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First Citizens Bank Acquires Silicon Valley Bank Deposits and Loans

The Federal Deposit and Insurance Corporation has announced that First Citizens Bank, located in North Carolina, will acquire all of Silicon Valley Bank‘s loans and deposits.

This agreement, which was made on March 26, will result in 17 previous Silicon Valley Bank branches being rebranded as First Citizens Bank and Trust Company.

All existing Silicon Valley Bank depositors will automatically become depositors of First Citizens Bank.

The FDIC stated that the transaction included the purchase of approximately $72 billion of Silicon Valley Bridge Bank, National Association’s assets at a discount of $16.5 billion.

The FDIC will keep approximately $90 billion in securities and other assets for future disposition, while also receiving equity appreciation rights in First Citizens BancShares, Inc. common stock valued at up to $500 million.

It is worth noting that First Citizens Bank is a major commercial bank in the US with $167 billion in total assets and $119 billion in deposits as of March 10.

Silicon Valley Bank experienced a bank run and collapsed on the same day, prompting the FDIC to take over as receiver and auction off the bank.

Two separate auctions were held for Silicon Valley Bank’s assets, one for its traditional deposits and the other for its private bank serving high-net-worth individuals.

Multiple companies were reportedly considering or had already submitted bids for the collapsed Silicon Valley Bank.

According to Cointelegraph, First Citizens had been preparing a bid as early as March 18 and then submitted a bid for the entire bank three days later. However, a spokesperson for First Citizens declined to comment on the matter.

Valley National Bancorp is another regional bank that is believed to have submitted a bid for the failed bank. Additionally, Reuters reported on March 24 that Citizens Financial Group was preparing to submit an offer for SVB’s private banking arm.

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