First Citizens Bank & Trust Company comes to the rescue of Silicon Valley Bank
The holding company signed an agreement to purchase Silicon Valley Bank's assets for $72 billion, a discount of about $16.5 million.
First Citizens Bank & Trust Company came to the rescue of Silicon Valley Bank (SVB). The holding company signed an agreement, as reported by the Federal Deposit Insurance Corporation (FDIC) on Sunday, to purchase the assets of the Santa Clara, Calif.-based bank for $72 billion:
The deal comes after the Treasury Department, the FDIC itself and the Federal Reserve bailed out 100% of the shares held by both Silicon Valley Bank and Signature two weeks ago to prevent a "systemic collapse."
FDIC to remain in control of part of SVB assets
The rescue is not total. As assured by the FDIC, $90 billion in securities and other assets will remain insolvent and only accessible by the FDIC. The corporation also received up to $500 million in "equity appreciation rights in First Citizens BancShares, Inc., Raleigh, North Carolina."
Through this agreement, the 17 former SVB branches will open as of Monday as new subsidiaries of First Citizens Bank & Trust Company. However, they warned, SVB's customers must still carry out their transactions at their former locations until further notice: