Webdesk: First Citizens BancShares Inc (FCNCA.O) announced on Monday that it will acquire deposits and loans from Silicon Valley Bank. As well as other assets from the Federal Deposit Insurance Corporation (FDIC).
As part of the transaction. FDIC said in a separate statement that it got equity appreciation rights in First Citizens BancShares stock. It is with a potential value of up to $500 million.
While, First Citizens stated that the acquisition planned to protect its good financial position. The merged company’s loan and deposit portfolios remain varied and resilient.
Under the terms of the agreement, First–Citizens Bank & Trust Company will assume SVB’s $110 billion in assets. As well as $56 billion in deposits, and $72 billion in loans.
“Prudent risk management approach will continue to protect customers. Stockholders through all economic cycles and market conditions,” stated the statement.
The FDIC stated that the purchase of approximately $72 billion worth of SVB’s assets at a discount of $16.5 billion occurred.
“The FDIC predicts that Silicon Valley Bank’s bankruptcy will cost its Deposit Insurance Fund (DIF) roughly $20 billion. After the FDIC terminates the receivership, the actual cost will be calculated “it said.
Moreover, The regulator noted that approximately $90 billion in securities and other assets from SVB will remain in receivership pending disposition.
While The 17 former SVB branches will resume operating as Silicon Valley Bank, a part of First Citizens Bank, beginning on Monday.
Moreover, First Citizens has approximately $109 billion in assets and $89.4 billion in total deposits.
