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First Citizens Bank to acquire failed Silicon Valley Bank assets at a discount

First-Citizens Bank is set to acquire the assets of the failed Silicon Valley Bank (SVB) — valued at $72 billion for a discount of $16.5 billion.

In a March 26 press statement, the Federal Deposit Insurance Corporation (FDIC) said the deal covers all the deposits and the loans of the failed crypto-friendly bank.

FDIC added that all depositors of Silicon Valley Bridge Bank — the bridge bank set up by the regulator after SVB’s collapse — would automatically become that of First–Citizens Bank. The financial regulator continued that all deposits assumed by First-Citizens Bank would continue to be insured to the insurance limit.

As of March 10, the bridge bank had approximately $167 billion in total assets and about $119 billion in total deposits.

“The FDIC and First–Citizens Bank & Trust Company 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 & Trust Company will share in the losses and potential recoveries on the loans covered by the loss–share agreement.”

FDIC said around $90 billion of SVB’s securities and other assets would remain in receivership for disposition. The regulator added that it received equity appreciation rights worth as much as $500 million in First Citizens BancShares common stock — the parent company of First-Citizens.

According to the FDIC, early estimates show that SVB’s failure cost its Deposit Insurance Fund around $20 billion. The regulator added that the total cost would be determined when it terminates the receivership.

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