First Citizens BancShares will acquire all of Silicon Valley Bank’s (SVB) deposits and loans from the Federal Deposit Insurance Corporation (FDIC), according to the regulator.
The acquisition by unit First-Citizens Bank & Trust Company includes the purchase of about US$72 billion of Silicon Valley Bank’s assets at a discount of US$16.5 billion, the FDIC said in a statement on Sunday (Mar 26).
“The FDIC estimates the cost of the failure of Silicon Valley Bank to its Deposit Insurance Fund (DIF) to be approximately US$20 billion. The exact cost will be determined when the FDIC terminates the receivership,” the statement said.
The FDIC has received rights in First Citizens BancShares stock with a potential value of up to US$500 million as part of the deal, the statement said.
The 17 former branches of SVB will open as First Citizens banks on Monday.
Approximately US$90 billion in securities and other assets from SVB will remain in receivership for dispersal, the regulator added.
First Citizens has around US$109 billion in assets and total deposits of US$89.4 billion.