Bankrupt SVB Financial Group & Senior Bondholders Agree to Setup New Company to Hold Key Assets Including Venture Capital SVB Capital $10 Billion AUM with 750 Limited Partners, Proposal Requiring Court Approval
10th January 2024 | Hong Kong
Bankrupt SVB Financial Group (Parent of Silicon Valley Bank, SVB) & senior bondholders have agreed to setup a new company to hold key assets including venture capital SVB Capital ($10 billion AUM with around 750 Limited Partners), with the proposal requiring court approval. The current value of SVB Capital is estimated to be around $572 million, but are estimating the key assets including SVB Capital are worth higher. Senior bondholders include Davidson Kempner Capital Management, Pacific Investment Management and King Street Capital Management. In August 2023, KPMG, Goldman Sachs, Morgan Stanley, Bank of America, Silicon Valley Bank CEO Greg Becker, Silicon Valley Bank directors & officers had been sued (7th April 2023) for misrepresenting the strength of Silicon Valley Bank balance sheet, liquidity & risks. KPMG is being sued as the role as auditor and Goldman Sachs, Bank of America, Morgan Stanley and Keefe, Bruyette & Woods had been sued as underwriters. Before Silicon Valley Bank collapsed, the bank was raising $2.25 billion in capital with Goldman Sachs, Bank of America, Morgan Stanley and Keefe, Bruyette & Woods as underwriters. A few weeks before Silicon Valley Bank collapsed, KPMG as auditor had signed off Silicon Valley Bank 2022 annual report, without highlighting risks of Silicon Valley Bank declining deposits and debt securities valuation concerns.
“ Bankrupt SVB Financial Group & Senior Bondholders Agree to Setup New Company to Hold Key Assets Including Venture Capital SVB Capital $10 Billion AUM with 750 Limited Partners, Proposal Requiring Court Approval “
KPMG, Goldman Sachs, Morgan Stanley, Bank of America, SVB CEO Greg Becker, Directors & Officers Sued for Misrepresenting Strength of Silicon Valley Bank Balance Sheet, Liquidity & Risks
8th April 2023 – KPMG, Goldman Sachs, Morgan Stanley, Bank of America, Silicon Valley Bank CEO Greg Becker, Silicon Valley Bank directors & officers had been sued (7th April 2023) for misrepresenting the strength of Silicon Valley Bank balance sheet, liquidity & risks. KPMG is being sued as the role as auditor and Goldman Sachs, Bank of America, Morgan Stanley and Keefe, Bruyette & Woods had been sued as underwriters. Before Silicon Valley Bank collapsed, the bank was raising $2.25 billion in capital with Goldman Sachs, Bank of America, Morgan Stanley and Keefe, Bruyette & Woods as underwriters. A few weeks before Silicon Valley Bank collapsed, KPMG as auditor had signed off Silicon Valley Bank 2022 annual report, without highlighting risks of Silicon Valley Bank declining deposits and debt securities valuation concerns. The filing was submitted on 7th April 2023. The case is City of Hialeah Employees Retirement System et al v. Becker, 23-cv-01697, US District Court for the Northern District of California ( San Francisco). Earlier in 2023 March, 18 defendants including Sequoia Capital, Softbank & Singapore Temasek received a class action lawsuit in United States (Miami, Florida) for allegedly conspiring with crypto exchange FTX, with the lawsuit claiming the defendants wielded power, influence & deep pockets to launch FTX house of cards into multi-billion scale. Read More: 18 Defendants Including Sequoia Capital, Softbank & Singapore Temasek Received Class Action Lawsuit in United States for Conspiring with Crypto Exchange FTX, Claims Defendants Wielded Power, Influence & Deep Pockets to Launch FTX House of Cards into Multi-Billion Scale
United States First Citizens Bank with $219 Billion Assets Acquires Silicon Valley Bank with $110 Billion Assets with Effect from 27th March 2023, Will Receive Credit Line from Federal Agency & Credit Loss Share Agreement with FDIC to Receive Equity with Potential of $500 Million in Value
28th March 2023 – United States First Citizens Bank (top 20 United States bank) with $219 billion assets has acquired Silicon Valley Bank with $110 billion assets with effect from 27th March 2023, and will receive credit line from Federal Agency (Federal Deposit Insurance Corporation, FDIC) & a credit loss- sharing agreement, and FDI to receive equity with potential of $500 million in value. See below for full statement from FDIC & First Citizens Bank.
