First Citizens Bank buys SVB deposits, loans

First Citizens Bank to buy all deposits and loans of Silicon Valley Bank, following its collapse, the biggest in the US since 2008, and its recent acquisition by First Citizens, the Federal Deposit Insurance Corporation (FDIC) announced on Sunday.

The deal includes $119 billion worth of deposits and $72 billion in assets, while $90 billion worth of securities and other assets will be in receivership in disposition by the FDIC.

SVB depositors will now be First Citizens Bank depositors, with the FDIC continuing to insure deposits, SVB’s 17 branches will be opened as First Citizens, the FDIC said on Monday. People with loans from SVB will continue making payments, including escrow payments, and the loan terms will remain unchanged.

First Citizens and the FDIC have a loss-share transaction, on the commercial loans purchased from the SVB bridge bank, with which the FDIC absorbs part of the loss on a specific pool of assets.

“The loss–share transaction is projected to maximize recoveries on the assets by keeping them in the private sector. The transaction is also expected to minimize disruptions for loan customers,” said the FDIC.

SVB’s collapse came after clients withdrew their deposits, the bank’s fall affected global banks, especially Swiss bank, Credit Suisse, which was acquired UBS.