First Citizens Bank and Trust, located in North Carolina, has acquired Silicon Valley Bank (SVB), a prominent financial institution in the technology sector that failed earlier this month in the face of an unprecedented bank run.
According to a statement issued by the Federal Deposit Insurance Corporation (FDIC) late on Sunday night, the transaction includes the sale of all deposits and loans held by SVB to First-Citizens.
According to the Associated Press (AP), users of Silicon Valley Bank will immediately become customers of First Citizens, a financial institution with its headquarters in Raleigh. When business officially starts on Monday, the 17 locations that once belonged to SVB will now be known as First Citizens branches.
On March 10, regulators put a stop to Silicon Valley’s operations. At the time, the company had around $167 billion in total assets and approximately $119 billion in deposits. According to a report from Breitbart News, the action caused the FDIC and other authorities to take action to safeguard depositors in order to avert greater financial instability.
The bank, which had its headquarters in Santa Clara, California, was unable to survive when depositors hurriedly withdrew their money out of anxiety for the institution’s well-being. With the fall of Washington Mutual in 2008, it was the second-largest bank failure in the annals of United States history.
The unrest also moved to Europe, where it led to the acquisition of Credit Suisse by UBS, another ailing Swiss financial institution.
Most recently, on Friday, shares of the long-troubled Deutsche Bank took a significant hit as a result of the lender’s escalating cost of default protection, which reignited concerns over the deepening of the crisis in the banking industry.
According to AP, the FDIC now has shares in First Citizens that are worth $500 million as a result of the purchase of SVB by First Citizens.
According to statements made by the FDIC, both themselves and First Citizens will participate in losses as well as any possible recovery on loans that are a part of a loss-sharing arrangement.
Three days after the financial collapse in the United States, Silicon Valley Bank UK was sold to HSBC, the largest bank in Europe. This transaction ensured the safety of 6.7 billion pounds ($8.1 billion) in customer deposits.
For the purchase, a nominal sum of one pound (or $1.2) was paid. First Citizens Bank was established in 1898 and claims to have more than $100 billion in total assets. The bank also operates as a countrywide bank in addition to its more than 500 local offices spread throughout 21 states. According to AP, during the most recent quarter it had a net profit of 243 million dollars.
