A buyer has been found for the collapsed Silicon Valley Bank, the bank whose downfall heralded the financial unrest still being felt across the banking world.
First Citizen Bank, self-described as one of America’s largest family-controlled banks, has bought SVB from US regulator the Federal Deposit Insurance Corporation (FDIC) which took over the lender earlier this month as depositors raced to withdraw money.
The UK arm of SVB was bought by HSBC in the days following the collapse.
All deposits, worth $119bn, and all loans are being taken over by First Citizen Bank which will open 17 former SVB branches as First Citizen Banks on Monday.
About $72bn of SVB assets are being bought at a discount of $16.5bn (£13.49bn) and approximately $90bn (£73.6bn) are being left with the FDIC.
But the deposit insurance fund – paid into by banks in case of such a scenario – is down by $20bn (£16.34bn), the FDIC said.
The FDIC is a US state corporation providing deposit insurance to customers in US commercial and savings banks.
Once the bank of choice for tech companies and start ups, SVB was taken over by regulators after a bank run began.
Depositors and investors took fright when SVB’s share price plummeted. The usually stable bonds held by SVB as security lost value as interest rates rose and attempts to sell shares to raise funds failed leaving the bank insolvent.