United States First Citizens Bank with $219 Billion Assets Acquires Silicon Valley Bank with $110 Billion Assets with Effect from 27th March 2023
- Federal Deposit Insurance Corporation
- First–Citizens Bank & Trust Company, Raleigh, NC, to Assume All Deposits and Loans of Silicon Valley Bridge Bank, N.A., From the FDIC
26th March 2023 – The Federal Deposit Insurance Corporation (FDIC) entered into a purchase and assumption agreement for all deposits and loans of Silicon Valley Bridge Bank, National Association, by First–Citizens Bank & Trust Company, Raleigh, North Carolina. The 17 former branches of Silicon Valley Bridge Bank, National Association, will open as First–Citizens Bank & Trust Company on Monday, March 27, 2023. 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. Depositors of Silicon Valley Bridge Bank, National Association, will automatically become depositors of First–Citizens Bank & Trust Company. All deposits assumed by First–Citizens Bank & Trust Company will continue to be insured by the FDIC up to the insurance limit.
As of March 10, 2023, Silicon Valley Bridge Bank, National Association, had approximately $167 billion in total assets and about $119 billion in total deposits. Today’s 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. The FDIC and First–Citizens Bank & Trust Company entered into a loss–share transaction on the commercial loans it purchased of the former Silicon Valley Bridge Bank, National Association. The FDIC as receiver and First–Citizens Bank & Trust Company will share in the losses and potential recoveries on the loans covered by the loss–share agreement. The loss–share transaction is projected to maximize recoveries on the assets by keeping them in the private sector. The transaction is also expected to minimize disruptions for loan customers. In addition, First–Citizens Bank & Trust Company will assume all loan–related Qualified Financial Contracts.
The FDIC estimates the cost of the failure of Silicon Valley Bank to its Deposit Insurance Fund (DIF) to be approximately $20 billion. The exact cost will be determined when the FDIC terminates the receivership.
The FDIC created Silicon Valley Bridge Bank, National Association, following the closure of Silicon Valley Bank by the California Department of Financial Protection and Innovation. All of the deposits—both insured and uninsured—and substantially all assets and all Qualified Financial Contracts of Silicon Valley Bank were transferred to the bridge bank. The purpose of establishing Silicon Valley Bridge Bank, National Association, was to allow time for the FDIC to stabilize the institution and market the franchise. Customers who would like more information about today’s transaction can visit the FDIC’s website at: https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/silicon-valley.html.
First Citizens Bank Enters into Whole Bank Purchase of Silicon Valley Bridge Bank, N.A.
Acquisition affirms First Citizens’ commitment to support Silicon Valley Bank depositors and borrowers
- Transaction is structured to preserve First Citizens’ solid financial position
- Combined company remains resilient and secure with diverse loan portfolio and deposit base
- Combination builds on First Citizens’ significant expertise and renowned franchises to meet the needs of a broader customer base
- Allows First Citizens to build on its experience with innovation hubs by leveraging Silicon Valley Bank’s strength in serving the private equity, venture capital and technology sectors
- Transaction brings together complementary strengths of both banks’ middle market commercial banking and private banking capabilities and leverages common platforms, vendor partners and technologies
- Prudent risk management approach will continue to protect customers and stockholders through all economic cycles and market conditions
27th March 2023 – First-Citizens Bank & Trust Company (“First Citizens Bank”), a subsidiary of Raleigh-headquartered First Citizens BancShares, Inc. (“First Citizens”) (Nasdaq: FCNCA), announced today that it has entered into an agreement with the Federal Deposit Insurance Corporation (FDIC) to purchase out of FDIC receivership substantially all loans and certain other assets, and assume all customer deposits and certain other liabilities of Silicon Valley Bridge Bank, N.A. The transaction is structured as a whole bank purchase with loss share coverage. First Citizens was selected to complete this transaction through a competitive bidding process.
Frank B. Holding, Jr., chairman and CEO of First Citizens, said: “First Citizens has a reputation for financial strength, exceptional customer service and prudent lending that spans 125 years. We have partnered with the FDIC to successfully complete more FDIC-assisted transactions since 2009 than any other bank, and we appreciate the confidence the FDIC has placed in us once again. We look forward to building relationships with our new customers and positioning our company for continued success as we affirm our commitment to support the integrity of our nation’s banking system.”
