CORRECTION: First Citizens Bank purchasing Silicon Valley Bank, taking over $72B in loans and $56B in deposits. $FCNCA shares are up 53% premarket. thesamreynolds reports
In a statement, the FDIC said that all depositors of Silicon Valley Bridge Bank, the bridge bank set up by the FDIC after SVB’s failure, will automatically become depositors of First Citizens Bank & Trust Company. All deposits assumed by First Citizens Bank & Trust Company will continue to be insured by the FDIC up to the insurance limit.
As of March 10, Silicon Valley Bridge Bank reported roughly $167 billion in assets and nearly $119 billion in deposits. Total assets acquired by First Citizens were $110.1 billion, which included $72.1 billion in loans, while liabilities assumed included $56.5 billion in deposits and $34.6 billion in other borrowings,About $90 billion in securities and other assets will stay in the receivership, awaiting disposition by the FDIC, according to the statement.
The FDIC also says it has acquired equity appreciation rights in First Citizens BancShares common stock, the parent of First Citizens Bank, which is potentially worth up to $500 million pending market conditions. Initial estimates from the FDIC say that Silicon Valley Bank’s failure cost its Deposit Insurance Fund around $20 billion. The precise cost will be established once the FDIC concludes the receivership.
It's unclear how many former clients of Silicon Valley Bank will remain with First Citizens as of Monday. Many established banks like Citi and First Republic, as well as fintech neobanks, poached Silicon Valley Bank's clients during the chaotic days after the bank run.
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