First Citizens Bank scoops SVB, FDIC to take $20B hit on failure
SIMONE DEL ROSARIO: THE FDIC’S DEPOSIT INSURANCE FUND IS TAKING A $20 BILLION DOLLAR HIT OVER SVB’S FAILURE.
AND NOW, SVB HAS A NEW NAME. REGIONAL NORTH CAROLINA-BASED FIRST CITIZENS IS TAKING OVER – GETTING $56.5 BILLION IN SVB’S DEPOSITS AND $72 BILLION IN LOANS AT A $16.5 BILLION DOLLAR DISCOUNT.
ACCORDING TO A SPOKESPERSON, FIRST CITIZENS IS NOT NEW TO THIS. THEY’VE ACQUIRED MORE THAN 20 FDIC-INSURED BANKS SINCE 2009. AND ITS LATEST SNAG MOVES IT INTO ONE OF THE TOP 15 U-S BANKS, ACCORDING TO BLOOMBERG INTELLIGENCE.
BUT WILL IT BE ABLE TO MEET THE NEEDS OF TECH STARTUPS LIKE WOOP INSURANCE THAT BANKED WITH SVB? COMPANY CO-FOUNDER ERIC FOSTER TOLD US ABOUT TROUBLES WITH REGIONAL EAST COAST BANKS THAT DROVE HIM TO S-V-B IN THE FIRST PLACE.
ERIC FOSTER | CO-FOUNDER, WOOP INSURANCE: Every time I had to wire something it came up as fraudulent. Because we had huge sums of money come in, come into us with basically no real reason for it outside of yes, we are venture capital backed that is what the industry is, and then huge sums of money outflow in a really short period of time. My literal line before, is commercial banking was the bane of my existence, because I would spend days just doing normal business transactions, and it had to actually be me to get physically had to be the CEO of the company. So the reason why I went there is because, hey, we knew we had the money, there is a reputation of being easy. And frankly, when I got there, I was like, wow, this is a lot easier than everyone else.
SIMONE DEL ROSARIO: AND NOW BILLIONS ARE AT STAKE IN HOW FIRST CITIZENS ADAPTS TO ITS NEW, HUGE TECH BASE. FOR NOW, FOSTER TELLS US – HE’S STICKING WITH THEM.
FRANK HOLDING JR., CHAIRMAN AND CEO, FIRST CITIZENS BANK: Silicon Valley Bank brings to us, overlaps our strengths in private banking, wealth management, and small business banking. What we look forward to learning and listening to is their market expertise in serving the tech and venture market and we’ll be adding a lot of associates with that capability.
U.S. Air Force