First Citizens Bank to Acquire all Deposits and Loans of Silicon Valley Bank
The Federal Deposit Insurance Corporation (FDIC) has announced that North Carolina-based First Citizens Bank will acquire all deposits and loans of Silicon Valley Bank.
The move comes after rumors of a severe liquidity crisis at the bank prompted a bank run, leading to the collapse of Silicon Valley Bank on March 10.
The FDIC was appointed as the failed bank’s receiver and attempted to auction off its assets, including its traditional deposits unit and private bank, which caters to high-net-worth individuals. Several firms were reported to have submitted bids for the collapsed U.S. bank.
According to a Bloomberg report, First Citizens Bank, the 30th largest commercial bank in the United States as of March 10, had been planning a bid for Silicon Valley Bank as early as March 18.
Three days later, it reportedly submitted a bid for Silicon Valley Bank. Valley National Bancorp was also understood to have submitted a bid for the collapsed bank.
Meanwhile, a report from Reuters on March 24 suggests that a third U.S. regional bank, Citizens Financial Group, had been preparing to submit an offer for Silicon Valley Bank’s private banking arm.
Details of the deal
Under a March 26 purchase and assumption agreement, 17 former branches of Silicon Valley Bank will open as First Citizens Bank and Trust Company on Monday, March 27. According to the FDIC, the deal includes purchasing about $72 billion of Silicon Valley Bridge Bank, National Association’s assets at a discount of $16.5 billion. All Silicon Valley Bank depositors will automatically become First Citizens Bank’s depositors.
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. common stock with a potential value of up to $500 million.
First Citizens Bank’s financials
As of March 10, First Citizens Bank had $167 billion in total assets and $119 billion in deposits. The bank is one of the largest in the U.S. and has been growing steadily over the past few years.
Acquiring Silicon Valley Bank’s deposits and loans will further boost First Citizens Bank’s assets and strengthen its position in the banking sector.
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Impact of the deal
The acquisition of Silicon Valley Bank’s deposits and loans by First Citizens Bank is likely to significantly impact the banking sector. The deal highlights the growing consolidation trend in the industry as banks look to expand their operations and strengthen their position in the market.
The deal is also expected to lead to job losses at Silicon Valley Bank as First Citizens Bank consolidates operations.
Overall, the acquisition of Silicon Valley Bank’s deposits and loans by First Citizens Bank is a significant development in the banking sector and is likely to have far-reaching consequences for the industry as a whole.
Andrey Kunev
Reporter at CoinsPress
Andrey Kunev is a knowledgeable cryptocurrency content creator passionate about the crypto market. With extensive experience in market analysis and investment reporting, Andrey is a valuable asset to the CoinsPress team. As a frequent contributor, he offers insightful and comprehensive coverage of market trends, price fluctuations, and new advancements in cryptocurrency. Whether you're a seasoned investor or just getting started, Andrey's clear and concise writing offers a comprehensive look at the current state of the crypto market and its prospects. Stay up-to-date with CoinsPress's expert analysis and commentary on all things cryptocurrency.
