North Carolina-based First Citizens has acquired Silicon Valley Bank (SVB), a financial institution focused on the tech industry.
This week’s purchase comes after SVB collapsed earlier this month, causing shockwaves throughout the banking industry worldwide, as previously covered by The Dallas Express.
First Citizens entered into an agreement with the Federal Deposit Insurance Corporation (FDIC) to “purchase out of FDIC receivership substantially all loans and certain other assets, and assume all customer deposits and certain other liabilities [of SVB],” per a news release on Monday.
SVB assets amount to $110 billion, with $56 billion in deposits and $72 billion in loans. First Citizens also received an “available line of credit from the FDIC for contingent liquidity purposes” in its agreement, the release said.
The deal did not include an additional $90 billion in securities that the FDIC will have to find a buyer for and which are now worth less due to recent federal interest rate increases.
“We have partnered with the FDIC to successfully complete more FDIC-assisted transactions since 2009 than any other bank, and we appreciate the confidence the FDIC has placed in us once again,” First Citizens Chairman and CEO Frank B. Holding Jr. said about the deal, per the news release.
The FDIC and other governing bodies had already implemented exceptional measures to prevent a broader banking crisis by ensuring that depositors of SVB and Signature Bank, which also collapsed, would have access to all their funds, as The Dallas Express reported. This included deposits amounting to over $250,000, which is the usual federally insured limit.
Almost all of Signature Bank was bought in a $2.7 billion deal last week by New York Community Bank, per Associated Press News.
With the deal in place, the clients of SVB have been transitioned to First Citizens and all 17 former SVB branches are now running as a First Citizens division.
In response to the news, First Citizens BancShares (FCNCA), was up 47% on Monday morning, per Yahoo Finance.