WASHINGTON – The Federal Deposit Insurance Corporation (FDIC) has entered into a purchase and assumption agreement for all deposits and loans of Silicon Valley Bridge Bank, National Association, with First-Citizens Bank & Trust Company, Raleigh, North Carolina.
17 former branches of Silicon Valley Bridge Bank, National Association, will open as First Citizens Bank and Trust Company on Monday, March 27, 2023. Customers of Silicon Valley Bridge Bank, National Association should continue to use their existing branch. Receive notification from First Citizens Bank and Trust Company that system changes have been completed to allow full-service banking at all of its other branch locations.
Depositors of Silicon Valley Bridge Bank, National Association will automatically become depositors of First Citizens Bank and Trust Company. All deposits assumed by First Citizens Bank and Trust Company will continue to be insured by the FDIC up to the limit of insurance.
As of March 10, 2023, Silicon Valley Bridge Bank, National Association, had approximately $167 billion in total assets and approximately $119 billion in total deposits. In today’s transaction, approximately $72 billion of Silicon Valley Bridge Bank, National Association’s assets were purchased at a discount of $16.5 billion. Approximately $90 billion in securities and other assets will remain in receivership for issuance by the FDIC. In addition, the FDIC acquired equity appreciation rights in First Citizens BancShares, Inc., Raleigh, North Carolina, common stock with a potential value of up to $500 million.
The FDIC and First-Citizens Bank & Trust Company entered into a loss-share transaction on commercial loans acquired by National Association, a former Silicon Valley bridge bank. The FDIC Receiver and First-Citizens Bank & Trust Company will share in the losses and potential recoveries of the loans covered by the loss-share agreement. A loss-share transaction is predicted to maximize the return on assets by keeping them private. The transaction is also expected to reduce disruptions for loan customers. Additionally, First Citizens Bank & Trust Company will undertake all qualified financing agreements related to the loan.
The FDIC estimates the cost of the failure of Silicon Valley Bank’s Deposit Insurance Fund (DIF) at approximately $20 billion. The exact cost will be determined when the FDIC terminates receivership.
The FDIC created Silicon Valley Bridge Bank, a national association, following the closure of Silicon Valley Bank by the California Department of Financial Protection and Innovation. All deposits—insured and uninsured—and substantially all assets and all qualifying financial contracts of Silicon Valley Bank were transferred to Bridge Bank. The purpose of establishing Silicon Valley Bridge Bank, National Association was to allow the FDIC time to stabilize the institution and market the franchise.
Customers seeking more information about today’s transaction can visit the FDIC’s website at: https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/silicon-valley.html.