Market Updates
First Citizens Agreed to Acquire Silicon Valley Bank's Assets, Deposits Under Loss-Sharing Arrangement
Scott Peters
27 Mar, 2023
New York City
First Citizens BancShares Inc soared 47% to $854.49 after the North Carolina-based bank agreed to acquire Silicon Valley Bank's assets from the FDIC.
First Citizens agreed to pay $16.5 billion for $72 billion of assets (or loan portfolio), own and operate 17 branches of the former bank, the FDIC said in a statement.
The FDIC will retain $90 billion of assets of the now defunct Silicon Valley Bank and the agency received stock appreciation rights potentially worth $500 million in the First Citizens BancShares, Inc.
The FDIC-controlled Silicon Valley Bank Bridge Bank, National Association will reopen as First-Citizen Bank & Trust Company, a wholly-owned subsidiary of First Citizens BancShares.
The FDIC estimated the cost of the failure of Silicon Valley Bank to be approximately $20 billion and the exact cost will be determined once the receivership is terminated.
The FDIC and First–Citizens Bank & Trust Company entered into a loss–share transaction on the commercial loans it purchased from the former Silicon Valley Bridge Bank, National Association.
The FDIC as receiver and First–Citizens Bank & Trust Company will share in the losses and potential recoveries on the loans covered by the loss–share agreement.
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