First Citizens Bank to acquire what's left of Silicon Valley Bank

Regional U.S. lender First Citizens Bankhas agreed to buy what's left of Silicon Valley Bank for a steep discount.

TheNorth Carolina-based bank said over the weekend that it has struck a deal with federal authorities to take over "substantially all loans and certain other assets ... all customer deposits and certain other liabilities," of the California-based lender, which collapsed into insolvency earlier this month.

The U.S. government-run Federal Deposit Insurance Corporation (FDIC) took over SVB to ensure customer deposits were safe, a stunning development that sent shock waves through the banking sector across the globe.

Since then, a handful of other banks from niche U.S. lenders like Signature Bank to major global giants likeCredit Suisse and Deutsche Bank have been bought, bailed out or otherwise plagued by uncertainty.

While the FDIC decided to backstop depositors, the government agency had no intention of actually running the bank and hasbeen seeking a buyer for thebank's operations, which includeabout $110 billion in assets, $56 billion worth of customer deposits and about $72 billion worth of business loans.

It found that buyer in First Citizens over the weekend. Starting on Monday, the 17 remaining SVB branches willbegin operating as "Silicon Valley Bank, a division of First Citizens Bank."

"We appreciate the confidence the FDIC has placed in us," First Citizens CEO Frank Holding said. "We look forward to building relationships with our new customers and positioning our company for continued success as we affirm our commitment to support the integrity of our nation's banking system."

Exact financial terms were not disclosed, but the purchase price for First Citizens includes a discount of about $16.5 billion from the face value ofthe loan portfolio. The FDIC will also have a chance to recoup some of its losses, as it will be getting about $500 million worth of equity in First Citizens.

The FDIC also says the move to backstop SVB deposits will result in about a $20 billion hit to its coffers, but the exact number can't be tallied until the receivership is fully terminated, the FDIC said in a release.