On March 26, the Carolina-based financial provider First Citizen Bank closed a merger and acquisition deal with the now-defunct Silicon Valley Bank (SVB). According to the report, the First Citizen team will acquire SVB assets, including deposits and loans.
The report was submitted to the Federal Deposit and Insurance Corporation (FDIC) department for review and approval. Per the report the closed SVB branches would be reopened on March 27 under the management of First Citizens Bank and Trust Company.
The First Citizen team will oversee the operation of the 17 SVB branches. Per the agreement, the existing customers will become First Citizen depositors.
First Citizen Acquires Silicon Valley Bank
The March 26 report stated that the M&A agreement was sealed at a buyout plan of $72 billion for the Silicon Valley Bridge Bank and an additional $16.5 billion for the National Association’s assets.
The assets retained as receivership for disposition to be conducted by the FDIC officials will translate to $90 million. The M&A deal provides the FDIC equity appreciation rights for the First Citizen shares amounting to $500 million.
Since March 18, the First Citizen group has been preparing the SVB acquisition. After prolonged internal dialogues between the First Citizen stakeholders, they submitted their SVB bid on March 21.
At the time of writing, the First Citizen Bank holds assets worth $167 billion and deposits amounting to $119 billion. The First Citizens Bancshares Inc. affiliate company ranks among the 30 largest financial providers in the US.
The FDIC team confirmed to receive numerous bids from other financial institutions, including Valley National Bancorp and Citizens Financial Group. After reviewing the proposals, the FDIC team considered the First Citizen group since they provided a promising deal for the SVB acquisition.
Ongoing Market Speculation Concerning Silicon Valley Bank Acquisition
Following the unexpected fallout of Silicon Valley Bank on March 10, the FDIC was appointed to oversee the acquisition of the SVB. The FDIC team has made remarkable efforts in auctioning the bankrupt financial institution.
The team formulated the SVB sale plan comprising two major divisions. The first auction will involve the disposal of the SVB depository unit, followed by selling assets from the private bank, including retail products and services.