First Citizens Bank Acquires Deposits, Loans of Silicon Valley Bank
Date
3/28/2023 2:37:38 AM
(MENAFN) First Citizens bank has agreed to acquire deposits and loans of Silicon Valley Bank (SVB), according to an announcement by the Federal Deposit Insurance Corporation (FDIC) on Monday. The deal will see 17 former branches of SVB open as First-Citizens Bank & Trust Company on the same day. The FDIC statement revealed that SVB had total assets of around USD167 billion and total deposits of about USD119 billion as of March 10. First Citizens Bank will purchase approximately USD72 billion of SVB's assets at a discount of USD16.5 billion.
The statement further explained that approximately USD90 billion in securities and other assets will remain in the receivership for disposition by the FDIC. Additionally, the FDIC received equity appreciation rights in First Citizens BancShares, Inc., Raleigh, North Carolina, common stock with a potential value of up to USD500 million. The acquisition deal will enable First Citizens Bank to expand its operations and strengthen its position in the banking industry.
Earlier in March, SVB sold its bond portfolio worth USD21 billion at a loss of USD1.8 billion to meet its customers' cash demand. However, the bank faced challenges and was subsequently shut down by federal regulators. This led to the acquisition deal with First Citizens Bank, which will allow SVB's customers to continue banking with the newly established First-Citizens Bank & Trust Company.
The acquisition deal between First Citizens Bank and SVB is a significant development in the banking industry. It highlights the importance of consolidation and collaboration among banks to enhance their capabilities and better serve their customers. First Citizens Bank's acquisition of SVB's deposits and loans will enable it to expand its customer base and provide a wider range of services. It is expected that the deal will benefit both banks and their customers in the long run.
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