SVB: Don't Cry For Me Argentina -- March 27, 2023

  

It's my understanding no customer / depositor at SVB lost any money -- backstopped by the US government.

And now, SVB is bought under very favorable conditions for the acquiring bank. A small regional bank in North Caroline now joins the big boys (and girls).

 

Crocodile tears for SVB's depositors. LOL.

Don't cry for me, Argentina. 

Details here. Wow, what a great country. 

A fast-growing North Carolina lender with a history of buying failed banks is taking on its largest challenge yet with its purchase of Silicon Valley Bank.

First Citizens BancShares Inc.’s acquisition of the bulk of SVB’s assets will effectively double the size of the 125-year-old lender, which for most of its history was controlled by one family and operated mainly in North Carolina. The Raleigh-based bank, which had $42 billion in assets three years ago, will have $219 billion after the SVB deal.

It won an auction for SVB orchestrated by the Federal Deposit Insurance Corp., which seized the tech-focused bank on March 10 following a run that drained more than $40 billion in deposits. 

Not too long ago, $315 / share.

 

Today, $800 / share.

 

FCNCB.

 

CBGB.  

Oh, sorry. FCNBN. 

How does one spell Zimbabwe? 

Don't cry for me Argentina. No one loses any money, and vultures swoop in and feast. 

Jamie Dimon is still kicking himself. My understanding he was given first opportunity to buy SVB.

 

Let's see, assets under management: $219 billion minus $42 billion = $177 billion for this NC regional bank whose shares trade on the "other OTC" market.

 

Market cap for JPMorgan Chase & Co: $378 billion.  

Market cap for FCNCB? $12 billion.

Not bad for one weekend of work. As of Friday, no buyer. Today, Monday, 72 hours later, a buyer. 

 

Wow, put those headphones on, turn up the volume.

 

Everyone knows the fight was fixed, the poor stay poor, the rich get richer, that's how it goes, everybody knows.

 

More from the linked article: 

The bank has expanded rapidly in recent years, particularly in commercial banking. The SVB purchase will give it a prominent banking presence in California and a wealth-management business in the Northeast.

“We see great promise in extending to the venture and tech spaces in Silicon Valley, building on the expertise and experience we developed through years of supporting North Carolina’s own innovative hub,” Chief Executive and Chairman Frank Holding Jr. said on a call with analysts Monday morning.

First Citizens was the winner among 18 bidders who put in 27 bids for all or part of SVB, according to FDIC Chairman Martin Gruenberg’s prepared testimony for a Tuesday congressional hearing. The auction process was extended to make time to evaluate the bids.

First Citizens took over SVB’s $56.5 billion in deposits, as well as $72 billion in loans at a discount of $16.5 billion.

The FDIC agreed to share any of First Citizens’s losses or potential gains on SVB’s commercial loans. 

All those folks wondering where Janet Yellen was during this process. LOL. Was she the puppeteer?

Reminder: