Bank Auctioned – First Citizens’ Acquisition of SVB 🤝

Bank Auctioned – First Citizens’ Acquisition of SVB

As banks have started to fall apart throughout the world, other banks have started to come around and pick up the scraps. UBS came in and acquired their rival Credit Suisse after things started to go south, which is likely the worst way for them to go out. First Republic Bank was on the brink of collapsing, which led to Jamie Dimon and JPMorgan organizing a rescue effort to keep the bank afloat. This is common in the banking sector during times of crisis, but more reassurance was given to investors on Monday.

First Citizens BancShares, a regional lender based in North Carolina, has purchased the now-defunct Silicon Valley Bank in an auction held by the Federal Deposit Insurance Corp, which took the assets from SVB. Out of the 27 bids placed, First Citizens came out with the prize of taking over $56.5 billion in deposits and $72 billion in loans from SVB, along with the FDIC offering to share any potential losses or gains on the commercial loans. First Citizens’ assets have essentially doubled with the acquisition of SVB, the number at $219 billion after being at only $42 billion three years ago. This comes after years of First Citizens Bank acquiring other small banks in their region who were struggling, and the SVB acquisition tops it all off. The bank now has exposure on the West Coast while having a good technology base in their home state of North Carolina with the Research Triangle. Shares of First Citizens rose by more than 50 percent on Monday because of the deal, and it brought joy to investors across the stock market as the SVB saga progressed into something more positive. First Citizens now has their work cut out for them as they are dealing with two major acquisitions now, but the future is bright.

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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.

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