First-Citizens Bank buys failed Silicon Valley Bank

All of Silicon Valley Bank's deposits and loans were purchased by First-Citizens Bank, according to an announcement from the United States Federal Deposit Insurance Corporation

First-Citizens Bank & Trust Company has reached an agreement for the acquisition of all the deposits and loans of Silicon Valley Bridge Bank, the entity created by the Federal Deposit Insurance Corporation (FDIC) of the United States, after the intervention of the Silicon Valley Bank (SVB) on March 10.

The FDIC estimates that the cost of Silicon Valley Bank’s bankruptcy for its Deposit Insurance Fund (DIF) amounts to about 20,000 million dollars (18,582 million euros), although the final figure will be determined when the judicial administration ends.

The agreement with First-Citizens Bank entails the purchase of assets for an amount of approximately 72,000 million dollars (66,897 million euros) from Silicon Valley Bridge Bank, with a discount of 16,500 million dollars (15,330 million euros), while around of 90,000 million dollars (83,621 million euros) in securities and other assets will remain under receivership for disposal by the FDIC.

In addition, the FDIC has received rights to common shares of First Citizens BancShares, with a potential value of up to 500 million dollars (465 million euros). In this way, the 17 branches of Silicon Valley Bridge Bank did open this Monday as offices of the First-Citizens Bank & Trust Company. Transactions will be carried out as usual, in the current branches, until the conversion of the systems is officially notified.

Source: dpa

(Reference image source: Mariia Shalabaieva, Unsplash)

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