UNITED STATES NEWS

Troubled Silicon Valley Bank acquired by First Citizens

Mar 26, 2023, 11:27 PM | Updated: Mar 27, 2023, 6:50 am

NEW YORK (AP) — First Citizens will acquire much of Silicon Valley Bank, the tech-focused financial institution that collapsed this month, setting off a chain reaction that caused a second bank to fail and tested faith in the global banking sector.

The Federal Deposit Insurance Corp. and other regulators had already taken extraordinary steps to head off a wider banking crisis by guaranteeing that depositors in SVB and failed Signature Bank would be able to access all of their money.

While more than half of Silicon Valley’s assets will remain in U.S. receivership, the First Citizens deal announced late Sunday, at least initially, seemed to achieve what regulators have sought: a shoring up of trust in U.S. regional banks.

At the opening bell Monday, shares of midsized banks like Keycorp, Zions and First Horizon rose 8%. First Republic Bank, which received a $30 billion rescue package from 11 of the biggest banks in the country as it teetered in the wake of the Silicon Valley collapse, jumped 23%.

Customers of SVB will automatically become customers of First Citizens, which is headquartered in Raleigh, North Carolina. The 17 former branches of SVB will open as First Citizens branches Monday, the FDIC said.

brokered a takeover by UBS of troubled Swiss bank Credit Suisse.

Shares of Deutsche Bank tumbled 8.5% Friday for similar reasons, rising interest rates, but stock in the German bank bounced back 3.6% Monday.

Silicon Valley, based in Santa Clara, California, collapsed March 10 in a bank run after customers rushed to withdraw money due to fears over the bank’s solvency. It was the second-largest bank collapse in U.S. history after the 2008 failure of Washington Mutual. Two days later, New York’s Signature Bank was seized by regulators in the third-largest bank failure in the U.S.

In both cases, the government agreed to cover deposits, even those that exceeded the federally insured limit of $250,000, so depositors were able to access their money.

New York Community Bank agreed to buy a significant chunk of Signature Bank in a $2.7 billion deal a week ago, but the search for a buyer for SVB took longer.

The sale of Silicon Valley Bank involves the sale of all deposits and loans of SVB to First-Citizens Bank and Trust Co., the FDIC said.

The acquisition gives the FDIC shares in First Citizens worth $500 million. Both the FDIC and First Citizens will share in losses and the potential recovery on loans included in a loss-share agreement, the FDIC said.

The FDIC will retain about $90 billion of Silicon Valley Bank’s $167 billion in total assets, as of March 10, while First Citizens will acquire $72 billion at a discount of $16.5 billion, the FDIC said. It said it estimates Silicon Valley Bank’s failure will cost its industry-funded Deposit Insurance Fund about $20 billion.

First Citizens Bank was founded in 1898 and says it has more than $100 billion in total assets, with more than 500 branches in 21 states as well as a nationwide bank. It reported net profit of $243 million in the last quarter. It is one of the top 20 U.S. banks and says it is the largest family-controlled bank in the country.

United States News

FILE - A marquee promoting a fundraiser with President Joe Biden is on display outside the Lunt-Fon...

Associated Press

Big money, fancy homes, old jokes — inside Joe Biden’s fundraisers

LOS ANGELES (AP) — If you’re a Democrat with money to burn and friends in high places, you can spend thousands on tickets to a fundraiser with President Joe Biden. If not, keep reading to see what you’re missing. With an election year around the corner, Biden is accelerating his fundraising to prepare for an […]

43 minutes ago

FILE - Republican presidential candidates from left, former UN Ambassador Nikki Haley, Florida Gov....

Associated Press

DeSantis, Haley and Ramaswamy will appear in northwest Iowa days after a combative GOP debate

SIOUX CENTER, Iowa (AP) — Republican presidential candidates will cross paths again in Iowa just days after a fractious debate and as the countdown to the caucuses nears the one-month mark. Florida Gov. Ron DeSantis, former United Nations Ambassador Nikki Haley and businessman Vivek Ramaswamy will make their case — this time without the others […]

1 hour ago

FILE - Republican presidential candidate and former President Donald Trump speaks to Texas state tr...

Associated Press

Appeals court upholds gag order on Trump in Washington case but narrows restrictions on his speech

A federal appeals court in Washington on Friday largely upheld a gag order on former President Donald Trump in his 2020 election interference case but narrowed the restrictions on his speech.

4 hours ago

FILE - Migrant families wade through shallow waters toward Roma, Texas, March 24, 2021. A federal j...

Associated Press

Federal judge prohibits separating migrant families at US border for 8 years

A federal judge on Friday prohibited the separation of families at the border for purposes of deterring immigration for eight years.

5 hours ago

Associated Press

Indiana secretary of state appeals ruling for US Senate candidate seeking GOP nod

INDIANAPOLIS (AP) — The Indiana secretary of state is appealing a ruling that a law stipulating voting requirements for a candidate’s party affiliation is unconstitutional in a decision that lifted the hopes of a U.S. Senate hopeful who wants to run as a Republican. The Indiana attorney general’s office filed the notice of appeal Friday […]

6 hours ago

Associated Press

Nashville Police investigation into leak of Covenant School shooter’s writings is inconclusive

NASHVILLE, Tenn. (AP) — Nashville Police have “exhausted all available investigative avenues” in the hunt for the person who leaked pages from a school shooter’s journals to a conservative commentator, the department announced in an email sent to media late on Friday. The writings are part of an ongoing legal battle over whether they should […]

6 hours ago

Sponsored Articles

Follow @KTAR923...

The best ways to honor our heroes on Veterans Day and give back to the community

Veterans Day is fast approaching and there's no better way to support our veterans than to donate to the Military Assistance Mission.

...

Desert Institute for Spine Care

Desert Institute for Spine Care (DISC) wants to help Valley residents address back, neck issues through awake spine surgery

As the weather begins to change, those with back issues can no longer rely on the dry heat to aid their backs. That's where DISC comes in.

...

Midwestern University

Midwestern University: innovating Arizona health care education

Midwestern University’s Glendale Campus near Loop 101 and 59th Avenue is an established leader in health care education and one of Arizona’s largest and most valuable health care resources.

Troubled Silicon Valley Bank acquired by First Citizens