First–Citizens Bank to acquire SVB's deposits, loans from Federal Deposit Insurance Corporation

First–Citizens Bank & Trust Company will acquire all deposits and loans of Silicon Valley Bank from the Federal Deposit Insurance Corporation (FDIC), the federal institution said in a statement.

The depositors of Silicon Valley Bridge Bank, National Association, will automatically become depositors of First–Citizens Bank & Trust Company, FDIC said.

“All deposits assumed by First–Citizens Bank & Trust Company will continue to be insured by the FDIC up to the insurance limit,” it added.

SVB had approximately $167 billion in total assets and about $119 billion in total deposits, as of March 10, 2023. The purchase and assumption agreement with First Citizens Bank included the purchase of about $72 billion of SVB’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 regulator said.

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

Moreover, FDIC estimates the cost of the failure of SVB to its Deposit Insurance Fund to be approximately $20 billion. 

FDIC and First–Citizens Bank entered into a loss–share transaction on the commercial loans it purchased of the former Silicon Valley Bridge Bank, National Association.  

“The loss–share transaction is projected to maximise recoveries on the assets by keeping them in the private sector. The transaction is also expected to minimise disruptions for loan customers,” the government corporation noted.

FDIC created Silicon Valley Bridge Bank, National Association, following the closure of SVB, the 16th largest bank in the United States, by the California Department of Financial Protection and Innovation.