The US Federal Deposit Insurance Corporation (FDIC) announced on Monday that First Citizens Bank & Trust Company will buy the deposits and liabilities of Silicon Valley Bank.
According to a statement from the FDIC, the acquisition includes the purchase of approximately $72 billion in assets from Silicon Valley Bank at a $16.5 billion discount.
Silicon Valley Bank buyout deal details
The purchase and assumption agreement covers 17 former branches of Silicon Valley Bridge Bank. Post the deal, they will open on March 27 as First-Citizens Bank and Trust Company.
As of March 10, the tech-focused bank had about $167 billion in total assets and about $119 billion in total deposits.
The statement reveals, “The FDIC estimates the cost of the Silicon Valley bank’s Deposit Insurance Fund (DIF) failure to be approximately $20 billion. The exact cost will be determined when the FDIC terminates receivership.”
overseas branches
The FDIC will continue to protect deposits up to insurance limits following its acquisition of First Citizens Bank. Earlier this month, the UK division of Silicon Valley Bank was bought by HSBC for £1. The subsidiary acquisition helped secure over $8.1 billion in deposits from UK customers.
SVB Financial Group filed for Chapter 11 protection last week following the failure of its banking arm.
The SVB closure marked an unprecedented bank turmoil last experienced in 2008 during the global financial crisis.
This story is breaking and will be updated as more details become available,
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