North Carolina-based First Citizens Bank and Trust has purchased Silicon Valley Bank (SVB), the tech industry favorite that collapsed earlier this month amidst an historic bank run.
The agreement involves the sale of all deposits and loans of SVB to First-Citizens, the Federal Deposit Insurance Corporation (FDIC) said in a statement late Sunday night.
AP reports customers of SVB automatically will become customers of First Citizens, which is headquartered in Raleigh. The 17 former branches of SVB will open as First Citizens branches when business begins Monday.
Regulators shut Silicon Valley down on March 10 when it had about $167 billion in total assets and roughly $119 billion in deposits. The move prompted the FDIC and other regulators to act to protect depositors to prevent wider financial turmoil, as Breitbart News reported.
“Oh so woke, oh so green, oh so diverse Silicon Valley Bank (SVB) just went bust.” https://t.co/hazi9LHVvw
— Breitbart News (@BreitbartNews) March 12, 2023
The bank, based in Santa Clara, California, went under after depositors rushed to withdraw money amid fears about the bank’s health. It was the second-largest bank collapse in U.S. history after the 2008 failure of Washington Mutual.
The turmoil also spread to Europe, where troubled Swiss lender Credit Suisse was taken over by UBS.
Most recently, shares in long-troubled Deutsche Bank fell heavily on Friday on the lender’s surging cost of default cover, reigniting fears about a widening banking sector crisis.
The acquisition of SVB by First Citizens gives the FDIC shares in the latter worth $500 million, according to AP.
Both the FDIC and First Citizens will share in losses and the potential recovery on loans included in a loss-share agreement, the FDIC said.
Watch: Worried Customers Line Up Outside SVB Branch in Boston
Chris Grondin via Storyful
Silicon Valley Bank UK was sold to to HSBC, Europe’s biggest bank, three days after the U.S. collapse thus ensuring the security of 6.7 billion pounds ($8.1 billion) of deposits.
A nominal £1 ($1.2) was paid for the acquisition.
First Citizens Bank was founded in 1898 and says it has more than $100 billion in total assets, with more than 500 branches in 21 states as well as a nationwide bank. It reported net profit of $243 million in the last quarter, according to AP.
Comments are closed.