The Federal Deposit Insurance Corporation (FDIC) announced Sunday that First–Citizens Bank & Trust Company of Raleigh, North Carolina (First Citizens BancShares), officially entered into a “purchase and assumption agreement” for all deposits and loans of the 17 branches of Silicon Valley Bridge Bank. All 17 branches of the U.S. bank will operate under First–Citizens Bank & Trust Company on Monday.
The FDIC says that customers of Silicon Valley Bridge Bank, National Association (what the watchdog agency renamed Silicon Valley Bank to when it collapsed earlier this month), “should continue to use their current branch until they receive notice from First–Citizens Bank & Trust Company that system conversions have been completed to allow full–service banking at all of its other branch locations,” according to a release. Current SVB depositors will automatically become depositors of the new entity.
Further, the FDIC noted in its release that—as of March 10—SVB had approximately $167B USD in total assets and about $119B in total deposits. The transaction included the purchase of about $72B at “a discount” of $16.5B, with $90B in “securities and other assets” remaining in the “receivership for disposition by the FDIC.” The FDIC also said in its release that it retained “equity appreciation rights in First Citizens BancShares, Inc., Raleigh, North Carolina, common stock” with a potential value of up to $500M.
Finally, the FDIC noted that “the failure of Silicon Valley Bank to its Deposit Insurance Fund (DIF) is approximately $20B, but the exact cost will be “determined when the FDIC terminates the receivership.”
Customers can find more information at the FDIC website.
As The Esports Advocate noted in a March 11 report, very few of the biggest esports organizations and companies in the U.S. appear to have been affected by the collapse of SVB, though several companies have subsequently mentioned financial ties that have forced them to make adjustments—most recently GAMURS Group, who told employees that SVB-related issues forced the latest round of layoffs this month.
The bank run that forced the FDIC to step in was caused by a number of factors including VC funds who told investors to pull their money out of the bank earlier this month. This ultimately led to the bank collapsing and the FDIC stepping in to take it over on March 10.
Check out all of the latest news and updates on SVB here on TEA.