Bill.com discusses impact of Silicon Valley Bank closure

Bill.com (BILL) has issued a statement saying that, "the California Department of Financial Protection and Innovation (DFPI) closed Silicon Valley Bank (SIVB) and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. While Bill Holdings has funds with SVB, the significant majority of our corporate cash and processed payments are with numerous large, multinational financial institutions. When we received notice of SVB’s closure, we promptly redirected payments to be made through SVB to one of our multinational bank processors. The Company is no longer using Silicon Valley Bank to process payment transactions for our customers. According to the FDIC, all insured depositors of SVB will have full access to their insured deposits no later than Monday morning, March 13, 2023. In addition, the FDIC will pay uninsured depositors an advance dividend within the next week. Uninsured depositors will be issued a receivership certificate for the remaining amount of their uninsured funds. As the FDIC sells the assets of SVB, future dividend payments may be made to uninsured depositors. Information on the SVB receivership from the FDIC can be found here. While the Company continues to assess the potential impacts associated with SVB’s closure, we are providing the following preliminary information as of March 9, 2023: The Company has total corporate cash, cash equivalents, and short-term investments of approximately $2.6 billion held at multiple financial institutions. Of this amount, approximately $300 million is held at SVB. These corporate deposits with SVB are largely uninsured, and it is unclear how much of this cash will be unrecoverable. The Company has total cash held in trust on behalf of our customers of approximately $3.3 billion, held at multiple financial institutions. Of this amount, approximately $370 million is held at SVB. While the amount of FBO Funds that will be recoverable and timing of recovery is currently uncertain, we believe a significant portion will ultimately be recoverable. This assessment is based on information from the FDIC indicating that all outstanding checks issued from SVB accounts will be honored. In addition, up to $250,000 of each BILL customer’s funds held in our FBO account may be recoverable through FDIC’s pass-through insurance. In the event of uninsured FBO Funds, it is our intention to utilize corporate cash to ensure pending payment transactions through SVB are processed successfully. Regardless of the amount of funds recovered from SVB and FDIC, the Company strongly believes that its existing cash, cash equivalents and cash flow from operations are sufficient to meet its working capital, capital expenditures, and material cash requirements from known contractual obligations."