For $500 million, First Citizens Bank has purchased Silicon Valley Bank (SVB). Compared to its $40 billion valuation a year ago, the crypto-friendly SVB is currently being bought for a whopping 99% discount. As of now, First Citizens BancShares has accepted deposits totaling $119 billion.
Discounted Deal
According to a press statement from the FDIC, on March 27, 2023, the 17 locations of Silicon Valley Bridge Bank, National Association will reopen as First-Citizens Bank & Trust Company. The FDIC also announced that it will sell all of SVB’s deposits and loans to First Citizens Bank & Trust Co.
On March 10th, the overall assets of Silicon Valley Bridge Bank were about $167 billion, while the total deposits were around $119 billion. Around $72 billion in Silicon Valley Bridge Bank assets will be acquired in the deal, at a discount of $16.5 billion. Yet the FDIC will still be in possession of $90 billion in securities and other assets as a receiver.
The FDIC estimates that the collapse of SVB will have a cost to the Deposit Insurance Fund (DIF) of almost $20 billion. When the FDIC receivership is through, the true cost may be determined. The California Department of Financial Protection and Innovation seized SVB on March 10.
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