First Citizens acquires deposits and loans of Silicon Valley Bank

The Federal Deposit Insurance Corporation entered into a purchase and assumption agreement for all deposits and loans of Silicon Valley Bridge Bank (SIVB) by First Citizens Bank & Trust Company (FCNCA). The 17 former branches of Silicon Valley Bridge Bank will open as First Citizens Bank & Trust Company on Monday, March 27. Depositors of Silicon Valley Bridge Bank will automatically become depositors of First Citizens Bank. All deposits will continue to be insured by the FDIC up to the insurance limit. The transaction included the purchase of about $72B of Silicon Valley Bridge Bank’s assets at a discount of $16.5B. Approximately $90B 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 common stock with a potential value of up to $500M. The FDIC and First-Citizens 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 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. $20 billion. The exact cost will be determined when the FDIC terminates the receivership. Reference Link