- The transaction includes SVB assets worth $72 billion, bought at a discount of $16.5 billion.
- SVB has 17 branches, $167 billion in total assets, and $119 billion in deposits.
First-Citizens Bank will acquire the loans and deposits of Silicon Valley Bank (SVB), one of the crypto lenders that failed this month, according to the Federal Deposit Insurance Corporation (FDIC).
As of March 10, 2023, Silicon Valley Bridge Bank, National Association, the entity created by the FDIC to oversee the receivership, had an estimated $167 billion in total assets and $119 billion in deposits. The entity operated 17 branches that were also ceded to First Citizens.
‘‘The 17 former Silicon Valley Bridge Bank National Association branches will open as First-Citizens Bank & Trust Company on Monday, March 27, 2023. Customers of (the bank) should continue to use their current branch until they receive notice from First-Citizens that system conversions have been completed to allow full-service banking at all of its other branch locations,’’ the press release said.
The ‘purchase and assume agreement’ includes selling SVB’s assets worth about $72 billion to First citizens at a discount of $16.5 billion. An estimated $90 billion in securities and other assets would reportedly remain with the FDIC, which also received equity appreciation rights in First Citizens BancShares common stock with a $500 million potential value.
See Related: Binance, Coinbase Suspend USDC Conversions After Circle Disclosed Exposure To Failed Silicon Valley Bank
SVB UK Subsidiary Under HSBC
On March 13, British banking giant HSBC won a bid to take over the UK subsidiary of Silicon Valley Bank for 1 pound ($1.2), excluding the assets and liabilities of the parent company, in a step the HM Treasury said was aimed at stabilizing the financial markets and the tech sector.
But in California, the collapse of SVB, which serviced a tenth of venture debts issued last year in the US, has brought devastation to the start-up community, according to coverage by the Financial Times. Most start-ups relying on venture debt could be wiped out, says Alessandro Chesser, CEO of Dynasty.
‘‘Larger companies relying on venture debt are in a lot of trouble right now. Unless things turn around quickly, we are going to see a lot of high-value start-ups going out of business.’’
See Related: HSBC’s UK Branch Acquires SVB’s UK Branch For A £1
