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FDIC: First Citizens Bank to acquire Silicon Valley Bank

The sale involves the sale of all deposits and loans of SVB to First-Citizens.

FDIC: First Citizens Bank to acquire Silicon Valley Bank

The sale involves the sale of all deposits and loans of SVB to First-Citizens.

RHONDELLA: WELCOME BACK. UNCERTAIN FINANCIAL TIMES FEELING EVEN MORE UNCERTAIN DUE TO THE INTEREST RATES STILL ON THE RISE. THESE AREN’T ALWAYS THE EASIEST TOPICS TO UNDERSTAND, SO JOINING US NOW TO HELP US ALL BREAK IT DOWN IS BANKRATE.COM U.S. ECONOMY REPORTER SARAH FOSTER. GOOD MORNING, THANK YOU FOR JOINING US AGAIN. >> THANKS FOR HAVING ME BACK. JENNIFER: WE SPOKE WITH YOU THREE WEEKS AGO ABOUT THESE RISING INTEREST RATES THAT KEEP GOING UP. ARE YOU SURPRISED THAT THE FEDERAL RESERVE DECIDED TO RAISE RATES BY ANOTHER QUARTER PERCENT THIS LAST WEEK? >> PROBABLY ONE OF THE BIGGEST HEADACHES, BUT ONE OF THE BIGGEST REPORTS FOR FEBRUARY, PRICES ARE STILL ELEVATED AND THE FED UNDERSTANDS THE MAIN OBJECTIVE IS MAINTAINING PRICE STABILITY. WHAT I’VE BEEN TELLING PEOPLE AND WHAT ECONOMISTS HAVE BEEN SAYING IS THAT THIS DECISION TO RAISE INTEREST RATES BY THAT SMALL AMOUNT, THAT IS ABOUT MEETING BOTH OF THESE CONCERNS IN THE MIDDLE. ON THE ONE HAND, YOU DON’T WANT TO CAUSE TOO MUCH PAIN FOR BANKS, BUT YOU ALSO WANT TO MAKE SURE THAT PRICES COME BACK A MUCH MORE SUSTAINABLE LEVEL. >> SINCE WE SPOKE A FEW WEEKS AGO, WE SEE TWO MAJOR BANKS COLLAPSE AND THE RIPPLE EFFECTS OF COUNTLESS OTHERS. WHAT DO YOU MAKE OF WHAT HAS HAPPENED? >> THE BOTTOM LINE THAT I LIKE TO TELL CONSUMERS IS THAT YOU SHOULD NOT BE PANICKING IF YOU PUT YOUR MONEY IN A BANK THAT IS PART OF THE FDIC, AND IF YOUR CASH FALLS WITHIN THE THRESHOLD. BUT THERE ARE SOME CONCERNS HERE ABOUT WHAT IS HAPPENING, SPECIFICALLY AT THESE MIDSIZE COMMUNITY BANKS, THAT THEY COULD WEIGH ON THE ECONOMY JUST A LITTLE BIT, NOT BECAUSE OF THESE FAILURES, BUT BECAUSE THESE REGIONAL-SIZED BANKS, THEY WANT TO MAKE SURE THEY RETAIN ENOUGH CASH ON HAND TO COVER ALL OF THE DEPOSITOR NEEDS. AND SO WE KNOW THAT THESE MIDSIZE BANKS, THEY REALLY MAKE UP A LARGE AMOUNT GOING INTO COMMERCIAL REAL ESTATE, EVEN FOR CONSUMER LENDING. THOSE LENDING STANDARDS, YOU CAN SEE A LITTLE BIT OF THAT ON THE ECONOMY. JENNIFER: TO FOLLOW-UP ON THAT, A POLL THIS PAST WEEK SHOWS THAT ONLY 10% OF AMERICANS HAVE A GREAT DEAL OF CONFIDENCE IN THE NATION’S BANKS AND FINANCIAL INSTITUTIONS RIGHT NOW. MORE THAN HALF THINK THE GOVERNMENT IS NOT DOING ENOUGH TO REGULATE BANKS AND FINANCIAL INSTITUTIONS. WHAT DO YOU THINK NEEDS TO BE DONE TO RESTORE TRUST IN THE INDUSTRY AT THIS POINT? >> WHAT WE DO KNOW HERE IS THAT TRUST IN THE BANKING SYSTEM IS THE BEDROCK FOR IT. WE CAN’T HAVE CONFIDENCE IN BANKS AND WE NEED TO HAVE CONFIDENCE IN BANKS AND ALSO A STRONG ECONOMY. WHAT WE ARE LIKELY GOING TO HEAR DISCUSSIONS ABOUT OVER THE NEXT FEW WEEKS, WE’VE ALREADY SEEN SOME REPRESENTATIVES POINT OUT THE IDEA OF DEPOSITS AT THE FDIC INSURANCE. JANET YELLEN KIND OF WALK THAT BACK A FEW DAYS AGO AND ADDRESSED AT THE CONGRESS. BUT I THINK WHAT YOU’RE GOING TO SEE HERE IS THAT THESE BANKING REGULATORS, THEY WANT TO MAKE SURE THAT ALL DEPOSITORS KNOW THAT THEIR CASH IS SAFE. THIS IS GOING TO BE A MAJOR AREA OF EMPHASIS FOR THEM GOING FORWARD. JENNIFER: SARAH FOSTER, THANK YOU AGAIN FOR YOUR INSIGHT
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FDIC: First Citizens Bank to acquire Silicon Valley Bank

