New York-based Signature Bank was the third regional bank to collapse after the failure of two California banks with exposure to cryptocurrency, Silvergate Bank and Silicon Valley Bank. But even with that ted triumvirate, the situation doesn’t compare to the GFC. “The three regional bank failures in the United States were large – about $300 billion in assets,” Barkham said. “But nowhere as high as the assets that were taken down by the bank failures in 2008. We don’t know how big the deposit outlays have been – it could be up to $1 trillion. But let’s remember the total deposits in US banks are $18 trillion.”
Silicon Valley Bridge Bank – what’s the latest
Over the weekend, the Federal Deposit Insurance Corp. (FDIC) sought to further assuage, disclosing that it had entered into a purchase and assumption agreement for all deposits and loans of Silicon Valley Bridge Bank, National Association, by First-Citizens & Trust Company of Raleigh, NC. As such, the 17 former branches of Silicon Valley Bridge Bank, National Association, opened as First–Citizens Bank & Trust Company. “Customers of Silicon Valley Bridge Bank, National Association, should continue to use their current branch until they receive notice from First–Citizens Bank & Trust Company that systems conversions have been completed to allow full–service banking at all of its other branch locations,” regulators said.
Depositors of Silicon Valley Bridge Bank, National Association, will automatically become depositors of First–Citizens Bank & Trust Company as a result, regulators added. All deposits assumed by First–Citizens Bank & Trust Company will continue to be insured by the FDIC up to the insurance limit, officials added.
Bank transactions changing the landscape
FDIC officials noted that as of March 10, Silicon Valley Bridge Bank, National Association, had approximately $167 billion in total assets and about $119 billion in total deposits. The latest transaction included the purchase of about $72 billion of Silicon Valley Bridge Bank, National Association’s assets at a discount of $16.5 billion. Approximately $90 billion in securities and other assets will remain in the receivership for disposition by the FDIC. In addition, the FDIC received equity appreciation rights in First Citizens BancShares, Inc., Raleigh, North Carolina, common stock with a potential value of up to $500 million.
Another recent transaction involving a failed bank had a similar effect of soothing nerves. In a recent interview with Mortgage Professional America, Lee Smith, senior executive vice president and president of mortgage at Flagstar Bank detailed its acquisition of assets and liabilities once held by Signature Bank before its March 12 collapse. Flagstar Bank’s parent company, New York Community Bancorp Inc., announced the acquisition from the FDIC of the assets that include cash totaling around $25 billion and some $13 billion in loans. The company noted that some $2.7 billion of the cash total represents a discounted bid to net asset value. The deal also called for acquisition of some $36 billion in liabilities, including deposits of around $34 billion and other liabilities of some $2 billion.
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