First Citizens Bank to acquire SVB’s deposits, loans from FDIC

The depositors of Silicon Valley Bridge Bank, National Association, will automatically become depositors of First–Citizens Bank & Trust Company. “All deposits assumed by First–Citizens Bank & Trust Company will continue to be insured by the FDIC up to the insurance limit,” the government corporation said in a press release.

SVB had approximately $167 billion in total assets and about $119 billion in total deposits as of March 10, 2023. The transaction with First Citizens included purchasing about $72 billion of SVB NA’s assets at a discount of $16.5 billion.

Approximately $90 billion in securities and other assets will remain in the receivership for disposition by the FDIC, the statement said.

In addition, the FDIC received equity appreciation rights in First Citizens BancShares, Inc., Raleigh, North Carolina, common stock with a potential value of up to $500 million.

The FDIC estimates the cost of the failure of SVB to its Deposit Insurance Fund (DIF) to be approximately $20 billion.

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First Citizens has around $109 billion in assets and total deposits of $89.4 billion.The FDIC had tried to sell SVB Private alongside Silicon Valley Bank over the last two weekends but it failed to reach a deal to sell them both together. It has since asked for separate offers for SVB Private and Silicon Valley Bank by March 24.

Silicon Valley Bank became the biggest US lender to fail in more than a decade, unraveling in less than 48 hours after abandoning a plan to shore up capital. The bank took a huge loss on sales of its securities as interest rates climbed, unnerving investors and depositors who rapidly began pulling their money.