First Citizens to Assume $72 Billion in SVB Deposits and Loans

Following First Citizens Bank & Trust Company’s agreement to assume $72 billion in deposits and loans of Silicon Valley Bridge Bank (SVBB), the North Carolina-based lender has opened 17 former SVP branches as its own.

Silicon Valley Bridge Bank is the newly named Silicon Valley Bank (SVP), which was taken over by the FDIC after depositors made a run on it during a crisis of confidence. To protect depositors, the FDIC transferred all SVB deposits into the new entity. They gained access to their funds in mid-March.

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The bank’s collapse will cost the Deposit Insurance Fund about $20 billion, according to an FDIC statement. It had run two unsuccessful auctions for SVBB. The First Citizens deal constitutes a discount of $16.5 billion.

“This is a very positive outcome for SVBB. It keeps the bank together in a way that provides the most value for our customers,” SVBB Chief Executive Officer Tim Mayopoulas said in a memo to staff. He will be replaced by First Citizens Chairman and CEO Frank B. Holding, Jr.

SVBB “had approximately $167 billion in total assets and about $119 billion in total deposits,” according to the FDIC statement. About $90 billion in securities and other assets will remain in the receivership for disposition by the FDIC, and the FDIC has “equity appreciation rights” in First Citizens BancShares, Inc. The $90 billion were not the assets of parent/holding company Silicon Valley Bank Financial, which is engaged in a separate bankruptcy sales process.

SVB, the 16th largest US bank, focused on lending to thousands of tech startups. First Citizens’ acquisition will strengthen its ability to serve firms in the private equity, venture capital, and technology sectors, Holding said in a statement.