NYCB - FDIC seeks to sell Silicon Valley Bank Signature Bank securities portfolios - report

2023-03-31 09:32:34 ET

The Federal Deposit Insurance Corporation is looking to sell the securities portfolios of failed regional lenders Silicon Valley Bank ( OTC:SIVBQ ) and Signature Bank ( OTC:SBNY ), Reuters reported Friday, citing people familiar with the matter.

The portfolios consist of low-yielding Treasuries and U.S. government agency-backed securities that the two banks had piled up on before interest rates shot up from near zero.

SVB's ( OTC:SIVBQ ) and Signature's ( OTC:SBNY ) portfolios have a face value of ~$90B and ~$26B, respectively, according to regulatory filings and statements by government officials, as reported by Reuters.

First Citizens Bancshares ( FCNCA ), the new owner of SVB ( OTC:SIVBQ ), and New York Community Bancorp ( NYCB ), the new owner of Signature Bank ( OTC:SBNY ), rejected the portfolios as they would have had to realize losses due to the high level of rates.

Overall, the estimated sale of SVB ( OTC:SIVBQ ) and Signature ( OTC:SBNY ) will cost the FDIC $20B and $2.5B, respectively. Final figures will be released after completing the sales of the banks' loan books and securities portfolios.

More on the Bank Crisis

• Federal Reserve watchdog starts its own Silicon Valley Bank investigation

• Silicon Valley Bank was rated by examiners as not well-managed, Fed’s Barr says

• U.S. said to evaluate expanding emergency lending for banks

• Banking Crisis: A Buying Opportunity

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