According to the Federal Deposit Insurance Corporation (FDIC), the American “First Citizens Bank” purchased “all deposits and loans” of the “Silicon Valley Bank” (SVB), which declared bankruptcy in early March.
This transaction supports Silicon Valley Bank depositors and borrowers, said FDIC.
The deal includes the purchase of $72 billion in SVB assets, as well as the opening of “all 17 SVB branches under the name of First Citizens Bank.”
First Citizens will now manage all of this entity’s loans and deposits, while the FDIC will continue to manage approximately $90 billion in securities and other assets.
The FDIC will transfer all Silicon Valley Bank deposits and loans to First Citizen. As of March 10, SVB had approximately $119 billion in deposits and $167 billion in assets.
Read more: SVB repercussions: Global banking stocks suffer big losses
The Federal Deposit Insurance Corporation (FDIC) estimates the cost to the Deposit Insurance Fund to cover the collapse of Silicon Valley Bank is $20 billion.
As part of the deal, the FDIC will receive rights linked to the stock of First Citizens, which could be worth up to $500 million.
First Citizen has approximately $109 billion in assets and $89.4 billion in deposits.
The failures of SVB and Signature Bank triggered a confidence crisis in the banking sector.
In previous statements, US President Joe Biden stated that the banking crisis that followed the recent collapse of the SVB and Signature is receding.
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