First Citizens buys Silicon Valley Bank

• First Citizens BancShares has agreed to buy Silicon Valley Bank.

• The deal includes the purchase of about $72 billion of Silicon Valley Bridge Bank assets at a discount of $16.5 billion.

• Silicon Valley Bank was shut by regulators on March 10 after a bank run and capital crisis.

First Citizens BancShares, the parent company of First Citizens Bank, has agreed to buy Silicon Valley Bank, according to a Sunday statement from the Federal Deposit Insurance Corp, or FDIC.

The North Carolina-based First-Citizens Bank & Trust Company entered into a purchase and assumption agreement for all deposits and loans of Silicon Valley Bank, according to the statement.

The deal includes the purchase of about $72 billion of Silicon Valley Bridge Bank assets at a discount of $16.5 billion.

Silicon Valley Bank was shut by regulators on March 10 after a bank run and a capital crisis.

Silicon Valley Bridge Bank had approximately $167 billion in total assets and about $119 billion in total deposits as of March 10, per the FDIC.

About $90 billion in securities and assets will remain with the FDIC for sale. The FDIC also received equity appreciation rights in First Citizens' common stock, per the statement.

The estimated cost of the failure of Silicon Valley Bank to the FDIC's Deposit Insurance Fund is approximately $20 billion. The exact cost will be determined when the receivership is terminated, according to the statement.

First Citizens tweeted that the acquisition "helps strengthen the US banking system and economy."

First Citizens said in a Monday statement the transaction is "structured to preserve First Citizens' solid financial position."

"We are committed to building on and preserving the strong relationships that legacy SVB's Global Fund Banking business has with private equity and venture capital firms," Frank B. Holding, Jr., the CEO of First Citizens Bank said in the statement.

"This transaction also will accelerate our expansion in California and introduce wealth capabilities in the Northeast. SVB's Private Wealth business is a natural fit for our high-touch and sophisticated level of high-net-worth customer service and approach," he added.

First Citizens BancShares Inc shares are down 23% so far this year.

March 27, 2022, 4.00 p.m. SGT: This story has been updated to include First Citizens BancShares' stock prices. 

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