How would First Citizens buying SVB affect current Silicon Valley Bank customers?
First Citizens Bank and the FDIC have reached an agreement for the purchase of Silicon Valley Bank’s assets, deposits, and loans. This is how it will impact former SVB customers.
The North Carolina-based, First Citizens BancShares, has announced this morning that they are working with the FDIC to purchase the bridge bank established for Silicon Valley Bank (SVB) in light of its collapse.
SVB, which had been the premier hub for venture capitalists and startups, collapsed this month after an investor-led bank run depleted the financial institution of their deposits, requiring government intervention. The bank then fell into the possession of the FDIC, and after a bidding process, the SVB’s loans, deposits, and assets will be transferred to First Citizens Bank.
How much did the deal cost First Citizens?
According to the press release, the agreement between the FDIC and First Citizens Bank “is structured as a whole bank purchase with loss share coverage,” meaning the losses will be split with the FDIC. In total, First Citizens will take over around $110 billion in assets, $56 billion in deposits, and $72 billion in loans. The exact amount paid for the SVB bridge bank has not been made public.
How will this impact SVB customers?
Starting Monday, 27 March, former SVB customers will be able to head to the seventeen “legacy” branches, which will begin operating as a “division of First Citizens Banks.”
Former SVB customers will see “no immediate change to customers’ current accounts, and they will be able to continue to access their accounts as they do today — through their current websites, mobile apps and branch locations.” SVB ATM cards and checks can still be used, and First Citizens Bank officials stated that “loan customers should continue making loan payments as usual.” When and if changes are made in the future, the bank’s new owner will inform customers “in advance.”
First Citizens Bank will host an investor call later this morning to provide more details on the acquisition.