First Citizens Bank is buying “all deposits and loans” from Silicon Valley Bank, FDIC says

First Citizens Bank will buy “all deposits and loans” from Silicon Valley Bank in the wake The bankruptcy of the SVB earlier this month, the Federal Deposit Insurance Corporation announced late Sunday. SVB was the largest US bank to fail since 2008, fueling global fears for the sector.

The new transaction covers $119 billion in deposits and $72 billion in assets, and “the SVB’s 17 branches will open Monday as First Citizens,” the FDIC said.

SVB depositors will “automatically become First Citizens Bank depositors and the FDIC will continue to insure deposits,” the agency said.

In addition, everyone with a loan from the SVB must continue to pay, including the deposit payments; the terms of your loan will not change,” the FDIC said.

First Citizens, headquartered in Raleigh, North Carolina, said the deal will maintain its solid financial position and the merged company will remain resilient, with a diverse loan portfolio and deposit base. “A prudent approach to risk management will continue to protect customers and shareholders through all economic cycles and market conditions,” the statement said.

Santa Clara, Calif.-based SVB — the United States’ 16th-largest bank by assets and a major lender to the country’s startups since the 1980s — filed for bankruptcy after a sudden run on deposits sent regulators to take control and disrupt the banking industry. rattling industry.

Together with the FDIC, the Treasury Department and the Federal Reserve had drawn up plans to ensure that SVB customers would have access to their deposits, while the Fed introduced a new lending tool for banks to avoid a repeat of the rapid demise of the prevent SVB.

The collapse of the SVB led to a crisis of confidence among the customers of US banks of a similar size, with many withdrawing their money and depositing it in larger institutions that were considered too big for the government not to bail out in a crisis.

The unrest also spread to Europe, where the Swiss lender was in trouble Credit Suisse was taken over by UBS.

Most recently shares in long troubled Deutsche Bank Stocks fell heavily Friday on rising costs of lender default coverage, reigniting fears of a deepening crisis in the banking sector.

Despite global contagion fears, central banks have continued monetary tightening while they focus on fighting inflation — even though the problems in the banking sector are linked to their rate hikes.