority of USD with a wider network of banking partners.”

Seeking Alpha contributor Stock Info believes JPMorgan’s ( JPM ) preferred shares could be a good choice for risk-averse investors “as they can act as a bankruptcy canary.”