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Resources

Feature Articles

  • 46th Annual Fairfax County Valor Awards
  • Accounting For Crypto Assets
  • Alabama Federal Judge Rules Corporate Transparency Act (CTA) Unconstitutional, Enforcement Halted
  • Megan McAtee Joins MillerMusmar CPAs as Audit Manager
  • Simplifying Depreciation Deductions for Business Vehicles in 2024
  • MillerMusmar CPAs Proudly Sponsors “Titans of the Toll Road: How Northern Virginia’s Space Economy is Transforming the Future” Event
  • Breaking: Temporary Suspension of CTA’s BOI Reporting Requirements
  • A Comprehensive Guide to Government Contract Accounting
  • Our New Secure Client Portal: CANOPY
  • BENEFICIAL OWNERSHIP REPORTING
  • MillerMusmar CPAs is proud to be Platinum Sponsor of Titans of the Toll Road
  • 45th Annual Valor Awards
  • Homebuilders Can Benefit from Expansion of Energy Efficient Home Credit
  • Six Steps to Banking Failure- Silicon Valley Bank (SVB) What You Should Do To Protect Your Money.
  • SBA RULE MODIFCATIONS UPDATE GOVERNNING 8A FIRMS
  • Taxability of Lawsuit Settlements
  • INFLATION REDUCTION ACT HIGHLIGHTS
  • Under legislation enacted by the 2022 General Assembly Virginia established a new elective pass-through entity (“PTE”) tax.
  • Tax Law Changes effective 2022
  • Don’t forget to factor 2022 cost-of-living adjustments into your year-end tax planning
  • SILVER MEDAL OF VALOR
  • AASHTO Overhead Rate Audits
  • SBA raises EIDL loan limit to $500,000
  • IRS Announces New Extended Tax Deadline for Individuals
  • Maryland Extends State Income Tax Filing Deadline to July 15th
  • Business Education Series: PPP Round Two – What You Need to Know
  • SBA Issues Extensive Final Rule Revising Several Small Business Contracting Regulations
  • 2020 depreciation limits for cars and trucks are issued
  • New Virginia Employment Law Update
  • Understanding the 2020 Coronavirus Relief Bill (the CARES Act)
  • FAQs About COBRA Insurance Coverage
  • Attention Local Workers Whose Job Has Been Affected by the Coronavirus
  • Emergency Paid Sick Leave Act (EPSLA)
  • The Three Step Process: Disaster Loans
  • U.S. Postpones April 15 Tax Payments for 90 Days for Most Americans
  • NEW TAX DEADLINE IN THE WORKS
  • SBA’s NEW YEAR RESOLUTION ENFORCEMENT!
  • New Law Helps People Save For Retirement; Other Retroactive Changes Impact Many Taxpayers
  • IRS Increases Visits To High-Income Taxpayers Who Haven’t Filed Tax Returns
  • Guidance and Enforcement Put Virtual Currencies Front and Center
  • Proposed regs. Issued on Meal and Entertainment Expense Deductions
  • IRS Issues 2020 Standard Mileage Rates
  • Form 1040-SR: Seniors Get a New Simplified Tax Form for 2019
  • Fundamentals of Government Cost Accounting
  • MillerMusmar’s 10th Consecutive Year as a Pinnacle Sponsor of the Taste of Reston.
  • 2018 YEAR-END TAX PLANNING FOR INDIVIDUALS
  • Foreign Financial Asset Reporting Guidance Matrix Form 8938 and/or FBAR for Filings

Newsletters

Our regularly updated newsletter provides timely articles to help you achieve your financial goals.

Six Steps to Banking Failure- Silicon Valley Bank (SVB) What You Should Do To Protect Your Money.

As we have seen since 2008, the banking industry has undergone a significant transformation. The COVID pandemic years and the recent interest rate changes in response to inflationary pressures have brought unique challenges to the banking industry. Unfortunately, not all banks have navigated these challenges successfully, as we saw in the case of Silicon Valley Bank (SVB) and Signature Bank. SVB’s failure was due to several missteps, which we have outlined below:

  1. The bank invested excess deposits into fixed-rate securities that became underwater as interest rates increased rapidly.
  2. SVB classified these securities as “Held to Maturity” on its balance sheet, which meant that any unrealized losses were opaque to market participants.
  3. The bank’s business model concentrated predominantly on one client vertical – venture capital, private equity, and start-ups. Furthermore, these clients placed their funds in a high concentration of uninsured deposits in accounts structures that can exit the bank quickly when there is a lack of confidence.
  4. As its venture capital clients burned through pandemic-era liquidity in their operations and other clients sought safer deposits with higher rates, the amount of SVB’s deposits declined steadily. The bank did not have sufficient on and off-balance-sheet liquidity to meet sudden deposit withdrawal requirements, resulting in a $1.8 billion loss.
  5. The losses from the sale of fixed-rate securities significantly impaired SVB’s capital, requiring the company to raise $2.25 billion to meet regulatory minimums. The bank attempted but failed to raise the necessary capital.
  6. As SVB’s stock price plummeted, many of its clients began to move money out of the bank, causing a classic “Run on the Bank.”

On Friday, March 10th, 2023, California’s financial regulator, the DFPI, took possession of SVB, citing inadequate liquidity and insolvency. As the receiver, the FDIC will retain all assets from SVB for later disposition. Depositors at FDIC-insured banks are subject to up to $250,000 deposit insurance in the event of a bank failure.

What should our clients do?

First, it is essential to bank with more than one bank, so you can move your money quickly when needed. Second, make sure you know the health of your bank. Bank monitoring websites like www.bankrate.com and most astute CFPs and CPAs can provide information on the health of financial institutions. Third, understand how you receive funds from intermediary banks for outsourced bank transactions like merchant service and ACH Credits because they too may be impacted.

If you remain concerned about systemic risk in the banking system, there are several ways to insulate your money. ICS checking and ICS Money Market, as well as CDARs products from banks, are excellent ways to protect your money and earn interest while doing so. Institutions, like MainStreet Bank, that offer ICS and CDARS are members of the IntraFi network. When we place your funds through the ICS or CDARS service, that deposit is divided into amounts under the standard FDIC insurance maximum of $250,000. The funds are then placed in demand deposit accounts or money market deposit accounts (using ICS), or in CDs (using CDARS), at multiple banks. As a result, you can access coverage from many institutions while working directly with just us! You receive one monthly statement from MainStreet Bank for each service in which you participate, and, as always, your confidential information is protected. Please feel free to reach out directly to us, and we can assist you with this process.

For more information, please feel free to contact us at info@millermusmar.com or call us at 703-437-8877.

Please note that based on current IRS rules and standards, the advice contained herein is not intended or written by the practitioner to be used and cannot be used by the taxpayer to avoid penalties.

MillerMusmar CPAs is an established accounting firm with offices in Reston, Virginia. We have a twenty-five-year history of providing top-quality auditing, tax, and accounting services to clients throughout the Washington Metropolitan area and internationally. By combining the expertise of a mid-sized firm with personal attention, we are both large and small enough to deliver the responsive service to our clients. For more information, please visit our website at www.MillerMusmar.com .

Please feel free to contact us to discuss how we can work with you to achieve your goals.
MillerMusmar is committed to the professional standards of
competence, objectivity, and care with every service provided.
Reston, VA Office

MillerMusmar CPAs
2100 Reston Parkway Suite 400
Reston VA 20191
Phone: +1-703-437-8877
Fax: 703-437-8937
info@millermusmar.com

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