Silicon Valley Bank becomes First Citizens 🏦; Binance has been hit by the biggest lawsuit ever 🤯; Coinbase vs. SEC🔥
FinTech is Eating the World, 27 March
Hey Everyone,
Good morning! We’re starting the new week today but it’s definitely worth the wait 😎 We’re looking at the Silicon Valley Bank that’s now part of First Citizens (& why it’s important), Binance which has been hit by the biggest lawsuit ever (this is a massive one!), and Coinbase vs. SEC (what it means?). Let’s jump straight into the hot stuff 🌶
Silicon Valley Bank becomes First Citizens 🏦
SVB 👉 First Citizens 🏦 First Citizens Bank, one of the largest regional banks in the US, has acquired large pieces of Silicon Valley Bank more than 2 weeks after the lender’s collapse sent the whole banking system shaking, WSJ reported.
Get up to speed: The rise and fall of Silicon Valley Bank 🏦
More on this 👉 Founded in 1898, First Citizens was the 30th-largest US bank last year. The SVB acquisition will put the lender in the top 25 US banks in terms of assets. Here’s the deal in a nutshell:
First Citizens is acquiring all of Silicon Valley Bank’s deposits, loans, and branches. All of them will open this week under the new ownership.
The purchase includes $56.5 billion in deposits and about $72 billion of SVB’s loans at a discount of $16.5 billion. Some $90 billion of SVB’s securities will remain in receivership.
The FDIC agreed to share any of First Citizens’ losses or potential gains on SVB’s commercial loans.
On top of the loss-sharing agreement, the FDIC will help finance the deal with a 5-year, $35 billion loan. The agency also is providing a $70 billion line of credit to help cover potential deposit flight.
Positive vibes 📈 The markets celebrated the move big time. Shares of First Citizens surged more than 40% shortly after the opening of trading Monday. Shares of other regional banks including First Republic Bank, PacWest Bancorp, and Western Alliance Bancorp were also higher.
This development is important for two main reasons and two levels - micro and macro.