The Federal Deposit Insurance Corporation (FDIC) has found a taker for the collapsed Silicon Valley Bank (SVB). On Monday, FDIC confirmed that North Carolina-based First Citizens Bancshares had entered an agreement to buy SVB’s assets, deposits, and loans.
According to the details of the deal, First Citizens will take on $72 billion in loans at a discount price of $16.5 billion. It will also receive SVB’s assets valued at $110 billion and $56 billion in deposits.
“In addition, the FDIC received equity appreciation rights in First Citizens BancShares, Inc., Raleigh, North Carolina, a common stock with a potential value of up to $500 million,” the FDIC said in a statement adding that they will keep “$90 billion in securities and other assets” from SVB.
On Monday, 17 of SVB’s former branches re-opened as First Citizens locations. Also, all of SVB’s clients have automatically become the clients of First Citizens.
Silicon Valley Bank was closed by regulators earlier in March due to “inadequate liquidity and insolvency.” It was the second-largest bank failure in the history of the U.S. and sparked a banking crisis that also caused New York-based Signature Bank to fold. Following the collapse of two banks, the Federal Reserve stepped in and promised the full protection of all deposits.