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KJHburg

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from the FDIC and this adds many new offices to FCB in California (as they have some in Southern California now) plus many big tech companies with operations in CA and NC like Google, Apple etc will move some of their deposits to First Citizens.  This is like the 21st failed bank First Citizens has scooped up.

First-Citizens Bank & Trust Company, Raleigh, NC, to Assume All Deposits and Loans of Silicon Valley Bridge Bank, N.A., from the FDIC

WASHINGTON – The Federal Deposit Insurance Corporation (FDIC) entered into a purchase and assumption agreement for all deposits and loans of Silicon Valley Bridge Bank, National Association, by First-Citizens Bank & Trust Company, Raleigh, North Carolina.

The 17 former branches of Silicon Valley Bridge Bank, National Association, will open as First-Citizens Bank & Trust Company on Monday, March 27, 2023.  Customers of Silicon Valley Bridge Bank, National Association, should continue to use their current branch until they receive notice from First-Citizens Bank & Trust Company that systems conversions have been completed to allow full-service banking at all of its other branch locations. 

Depositors of Silicon Valley Bridge Bank, National Association, will automatically become depositors of First-Citizens Bank & Trust Company. All deposits assumed by First-Citizens Bank & Trust Company will continue to be insured by the FDIC up to the insurance limit. 

As of March 10, 2023, Silicon Valley Bridge Bank, National Association, had approximately $167 billion in total assets and about $119 billion in total deposits. Today's transaction included the purchase of about $72 billion of Silicon Valley Bridge Bank, National Association's assets at a discount of $16.5 billion. Approximately $90 billion in securities and other assets will remain in the receivership for disposition by the FDIC. In addition, the FDIC received equity appreciation rights in First Citizens BancShares, Inc., Raleigh, North Carolina, common stock with a potential value of up to $500 million. 

The FDIC and First-Citizens Bank & Trust Company entered into a loss-share transaction on the commercial loans it purchased of the former Silicon Valley Bridge Bank, National Association.  The FDIC as receiver and First-Citizens Bank & Trust Company will share in the losses and potential recoveries on the loans covered by the loss-share agreement.  The loss-share transaction is projected to maximize recoveries on the assets by keeping them in the private sector.  The transaction is also expected to minimize disruptions for loan customers.  In addition, First-Citizens Bank & Trust Company will assume all loan-related Qualified Financial Contracts. 

The FDIC estimates the cost of the failure of Silicon Valley Bank to its Deposit Insurance Fund (DIF) to be approximately $20 billion. The exact cost will be determined when the FDIC terminates the receivership. 

The FDIC created Silicon Valley Bridge Bank, National Association, following the closure of Silicon Valley Bank by the California Department of Financial Protection and Innovation. All of the deposits—both insured and uninsured—and substantially all assets and all Qualified Financial Contracts of Silicon Valley Bank were transferred to the bridge bank. The purpose of establishing Silicon Valley Bridge Bank, National Association, was to allow time for the FDIC to stabilize the institution and market the franchise. 

Customers who would like more information about today’s transaction can visit the FDIC’s website at: https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/silicon-valley.html.

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Interesting story I read in the SF Biz Journal  First Citizens has 68% of its deposits fully insured vs. the former SVB with only 15% fully insured.  

""Specifically, we are committed to building on and preserving the strong relationships that legacy SVB's Global Fund Banking business has with private equity and venture capital firms. This transaction also will accelerate our expansion in California and introduce wealth capabilities in the Northeast. SVB's Private Wealth business is a natural fit for our high-touch and sophisticated level of high-net-worth customer service and approach."""  from their press release from FCB 

https://newsroom.firstcitizens.com/2023-03-27-First-Citizens-Bank-Enters-into-Whole-Bank-Purchase-of-Silicon-Valley-Bridge-Bank,-N-A

I dont think this includes SVB Securities which just opened up an office in Charlotte but maybe I am mistaken.  @atlrvr do you know?  

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23 hours ago, kermit said:

^

1) First citizens got a hell of a deal on a chunk of assets that doubled their size (they are now the 23rd largest bank in the country) and very little risk of seeing any loss thanks to the terms of the deal with the FDIC.

