June 3, 2023

Volume XIII, Number 154


June 02, 2023

Subscribe to Latest Legal News and Analysis

June 01, 2023

Subscribe to Latest Legal News and Analysis

May 31, 2023

Subscribe to Latest Legal News and Analysis

The 2023 Banking Crisis: Guidance for Private Investors Seeking to Acquire or Invest in Assets of Failed Insured Depository Institutions

Following the failure of both Silicon Valley Bank, Santa Clara, CA (SVB) and Signature Bank, New York, NY (SigBank), the Federal Deposit Insurance Corporation (FDIC) was appointed as receiver of each institution pursuant to the agency’s authority under Section 11(e) of the Federal Deposit Insurance Act. The FDIC transferred all deposits and substantially all assets of SigBank to a newly created, full-service FDIC-operated ‘bridge bank’ – Signature Bridge Bank, N.A. (Sig Bridge). The FDIC operated Sig Bridge until March 19, 2023, when Flagstar Bank, N.A., a wholly owned subsidiary of New York Community Bancorp, Inc., entered into a Purchase and Assumption (P&A) transaction to purchase approximately $38 billion in assets, including $25 billion in cash, assume liabilities of approximately $36 billion, including $34 billion in deposits, acquire certain commercial and industrial loan portfolios of Sig Bridge, acquire its wealth management and broker-dealer businesses, and assume all of Sig Bridge’s branches. SigBridge’s commercial real estate portfolio and certain other loans remain unsold.

The FDIC also transferred all deposits and substantially all assets of SVB to a newly created, full-service FDIC-operated ‘bridge bank’ – Silicon Valley Bridge Bank, N.A. (SVB Bridge). The FDIC operated SVB Bridge until March 27, 2023, when First-Citizens Bank & Trust Company, the banking subsidiary of First Citizens BancShares, Inc., announced it had entered into a P&A transaction to purchase SVB Bridge’s assets of $110 billion, deposits of $56 billion, loans of $72 billion and assume the 17 former branches of SVB Bridge as part of the deal. The FDIC as receiver and First-Citizens Bank & Trust Company also entered into a loss share coverage agreement pursuant to which the parties share in the losses and potential recoveries on certain loans covered by the agreement. The loss share transaction is projected to maximize recoveries on the assets by keeping them in the private sector. Approximately $90 billion in securities and other assets from SVB Bridge remain in the FDIC’s receivership for disposal.

To promote efficient and expedient liquidation at the least cost to the Deposit Insurance Fund, the FDIC, by statute, has special resolution powers to use in the liquidation of the assets from failed banks. The most common and preferred method for resolving a failing bank is a P&A transaction, whereby a healthy institution agrees to purchase some or all of the assets of the receiver bank, as was the case with Sig Bridge.

In the absence of a P&A transaction, or if the assuming institution does not acquire all the assets, as in the case of both Sig Bridge and SVB Bridge, the FDIC, as a receiver, assumes ownership of the failed bank’s remaining assets and must manage, market, and sell them. The FDIC conducts sales of a variety of failed bank assets, including loans, securities, owned real estate, furniture, fixtures, and equipment. Qualifications, requirements, and processes vary depending on type of assets.

Click here to continue reading the full GT Alert.

©2023 Greenberg Traurig, LLP. All rights reserved. National Law Review, Volume XIII, Number 89

About this Author

Barbara Jones, Greenberg Traurig Law Firm, Los Angeles, Private Equity, Corporate and Energy Law Attorney

Barbara A. Jones is a member of the firm’s Global Securities practice group and co-chairs the firm's Blockchain Task Force. She is also co-coordinator of the firm’s interdisciplinary Conflict Minerals Compliance Initiative. Barbara maintains a diverse corporate and securities law practice across industry groups, emphasizing complex international and domestic transactions, including blockchain/cryptocurrency transactions, private and public financings (including ICOs), dual listings, mergers and acquisitions, strategic collaborations and joint ventures, and licensing...

Marina Olman Pal, Greenberg Trauig Law Firm, Miami, Corporate and Finance Law Attorney
Practice Group Attorney

Marina Olman-Pal advises foreign and U.S. financial institutions on licensing, regulatory and compliance matters. She represents clients before U.S. regulators such as the Federal Reserve, OCC, FDIC, FinCEN, OFAC, Florida Office of Financial Regulation and other supervisory authorities. Marina counsels foreign and U.S. financial institutions on a broad range of issues including the Bank Secrecy Act (BSA), anti-money laundering compliance and Office of Foreign Assets Control (OFAC) sanction programs.


  • ...
Benjamin Saul Financial Compliance Attorney Greenberg Traurig Law Firm DC

Benjamin Saul is a shareholder in the firm’s Financial Regulatory and Compliance Practice. For two decades, Ben has handled high-stakes regulatory, enforcement, and litigation matters for corporate and individual clients in the consumer finance, specialty finance, fintech, and banking sectors. 

Ben has helped clients navigate dozens of contentious supervisory, enforcement, and litigation matters involving the Consumer Financial Protection Bureau (CFPB), and has been a leader in the private bar on CFPB matters since the Bureau’s inception in 2011...

Hilary R. Sledge-Sarnor Los Angeles Finance Attorney Greenberg Traurig

Hilary R. Sledge-Sarnor is a Shareholder at Greenberg Traurig's Los Angeles office. She represents businesses and financial institutions in a range of legal matters. Hilary has over 15 years of experience representing financial institutions, corporate borrowers, funds and fund sponsors in a broad range of syndicated cross-border and domestic financings. Hilary is experienced in a wide range of industries, including technology, fund finance retail and entertainment. She regularly provides counsel on secured transactions and UCC Article 9.


Keren Barash Attorney Corporate Law Greenberg Traurig

Keren Barash is a member of the Corporate Practice in Greenberg Traurig’s Los Angeles office. Keren focuses her practice on virtually all aspects of finance and represents borrowers, lenders, private equity sponsors and their portfolio companies, private real estate companies, and financial institutions in complex finance transactions. She has experience with senior and subordinated debt transactions, secured and unsecured lending, syndicated facilities, commercial mortgage loans, real estate fund formation, and structured finance with a broad range of underlying assets...