The U.S. Federal Deposit Insurance Corporation (FDIC) announced on Monday that First Citizens Bank & Trust Co. would purchase the deposits and liabilities of Silicon Valley Bank.
According to a statement by the FDIC, the acquisition involves buying about $72 billion in assets from Silicon Valley Bank at a $16.5 billion discount.
Details of the Silicon Valley Bank Buyout Deal
The purchase and assumption agreement includes 17 former branches of Silicon Valley Bridge Bank. Post the deal, they will open as First–Citizens Bank & Trust Company on March 27.
As of March 10, the tech-focused bank reportedly had around $167 billion in total assets and about $119 billion in total deposits.
The statement reveals, “The FDIC estimates the cost of the failure of Silicon Valley Bank to its Deposit Insurance Fund (DIF) to be approximately $20 billion. The exact cost will be determined when the FDIC terminates the receivership.”
The FDIC will continue to protect the deposits up to the insurance limit after the First Citizens Bank acquisition. Earlier this month, Silicon Valley Bank’s U.K. division was purchased by HSBC for £1. The subsidiary acquisition assisted U.K. clients in securing over $8.1 billion in deposits.
SVB Financial Group filed for Chapter 11 Protection last week after the failure of its banking arm.
The SVB closure unveiled unprecedented bank turmoil last experienced in 2008 during the Global Financial Crisis.
This story is breaking and will be updated as we receive more details.
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.
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