Silicon Valley Bank Officially Sold To First Citizens Bank

Lavina Daryanani
Source: Moneylife

Earlier during the day, there were speculations claiming that Silicon Valley Bank could be sold to First Citizens Bank. During the late hours on Sunday, March 26, an official FIDC statement confirmed the same. The statement read,

“The Federal Deposit Insurance Corporation (FDIC) entered into a purchase and assumption agreement for all deposits and loans of Silicon Valley Bridge Bank, National Association, by First–Citizens Bank & Trust Company, Raleigh, North Carolina.”

Depositors of Silicon Valley Bridge Bank, National Association, will now “automatically” become depositors of First–Citizens Bank & Trust Company. Also, it is worth noting that all the deposits assumed by the latter, will continue to be insured by the FDIC up to the insurance limit.

Also Read: Silicon Valley Bank Files for Chapter 11 Bankruptcy

Silicon Valley Bank’s assets-deposits breakdown

Silicon Valley was among the initial three banks that collapsed in the U.S., instigating massive banking turmoil. With First Citizens Bank now to the rescue, depositors, and investors can breathe a sigh of relief.

According to the official statement, the 17 former branches of SVB, will open as First–Citizens Bank & Trust Company on Monday, March 27. However, the customers of the bank should continue to use their current branch. Going forward they will get a notice from First–Citizens Bank & Trust Company prompting that the systems conversions have been completed. So, only after the completion, bank services at all the locations will be allowed.

The bank had approximately $167 billion in total assets and about $119 billion in total deposits as of March 10, 2023. The latest transaction included the purchase of about $72 billion of the bank’s assets at a discount of $16.5 billion. According to the official statement,

Approximately $90 billion in securities and other assets will remain in the receivership for disposition by the FDIC. In addition, the FDIC received equity appreciation rights in First Citizens BancShares, Inc., Raleigh, North Carolina, common stock with a potential value of up to $500 million.

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