On Sunday, the Federal Deposit Insurance Corporation FDIC announced the First-Citizens Bank Trust Company of Raleigh, North Carolina has entered a purchase agreement for all deposits and loans of the Silicon Valley Bridge Bank, National Association.
The FDIC said that the 17 former Silicon Valley Bridge Bank, National Association branches will open as First Citizens Bank Trust Company on March 27, 2023.
Customers of Silicon Valley Bridge Bank, National Association, should use their current branch until they receive notice from First Citizens Bank Trust Company that systems conversions have been completed to allow full service banking at all of its other branch locations, the statement continued.
Depositors of the Santa Clara, California-based bank will automatically become depositors of First Citizens Bank Trust Company, and all deposits will be assumed and insured by First Citizens Bank Trust Company, up to the insurance limit.
The FDIC said that as of March 10, 2023, Silicon Valley Bridge Bank, National Association, had about $167 billion in total assets and about $119 billion in total deposits. The deal included the purchase of about $72 billion of National Association's Silicon Valley Bridge Bank, which has assets at a discount of $16.5 billion. There are approximately 90 billion dollars in securities and other assets that will be put in receivership for disposal by the FDIC.
The statement said that the FDIC and First Citizens Bank Trust Company entered into a loss share transaction on all commercial loans it purchased from Silicon Valley Bank SVB The FDIC as receiver and First Citizens Bank Trust Company will share in the losses and potential recoveries on the loans covered by the loss share agreement. The loss share transaction is expected to maximize recoveries on the assets by keeping them in the private sector. The transaction is expected to minimize disruption for loan customers. The FDIC said First Citizens Bank Trust Company will assume all loan related Qualified Financial Contracts.
The cost will be more accurately determined when the FDIC terminates the receivership, according to the FDIC.
The Silicon Valley Bridge Bank was created by the FDIC after the California Department of Financial Protection Innovation closed the Silicon Valley Bank on Friday, March 10. All of the deposits, both insured and uninsured, were transferred to the bridge bank.