In recent news, First Citizens BancShares is all set to complete the purchase of the embattled Silicon Valley Bank. Ever since SVB caved in due to the liquidity crisis, it has been under the aegis of the Federal Insurance Development Corp (FDIC).
As per a statement by the FDIC, the American lender based in North Carolina is willing to enter into an agreement to assume the purchase of all deposits and loans of SVB.
The agreement covers deposits worth 119 billion dollars, and 72 billion dollars in assets, with SVB’s 17 branches slated to open as First Citizens on Monday, the statement adds.
The FDIC will continue to insure all SVB deposits which will be under the control of First Citizens, up to the insurance ceiling.
“The FDIC estimates the cost of the failure of Silicon Valley Bank to its Deposit Insurance Fund (DIF) to be approximately 20 billion dollars. The exact cost will be determined when the FDIC terminates the receivership,” the statement read while adding, “approximately 90 billion dollars in securities and other assets will remain in the receivership for disposition by the FDIC.”
The total assets and deposits of First Citizens are approximately 109 billion dollars and 89.4 billion dollars respectively.
The FDIC has been unsuccessfully hunting for potential buyers for SVB Private and the Silicon Valley Bank in the past couple of weeks. Due to this, the American regulator had been seeking for separate deals for both entities.