The sale involves the sale of all deposits and loans of SVB to First-Citizens.

North Carolina-based First Citizens will buy Silicon Valley Bank, the tech industry-focused financial institution that collapsed earlier this month, rattling the banking industry and sending shockwaves around the world.The sale involves the sale of all deposits and loans of SVB to First-Citizens Bank and Trust Co., the FDIC said in a statement late Sunday. Customers of SVB automatically will become customers of First Citizens, which is headquartered in Raleigh. The 17 former branches of SVB will open as First Citizens branches Monday.Video above: A economy reporter breaks down the Federal Reserve's decision to raise interest rates despite recent banking collapsesThe collapse of Silicon Valley Bank on March 10 prompted the FDIC and other regulators to act to protect depositors to prevent wider financial turmoil.The bank, based in Santa Clara, California, failed after depositors rushed to withdraw money amid fears about the bank's health. It was the second-largest bank collapse in U.S. history after the 2008 failure of Washington Mutual.On March 12, New York-based Signature Bank was seized by regulators in the third-largest bank failure in the U.S.In both cases, the government agreed to cover deposits, even those that exceeded the federally insured limit of $250,000, so depositors at Silicon Valley Bank and Signature Bank were able to access their money.Mid-sized San Francisco-based First Republic Bank, which serves a similar clientele as Silicon Valley Bank and appeared to be facing a similar crisis, was in turn battered by investors worried that it, too, might collapse. That led 11 of the biggest banks in the country to announced a $30 billion rescue package.The acquisition of SVB by First Citizens gives the FDIC shares in the latter worth $500 million. Both the FDIC and First Citizens will share in losses and the potential recovery on loans included in a loss-share agreement, the FDIC said.First Citizens Bank was founded in 1898 and says it has more than $100 billion in total assets, with more than 500 branches in 21 states as well as a nationwide bank. It reported net profit of $243 million in the last quarter.

North Carolina-based First Citizens will buy Silicon Valley Bank, the tech industry-focused financial institution that collapsed earlier this month, rattling the banking industry and sending shockwaves around the world.

The sale involves the sale of all deposits and loans of SVB to First-Citizens Bank and Trust Co., the FDIC said in a statement late Sunday. Customers of SVB automatically will become customers of First Citizens, which is headquartered in Raleigh. The 17 former branches of SVB will open as First Citizens branches Monday.

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Video above: A economy reporter breaks down the Federal Reserve's decision to raise interest rates despite recent banking collapses

The collapse of Silicon Valley Bank on March 10 prompted the FDIC and other regulators to act to protect depositors to prevent wider financial turmoil.

The bank, based in Santa Clara, California, failed after depositors rushed to withdraw money amid fears about the bank's health. It was the second-largest bank collapse in U.S. history after the 2008 failure of Washington Mutual.

On March 12, New York-based Signature Bank was seized by regulators in the third-largest bank failure in the U.S.

In both cases, the government agreed to cover deposits, even those that exceeded the federally insured limit of $250,000, so depositors at Silicon Valley Bank and Signature Bank were able to access their money.

Mid-sized San Francisco-based First Republic Bank, which serves a similar clientele as Silicon Valley Bank and appeared to be facing a similar crisis, was in turn battered by investors worried that it, too, might collapse. That led 11 of the biggest banks in the country to announced a $30 billion rescue package.

The acquisition of SVB by First Citizens gives the FDIC shares in the latter worth $500 million. Both the FDIC and First Citizens will share in losses and the potential recovery on loans included in a loss-share agreement, the FDIC said.

First Citizens Bank was founded in 1898 and says it has more than $100 billion in total assets, with more than 500 branches in 21 states as well as a nationwide bank. It reported net profit of $243 million in the last quarter.