North Carolina-based bank holding company First Citizens BancShares will buy Silicon Valley Bank’s deposits and loans, the Federal Deposit Insurance Corp. announced Monday, two weeks after the biggest U.S. bank failure since the global financial crisis, CNBC reported.

Shares of First Citizens rose more than 47% in Monday trading on Wall Street.

The deal calls for the purchase of about $72 billion of SVB’s assets at a $16.5 billion discount, but about $90 billion worth of securities and other assets will remain “in receivership for disposition by the FDIC.”

“In addition, the FDIC has been granted rights to increase the value of First Citizens BancShares, Inc., Raleigh, North Carolina, common stock with a potential value of up to $500 million,” the FDIC said in a statement.

The deal comes after the regulator earlier this month transferred all of SVB’s deposits and assets to a new “bridge bank” in an effort to protect depositors from the failed bank.

“The 17 former Silicon Valley Bridge Bank National Association branches will reopen as First-Citizens Bank & Trust Company on Monday, March 27, 2023,” the FDIC said in a statement.

First-Citizens Bank & Trust Company is a subsidiary of First Citizens BancShares.

“Customers of Silicon Valley Bridge Bank, National Association should continue to use their current branch until they receive notification from First-Citizens Bank & Trust Company that the system conversion has been completed to provide full banking services at all of its other branch locations . “

First Citizens and the FDIC also entered into a “loss share agreement” — in which the FDIC absorbs a portion of losses on a specified pool of assets — through commercial loans purchased from bridge bank SVB.

“It is calculated that a loss-making capital operation maximizes the return of assets by keeping them in the private sector. It is also expected that this transaction will minimize disruption to customers dealing with loans,” the FDIC explained.

The regulator added that the estimated cost of SVB’s bankruptcy in relation to its Deposit Insurance Fund would be around $20 billion, with the exact amount to be determined after the conclusion of the legal proceedings.

Regulators shut down SVB, a prominent name in the technology and venture capital sector, and took control of its deposits on March 10.

The collapse of the bank came as bank customers withdrew billions from their accounts and the value of previously considered safe assets such as US Treasury bills and government mortgage-backed securities plummeted as the US Federal Reserve aggressively raised interest rates. .

That spelled trouble for the bank, which was struggling to raise $2.25 billion to meet the needs of customers who withdrew money and fund new loans.

As of March 10, transition bank SVB had total assets of about $167 billion and total deposits of about $119 billion, the FDIC confirmed.

The collapse of SVB shook the world’s banking systems and was cited as one of the catalysts for the possible collapse of the Swiss banking giant Credit Suisse and the emergency rescue by the Swiss group UBS.

However, many analysts believe that the subsequent market volatility was unwarranted.