First-Citizens Bank is set to acquire the assets of failed Silicon Valley Bank (SVB) – valued at $72 billion for a $16.5 billion discount.
In a press of March 26 statementthe Federal Deposit Insurance Corporation (FDIC) said the agreement covers all deposits and loans from the bankrupt crypto-friendly bank.
The FDIC added that all depositors of Silicon Valley Bridge Bank – the bridge bank created by the regulator after the collapse of the SVB – would automatically become that of First–Citizens Bank. The financial regulator continued that all deposits supported by First-Citizens Bank would continue to be insured up to the insurance limit.
As of March 10, the bridge bank had about $167 billion in total assets and about $119 billion in total deposits.
“The FDIC and First–Citizens Bank & Trust Company entered into a loss-sharing transaction on commercial loans it purchased from the former Silicon Valley Bridge Bank, National Association. The FDIC as receiver and First–Citizens Bank & Trust Company will share potential losses and recoveries on loans covered by the loss sharing agreement.
The FDIC said approximately $90 billion of SVB securities and other assets will remain in escrow for disposal. The regulator added that it had received stock appreciation rights worth up to $500 million in common stock from First Citizens BancShares – the parent company of First-Citizens.
According to the FDIC, early estimates show that SVB’s failure cost its deposit insurance fund about $20 billion. The regulator added that the full cost would be determined when it ends the receivership.
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