USA (27/03/2023): The U.S. Federal Deposit Insurance Corporation announced on Monday that First Citizens Bank had decided to purchase the deposits and loans of Silicon Valley Bank. The SVB had recently collapsed sending shockwaves across financial institutions in America.
The FDIC stated, “The 17 former branches of Silicon Valley Bridge Bank, National Association, will open as First–Citizens Bank & Trust Company on Monday, March 27, 2023.”
First Citizens Bank, a division of Raleigh-based First Citizens BancShares, and the Federal Deposit Insurance Corporation (FDIC) have agreed to buy Silicon Valley Bridge Bank’s loans and other assets out of FDIC receivership and to assume all customer deposits as well as certain other liabilities.
The FDIC will also provide First Citizens Bank with a line of credit that is open for potential liquidity needs. To further safeguard against possible credit losses, the bank and the FDIC have entered into a loss-sharing agreement.
However, First Citizens Bank will not purchase any of the assets, common stock, preferred stock, debt, or other liabilities of SVB Financial Group, the previous holding company of SVB, nor will it assume any of their other liabilities.
There would be no immediate changes for the customers of the SVB and they will be able to operate, access and control their bank accounts with the help of the same accounts, mobile app and other facilities.
Silicon Valley Bank was the America’s 16th-largest bank when the government took it over. Its collapse was the largest bank failure in the United States since the 2008 financial crisis. The former parent company of SVB, SVB Financial had filed for bankruptcy on February 17.
