a fresh development in the ongoing investigation into Silicon Valley Bank’s demise. An affiliate of First Citizens BancShares, First-Citizens Bank & Trust Company, announced the acquisition of troubled Silicon Valley Bank (SVB), which is now known as Silicon Valley Bridge Bank, N.A.
According to the announcement, First Citizens is set to purchase out of FDIC receivership substantially all loans and certain assets and assume all user deposits and certain liabilities of SVB.
SVB’s $110 billion in assets, $56 billion in deposits, and $72 billion in loans will be transferred to First Citizens Bank. Moreover, the FDIC will provide First Citizens Bank access to a line of credit that is available for unforeseen liquidity need.
According to the release, “First Citizens was chosen to execute this transaction after a competitive bidding procedure.” The FDIC will continue to be in possession of securities and other assets worth a total of $90 billion.
A loss-sharing agreement has been reached between the First Citizens Bank and the FDIC. First Citizens Bank will not purchase any SVB Financial Group assets, common stock, preferred stock, debt, or other commitments from the company.
First Citizens’ chairman and CEO, Frank B. Holding Jr., said: “First Citizens has a 125-year history of financial stability, outstanding client care, and responsible lending. Since 2009, we and the FDIC have successfully completed more FDIC-assisted transactions than any other bank, and we are grateful for the FDIC’s renewed trust in us.
Beginning on March 27, 2023, the 17 former Silicon Valley Bridge Bank, N.A. zones will operate as First Citizens Bank. Until further notice, users may still access their present accounts.
The FDIC received First Citizens BancShares common stock in exchange for equity appreciation rights that have a maximum value of $500 million. For all deposits up to the insurance threshold, First-Citizens Bank & Trust Company will continue to provide FDIC insurance coverage.
Compiled by Coinbold