2) Seems like the large SVB stump will create a huge culture shift for what has always been one of the most conservative banks in NC. But, the acquisition does have some interesting implications for start up financing in NC (something we have always struggled with).

I was shocked when I read this news. My first thought was ‘this is a disaster waiting to happen’ but I hope I’m wrong. 
 

I do see what they’re trying to do and it could be a boon for the state and the bank but I’m still skeptical. These SVB folks are about to have serious culture shock. 

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27 minutes ago, tarhoosier said:

Shock? When the bank you work for has suddenly and dramatically failed that means your company culture was electrocuted not shocked.

and the shock is waking up one day in less than 48 hours worried that all your money in the bank which 80% was over the insured limits could be totally gone wiped out lost for ever.  That possibility was there until later in the weekend when FDIC said it would cover it all.  Grownups,  great bankers from NC will run this now not some people literally handing out bonuses to employees the day of the failure like SVB did.  The head of the FDIC said this was classic mismanagement .  If these Silicon Valley types want to start a new bank go right ahead but I am sure they will be very cautious now.  

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18 hours ago, Phillydog said:

See 3:53.  Miami is the "Wall Street of the South"?

 

I mean...it is a major Latin America banking center. And it's rising in international banking. But I'm surprised it was mentioned with such confidence when there are others that would easily beat it out. 

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19 hours ago, Rufus said:

I mean...it is a major Latin America banking center. And it's rising in international banking. But I'm surprised it was mentioned with such confidence when there are others that would easily beat it out. 

I believe that Panama City, Panama has a monopoly on Latin American money. Have you been there lately? Banking there is incredibly huge. 

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I believe that Miami considers itself a financial capital because Citadel and Tapper’s hedge fund have moved their “headquarters” there. In reality, NY is still the nerve center for both, even though Citadel was “headquartered” in Chicago before moving to Miami.

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On 4/1/2023 at 10:25 PM, SydneyCarton said:

I believe that Miami considers itself a financial capital because Citadel and Tapper’s hedge fund have moved their “headquarters” there. In reality, NY is still the nerve center for both, even though Citadel was “headquartered” in Chicago before moving to Miami.

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And the REAL south FL HQ is Palm Beach where Ross, Cohen, Tepper, Schwab, Koch, Dan Gilbert, Griffin, Ichan all live. 

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Most of them live in Manhattan. They have places in Palm Beach where they spend time during the winter.

They also spend the summers in the Hamptons. No one rich would want to be in Florida during June through September.

Griffen bought a $230m condo in Manhattan, and he’s planning a 1,350’ HQ on Park Ave.

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Anyway, Dallas is definitely Charlotte’s biggest competitor for finance.

In fact, Dallas dominates general corporate relocations too. Atlanta, which used to be a big player, doesn’t seem to attract anything anymore. All relos seem to go to DFW. I assume that companies are attracted to the low-tax and zero regulation atmosphere, on top on massive incentives.


It seems that NC is taking a different track from Texas by increasing social spending for Medicaid, etc.

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1 hour ago, SydneyCarton said:

Anyway, Dallas is definitely Charlotte’s biggest competitor for finance.

In fact, Dallas dominates general corporate relocations too. Atlanta, which used to be a big player, doesn’t seem to attract anything anymore. All relos seem to go to DFW. I assume that companies are attracted to the low-tax and zero regulation atmosphere, on top on massive incentives.


It seems that NC is taking a different track from Texas by increasing social spending for Medicaid, etc.

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I think you’re confusing Charlotte’s status as a “Banking Hub” based on basically Bank of America’s HQ being located in CLT (If BofA decided to make the HQ in NY and not change a single thing, Charlotte would plummet down the list as a banking hub. If Wells Fargo made the HQ in Charlotte but didn’t materially change jobs or anything, Charlotte would skyrocket up further.) 

I think Atlanta, Houston & Miami are Dallas’s main competitors as a Finance hub - not Charlotte. And even then, Houston & Miami might be a little more specialized making Atlanta and Dallas the most direct competitors. I believe Charlotte is well smaller than the largest southern cities as a Financial Center. And that mostly comes from Charlotte being a smaller economy. 

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