SAN FRANCISCO -- First Citizens Bank is buying most of the business of Silicon Valley Bank, the US tech lender that failed earlier this month.
The Federal Deposit Insurance Corporation (FDIC) said in a statement late Sunday it had agreed that First-Citizens Bank & Trust Company would buy all of SVB's deposits and loans that regulators had transferred to a bridge bank in the wake of its collapse.
Seventeen former branches of SVB will begin operating as "Silicon Valley Bank, a division of First Citizens Bank," on Monday, First Citizens said. SVB customers should continue to use their current branch until they receive notice from First Citizens that systems have been converted to allow full service at its wider branch network, FDIC added.
SVB was shut down by regulators on Friday, March 10, after clients withdrew $42 billion in a single day. It was the second-largest bank failure in US history, after Washington Mutual in 2008. The FDIC agreed to guarantee all deposits, including those above the $250,000 per account that are usually insured.
First Citizens, based in Raleigh, North Carolina, offers general banking services through more than 550 branches and offices in 23 states.
It said in a statement that it would assume SVB assets of $110 billion, deposits of $56 billion and loans of $72 billion, based on the latest information from the FDIC. It has also entered into an agreement with the FDIC that will protect the bank against potential losses on the commercial loans it is buying.
"This transaction leverages our solid foundation to add significant scale, geographic diversity, compelling digital capabilities and, most importantly, meaningful solutions for customers throughout their lifecycle," First Citizens chairman and CEO Frank B. Holding said in the statement.
"Specifically, we are committed to building on and preserving the strong relationships that legacy SVB's Global Fund Banking business has with private equity and venture capital firms," he added.
The FDIC said First Citizens was getting the $72 billion in SVB loans at a discount of $16.5 billion. About $90 billion in securities and other assets that were owned by SVB will remain in receivership for disposition by the FDIC.
"The FDIC estimates the cost of the failure of Silicon Valley Bank to its Deposit Insurance Fund to be approximately $20 billion. The exact cost will be determined when the FDIC terminates the receivership," the regulator said.
The collapse of SVB, followed in quick succession by Signature Bank - another US regional lender - roiled global financial markets and triggered a collapse in confidence among investors and depositors in other vulnerable banks.
Switzerland's second-biggest bank, Credit Suisse, has been the largest casualty of the current crisis. It had to be rescued a week ago by bigger rival UBS in an emergency takeover orchestrated by the Swiss government.
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FAQs
The FDIC created Silicon Valley Bridge Bank, N.A., following the closure of Silicon Valley Bank by the California Department of Financial Protection and Innovation. All of the deposits and substantially all assets of Silicon Valley Bank were transferred to the bridge bank.
Is Silicon Valley Bank being sold to First Citizens Bank? ›
Silicon Valley Bank was acquired by First Citizens Bank on March 27, 2023. Silicon Valley Bank is open and operating as a division of First Citizens Bank serving the same investor and innovation economy clients that it has for the past 40 years.
Is Citizens Bank being taken over by the FDIC? ›
On November 3, 2023, the Iowa Division of Banking (IDOB) closed Citizens Bank and appointed the Federal Deposit Insurance Corporation (FDIC) as receiver.
How much are First Citizens paying for Silicon Valley Bank? ›
First Citizens shares soar 50% after the bank buys a large chunk of failed Silicon Valley Bank. The deal will see First Citizens BancShares purchase around $72 billion of Silicon Valley Bank assets at a discount of $16.5 billion.
What happens if FDIC takes over the bank? ›
After a seizure, the bank's employees work for the FDIC. The customer experience does not change much. Depositors are still able to retrieve their money, usually up to the insured amount, including by writing checks, accessing their safe deposit boxes, and withdrawing money through an ATM.
Did Silicon Valley Bank depositors get their money back? ›
The transfer of all the deposits was completed under the systemic risk exception approved yesterday . All depositors of the institution will be made whole. No losses associated with the resolution of Silicon Valley Bank will be borne by taxpayers.
What family owns First Citizens Bank? ›
Holding, the patriarch, died in 1957, his three children, then under the age of 32, took over the entity. Since 2009, Frank B. Holding Jr., 61, has served as chairman and CEO, while his sister Hope Holding Bryant, 60, has been the vice-chair. Their brother-in-law, Peter Bristow, 57, is the president.
Will Silicon Valley Bank still exist? ›
Silicon Valley Bank (SVB) was shut down in March 2023 by the California Department of Financial Protection and Innovation.
Did JP Morgan buy Silicon Valley Bank? ›
JPMorgan Chase, one of the largest and most influential banks in the world, has announced a historic takeover of Silicon Valley Bank (SVB). The deal, which was announced today, marks a significant shift in the financial landscape and has sparked intense speculation and debate within the industry.
Is Citizens Bank safe from collapse? ›
Citizens Bank is an insured member of the Federal Deposit Insurance Corporation (FDIC), which means deposits in all types of accounts are insured, dollar-for-dollar, up to $250,000 per person.
Republic First Bank reported unrealized securities losses in excess of its equity as early as June 2022. State regulators closed Republic First Bank in April 2024, marking the first bank failure of the year.
Are banks no longer FDIC-insured? ›
Key Takeaways
Most, but not all, banking institutions are insured by the FDIC. The Federal Deposit Insurance Corp. (FDIC) protects you against loss if your bank or thrift institution fails. Eligible bank accounts are insured up to $250,000 for principal and interest.
Where does First Citizens Bank rank in the US? ›
20 Largest Banks in the U.S.
| Rank | Bank | Assets (domestic) |
|---|
| 13 | First Citizens Bank | $217.67 billion. |
| 14 | M&T Bank | $214.67 billion. |
| 15 | Fifth Third Bank | $213.55 billion. |
| 16 | Huntington National Bank | $192.86 billion. |
16 more rowsMay 30, 2024
First Citizens shares jumped 50%. First Citizens will assume Silicon Valley Bank's assets of $110 billion, deposits of $56 billion and loans of $72 billion as part of the deal. The FDIC said the $72-billion purchase of SVB's assets came at a discount of $16.5 billion.
How much did FDIC lose on SVB? ›
The collapse of Silicon Valley Bank (SVB) set the Federal Deposit Insurance Corporation (FDIC) back only $20 billion while the failure of Signature Bank cost just $2.5 billion, according to prepared remarks by FDIC Chair Martin Gruenberg set to be delivered in front of the Senate Banking Committee on Tuesday.
Is Silicon Valley Bank safe now? ›
Silicon Valley Bank (SVB)—the 16th largest bank in the United States—was shut down by federal regulators on March 10, 2023. In the aftermath of the collapse, federal regulators promised to make all depositors whole, even for those funds that weren't protected by the Federal Deposit Insurance Corporation (FDIC).
What is the status of Silicon Valley Bank? ›
Silicon Valley Bank is closed, so the FDIC formed the Deposit Insurance National Bank of Santa Clara to consolidate insured and uninsured deposited into one institution. All deposits of SVB were transferred to the National Bank of Santa Clara, and insured depositors had access to their funds on March 13.
Will FDIC pay SVB? ›
The FDIC will pay uninsured depositors an advance dividend within the next week. Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds. As the FDIC sells the assets of Silicon Valley Bank, future dividend payments may be made to uninsured depositors.
