Well, kinda. They’ve come in and scooped up a good chunk of Silicon Valley Bank’s assets.
Roughly $72 Billion of their assets were purchased at a steep discount, only paying $16.5 Billion which sent shares of First Citizens soaring 45% during yesterday’s trading.
This transpired after regulators transferred all SVB deposits and assets into a new “bridge bank” in an effort to protect depositors of the failed lender.
First Citizens and the FDIC also entered into a what’s called a “loss-share transaction” — in which the FDIC absorbs part of the loss on a particular pool of assets — on the commercial loans purchased from the SVB bridge bank.
The estimated cost of SVB’s failure to its Deposit Insurance Fund will be around $20 billion.
SVB, a big name in the tech and venture capital sector, was shut down by regulators and took control of its deposits on March 10.
The collapse came after the value of assets previously viewed as safe — such as the U.S. Treasury bills and government-backed mortgage securities — dropped dramatically in the face of the Federal Reserve’s aggressive interest rate hikes.
This left the bank floundering as it attempted to raise $2.25 billion to meet clients’ withdrawal needs and fund new lending obligations.
SVB’s collapse sent shockwaves through global banks and was cited as one of the catalysts for Swiss giant Credit Suisse’s eventual downfall and emergency rescue by domestic rival UBS.
However, many analysts believe the ensuing market volatility has been unwarranted given the “idiosyncratic” flaws that left the likes of SVB and Credit Suisse exposed and caused a loss of investor confidence.
The fact of the matter is, should you or I fail like SVB or any of these other banks, the “G” isn’t coming to our rescue. You are your frontline defense from outside forces. We can’t control everything going on around us.
But we can control what we’re able to do for ourselves and our families. We can control our finances. More millionaires are self-made than not.
Let’s talk about the opportunities in the market we can conquer together!