First-Citizens Bank & Trust Company (FCBTC) has acquired Silicon Valley Bridge Bank (SVBB), National Association, after the closure of Silicon Valley Bank by the California Department of Financial Protection and Innovation. All deposits and assets of Silicon Valley Bank were transferred to the bridge bank to allow the FDIC time to stabilize the institution and market the franchise. As part of the purchase and assumption agreement, FCBTC will assume all deposits and loans of Silicon Valley Bridge Bank. Depositors of the failed bank will automatically become depositors of First-Citizens Bank & Trust Company, with all deposits assumed by the new bank insured by the FDIC up to the insurance limit.
The 17 former SVBB branches will open as First-Citizens Bank & Trust Company on Monday, March 27, 2023. Customers are advised to continue using their current branch until they receive a notice that systems conversions have been completed. Additionally, the acquisition deal included purchasing approximately $72 billion of SVBB’s assets at a discount of $16.5 billion. Roughly $90 billion in securities and other assets will remain in the receivership for disposition by the FDIC. 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.
It is worth noting that Silicon Valley Bank was welcoming to cryptocurrencies and blockchain technology. In 2015, it partnered with the Coinbase (NASDAQ:COIN) crypto exchange to provide bitcoin services to its clients. However, its failure cost approximately $20 billion to the FDIC’s Deposit Insurance Fund, with the exact cost to be determined when the FDIC terminates the receivership.
