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First Citizens BancShares Terminates FDIC Shared-Loss Agreement Tied to Silicon Valley Bridge Bank Acquisition

First Citizens BancShares, Inc. has announced the early termination of a key agreement with the Federal Deposit Insurance Corporation (FDIC) that was established during the acquisition of certain assets from Silicon Valley Bridge Bank, N.A. in March 2023.

The original shared-loss agreement, which covered approximately $60 billion in loans, provided for loss reimbursement by the FDIC only after First-Citizens Bank & Trust Company incurred more than $5 billion in losses on covered assets. The FDIC would then share 50% of any excess losses, and First Citizens would return 50% of any recoveries. However, due to a determination that losses would likely remain below the threshold, the agreement has now been officially terminated as of April 7, 2025.

With this move, all associated obligations and reporting requirements under the agreement have ended. The bank emphasized that there are no outstanding payments due between the parties under the terminated agreement.

Importantly, the termination does not affect the $35.99 billion Purchase Money Note that was issued in connection with the acquisition, which remains active and continues to bear interest at 3.50% per annum until its scheduled maturity in March 2028. Provisions related to this note were preserved in the termination process.

The bank cited operational simplification and reduced administrative burden as key factors in its decision, signaling confidence in the stability of the acquired assets.
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M
ME NEWS 04-08-25