8-KMaterial AgreementsExhibits & Filings

FIRST CITIZENS BANCSHARES INC /DE/ 8-K Report, Agreement Terminated (Apr 7, 2025)

Filed April 7, 2025For Securities:FCNCAFCNCPFCNCBFCNCOFCNCN

Summary

First Citizens BancShares, Inc. (FCNCA) has entered into an agreement with the FDIC to terminate its commercial shared-loss agreement related to the Silicon Valley Bridge Bank (SVBB) acquisition. This agreement, which initially covered an estimated $60 billion in loans, had provisions for the FDIC to reimburse FCB for losses up to $5 billion and share in losses above that threshold, while FCB would share in recoveries. The early termination means all rights and obligations under this agreement have ceased, with no outstanding payments due from either party as of the termination date. This decision was driven by FCB's assessment that the likelihood of reaching the $5 billion loss threshold was remote, and it will also eliminate associated reporting burdens.

Key Highlights

  • 1Termination of the SVBB acquisition shared-loss agreement with the FDIC effective April 7, 2025.
  • 2No payments or outstanding obligations are due from either First Citizens Bank & Trust Company (FCB) or the FDIC under the terminated shared-loss agreement.
  • 3The shared-loss agreement covered an estimated $60 billion in loans from the SVBB acquisition.
  • 4FCB determined the likelihood of reaching the $5 billion loss threshold for FDIC reimbursement was remote.
  • 5Termination eliminates reporting covenants and obligations related to FDIC loss sharing and FCB reimbursement.
  • 6Related debt agreements with the FDIC, including the $35.99 billion Purchase Money Note, survive the termination of the shared-loss agreement.

Frequently Asked Questions

The termination simplifies operations for First Citizens Bank by eliminating reporting requirements and associated burdens related to the Silicon Valley Bridge Bank acquisition. Crucially, it was undertaken because the bank assessed that the probability of incurring losses that would trigger the FDIC's shared-loss provisions was very low. This action has no immediate financial cost, as no payments are due from or to the FDIC under the terminated agreement.

No, the termination of the shared-loss agreement does not affect other material debt agreements with the FDIC. Specifically, the Purchase Money Note, which had an outstanding principal of $35.99 billion as of December 31, 2024, and matures in March 2028, remains in place with its existing terms and interest rate.

The shared-loss agreement was entered into at the time of the Silicon Valley Bridge Bank acquisition on March 27, 2023. Its purpose was to mitigate risk for First Citizens Bank by having the FDIC reimburse a portion of potential losses on a pool of approximately $60 billion in loans, while also having First Citizens reimburse the FDIC for a portion of any recoveries. This structure was intended to protect the bank from significant downside risk on a large portfolio of assets acquired in an FDIC-assisted transaction.

From an immediate financial standpoint, there are no new costs or liabilities. The termination agreement states that as of the termination date, no payments or other obligations are due or outstanding by either FCB or the FDIC under the shared-loss agreement. The primary benefit is operational simplification and the removal of a potential, albeit remote, financial contingency tied to the shared-loss provisions.