As part of the agreement, First Citizens Bank will assume Silicon Valley Bridge Bank, N.A. assets of $110 billion, deposits of $56 billion and loans of $72 billion, based on latest information provided by the FDIC. First Citizens Bank will additionally receive an available line of credit from the FDIC for contingent liquidity purposes. In addition, First Citizens Bank has entered into a loss share agreement with the FDIC to provide further downside protection against potential credit losses. First Citizens Bank will not acquire any of the assets, common stock, preferred stock, debt or assume any other obligations of SVB Financial Group, the former holding company of Silicon Valley Bank (“SVB”).
On March 27, 2023, the 17 legacy Silicon Valley Bridge Bank, N.A. branches will begin operating as Silicon Valley Bank, a division of First Citizens Bank. There will be no immediate change to customers’ current accounts, and they will be able to continue to access their accounts as they do today — through their current websites, mobile apps and branch locations. They can continue to use their checks and cards and will still have ATM and online access to their accounts. Loan customers should continue making loan payments as usual. Customers will be notified of any future account changes in advance.
“First Citizens has a proud history of growing organically and through strategic acquisitions that build our core capabilities in a careful and deliberate manner,” said Holding. “This transaction leverages our solid foundation to add significant scale, geographic diversity, compelling digital capabilities and most importantly, meaningful solutions for customers throughout their lifecycle. Specifically, we are committed to building on and preserving the strong relationships that legacy SVB’s Global Fund Banking business has with private equity and venture capital firms. This transaction also will accelerate our expansion in California and introduce wealth capabilities in the Northeast. SVB’s Private Wealth business is a natural fit for our high-touch and sophisticated level of high-net-worth customer service and approach.”
The California Department of Financial Protection and Innovation closed SVB of Santa Clara, Calif., on March 10, 2023, and appointed the FDIC as receiver. Afterward, the FDIC transferred all the deposits of the former Silicon Valley Bank to Silicon Valley Bridge Bank, N.A., operated by the FDIC. BofA Securities, Inc. is serving as exclusive financial advisor to First Citizens and Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, LLP acted as legal advisor.
About First Citizens
First Citizens Bank helps personal, business, commercial and wealth clients build financial strength that lasts. Founded in 1898 and headquartered in Raleigh, N.C., First Citizens provides a unique legacy of strength, stability and long-term thinking that has spanned generations. First Citizens offers an array of general banking services including a network of more than 550 branches and offices in 23 states; commercial banking expertise delivering best-in-class lending, leasing and other financial services coast to coast; and a nationwide direct bank. Parent company First Citizens BancShares, Inc. (NASDAQ: FCNCA) is a top 20 U.S. financial institution with more than $219 billion in assets. First Citizens Bank, Member FDIC. In 2023, the bank is celebrating the 125th anniversary of its founding. Discover more at firstcitizens.com.
HSBC Acquires Silicon Valley Bank UK for £1 with Deposits of £6.7 Billion & Loans of £5.5 Billion, Excludes Assets & Liabilities of Parent Companies from Transaction
13th March 2023 – HSBC, one of the world’s largest financial institution, has acquired Silicon Valley Bank UK for £1 with deposits of £6.7 billion & loans of £5.5 billion (net tangible equity £1.4b billion, 2022 profit before tax £88 million), excluding the assets & liabilities of parent companies (Silicon Valley Bank) from transaction (13/3/23). United States 16th largest bank Silicon Valley Bank (SVB) founded in 1983, named by Forbes as one of America’s Best Banks, Nasdaq listed with $212 billion assets & $342 billion client funds collapsed and was placed into receivership (2nd largest in history, largest is 2008 Washington Mutual collapse with $300 billion assets). On 10th March 2023 (Fri), Silicon Valley Bank (SVB) was put under receivership by the Federal Deposit Insurance Corp. Noel Quinn, HSBC Group CEO: “This acquisition makes excellent strategic sense for our business in the UK. It strengthens our commercial banking franchise and enhances our ability to serve innovative and fast-growing firms, including in the technology and life-science sectors, in the UK and internationally. We welcome SVB UK’s customers to HSBC and look forward to helping them grow in the UK and around the world. SVB UK customers can continue to bank as usual, safe in the knowledge that their deposits are backed by the strength, safety and security of HSBC. We warmly welcome SVB UK colleagues to HSBC, we are excited to start working with them.” See below for more info of Silicon Valley Bank collapsed.
