First Citizens excludes Canadian branch from Silicon Valley Bank purchase

OSFI seized control of SVB's Canadian operations earlier this month

First Citizens excludes Canadian branch from Silicon Valley Bank purchase

While First Citizens BancShares has agreed to purchase most of Silicon Valley Bank, it excluded the failed bank’s Canadian branch from the acquisition, a regulatory filing shows.

The U.S. 8-K form – a report filed with the U.S. Securities and Exchange Commission to announce major company events shareholders should be made aware of – revealed that First Citizens’ purchase of Silicon Valley Bank did not include the latter’s Canadian branch. Instead, Silicon Valley Bank’s Canadian, German, and Hong Kong branches were made available as purchase options for First Citizens.

Earlier this month, the Office of the Superintendent of Financial Institutions (OSFI) seized control of SVB’s Canadian operations as the tech lender collapsed into the second biggest bank failure in American history just as the U.S. Federal Deposit Insurance Corporation (FDIC) took control of the parent bank.

While the Canadian branch of Silicon Valley Bank was especially active with startup funding in Canada’s tech sector, most of its deposits were transferred to the bridge bank set up by U.S. regulators as part of efforts to keep U.S. operations running.

OSFI later secured a winding-up order from the Ontario Supreme Court of Justice to support a potential transition of the Canadian branch operations and provide a framework for possible future liquidation. The court appointed PricewaterhouseCoopers to oversee the transition.

The FDIC will be receiving equity appreciation rights in First Citizens BancShares stock potentially worth up to $500 million as part of the deal, the U.S. regulator said in a statement, while First Citizens Bank & Trust Company will assume Silicon Valley Bank assets of $110 billion, deposits of $56 billion, and loans of $72 billion.

Silicon Valley Bank was ranked as the 16th biggest lender in the U.S. in December 2022, with about $209 billion in assets.

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