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First Citizens Bank acquires SVB's deposits, loans from FDIC

The transaction covers $119 billion in deposits and $72 billion in assets

SVB sold to First Citizens Bank Representational Image | Reuters

The Federal Deposit Insurance Corporation (FDIC) sold all deposits and loans of Silicon Valley Bank (SVB) deposits and loans by First-Citizens Bank and Trust Company.

The FDIC in a statement said that the transaction covers $119 billion in deposits and $72 billion in assets and SVB's 17 branches will open as First Citizens on Monday.

Approximately $90 billion in securities and other assets will remain in the receivership for disposition by the FDIC, the statement read.

"All deposits assumed by First-Citizens Bank and Trust Company will continue to be insured by the FDIC up to the insurance limit," the government corporation said in a press release.

First Citizens Bank is a subsidiary of Raleigh-headquartered First Citizens BancShares, Inc. The transaction has been structured as a whole bank purchase with loss share coverage.

SVB, one of the US's biggest banks by assets collapsed after a sudden run on deposits, prompting regulators to seize control.

The United States Treasury and Federal Reserve along with the FDIC had set out plans to ensure SVB customers would be able to access their deposits, reported AFP.

Fed has also introduced a new lending tool for banks in an effort to prevent a repeat of SVB's quick demise, it added.

The First Citizens Bank reportedly has more than $100 billion in assets and more than 500 branches across 22 states. Earlier too the Bank had bought government-seized community banks.

The FDIC estimated that the cost of the bank failure to the government's deposit insurance fund will be around $20 billion, reported The New York Times.

Recently UBS, Switzerland's largest bank had agreed to acquire crisis-hit Credit Suisse in deal arranged by Swiss government. 

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