North Carolina-based First Citizens Bank is taking over all of Silicon Valley Bank’s customer credits and loans, according to a statement from the Federal Deposit and Insurance Corporation (FDIC). On Monday, March 26, an agreement was reached to open the 17 former branches of Silicon Valley Bank as First Citizens Bank and Trust Company branches on Monday, March 27.
$72 billion in assets
With the acquisition, First Citizens will acquire approximately $72 billion in assets from Silicon Valley Bank for a “discount” of $16.5 billion, the FDIC said.
After the collapse of Silicon Valley Bank, the FDIC took over the bank, aiming to sell the bank as quickly as possible. That has now succeeded. First Citizens, the acquiring bank, is the 30th largest bank in the United States.
In total, the bank manages $167 billion in assets and $119 billion in deposits. Silicon Valley Bank finally collapsed on March 10 due to a massive liquidity crisis that caused a bank run.
Strange situation
The strange thing about the deal between First Citizen and the FDIC regarding the acquisition of Silicon Valley Bank is that the former bank is about half the size of SVB.
Aditya Shah nicely explains in the above post how big both banks were. When you see that, it is indeed very strange that a bank of the size of First Citizens can succeed in taking over Silicon Valley Bank.
So those are the crazy things you see during a crisis. It looks like we are entering another exciting week on the macroeconomic front, as we wouldn’t be surprised to see further developments in this incipient banking crisis, which has been pretty good for Bitcoin so far.