First Citizens BancShares will acquire Silicon Valley Bank, the California lender whose collapse this month sent shock waves across the financial sector.
Ednews reports citing New York Times that the Federal Deposit Insurance Corporation seized control of Silicon Valley Bank on March 10, after a run on deposits had left it insolvent. The F.D.I.C., which announced the deal late Sunday, has since been looking for a buyer for the bank, either in its entirety or in pieces.
Silicon Valley Bank was the country’s 16th-largest bank when the government took it over. Its collapse was the largest bank failure in the United States since the 2008 financial crisis.
The deal for the bank, which became Silicon Valley Bridge Bank after the F.D.I.C seized it, included the purchase of about $72 billion of assets, at a discount of $16.5 billion. Another $90 billion in securities and other assets were not included.
The bank regulator will receive equity appreciation rights in the stock of First Citizens, worth up to $500 million. The F.D.I.C. estimated that the cost of the bank failure to the government’s deposit insurance fund will be around $20 billion.
The bank’s 17 former branches, in California and Massachusetts, will open under the First Citizens umbrella on Monday. Its depositors will automatically become customers of First Citizens.
