First Citizens Bank to acquire Silicon Valley Bank: FDIC
North Carolina-based First Citizens will buy Silicon Valley Bank, the tech industry-focused financial institution that collapsed earlier this month, rattling the banking industry and sending shockwaves around the world.
The sale involves the sale of all deposits and loans of SVB to First-Citizens Bank and Trust Co., the FDIC said in a statement late Sunday. Customers of SVB automatically will become customers of First Citizens, which is headquartered in Raleigh. The 17 former branches of SVB will open as First Citizens branches Monday.
The collapse of Silicon Valley Bank on March 10 prompted the FDIC and other regulators to act to protect depositors to prevent wider financial turmoil.
The bank, based in Santa Clara, California, failed after depositors rushed to withdraw money amid fears about the bank's health. It was the second-largest bank collapse in U.S. history after the 2008 failure of Washington Mutual.
On March 12, New York-based Signature Bank was seized by regulators in the third-largest bank failure in the U.S.
In both cases, the government agreed to cover deposits, even those that exceeded the federally insured limit of US$250,000, so depositors at Silicon Valley Bank and Signature Bank were able to access their money.
Mid-sized San Francisco-based First Republic Bank, which serves a similar clientele as Silicon Valley Bank and appeared to be facing a similar crisis, was in turn battered by investors worried that it, too, might collapse. That led 11 of the biggest banks in the country to announced a $30 billion rescue package.
The acquisition of SVB by First Citizens gives the FDIC shares in the latter worth $500 million. Both the FDIC and First Citizens will share in losses and the potential recovery on loans included in a loss-share agreement, the FDIC said.
First Citizens Bank was founded in 1898 and says it has more than $100 billion in total assets, with more than 500 branches in 21 states as well as a nationwide bank. It reported net profit of $243 million in the last quarter.
MORE Business News
opinion | Find out how much contribution room is left in your RESP to avoid penalties
Opening a Registered Education Savings Plan (RESP) is a great way to fund your child’s future education. Personal finance contributor Christopher Liew outlines the contribution rules for RESPs and explains how to find out how much contribution room you have left so that you can avoid penalties.
opinion | Is it a good time to buy a new vehicle?
If you're like many would-be vehicle shoppers, you may be wondering when prices will finally drop. The good news is that the vehicle market seems to be finally stabilizing, says personal finance contributor Christopher Liew.
opinion | How to get the most out of your grocery rebate
Personal finance contributor Christoper Liew shares the latest information about who’s eligible for the grocery rebate, when they can expect their payments, and some helpful tips on making the most of your grocery rebate.
opinion | Dos and don'ts of money while travelling
As a former financial advisor, I’ve always been fascinated by how the 'culture' around money differs from one region of the world to another,' writes personal finance commentator Christopher Liew. 'Today, I’ll outline some of the interesting money habits that I’ve noticed while travelling the globe, starting with some of our own!'
opinion | How much of a raise should you ask for in a time of high inflation?
With the rising cost of food and living expenses, you might be considering asking for a raise. On CTVNews.ca, personal finance contributer Christopher Liew explains how inflation could determine the extent of your raise, as well as other key factors.
opinion | Top sources of passive income for Canadians looking to earn more
On CTVNews.ca, personal finance contributor Christopher Liew explores some of the top sources of passive income in Canada, for those looking to increase their earnings.
Owe money to the CRA? Here are some repayment options
Getting an income tax refund can be a happy bonus for your household budget, but an unexpected tax bill can be an unpleasant surprise, especially if you don't have the cash on hand to pay it.
Canadians with celiac disease especially hard hit by grocery price pain, group says
Those prices have been increasing even more along with the rising cost of groceries overall. Celiac Canada says gluten-free products cost between 150 and 500 per cent more than their regular gluten-containing equivalents.