First Citizens Bank to acquire Silicon Valley Bank
First Citizens Bank is set to acquire Silicon Valley Bank following its shocking collapse a few weeks ago.
The Deseret News reported that the Justice Department is beginning to investigate the cause of the collapse and the events leading up to it.
Here’s what we know.
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What happened? The New York Times reported that the collapse of Silicon Valley Bank was “the largest bank failure in the United States since the 2008 financial crisis.”
First Citizens is set to take the sale of all loans and deposits from Silicon Valley Bank, according to NPR.
CNBC reported that the deal made gives “$72 billion of SVB assets at a discount of $16.5 billion, but around 90 billion in securities and other assets will remain ‘in receivership for disposition by the FDIC.’”
“Admittedly, there has been a strong amount of runoff from the legacy Silicon Valley Bank this quarter,” Craig Nix, chief financial officer of First Citizens, said. “However, it is our intent to embrace the talents of our legacy SVB employees, embrace their business capabilities and then reiterate to their clients that First Citizens has an unwavering focus on holistic client relationships.”
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What does this mean? CNBC reported that the “First Citizens shares jumped more than 45% during Monday morning trading on Wall Street.”
Per CNBC, the FDIC said in a statement on the deal, “The 17 former branches of Silicon Valley Bridge Bank, National Association, will open as First-Citizens Bank & Trust Company on Monday, March 27, 2023.”
Lawmakers across the aisle have considered raising the federal insurance limit on bank deposits, according to the Deseret News.
“I think that lifting the FDIC insurance cap is a good move,” Sen. Elizabeth Warren, D-Mass, said on CBS News’ “Face the Nation.” “Now the question is where’s the right number in lifting it.”
As lawmakers are finding ways to handle the collapse of Silicon Valley Bank and navigating the new FDIC partnership, First Citizens seeks to hold an emphasis on protecting bank customers and stockholders.
“Prudent risk management approach will continue to protect customers and stockholders through all economic cycles and market conditions,” First Citizens said in a statement.
