Failed Silicon Valley Bank Finds Buyer

First Citizens Bank has finalized a deal with the Federal Deposit Insurance Corp. (FDIC) to acquire the remaining deposits and loans of the failed Silicon Valley Bank. The FDIC announced that all depositors of Silicon Valley Bridge Bank, which was set up as a bridge bank after SVB’s failure, will become depositors of First Citizens Bank & Trust Company. The deposits assumed by First Citizens Bank will continue to be insured by the FDIC up to the insurance limit.

As of March 10, Silicon Valley Bridge Bank reported around $167 billion in assets and nearly $119 billion in deposits. The transaction involved the FDIC purchasing approximately $72 billion of the bank's assets at a $16.5 billion discount, while around $90 billion in securities and other assets will stay in the receivership, awaiting disposition by the FDIC.

The FDIC has also acquired equity appreciation rights in First Citizens BancShares common stock, the parent of First Citizens Bank, which could be worth up to $500 million, depending on market conditions. The FDIC estimates that the failure of Silicon Valley Bank has cost its Deposit Insurance Fund approximately $20 billion. However, the precise cost will only be established once the FDIC concludes the receivership.

It is currently unclear how many former clients of Silicon Valley Bank will remain with First Citizens as many established banks, such as Citi and First Republic, as well as fintech neobanks, had poached Silicon Valley Bank's clients during the chaotic days after the bank's failure.