The Federal Deposit Insurance Corporation (FDIC), the former holder of the collapsed crypto-friendly Silicon Valley Bank (SVB), has announced that SVB was partially sold to the U.S.-based banking giant First Citizens BancShares.
The deal includes the sale of $72B of SVB’s assets at a discount of $16.5B.
- Another $90B in securities and other assets were excluded from the acquisition and will remain in the receivership of FDIC for disposition.
- FDIC will receive $500M of equity appreciation rights in the stock of First Citizens.
- The regulator estimates that the bank’s failure would cost around $20B to the government’s deposit insurance fund.
- SVB’s 17 former branches have opened under the name of First Citizens as of March 27, and the depositors automatically became customers of the new holder.
- First Citizens has more than $100B in assets and over 500 branches across 22 states, including its primary subsidiary First Citizens Bank.
- California-based SVB was shut down by the state’s Department of Financial Protection and Innovation on March 10, in the same week that saw the consecutive collapses of Silvergate Bank and Signature Bank.
- SVB’s parent company, SVB Financial Group, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York on March 17.
- SVB, previously the 16th largest bank in the U.S., provided banking services to several crypto and tech startups.
- The 40-year-old bank’s collapse marked the largest bank failure in U.S. history since Washington Mutual in 2008.
- Earlier in March, Signature Bank was sold to Flagstar Bank by the FDIC with its $38.4B of non-crypto-related deposits and $12.9B in loans.
