te First Citizens agrees to acquire Silicon Valley Bank: FDIC | Zee Business

First Citizens agrees to acquire Silicon Valley Bank: FDIC

The deal includes assets worth around $72 billion from Silicon Valley Bridge Bank, National Association on a discount of $16.5 billion. A total of $90 billion in securities and other assets will still be under receivership for the FDIC to sell.  

First Citizens agrees to acquire Silicon Valley Bank: FDIC
Silicon Valley Bridge Bank, National Association had an asset worth $167 billion as of March 10, 2023. Source: Reuters

North Carolina-based First Citizens Bank is acquiring Silicon Valley Bank (SVB) which failed earlier this month. First Citizens Bank has entered into a purchase and assumption agreement for all deposits and loans of SVB, according to a statement by The Federal Deposit Insurance Corporation (FDIC) on Monday, 27 March 2023.

"The 17 former branches of Silicon Valley Bridge Bank, National Association, will open as First–Citizens Bank & Trust Company on Monday, March 27, 2023. Customers of Silicon Valley Bridge Bank, National Association, should continue to use their current branch until they receive notice from First–Citizens Bank & Trust Company that systems conversions have been completed to allow full–service banking at all of its other branch locations," the statement said.

The deal includes assets worth around $72 billion from Silicon Valley Bridge Bank, National Association on a discount of $16.5 billion. A total of $90 billion in securities and other assets will still be under receivership for the FDIC to sell. In addition, the FDIC received equity appreciation rights in First Citizens common stock with a potential value of up to $500 million.

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FDIC created Silicon Valley Bridge Bank and National Association after the California Department of Financial Protection and Innovation closed SVB. All of Silicon Valley Bank's insured and uninsured deposits and all qualified financial contracts were transferred to the bridge bank. The Silicon Valley Bridge Bank and National Association were founded to give the FDIC time to strengthen the institution and promote the brand. 

Silicon Valley Bridge Bank and National Association had an asset worth $167 billion as of March 10, 2023.

The FDIC calculates that the loss to its Deposit Insurance Fund (DIF) from Silicon Valley Bank's bankruptcy would be close to $20 billion. When the FDIC ends the receivership, the precise cost will be known.

ALSO READ: Silicon Valley Bank collapse leaves Indian startups worried – here’s why

Written By: Bhawna Gupta
Updated: Mon, Mar 27, 2023
12:27 pm
New Delhi, ZeeBiz WebDesk
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