First Citizens Bank Completes Acquisition of Silicon Valley Bank Assets and Deposits
First Citizens Bank signs an agreement to assume the deposits and loans of Silicon Valley Bank, as disclosed this morning by the Federal Deposit Insurance Corporation (FDIC). The regulator stated that Silicon Valley Bridge Bank, formed from 17 former branches of the National Association, will open as First Citizens Bank & Trust Company on Monday, March 27, 2023. Customers will continue using their existing branches until First Citizens confirms that its system transformation is complete and all services are fully available across the network.
US authorities, after a two‑week search for a buyer, sanctioned the regional bank head‑quartered in Raleigh, North Carolina, to take over approximately $72 billion in assets at a discount of about $16.5 billion from Silicon Valley Bank. By March 10, the U.S. Deposit Insurance Fund reported Silicon Valley Bank had total assets around $167 billion and deposits near $119 billion. Roughly $90 billion in securities and other assets will stay under the FDIC’s control as creditors’ collateral.
The regulator agreed to a valuation for First Citizens’ common stock of roughly $500 million. Under the loss‑sharing framework, the FDIC and First Citizens Bank agreed to cover losses on acquired loans, aiming to maximize asset recovery by keeping recovery efforts within the private sector and to minimize disruption for loan customers.
FDIC estimates suggest Silicon Valley Bank’s failure cost well over $20 billion; the exact figure will be clarified as the receivership process completes. In the meantime, Silicon Valley Bank depositors become First Citizens Bank depositors, with all deposits insured by the FDIC up to the applicable limit.
Extension of Deposit Guarantees
Related news continues to circulate as the broader US financial sector absorbs the impact of the SVB and Signature Bank collapses. Regulators initially protected deposits up to $250,000 per account; however, ongoing market churn and concerns around other banks may prompt further adjustments to deposit guarantees and backstops.
Janet Yellen, the Treasury secretary, noted last week that larger collateral arrangements could be used to support the liquidity needs of smaller banks. She emphasized that while large banks play a critical role, smaller and mid-sized banks are equally vital to the economy. The broader goal remains ensuring confidence and continuity in financial services for both individuals and businesses across the United States.