Silicon Valley Bank purchase deal with First Citizens Bank

new york –

North Carolina-based First Citizens will acquire Silicon Valley Bank, a tech-focused financial institution whose collapse earlier this month shocked the banking industry and shocked the world.

The sale includes selling all SVB deposits and loans to First-Citizens Bank and Trust Co., the FDIC said in a statement issued late Sunday. Customers of SVB are automatically customers of First Citizens, headquartered in Raleigh. SVB’s 17 former branches will open as First Citizens branches on Monday.

The March 10th failure of Silicon Valley Bank prompted the FDIC and other regulators to act to protect depositors in order to prevent wider financial turmoil.

The Santa Clara, Calif.-based bank went bust after depositors rushed to withdraw money over concerns about the bank’s health. It was the second largest bank failure in US history, after the Washington Mutual failure in 2008.

On March 12, the New York-based undersigned bank was seized by regulators in the third largest bank failure in the United States.

In both cases, the government agreed to cover deposits, even those exceeding the federally guaranteed US$250,000 cap, so Silicon Valley and Signature bank depositors could access their money. is ready.

San Francisco-based midsize First Republic Bank, which serves similar customers and appears to be facing similar crises as Silicon Valley Bank, fears it will similarly fail. Investors have taken a hit. This prompted 11 of the country’s largest banks to announce his $30 billion bailout.

First Citizens’ acquisition of SVB will bring the latter’s FDIC stake to $500 million. Both the FDIC and First Citizens will share losses and potential recoveries on loans included in loss-sharing agreements, the FDIC said.

Founded in 1898, First Citizens Bank claims to have more than $100 billion in total assets, more than 500 branches in 21 states and a nationwide bank. Net income last quarter was $243 million.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button