Are vintners better off after the collapse of Silicon Valley Bank?

The SVB Wine Division is intact in its new home at First Citizens Bank, but today, more vintners have contingency plans.

After the collapse of the Silicon Valley Bank last month, keeping funds fluid appears to be the new modus operandi of wineries moving forward.

Adam Lee, founder and winemaker of Clarice Wine Co. in Windsor, said he knows of about 60 wineries in Sonoma County and Napa Valley who have ties to Silicon Valley Bank and they’re pleased the wine division of the former bank has found a new home with First Citizens Bank.

But, the vintner said, they’re hedging their bets.

“People are making certain their money is fluid and they can move it quickly in case another bank has issues,” Lee explained.

Lee has been a client of Silicon Valley Bank since 1997, when he was co-vintner of Santa Rosa’s Siduri Wine Co. Today, the vintner, who founded Clarice in 2017, continues to have a $100,000 line of credit, as well as merchant accounts with the wine division.

“We’re all back to normal,” Lee said. “The only thing that has changed is that we’re keeping an account open and linked in another bank so we can move funds around quickly if needed.”

The fate of the former Silicon Valley Bank and its wine division were a mystery last month when vintners were locked out of accounts after the bank had a run on deposits. Once the FDIC took control, it assured clients all deposits would be covered.

Now that the former Silicon Valley Bank’s wine division has been kept intact and loans won’t be modified, this transition has calmed the frayed nerves of its winery clients.

First Citizens has decided to retain the SVB Wine Division name and maintain the status quo of its operations.

“Personally, I’m thrilled,” Lee said. “First Citizens isn’t a particularly sexy option, but it’s a tremendously stable one.”

‘State of the Wine Industry’ Report

Rob McMillan, at the helm of the former Silicon Valley Bank’s wine division, wrote in a recent blog post that he’s “fairly certain” he’ll be able to resume the “State of the Wine Industry” report that he’s written for roughly two decades and which has become an industry standard guide to wine trends. (It will be published under SVB Wine Division at First Citizens Bank.)

Keeping the report intact is “good news,” Lee said.

“Rob’s report provides a fantastic snapshot of the business, where things stand and often where things are heading,” Lee explained. “This type of road map, so to speak, is vital to all of us that make and sell wine.”

In his blog, McMillan wrote, “First Citizens Bank has given us a mandate: ‘Keep doing what you always do. You are the experts. Not us.’”

What’s more, McMillan added, First Citizens Bank also likes to guide communities where it operates.

He pointed out First Citizen Bank’s website offers clients a host of insightful pieces including on such topics as “Tips to improve your inventory-management process” and “What is data literacy and how can it benefit your business?”

With a similar mindset, McMillan said, he expects his wine division to expand its role in providing insights and analytical data to its clients and the wine industry at large.

Beyond resuming the annual report, McMillan wrote, “We’re also 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.”

While some vintners had sleepless nights last month after the collapse of the former Silicon Valley Bank, it’s possible that today they’re on better financial footing. They’ve set themselves up with contingencies to safeguard the flow of their money.

And Rob McMillan will likely be guiding the wine industry with more publications.

You can reach wine writer Peg Melnik at 707-521-5310 or peg.melnik@pressdemocrat.com. On Twitter @pegmelnik.