A buyer has been found for collapsed Silicon Valley Bank.
The Associated Press reported that the North Carolina-based First Citizens Bank & Trust Company has reached a deal to purchase Silicon Valley Bank.
The deal was announced by the Federal Deposit Insurance Corporation (FDIC) in a news release on Sunday.
“Today’s transaction included the purchase of about $72 billion of Silicon Valley Bridge Bank, National Association’s assets at a discount of $16.5 billion. Approximately $90 billion in securities and other assets will remain in the receivership for disposition by the FDIC. In addition, the FDIC received equity appreciation rights in First Citizens BancShares, Inc., Raleigh, North Carolina, common stock with a potential value of up to $500 million,” the FDIC said.
SVB customers will become customers of First Citizens Bank automatically, while the 17 former branches of the failed bank will open Monday as First Citizens with full-service banking.
All deposits that First Citizens takes over will be insured by the FDIC.
“We look forward to building relationships with our new customers and positioning our company for continued success as we affirm our commitment to support the integrity of our nation’s banking system,” First Citizens chairman and CEO Frank Holding, Jr. said in a statement.
The FDIC estimated the cost of SVB’s failure and impact on the insurance fund as $20 billion. The FDIC seized SVB after a bank run that was sparked when the institution said it had a high number of Treasury and other government bonds. The government bonds had lost value as interest rates increased, The Washington Post reported.