First Citizens Bank will acquire significant holdings of fallen lender Silicon Valley Bank, a US banking agency announced late Sunday, as regulators seek to contain an industry crisis.
Under a transaction overseen by the US Federal Deposit Insurance Corporation, First Citizens agreed to purchase "substantially all loans and certain other assets, and assume all customer deposits and certain other liabilities of Silicon Valley Bridge Bank," First Citizens said in a news release.
Near midday, First Citizens was up nearly 50 percent, while the embattled First Republic gained 16.1 percent. KeyCorp rose 3.8 percent and Comerica won 4.9 percent."It's just a good look that the banks aren't considered so broken that nobody would want them," said Alexander Yokum, an analyst at CFRA Research.
Regulators seized it after a sudden run on deposits, creating Silicon Valley Bridge Bank, an entity that will be taken over by First Citizens from Monday. All the entity's loans and deposits will now be managed by First Citizens, while the FDIC will retain some $90 billion in securities and other SVB assets.That number compares with $119 billion on March 10, according to the FDIC.
"Together with the legacy SVB team, we are well positioned to understand the unique financial needs of these sectors and provide creative, highly tailored offering combined with high touch relationship banking," said Frank Holding Jr, chief executive of First Citizens on a conference call with investors.
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