More than two weeks after its collapse, Silicon Valley is being acquired by First Citizens Bank.
First Citizens Bank, the 30th largest commercial bank in the United States based in North Carolina, is acquiring "all deposits and loans" of the collapsed Silicon Valley Bank.
The news was revealed by the Federal Deposit and Insurance Corporation (FDIC) on March 26th.
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According to the announcement, the 17 former branches of Silicon Valley Bank are scheduled to reopen as First Citizens Bank and Trust Company branches on March 27th.
The statement highlighted that all Silicon Valley Bank depositors are set to become depositors of First Citizens Bank. On top of that, FDIC revealed that:
Transaction included the purchase of about $72 billion of Silicon Valley Bridge Bank, National Association's assets at a discount of $16.5 billion.
Based on the deal, the receivership will retain approximately $90 billion "in securities and other assets." With the sale agreement, the FDIC secured "equity appreciation rights" in First Citizens BancShares, Inc. common stock, worth around $500 million.
On March 10th, the news broke that Silicon Valley Bank collapsed due to a liquidity crisis that sparked a bank run. After the collapse, FDIC was selected as the receiver and started the bidding process for the bank.
Two separate auctions were conducted for Silicon Valley Bank's assets. One round was organized for its traditional deposits unit, while another has been arranged for its private bank.
It is believed that several companies were bidding for Silicon Valley Bank. Based on various reports, firms like Valley National Bancorp and Citizens Financial Group were among the bidders.
Over a week after the collapse of SVB, Reuters reported that First Citizens was considering bidding for Silicon Valley Bank. On March 21st, it was alleged that the bank submitted a bid for the Silicon Valley Bank. At that time, a First Citizens Bank spokesperson claimed that the firm will not comment on "market rumors or speculation."