HSBC UK serves over 14 million customers across the UK, supported by 18,500 colleagues. HSBC UK offers a complete range of retail banking and wealth management to personal and private banking customers, as well as commercial banking for small to medium businesses and large corporates. HSBC Holdings plc, the parent company of HSBC, is headquartered in London. HSBC serves customers worldwide from offices in 62 countries and territories in its geographical regions: Europe, Asia, North America, Latin America, the Middle East and North Africa. With assets of US$2,967bn at 31 December 2022, HSBC is one of the world’s largest banking and financial services organisations.
Silicon Valley Bank UK Limited was a subsidiary of Silicon Valley Bank, a Delaware corporation and subsidiary of SVB Financial Group. Silicon Valley Bank UK entered the UK market in 2004, and specialised in serving the UK technology and life-sciences sectors, assisting entrepreneurs, investors and innovative companies, building a portfolio of loyal customers. It has used deep sector knowledge, expertise and capabilities to serve and grow this critical part of the economy.
Rishi Sunak, Prime Minister of the United Kingdom:
HSBC Acquires Silicon Valley Bank UK for £1 with Deposits of £6.7 Billion & Loans of £5.5 Billion
United States 16th Largest Bank Silicon Valley Bank Founded in 1983, Named by Forbes as One of America’s Best Banks, Nasdaq Listed with $212 Billion Assets & $342 Billion Client Funds Including Providing Private Banking & Wealth Advisory has Collapsed, CEO Greg Becker Filed to Sell $3.6 Million Shares in 26th Jan 2023 & Selling on 27th Feb 2023
11th March 2023 – United States 16th largest bank Silicon Valley Bank (SVB) founded in 1983, named by Forbes as one of America’s Best Banks, Nasdaq listed with $212 billion assets & $342 billion client funds has collapsed and placed into receivership (2nd largest in history, largest is 2008 Washington Mutual collapse with $300 billion assets), with reports on SVB CEO Greg Becker filing to sell SVB shares in 26th January 2023 and selling $3.6 million of SVB shares on 27th February 2023. Silicon Valley Bank (SVB) has 4 core businesses, providing commercial banking, private banking & wealth advisory, investment banking, venture capital investing. Silicon Valley Bank (SVB) is focused on providing banking services to United States startup, doing business with almost half of United States venture-backed startups with clients including e-commerce giant Shopify and leading venture capital firm Andreessen Horowitz. On the 8th of March 2023 (Wed), Silicon Valley Bank (SVB) announced it had sold $21 billion of securities and to raise $2.25 billion in new share issuance to strengthen its balance sheet. These actions prompted clients to withdraw their cash in the bank, and triggered a bank run. On 10th March 2023 (Fri), Silicon Valley Bank (SVB) collapsed and was put under receivership by the Federal Deposit Insurance Corp. Immediately, a new bank Deposit Insurance National Bank of Santa Clara was created to hold the assets of Silicon Valley Bank (SVB). Silicon Valley Bank (SVB) customers with less than $250,000 will have full access to their money by 13th March 2023. The Federal Deposit Insurance Corporation (FDIC) is an independent agency created by Congress to maintain stability and public confidence in the nation’s financial system. To accomplish this mission, the FDIC insures deposits; examines and supervises financial institutions for safety, soundness, and consumer protection; makes large and complex financial institutions resolvable; and manages receiverships. More info below.
10th March 2023 – FDIC Creates a Deposit Insurance National Bank of Santa Clara to Protect Insured Depositors of Silicon Valley Bank, Santa Clara, California
10th March 2023 – Silicon Valley Bank, Santa Clara, California, was closed today by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect insured depositors, the FDIC created the Deposit Insurance National Bank of Santa Clara (DINB). At the time of closing, the FDIC as receiver immediately transferred to the DINB all insured deposits of Silicon Valley Bank.
All insured depositors will have full access to their insured deposits no later than Monday morning, March 13, 2023. The FDIC will pay uninsured depositors an advance dividend within the next week. Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds. As the FDIC sells the assets of Silicon Valley Bank, future dividend payments may be made to uninsured depositors.
