First Citizens agrees to acquire Silicon Valley Bank: FDIC
The deal includes assets worth around $72 billion from Silicon Valley Bridge Bank, National Association on a discount of $16.5 billion. A total of $90 billion in securities and other assets will still be under receivership for the FDIC to sell.
North Carolina-based First Citizens Bank is acquiring Silicon Valley Bank (SVB) which failed earlier this month. First Citizens Bank has entered into a purchase and assumption agreement for all deposits and loans of SVB, according to a statement by The Federal Deposit Insurance Corporation (FDIC) on Monday, 27 March 2023.
"The 17 former branches of Silicon Valley Bridge Bank, National Association, will open as First–Citizens Bank & Trust Company on Monday, March 27, 2023. Customers of Silicon Valley Bridge Bank, National Association, should continue to use their current branch until they receive notice from First–Citizens Bank & Trust Company that systems conversions have been completed to allow full–service banking at all of its other branch locations," the statement said.
The deal includes assets worth around $72 billion from Silicon Valley Bridge Bank, National Association on a discount of $16.5 billion. A total of $90 billion in securities and other assets will still be under receivership for the FDIC to sell. In addition, the FDIC received equity appreciation rights in First Citizens common stock with a potential value of up to $500 million.
FDIC created Silicon Valley Bridge Bank and National Association after the California Department of Financial Protection and Innovation closed SVB. All of Silicon Valley Bank's insured and uninsured deposits and all qualified financial contracts were transferred to the bridge bank. The Silicon Valley Bridge Bank and National Association were founded to give the FDIC time to strengthen the institution and promote the brand.
Silicon Valley Bridge Bank and National Association had an asset worth $167 billion as of March 10, 2023.
The FDIC calculates that the loss to its Deposit Insurance Fund (DIF) from Silicon Valley Bank's bankruptcy would be close to $20 billion. When the FDIC ends the receivership, the precise cost will be known.
ALSO READ: Silicon Valley Bank collapse leaves Indian startups worried – here’s why
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
Retirement Planning: SIP+SWP combination; Rs 15,000 monthly SIP for 25 years and then Rs 1,52,000 monthly income for 30 years
Top Gold ETF vs Top Large Cap Mutual Fund 10-year Return Calculator: Which has given higher return on Rs 11 lakh investment; see calculations
Retirement Calculator: 40 years of age, Rs 50,000 monthly expenses; what should be retirement corpus and monthly investment
SBI 444-day FD vs Union Bank of India 333-day FD: Know maturity amount on Rs 4 lakh and Rs 8 lakh investments for general and senior citizens
EPF vs SIP vs PPF Calculator: Rs 12,000 monthly investment for 30 years; which can create highest retirement corpus
Home loan EMI vs Mutual Fund SIP Calculator: Rs 70 lakh home loan EMI for 20 years or SIP equal to EMI for 10 years; which can be easier route to buy home; know maths
12:27 PM IST