First Citizens Buy Silicon Valley Bank Assets Worth 110 Billion US Dollars

JAKARTA - The US regional bank, First Citizens BancShares, Inc. announced on Monday 27 March that its subsidiary First-Citizens Bank & Trust Company entered into an agreement with the Federal Deposit Insurance Corporation (FDIC) to purchase all loans and bear all customer deposits from the failed Silicon Valley Bank.

As reported by Antara, First Citizens Bank will purchase $11 billion worth of assets from Silicon Valley Bridge Bank, NA, founded by the FDIC following the collapse of Silicon Valley Bank on March 10, according to First Citizens BancShares.

The purchases included 35.26 billion US dollars in cash, 72.11 billion US dollars in gross loans and 2.7 billion US dollars in other assets.

Meanwhile, First Citizens Bank will bear 93.63 billion US dollars in liabilities from Silicon Valley Bridge Bank, NA including 56.49 billion US dollars in deposits, 34.6 billion US dollars in loans, and 2.54 billion US dollars in other liabilities.

First Citizens Bank sealed the deal through a competitive bidding process with a discount of 16.45 billion US dollars, according to First Citizens BancShares release.

Silicon Valley Bridge Bank has total assets of around $167 billion and total deposits of around $19 billion as of March 10, when Silicon Valley Bank was closed by California's Department of Finance and Innovation and was under the FDIC curator.

The FDIC said about 90 billion US dollars in securities and other assets under Silicon Valley Bridge Bank would remain in the curator's position.

"First Citizens Bank will also receive available credit lines from the FDIC for contingency liquidity purposes. In addition, First Citizens Bank has signed a loss-sharing agreement with the FDIC to provide further protection for further reductions to potential credit losses," First Citizens BancShares said in a release.

Starting Monday 27 March, 17 of Silicon Valley Bridge Bank's old branch, NA will start operating as Silicon Valley Bank, a division of First Citizens Bank.

First Citizens BancShares said it had received all regulatory and transaction approvals that had been closed.

By the end of 2022, First Citizens BancShares, headquartered intensive North Carolina, owns 550 branches and private banking offices in the United States with assets of 109 billion US dollars and 89 billion US dollars in deposits, according to a presentation by First Citizens BancShares.

The US banking turmoil in the Silicon Valley Bank's recent technology-focused collapse, and two crypto lenders Signature Bank and Silvergate Bank sent a shock wave across the global market and raised concerns about the risk of transmission.