First Citizens BancShares has agreed to buy most of Silicon Valley Bank.
On March 10, U.S. financial regulators shut down Silicon Valley Bank’s parent company SVB Financial Group and appointed the FDIC as receiver. The FDIC transferred all SVB deposits and assets to a new bridge bank.
First Citizens is buying $56.5B of Silicon Valley Bank’s deposits, about $72B of the bank’s loans at a discount of $16.5B, and all 17 branch locations.
- About $90B of SVB’s securities will remain in receivership for disposition by the FDIC.
- Federal regulators have been looking for a buyer for Silicon Valley Bank, even extending the bidding window for the bank twice.
- The purchase puts First Citizens in the top 25 U.S. banks in terms of assets.
- First Citizens and the FDIC also entered a loss-share agreement for the commercial loans purchased from the SVB bridge bank.
- The FDIC will absorb some of the losses from those assets.
- First Citizens shares rose nearly 54% on Monday following news of the acquisition.
- The bank’s shares closed at $895.61.
