First Citizens agrees to buy Silicon Valley Bank – 03/27/2023 – Market

First Citizens BancShares Inc said on Monday that it will acquire Silicon Valley Bank’s deposits and loans, as well as some other FDIC (Federal Deposit Insurance Corporation) assets.

The FDIC said in a separate statement that it received appreciation rights to First Citizens BancShares shares with a potential value of up to $500 million as part of the settlement.

First Citizens said the transaction was structured to preserve its strong financial position and that the combined company remains resilient with a diversified loan book and deposit base.

Under the agreement, the First–Citizens Bank & Trust Company unit will take over SVB’s assets of US$110 billion, deposits of US$56 billion and loans of US$72 billion.

“The prudent approach to risk management will continue to protect clients and shareholders through all economic cycles and market conditions,” the statement said.

The FDIC said the purchase of about $72 billion of assets from SVB was discounted by $16.5 billion.

“The FDIC estimates the cost of Silicon Valley Bank’s failure to its Deposit Insurance Fund (DIF) to be approximately $20 billion. The exact cost will be determined when the FDIC closes receivership,” he said.

Approximately $90 billion of SVB securities and other assets will remain in receivership for disposal, the regulator added.

From Monday, the 17 former SVB branches will operate as a division of First Citizens Bank.

First Citizens has about $109 billion in assets and total deposits of $89.4 billion.