8-KAcquisitions & DispositionsMaterial AgreementsFinancial Events+3

FIRST CITIZENS BANCSHARES INC /DE/ 8-K Report, Material Agreement (Mar 27, 2023)

Filed March 27, 2023For Securities:FCNCAFCNCPFCNCBFCNCOFCNCN

Summary

First Citizens BancShares, Inc. (FCNCA), through its subsidiary First-Citizens Bank & Trust Company (FCB), has completed a significant acquisition of substantially all assets and assumed certain liabilities of Silicon Valley Bridge Bank, N.A., as receiver for Silicon Valley Bank (the "Failed Bank"), from the FDIC. This transaction, effective March 27, 2023, involved acquiring approximately $110.1 billion in assets, including $72.1 billion in loans and $56.5 billion in customer deposits, while excluding certain assets like cryptocurrency and international branches. The acquisition was structured with significant financial support from the FDIC, including a $35 billion note and a $70 billion credit facility, to ensure a smooth transition and provide liquidity.

Key Highlights

  • 1Acquisition of Silicon Valley Bridge Bank's core assets and liabilities completed on March 27, 2023.
  • 2First Citizens acquired approximately $110.1 billion in assets, including $72.1 billion in loans and assumed $56.5 billion in customer deposits.
  • 3Certain assets, including cryptocurrency, specific branches, and derivatives, were explicitly excluded from the transaction.
  • 4FDIC provided a five-year, $35 billion note to FCB as part of the initial payment.
  • 5FDIC extended a five-year, $70 billion line of credit to FCB to support liquidity and fund unfunded commitments.
  • 6A commercial shared loss agreement with the FDIC covers an estimated $60 billion of loans, with the FDIC absorbing 0%-50% of losses above a threshold.
  • 7BancShares issued a Cash Settled Value Appreciation Instrument to the FDIC, with a potential payout capped at $500 million based on stock price appreciation.

Frequently Asked Questions

This Form 8-K is filed to announce the completion of a material definitive agreement, specifically the acquisition of substantially all assets and assumption of certain liabilities of Silicon Valley Bridge Bank, N.A. by First-Citizens Bank & Trust Company (FCB) from the FDIC. It details the terms of the acquisition, financial support provided by the FDIC, and related agreements.

The acquisition involved FCB assuming deposits and acquiring loans and assets. The FDIC provided significant financial support, including a $35 billion note to FCB and a $70 billion line of credit to assist with liquidity and unfunded commitments. Additionally, a shared loss agreement allows the FDIC to share in potential losses on acquired loans.

FCB acquired approximately $110.1 billion in assets, including $72.1 billion in loans, and assumed $56.5 billion in customer deposits. The assets were acquired at a discount of approximately $16.45 billion. The FDIC's financial support includes a 3.50% fixed-rate $35 billion note and a variable-rate credit facility up to $70 billion.

Yes, several items were expressly excluded. These include certain derivative contracts, cryptocurrency assets, the China joint venture (SPD Silicon Valley Bank Co., Ltd.), the Cayman Islands branch, and the German, Canadian, and Hong Kong branches (though FCB has an option to purchase these). Liabilities of acquired subsidiaries not in the ordinary course of business and cryptocurrency deposits were also excluded.