Silicon Valley Bank had 17 branches in California and Massachusetts. The main office and all branches of Silicon Valley Bank will reopen on Monday, March 13, 2023. The DINB will maintain Silicon Valley Bank’s normal business hours. Banking activities will resume no later than Monday, March 13, including on-line banking and other services. Silicon Valley Bank’s official checks will continue to clear. Under the Federal Deposit Insurance Act, the FDIC may create a DINB to ensure that customers have continued access to their insured funds.
As of December 31, 2022, Silicon Valley Bank had approximately $209.0 billion in total assets and about $175.4 billion in total deposits. At the time of closing, the amount of deposits in excess of the insurance limits was undetermined. The amount of uninsured deposits will be determined once the FDIC obtains additional information from the bank and customers.
Customers with accounts in excess of $250,000 should contact the FDIC toll–free at 1-866-799-0959. The FDIC as receiver will retain all the assets from Silicon Valley Bank for later disposition. Loan customers should continue to make their payments as usual.
Silicon Valley Bank is the first FDIC–insured institution to fail this year. The last FDIC–insured institution to close was Almena State Bank, Almena, Kansas, on October 23, 2020.
8th March 2023 – SVB Financial Group Announces Proposed Offerings of Common Stock and Mandatory Convertible Preferred Stock
8th March 2023 – SVB Financial Group (“SVB”) (NASDAQ: SIVB), announced today that it intends to offer $1.25 billion of its common stock and $500 million of depositary shares, consisting of 10 million depositary shares each representing a 1/20th interest in a share of its Series F Mandatory Convertible Preferred Stock (“Preferred Stock”), liquidation preference $1,000 per share (equivalent to a liquidation preference of $50 per depositary share), in separate underwritten registered public offerings. In addition, prior to commencing the offerings, SVB entered into a subscription agreement with General Atlantic, a leading global growth equity investor, to purchase $500 million of common stock at the public offering price in the offering of common stock in a separate private transaction. The subscription agreement with General Atlantic is contingent on the closing of the offering of common stock and is expected to close shortly thereafter. SVB also intends to grant (i) the underwriters in the common stock offering an option to purchase up to an additional $187.5 million of common stock and (ii) the underwriters in the Preferred Stock offering an over-allotment option to purchase up to an additional $75 million, or 1.5 million depositary shares in the Preferred Stock offering. SVB intends to use the net proceeds from the offerings for general corporate purposes. The consummation of each offering is not contingent upon the consummation of the other offering.
Additionally, earlier today, SVB completed the sale of substantially of its available for sale securities portfolio. SVB sold approximately $21 billion of securities, which will result in an after tax loss of approximately $1.8 billion in the first quarter of 2023. Goldman Sachs & Co. LLC and SVB Securities will act as book-running managers for each offering. Each offering is being made pursuant to an effective shelf registration statement, including a prospectus and a separate prospectus supplement, filed by SVB with the U.S. Securities and Exchange Commission (“SEC”). Investors should read the prospectus in that registration statement, the applicable prospectus supplement and other documents SVB has filed with the SEC for more complete information about SVB and the relevant offering before investing. These documents may be obtained for free by visiting the SEC website at www.sec.gov. Alternatively, for each offering, SVB, any underwriter or any dealer participating in the offering will arrange to send you the prospectus contained in the registration statement, together with the applicable prospectus supplement, if you request it by contacting Goldman Sachs & Co. LLC at 200 West Street, New York, NY 10282, Attention: Prospectus Department, telephone: 1-866-471-2526, facsimile: 212-902-9316 or by emailing [email protected]. This press release is for informational purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy, these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
About SVB
SVB is the financial partner of the innovation economy, helping individuals, investors and the world’s most innovative companies achieve their ambitious goals. SVB’s businesses – Silicon Valley Bank, SVB Capital, SVB Private and SVB Securities – together offer the services that dynamic and fast-growing clients require as they grow, including commercial banking, venture investing, wealth planning and investment banking. Headquartered in Santa Clara, California, SVB operates in centers of innovation around the world. SVB Financial Group (SVB) (Nasdaq: SIVB) is the holding company for all business units and groups. © 2023 SVB Financial Group. All rights reserved. SVB, SVB FINANCIAL GROUP, SILICON VALLEY BANK, SVB SECURITIES, SVB PRIVATE, SVB CAPITAL and the chevron device are trademarks of SVB Financial Group, used under license. Silicon Valley Bank is a member of the FDIC and the Federal Reserve System. Silicon Valley Bank is the California bank subsidiary of SVB Financial Group. [SIVB-F]
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