According to a statement from the Federal Deposit Insurance Corporation, First Citizens Bank of North Carolina will acquire all of Silicon Valley Bank’s (SVB) deposits and loans in a deal announced on March 26th.
In accordance with the purchase and assumption agreement signed on March 26, 17 former Silicon Valley Bank branches will reopen as First Citizens Bank and Trust Company on March 27, and all Silicon Valley Bank depositors will instantly become First Citizens Bank depositors.
The FDIC said in a statement, “Today’s deal comprised the purchase of approximately $72 billion of Silicon Valley Bridge Bank, National Association’s assets at a discount of $16.5 billion.”
Over $90 billion in securities and other assets will stay in receivership until the FDIC disposes of them. Also, the FDIC obtained equity appreciation rights on First Citizens BancShares, Inc. common stock with a maximum value of $500 million.
As of March 10, this bank is the 30th largest commercial bank in the United States, with total assets of $167 billion and deposits of $119 billion.
The Silicon Valley Bank failed on March 10 due to a bank run sparked by rumors of a severe liquidity shortage. The FDIC was then appointed as the bankrupt bank’s receiver and attempted to sell it at auction.
The procedure involved two separate auctions for SVB’s assets, one for its typical deposits section and another for its private bank, which was headquartered within its retail operations and catered to high-net-worth people.
Numerous corporations were said to have either planned or submitted bids for the defunct U.S. bank.
Bloomberg reported that First Citizens contemplated an SVB proposal as early as March 18. Three days later, an offer was purportedly submitted for the entirety of SVB. At the time, a spokeswoman for First Citizens declined to comment on “market rumors and speculation.”
It is believed that another regional bank, Valley National Bancorp, has also placed a bid for the failed bank.
Reuters reported on March 24 that a third regional bank in the United States, Citizens Financial Group, was preparing an offer for SVB’s private banking arm.
