NEW YORK (AP) – First North Carolina-based Citizen Will Buy Silicon Valley Bank, The tech-focused financial institution collapsed earlier this month, rocking the banking industry and sending shockwaves around the world.
The sale involves the sale of all SVB deposits and loans to First-Citizens Bank and Trust Co., the FDIC said in a statement late Sunday. SVB customers automatically become First Citizens customers, which are headquartered in Raleigh. SVB’s 17 former branches will open as First Citizens branches on Monday.
The The fall of Silicon Valley Bank on March 10 caused the FDIC and other regulators action to protect depositors to prevent further financial turmoil.
The Santa Clara, California-based bank went bankrupt after depositors massively withdrew funds amid concerns about the bank’s health. It was the second-largest bank crash in US history after the 2008 failure of Washington Mutual.
On March 12, New York-based Signature Bank was seized by regulators in the third largest bank bankruptcy in the United States.
In both cases, the government has agreed to cover the depositeven those over the federal insured limit of $250,000, so Silicon Valley Bank and Signature Bank depositors can access their funds.
Based in mid-sized San Francisco Bank of the First Republic, serves a similar set of clients as Silicon Valley Bank and appears to be facing a similar crisis, which in turn has been battered by investors worried that it too might collapse. That prompted 11 of the biggest banks in the country to announce a $30 billion rescue package.
First Citizens’ acquisition of SVB gave the FDIC a stake that would later be worth $500 million. The FDIC and First Citizens will share the loss and recoverability of the loans included in the loss-sharing agreement, the FDIC said.
First Citizens Bank was founded in 1898 and says it has total assets of more than $100 billion, with more than 500 branches in 21 states as well as a nationwide bank. It reported a net profit of $243 million for the past quarter.
