On Monday, First Citizens BancShares Inc. (FCNCA.O) said it would buy Silicon Valley Bank’s (SIVB.O) deposits, loans, and other assets from the Federal Deposit Insurance Corporation (FDIC).
According to a separate statement, the purchase gave the FDIC equity appreciation rights in First Citizens BancShares stock worth up to $500 million.
First Citizens said the merger preserved its good financial position, and the merged firm is resilient with a varied loan portfolio and deposit base.
First–Citizens Bank & Trust Company will acquire SVB’s $110 billion assets, $56 billion deposits, and $72 billion loans.
The statement claimed prudent risk management would safeguard consumers and investors across all economic cycles and market situations.
The FDIC purchased SVB’s $72 billion assets at a $16.5 billion discount.
“Silicon Valley Bank’s bankruptcy will cost the FDIC’s DIF $20 billion. The FDIC’s receivership termination will decide the cost “it stated.
The regulator noted that around $90 billion in SVB securities and other assets would remain under receivership pending disposal.
First Citizens Bank’s Silicon Valley Bank will take over SVB’s 17 locations on Monday.
First Citizens’ assets are $109 billion, and deposits are $89.4 billion.
