North Carolina-based lender First Citizens Bank has sealed a deal to buy collapsed lender Silicon Valley Bank (SVB), taking on US$56bn (£46bn) of customer deposits, US regulators have confirmed.
First Citizens, a family-run institution with over 500 branches across the US, inked the agreement with the Federal Deposit Insurance Corporation (FDIC) to purchase out of FDIC receivership all of SVB’s loans and certain assets and liabilities.
Chairman and chief executive Frank B Holding Jr said: “We have partnered with the FDIC to successfully complete more FDIC-assisted transactions since 2009 than any other bank, and we appreciate the confidence the FDIC has placed in us once again.
“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."
Under the deal, First Citizens will assume assets of US$110bn, deposits of US$56bn and loans of US$72bn as per a loss-sharing agreement that will provide downside protection against possible credit losses.
First Citizens was selected to complete this transaction through a competitive bidding process.
FDIC will retain control of around US$90bn worth of SVB’s securities and assets. FDIC disclosed that SVB’s collapse will cost the regulator up to US$20bn.
The addition of SVB’s business will significantly increase the size of First Citizens, which at the end of last year had just over US$100bn in assets and nearly US$90bn in deposits, placing it as the US’s 36th-largest bank, by assets. As of Friday, First Citizens bank had a market value of just over US$8bn.
All SVB branches will reopen as Silicon Valley Bank, a division of First Citizens Bank.