First Citizens Bancshares Inc 8-K, filed Mar 27, 2023
First Citizens Bancshares Inc /De/ (FCNCA)
About this 8-K
First Citizens Bancshares Inc filed this 8-K on March 27, 2023.
Items reported
- Item 1.01: Entered into a material agreement
- Item 2.01: Completed an acquisition or sale of assets
- Item 2.03: New debt or off-balance-sheet obligation
- Item 7.01: Regulation FD disclosure
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 1.01. | Entry into a Material Definitive Agreement. |
Effective March 27, 2023 (the “Acquisition Date”), First-Citizens Bank & Trust Company (“FCB”), a North Carolina chartered commercial bank and direct, wholly owned subsidiary of First Citizens BancShares, Inc. (“BancShares”), assumed all customer deposits and certain other liabilities, and acquired substantially all loans and certain other assets, of Silicon Valley Bridge Bank, N.A. (“Silicon Valley Bridge Bank”), as successor to Silicon Valley Bank (the “Failed Bank”), from the Federal Deposit Insurance Corporation (the “FDIC”), as receiver for Silicon Valley Bridge Bank (the “Acquisition”), pursuant to the terms of a purchase and assumption agreement entered into by FCB and the FDIC on March 27, 2023 (the “Purchase Agreement”).
Under the terms of the Purchase Agreement, FCB acquired approximately $110.1 billion in assets, including approximately $72.1 billion in loans held by Silicon Valley Bridge Bank and approximately $2.7 billion of other assets. FCB also assumed approximately $59.0 billion in liabilities, including approximately $56.5 billion in customer deposits. The deposits were acquired without a premium and the assets were acquired at a discount of approximately $16.45 billion, subject to customary adjustments. The Purchase Agreement expressly excludes (i) any obligation for FCB to purchase (a) qualified financial contracts or any other derivative instructions to the extent FCB has not acquired the underlying assets or assumed the underlying liability, (b) cryptocurrency assets or any assets backed by cryptocurrency, (c) SPD Silicon Valley Bank Co., Ltd., the China joint venture, (d) the Cayman Islands branch, (e) the German, Canadian, and Hong Kong branches, for which FCB will receive an option to purchase, and (ii) any obligation for FCB to assume (a) liabilities of any acquired subsidiaries not in the ordinary course of business and not reflected, or reserved for, on the Failed Bank’s balance sheet as of March 17, 2023 or (b) deposits denominated in cryptocurrency. Silicon Valley Bridge Bank owns certain bank premises and leases certain bank premises, for which FCB will receive an option to purchase or an option to lease, respectively. No assets were acquired or liabilities assumed from the Failed Bank’s former parent company, SVB Financial Group. The terms of the Purchase Agreement provide for the FDIC to indemnify FCB against, among other things, claims based on the rights of any current or former stockholders, creditors, directors, officers, employees, or agents of the Failed Bank, and claims based on any action or inaction of the Failed Bank or its directors, officers, employees, or agents.
In connection with the Acquisition, as initial payment under the Purchase Agreement, FCB issued a five-year $35.0 billion note to the FDIC (the “Purchase Money Note”). It is anticipated that the Purchase Money Note will be secured by (i) all loans (other than certain consumer loans and related collateral) and certain real estate and bank premises acquired by FCB from the FDIC, (ii) certain other assets related to the foregoing, including specified rights under the Purchase Agreement and Shared-Loss Agreement (as defined below), and (iii) proceeds of the foregoing. Interest will accrue on the outstanding principal balance of the Purchase Money Note at a fixed rate of 3.50% per annum, and will be computed on the basis of a 360 day year for actual days elapsed and payable monthly in arrears. FCB may prepay the principal of the Purchase Money Note at any time, without premium or penalty, upon notice to the FDIC. FCB will be required to prepay the principal of the Purchase Money Note in an amount equal to all collections and other proceeds received in respect of the Purchase Money Note collateral.
