One of the largest lenders in the United States takes over a large part of the failed Californian bank. The announcement of the Federal Deposit Guarantee Authority
From today, the 17 former branches of Silicon Valley Bank open as First–Citizens Bank & Trust Company. The Raleigh, North Carolina-based bank holding company bought the bankrupt California bank’s deposits and loans. The purchase agreement was entered into by the Federal Deposit Insurance Corporation (Fdic). The transaction includes the approximately $72 billion purchase of Silicon Valley Bridge Bank, at a discount of $16.5 billion.
Opening today
Customers of the bankrupt Silicon Valley Bank will continue to use their current branch until notified by First–Citizens Bank & Trust Company that systems conversions have been completed to enable full banking services at all other branches. This was communicated by the Federal Deposit Insurance Corporation which insures all deposits taken on by First–Citizens Bank & Trust Company, one of the main banks in the United States of America. As of March 10, 2023, Silicon Valley Bank had approximately $167 billion in total assets and approximately $119 billion in total deposits.
Silicon Valley Bridge Bank
The California bank was created by Fdic following the closure of Silicon Valley Bank by the California Department of Financial Protection and Innovation. About $90 billion in securities and other assets will remain in administration under the FDIC disposition. In addition, the FDIC received capital appreciation rights to First Citizens BancShares common stock with a potential value of up to $500 million. The FDIC estimates the cost of Silicon Valley Bank’s bankruptcy to its Deposit Insurance Fund (DIF) at about $20 billion.
The contract
The FDIC and First-Citizens Bank & Trust Company have entered into a loss-sharing transaction on commercial loans purchased by the former Silicon Valley Bridge Bank, National Association. The Fdic as liquidator and First–Citizens Bank & Trust Company will share losses and potential recoveries on loans covered by the loss sharing agreement. The loss-sharing transaction is expected to maximize recoveries on assets by keeping them in the private sector. In addition, First–Citizens Bank & Trust Company will assume all qualified financial agreements relating to the loan.
Source-tg24.sky.it