for release
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, First-Citizens Bank & Trust Company, Raleigh, North Carolina.
17 former branches of Silicon Valley Bridge Bank, National Association, will open on Monday, March 27, 2023 as First-Citizens Bank & Trust Company. Customers of Silicon Valley Bridge Bank, National Association should continue to use their current branches until they receive notice from First-Citizens Bank & Trust Company that system conversions have been completed to allow full-service banking at other branch locations.
Depositors of Silicon Valley Bridge Bank, National Association will automatically become depositors of First-Citizens Bank and Trust Company. All deposits accepted by First-Citizens Bank & 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 total assets of approximately $167 billion and total deposits of approximately $119 billion. Today’s transactions include the $72 billion purchase of Silicon Valley Bridge Bank, National Association’s assets at a discount of $16.5 billion. Approximately $90 billion in securities and other assets will remain in receivership for disposition by the FDIC. In addition, the FDIC has acquired equity appreciation rights in the common stock of First Citizens Bancshares, Inc., Raleigh, North Carolina, with a potential value of up to $500 million.
The FDIC and First-Citizens Bank & Trust Company have entered into a loss-sharing transaction for commercial loans purchased from former Silicon Valley Bridge Bank, National Association. The FDIC as receiver and First-Citizens Bank & Trust Company will share loan losses and potential recoveries covered by the loss-share agreement. Loss-share transactions are assumed to maximize asset recovery by keeping them in the private sector. The transaction is expected to reduce disruption for loan customers. In addition, First-Citizen Bank and Trust Company will accept all loan-related qualifying financial agreements.
The FDIC estimates that Silicon Valley Bank’s failure in its Deposit Insurance Fund (DIF) could cost nearly $20 billion. Exact costs will be determined when the FDIC closes the receivership.
The FDIC created Silicon Valley Bridge Bank, National Association, after the closure of Silicon Valley Bank by the California Department of Financial Protection and Innovation. All deposits—both insured and uninsured—and substantially all property and all eligible financial contracts of Silicon Valley Bank were transferred to Bridge Bank. The purpose of establishing the Silicon Valley Bridge Bank, National Association was to give the FDIC time to stabilize the institution and market the franchise.
Consumers 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.
FDIC: PR-23-2023