First Citizens acquires Silicon Valley Bank — Branches open Monday

The Federal Deposit Insurance Corporation revealed the agreement on March 26.

According to a statement from the Federal Deposit Insurance Corporation, North Carolina-based First Citizens Bank is poised to acquire all of Silicon Valley Bank’s deposits and loans.

According to the March 26 purchase and assumption agreement, 17 former Silicon Valley Bank branches will reopen as First Citizens Bank and Trust Company on Monday, March 27, and all Silicon Valley Bank depositors will immediately become First Citizens Bank depositors.

“Today’s transaction included the purchase of approximately $72 billion in assets from Silicon Valley Bridge Bank, National Association at a $16.5 billion discount,” the FDIC said in a statement.

As of March 10, the North Carolina-based bank was the 30th biggest commercial bank in the country, with $167 billion in total assets and $119 billion in deposits.

Silicon Valley Bank went bankrupt on March 10 after rumours of a severe liquidity problem prompted a bank run. The FDIC was then appointed receiver of the failed bank and tried to auction it off.

SVB’s assets were auctioned off in two distinct auctions, one for its traditional deposits unit and the other for its private bank, which was located within its retail operations and catered to high-net-worth people.

Several companies were said to be planning or had made bids for the failed US bank. Bloomberg claimed that First Citizens was planning an SVB bid as early as March 18. Three days later, it allegedly made a bid for the entire SVB. At the time, a spokesperson for First Citizens refused to comment on “market rumours or speculation.”

Valley National Bancorp, another regional bank, is also believed to have made an offer for the failed institution.

Meanwhile, Reuters reported on March 24 that Citizens Financial Group, a third US regional bank, was planning to make an offer for SVB’s private banking division.