First Citizens to acquire Silicon Valley Bank
The failed Silicon Valley Bank (SVB) has been taken over by First Citizens, a North Carolina lender, according to the Federal Deposit Insurance Corporation (FDIC).
The latter greenlighted the deal. First Citizens confirmed this information. Silicon Valley Bank had approximately $167 billion in total assets and about $119 billion in deposits and loans. The deal includes the purchase of approximately $72 billion of SVB assets at a discount of $16.5 billion.
The remaining assets of the collapsed bank as well as its securities worth $ 90 billion remained "in the receivership for disposition by the FDIC." "In addition, the FDIC received equity appreciation rights in First Citizens BancShares, Inc., Raleigh, North Carolina, a common stock with a potential value of up to $500 million," the FDIC said in a release.
The 17 former branches of Silicon Valley Bank reopened as First-Citizens Bank & Trust Company on March 27, 2023, the FDIC stressed. Notably, last year, First Citizens was the 30th largest commercial bank in the US as per assets.
Silicon Valley Bank was shuttered by US regulators after incurring huge losses from the sell-off of securities. Startup-focused lender SVB became the largest bank to fail since the 2008 financial crisis. Its customers withdrew $42 billion in one day, draining the California lender of all of its cash. That forced regulators to seize the bank. After that, the panic slightly eased.