First Citizens Bank Acquires SVB And FDIC-Backed Loans

First-Citizens Bank and Trust Company will automatically accept Silicon Valley Bridge Bank, National Association’s depositors as depositors. “First-Citizens Bank has taken on all deposits.” 

All of Silicon Valley Bridge Bank’s deposits and loans were sold to First-Citizens Bank by the FDIC on Monday. 

The deal has been set up as a whole bank purchase with loss share protection. 

First-Citizens Bank will automatically accept the deposits of Silicon Valley Bridge Bank, the National Association’s depositors. “First-Citizens Bank has accepted all deposits.”. 

The lender’s total deposits stand at $89.4 billion, compared to its approximately $109 billion in assets. 

It will also be given access by the FDIC to a credit line that is currently accessible for unforeseen liquidity requirements.

The FDIC on Monday sold all of SVBB  deposits and loans to First-Citizens Bank.The deal has been set up as a whole bank purchase with loss share coverage. 

Depositors of Silicon Valley Bridge Bank, National Association will automatically become depositors of First-Citizens Bank. “First-Citizens Bank is responsible for all deposits.”. 

The lender’s total deposits stand at $89.4 billion, compared to its approximately $109 billion in assets. 

The FDIC will also grant it access to a line of credit that is currently open for contingent liquidity needs. 

As of March 10, 2023, SVB had about $119 billion in total deposits, $167 billion in total assets, and other assets.

About $72 billion of SVB NA’s assets were purchased as part of the deal with First Citizens, at a $16 point 5 billion discount. 

The FDIC will continue to be in charge of the receivership’s approximately $90 billion worth of securities and other assets. 

The FDIC also acquired rights to First Citizens BancShares, Inc.’s equity appreciation. , common stock with a maximum value of $500 million, is located in Raleigh, North Carolina. 

The FDIC estimates that the failure of SVB will cost the DIF $20 billion. A division of Raleigh-based First Citizens BancShares, Inc. Is First Citizens Bank. The FDIC has requested separate offers for SVB and SVB Private by March 24.

Silicon Valley Bank collapsed in less than 48 hours after abandoning a plan to raise capital, making it the largest US lender to fail in more than a decade.

As interest rates rose, the bank suffered a significant loss on the sales of its securities, which alarmed investors and depositors who immediately started withdrawing their funds.

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