For release
WASHINGTON – The Federal Deposit Insurance Corporation (FDIC) has entered into an agreement to purchase and acquire all deposits and loans held by Silicon Valley Bridge Bank, National Association, by First-Citizens Bank & Trust Company, Raleigh, North Carolina.
The 17 former branches of Silicon Valley Bridge Bank, National Association, will open Monday, March 27, 2023 as First–Citizens Bank & Trust Company. Silicon Valley Bridge Bank, National Association customers should continue to use their current branch until then to receive notification from First–Citizens Bank & Trust Company that the system conversion has been completed to enable full-service banking at all other branches.
Silicon Valley Bridge Bank, National Association depositors automatically become First–Citizens Bank & Trust Company depositors. All deposits accepted by First-Citizens Bank & Trust Company will continue to be insured by the FDIC up to the insurance limit.
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. Today’s transaction included the purchase of approximately $72 billion in assets of Silicon Valley Bridge Bank, National Association, at a discount of $16.5 billion. Approximately $90 billion in securities and other assets remain in receivership available through the FDIC. In addition, the FDIC received stock appreciation rights on the common stock of First Citizens BancShares, Inc., of Raleigh, North Carolina, with a potential value of up to $500 million.
The FDIC and First-Citizens Bank & Trust Company have completed a loss sharing transaction for the commercial loans they purchased from the former Silicon Valley Bridge Bank, National Association. The FDIC, as receiver, and First-Citizens Bank & Trust Company will share in losses and potential recoveries on loans covered by the Loss Sharing Agreement. The loss sharing transaction is designed to maximize returns from the assets by holding them in the private sector. The transaction is also expected to minimize disruption to lending customers. In addition, First-Citizens Bank & Trust Company handles all credit-related qualifying financial contracts.
The FDIC estimates the cost of Silicon Valley Bank’s failure to its Deposit Insurance Fund (DIF) at about $20 billion. The exact cost will be determined when the FDIC terminates receivership.
The FDIC formed the Silicon Valley Bridge Bank, National Association, following the closure of Silicon Valley Bank by the California Department of Financial Protection and Innovation. All of Silicon Valley Bank’s deposits — both insured and uninsured — and substantially all of its assets and qualifying financial contracts were transferred to the bridge bank. The purpose of forming the Silicon Valley Bridge Bank, National Association was to give the FDIC time to stabilize the institution and market the franchise.
Customers who would like 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.
FDIC: PR-23-2023