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First Citizens to Buy Silicon Valley Bank Loans and Deposits

First Citizens to Buy Silicon Valley Bank Loans and Deposits

First Citizens BancShares has agreed to buy the loans and deposits of failed Silicon Valley Bank (SVB) from the Federal Deposit Insurance Corp (FDIC). The 17 branches once belonging to Silicon Valley Bank will now open as First Citizen Bank branches beginning today.

According to the FDIC, the purchase includes $72 billion of Silicon Valley Bank assets at a $16.5 billion discount. About $90 billion in stressed securities and other assets will remain in FDIC receivership. The FDIC has obtained equity appreciation rights of up to $500 million in First Citizens Bank common stock.

“This has been a remarkable transaction in partnership with the FDIC that should instill confidence in the banking system,” said Frank Holding Jr., chief executive officer of First Citizens.

The FDIC took control of SVB on March 10, following a run on deposits, and moved them into a “bridge bank” to protect depositors. At the time, the lender had an estimated $167 billion in assets and $119 billion in deposits. The regulators have since been seeking to auction off the failed bank, which will cost the FDIC an estimated $20 billion.

The North Carolina-based First Citizens Bank has an estimated $109 billion in assets and $89.4 billion in deposits and was the 30th largest bank in the US as of December 2022.

The SVB purchase deal nearly doubles the size of First Citizens’ current assets, totaling $181 billion and making it one of the top 25 banks in the US, while its deposits will total an estimated $145 billion.

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About Joe Palmisano

Joe Palmisano is Editorial Director for Connect Money, where he brings nearly three decades experience of market insights as a financial journalist, analyst and senior portfolio manager for leading financial publications, advisory firms, and hedge funds. In his role as Editorial Director, Joe is responsible for the selection of content and creation of daily business news covering the financial markets, including Alternative Assets, Direct Investment and Financial Advisory services. Before joining Connect Money, Joe was a financial journalist for the Wall Street Journal, regularly publishing feature stories and trend pieces on the foreign exchange, global fixed income and equity markets. Joe parlayed his experience as a financial journalist into roles as a Senior Research Analyst and Portfolio Manager, writing daily and weekly market analysis and managing a FX and US equity portfolio. Joe was also a contributing writer for industry magazines and publications, including SFO Magazine and the CMT Association. Joe earned a B.S.B.A. in Finance from The American University. He holds the Chartered Market Technician (CMT) designation and is a member of the CFA Institute.

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