• Send Us A Tip
  • Calling all Tech Writers
  • Advertise
Tuesday, July 15, 2025
  • Login
TechStory
  • News
  • Crypto
  • Gadgets
  • Memes
  • Gaming
  • Cars
  • AI
  • Startups
  • Markets
  • How to
No Result
View All Result
  • News
  • Crypto
  • Gadgets
  • Memes
  • Gaming
  • Cars
  • AI
  • Startups
  • Markets
  • How to
No Result
View All Result
TechStory
No Result
View All Result
Home News

U.S. backstops Silicon Valley Bank’s sale to First Citizens

by Sneha Singh
March 27, 2023
in News
Reading Time: 3 mins read
0
Silicon Valley
TwitterWhatsappLinkedin

U.S. authorities said on Monday that they would support the acquisition of the defunct Silicon Valley Bank by regional lender First Citizens BancShares, which would have caused a $20 billion hit to a government-run insurance fund. The agreement comes after the Federal Deposit Insurance Corporation assumed control of Silicon Valley Bank on March 10 following a bank run that also brought down Signature Bank and destroyed more than half the market value of several other regional lenders in the United States.

You might also like

Kumar Mangalam Birla Announces Rs 2,200-Crore Expansion Plan for BITS Pilani

Leaked: iPhone 17 Prices in India, US, and UAE — Model-wise Details Inside

India’s First University-Led Startup Platform ‘Campus Tank’ Launched in Chandigarh

In a conference call with investors on Monday, CEO Frank Holding described the purchase as “momentous” for First Citizens. “We believe this transaction is a great outcome for depositors.” According to a Piper Sandler note on Monday, the Raleigh, North Carolina-based lender had executed 21 government-assisted mergers, including 14 since 2009 when CEO Holding was appointed chairman. The FDIC fund is refilled by a fee on participating banks rather than withholding funds from American taxpayers.

According to a note published on Monday by a group of Wells Fargo analysts under the leadership of Mike Mayo, “The FDIC’s sale of SVB helps show business can go on as usual for the banking industry.” First, Citizens will only make an upfront payment for the transaction. Instead, it claimed that it had given the FDIC equity appreciation rights in its shares that may be worth up to $500 million, a small portion of the value of Silicon Valley Bank before its failure.

U.S. backstops Silicon Valley Bank sale to First Citizens
Credits: Yahoo Finance

First Citizens will take $72 billion in loans of Silicon Valley

The FDIC may use these powers from March 27 to April 14. The cash it gets will depend on how much First Citizens’ stock is worth. Shares of First Citizens increased 47% on Monday to $854.62. As part of the agreement, First Citizens will take over the $110 billion in assets, $56 billion in deposits, and $72 billion in loans of Silicon Valley Bank. According to the FDIC, SVB’s assets were purchased for $72 billion at a $16.5 billion discount.

As additional protection against future credit losses, First Citizens will arrange with the regulator to share certain losses on commercial loans and get a line of credit from the FDIC for contingency liquidity needs. According to Redmond Wong, more excellent China market strategist at Saxo Markets, “First Citizens Bank’s acquisition of the SVB loan book and deposits does not add much to solve the number one issue that the U.S. banking system is now facing: deposits leaving smaller banks for larger banks or money market funds.”

Silicon Valley Bank, a Santa Clara-based lender with around $209 billion in assets, was the 16th-largest lender in the United States at the end of 2017.
The agreement ended the worst financial crisis since 2008, which threw the global banking industry for a loop. Friday saw a dramatic decline in the value of European lenders’ shares, headed by Germany’s Deutsche Bank, which caused authorities to worry about a potential credit crisis.

FDIC also suffered a $2.5 billion loss when it sold Signature Bank to New York

On Monday, shares of big and midsize US banks increased. Customers of SVB will still be able to access their accounts via websites, mobile applications, and branches, according to First Citizens. Workers from the purchased companies would remain on board, it was said.

According to First Citizens, the agreement would hasten its growth in California and offer access to asset management services in the northeastern United States. First Citizens has deposits of $89.4 billion and assets of about $109 billion. According to a presentation by First Citizens, the merged organisation will have $145 billion in deposits and $219 billion in total assets. In addition to that, the FDIC also suffered a $2.5 billion loss when it sold Signature Bank to New York Community Bancorp a week ago.

The fund will drop to around a third of its statutory minimum as a result of the loss, which will be “handled solely by the banking industry,” according to Wells Fargo analysts. The regulator stated that securities and other assets from SVB worth around $90 billion would continue to be in receivership pending disposal.

Tags: #FDICNew YorkSignature Banksillicon valleyUS Banks
Tweet54SendShare15
Previous Post

How to get pokemon transporter

Next Post

Avatar: Frontiers of Pandora Gameplay Screenshots Leak Online

Sneha Singh

Sneha is a skilled writer with a passion for uncovering the latest stories and breaking news. She has written for a variety of publications, covering topics ranging from politics and business to entertainment and sports.

Recommended For You

Kumar Mangalam Birla Announces Rs 2,200-Crore Expansion Plan for BITS Pilani

by Rounak Majumdar
July 14, 2025
0
Kumar Mangalam Birla Announces Rs 2,200-Crore Expansion Plan for BITS Pilani

Kumar Mangalam Birla, Chairman of the Aditya Birla Group and Chancellor of Birla Institute of Technology and Science (BITS) Pilani, has unveiled a comprehensive Rs 2,200-crore expansion plan...

Read more

Leaked: iPhone 17 Prices in India, US, and UAE — Model-wise Details Inside

by Thomas Babychan
July 14, 2025
0
iPhone 17

Apple is gearing up to unveil its iPhone 17 lineup in September 2025, continuing its tradition of annual refreshes. This year promises a broader range of models, including the base...

Read more

India’s First University-Led Startup Platform ‘Campus Tank’ Launched in Chandigarh

by Ishaan Negi
July 14, 2025
0
India’s First University-Led Startup Platform ‘Campus Tank’ Launched in Chandigarh

India has launched its first university-led startup platform, Campus Tank, giving young entrepreneurs under 30 a chance to pitch their ideas for a $1 million investment. Launched in...

Read more
Next Post
Avatar: Frontiers of Pandora Gameplay Screenshots Leak Online

Avatar: Frontiers of Pandora Gameplay Screenshots Leak Online

Please login to join discussion

Techstory

Tech and Business News from around the world. Follow along for latest in the world of Tech, AI, Crypto, EVs, Business Personalities and more.
reach us at [email protected]

Advertise With Us

Reach out at - [email protected]

BROWSE BY TAG

#Crypto #howto 2024 acquisition AI amazon Apple Artificial Intelligence bitcoin Business China cryptocurrency e-commerce electric vehicles Elon Musk Ethereum facebook funding Gaming Google India Instagram Investment ios iPhone IPO Market Markets Meta Microsoft News NFT samsung Social Media SpaceX startup startups tech technology Tesla TikTok trend trending twitter US

© 2024 Techstory.in

No Result
View All Result
  • News
  • Crypto
  • Gadgets
  • Memes
  • Gaming
  • Cars
  • AI
  • Startups
  • Markets
  • How to

© 2024 Techstory.in

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?