After Going Bankrupt a US Firm Acquires Silicon Valley Bank

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First Citizens BancShares Inc. has agreed to buy Silicon Valley Bank, which was taken over by regulators after a run on the bank.
According to a statement from the Federal Deposit Insurance Corp., the Raleigh, North Carolina-based bank entered into a purchase and assumption agreement for all of SVB’s deposits and loans. The transaction includes the purchase of approximately $72 billion in SVB assets at a $16.5 billion discount.

The FDIC will keep approximately $90 billion in securities and other assets in receivership for disposition, while the Federal institution will also receive equity appreciation rights in First Citizens worth up to $500 million.

First Citizens BancShares Inc. has agreed to buy Silicon Valley Bank, which was taken over by regulators after a run on the bank.
According to a statement from the Federal Deposit Insurance Corp., the Raleigh, North Carolina-based bank entered into a purchase and assumption agreement for all of SVB’s deposits and loans. The transaction includes the purchase of approximately $72 billion in SVB assets at a $16.5 billion discount.

The FDIC will keep approximately $90 billion in securities and other assets in receivership for disposition, while the Federal institution will also receive equity appreciation rights in First Citizens worth up to $500 million.

Regulators had been racing to find a buyer for all or parts of the bank in order to cover the uninsured deposits of its startup customers, but an earlier auction failed to find a buyer.

After receiving “substantial interest” from multiple potential acquirers, the FDIC extended the bidding process. The FDIC allowed parties to submit separate bids for the Silicon Valley Private Bank subsidiary and Silicon Valley Bridge Bank NA – the firm created by the FDIC after SVB went into receivership – to simplify the process and expand the pool of bidders.

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