The FDIC said in separate statement it has received equity appreciation rights in First Citizens BancShares stock with a potential value of up to $500 million as part of the deal.
First Citizens said the transaction was structured to preserve its solid financial position and the combined company remains resilient with a diverse loan portfolio and deposit base.
Under the deal, unit First–Citizens Bank & Trust Company will assume SVB assets of $110 billion, deposits of $56 billion and loans of $72 billion.
“Prudent risk management approach will continue to protect customers and stockholders through all economic cycles and market conditions,” the statement said.
The FDIC said the purchase of about $72 billion of SVB’s assets came at a discount of $16.5 billion.
“The FDIC estimates the cost of the failure of Silicon Valley Bank to its Deposit Insurance Fund (DIF) to be approximately $20 billion. The exact cost will be determined when the FDIC terminates the receivership,” it said.
Approximately $90 billion in securities and other assets from SVB will remain in receivership for disposition, the regulator added.
From Monday, SVB’s 17 former branches will begin operating as Silicon Valley Bank, a division of First Citizens Bank.
First Citizens has around $109 billion in assets and total deposits of $89.4 billion.