First Citizens Bank has decided to buy Silicon Valley Bridge Bank. First Citizens Bank is a big bank that manages over $100 billion in assets. Follow our website samsunghubs.com to find out about the latest news!
The deal was made public this morning.
After Silicon Valley Bank went out of business this month, officials moved the bank’s assets to Silicon Valley Bridge Bank. After the reorganization, the government started looking for a buyer. Several investors allegedly offered to buy parts of Silicon Valley Bridge Bank, but bank officials were looking for a buyer who would buy the whole company, not just some assets.
The winning deal from First Citizens Bank is called a “whole bank purchase.” The company will take over all of Silicon Valley Bridge Bank’s deposits and loans and $110 billion worth of other assets like stocks. For now, securities and other investments worth about $90 billion will stay with the Federal Deposit Insurance Corp… Also Read – Twitter braces itself after its source code leaked online
The Federal Deposit Insurance Corporation (FDIC) is a government body that protects bank deposits against loss and does other things. It took over for SVB after that bank went out of business. A receiver is an organization caring for a company’s assets that have gone bankrupt.
“First Citizens has been known for 125 years for its strong finances, great customer service, and careful lending,” said CEO Frank Holding Jr. “We’re looking forward to getting to know our new customers and setting up our business for continued success. We’re also sticking to our promise to support the integrity of our country’s banking system.”
First Citizens Bank will buy $72 billion in assets from Silicon Valley Bridge Bank for $16.5 billion less than they are worth. On the other hand, the FDIC is getting stock appreciation rights in First Citizens Bancshares Inc., the publicly traded company that owns First Citizen Bank. The deal will give the agency a share in the company worth up to $500 million.
The FDIC and First Citizens Bank have also signed a loss share agreement as part of the deal. The deal is mainly about the business loans the second company takes on after buying Silicon Valley Bridge Bank. If First Citizens Bank loses over $5 billion on these loans, the FDIC will pay for half. Also Read – OnePlus’s CEO denies reports that the company is leaving European market
The failure of Silicon Valley Bank is expected to cost the FDIC’s Deposit Insurance Fund, or DIF, about $20 billion. It is a fund that the FDIC uses to protect bank savings from loss. Insurance payments from banks pay for it. At the end of 2022, it still had over $128 billion.
Silicon Valley Bank and Silicon Valley Bridge Bank had 17 locations in California and Massachusetts. Today, these offices reopened as First Citizens Bank locations.
The purchase of Silicon Valley Bridge Bank comes just a few weeks after SVB UK Ltd., the U.K. branch of the failed bank, was sold to HSBC plc. The unit took care of accounts worth £6.7 billion for more than 3,500 clients in the area. It is now part of the U.K. branch of HSBC, which has 14 million users there. Also Read – Silicon Valley Bank Swag is latest flash sale on the Internet
The company that used to own Silicon Valley Bank, SVB Financial Group Corp., is also looking for a buyer now that it has filed for bankruptcy. The company wants to sell off two of its companies. The first engages in new businesses and venture capital funds, and the second is an investment bank.