FCB and the FDIC also entered into a binding term sheet pursuant to which the FDIC is providing a five-year, $70 billion line of credit to FCB (the “Credit Facility”). During the two-year period following the Acquisition (the “Availability Period”), FCB may draw on the Credit Facility to support liquidity, including for deposit withdrawal or runoff and to fund the unfunded commercial lending commitments acquired pursuant to the Acquisition (the “Unfunded Commitments”). The Credit Facility is secured by the commercial loans and other extensions of commercial credit acquired pursuant to the Acquisition, including Unfunded Commitments subsequently funded by FCB (collectively, the “Assumed Commercial Loans”). FCB may prepay advances at any time, in full or in part, without premium or penalty. FCB is required to repay advances (i) at any time (but only to the extent) that outstanding advances exceed the aggregate principal amount of Assumed Loans outstanding, and (ii) in full upon acceleration or maturity of the Credit Facility. Interest on outstanding principal will accrue at a variable rate equal to the Secured Overnight Financing Rate plus 25 basis points (but in no event less than 0.00%), and will be computed on the basis of a year of 365 or 366 days, as applicable, for actual days elapsed. Interest is payable in arrears on the first business day of each fiscal quarter.
In connection with the Purchase Agreement, FCB also entered into a commercial shared loss agreement with the FDIC (the “Shared-Loss Agreement”). The Shared-Loss Agreement will cover an estimated $60 billion of loans (collectively, the “covered assets”). Pursuant to the terms of the Shared-Loss Agreement, the FDIC will reimburse FCB for 0% of losses of up to $5 billion with respect to covered assets and 50% of losses in excess of $5 billion with respect to covered assets (“FDIC loss sharing”) and FCB will reimburse the FDIC for 50% of recoveries related to such covered assets (“FCB reimbursement”). The
Shared-Loss Agreement provides for FDIC loss sharing for five years and FCB reimbursement for eight years, in each case on the terms and conditions described in the Shared-Loss Agreement. The Shared-Loss Agreement extends to loans funded after the Acquisition Date that were unfunded commitments to loan at the Acquisition Date for a period of one year after the Acquisition Date. If actual losses incurred are not as significant as estimated in the Shared-Loss Agreement, FCB has agreed to pay to the FDIC, 45 days after March 31, 2031 (or, if earlier, the time of disposition of all acquired assets pursuant to the Shared-Loss Agreement), a true-up amount up to $1.5 billion calculated using a formula set forth in the Shared-Loss Agreement.
In addition, as part of the consideration for the Acquisition, BancShares issued a Cash Settled Value Appreciation Instrument to the FDIC (the “Value Appreciation Instrument”) in which FCB agreed to make a cash payment to the holder thereof equal to the product of (a) 5 million and (b) the excess amount (if any) by which the average volume weighted price of one share of BancShares’ Class A common stock, par value $1, over the two Nasdaq trading days immediately prior to the date on which the Value Appreciation Instrument is exercised exceeds $582.55; provided, however, that in no event will the settlement amount that the holder is entitled to as a result of the exercise of the Value Appreciation Right exceed $500,000,000. The Value Appreciation Instrument is exercisable by the holder thereof, in whole or in part, from and including March 27, 2023 to April 14, 2023, and is payable within five business days following the exercise date. If the Value Appreciation Instrument is not exercised by the FDIC on or before April 14, 2023, it will be of no further force and effect.
| Item 2.01. | Completion of Acquisition or Disposition of Assets. |
The Acquisition was consummated on March 27, 2023. The information set forth under Item 1.01 “Entry into a Material Definitive Agreement” is incorporated by reference into this Item 2.01.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth under Item 1.01 “Entry into a Material Definitive Agreement” regarding the Purchase Money Note and the Credit Facility is incorporated into this Item 2.03 by reference to the extent required.
| Item 7.01. | Regulation FD Disclosure. |
BancShares will host a conference call at 8:30 a.m., Eastern Time on Monday, March 27, 2023 relating to the Acquisition. A copy of the slides that will be made available in connection with the presentation are attached as Exhibit 99.1 to this Current Report on Form 8-K (this “Report”).
In accordance with General Instruction B.2 of Form 8-K, the information presented herein pursuant to Item 7.01, “Regulation FD Disclosure,” including Exhibits 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall the information be deemed incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.
| Item 8.01. | Other Events. |
On March 27, 2023, FCB issued a press release announcing the Acquisition. A copy of this press release is attached as Exhibit 99.2 to this Report and incorporated by reference herein.
| Item 9.01. | Financial Statements and Exhibits |
(a) Financial Statements of Businesses Acquired.
Pursuant to Item 9.01(a)(3), no financial statements are being filed with this Report. To the extent that financial statements are required by this Item, they will be filed in an amendment to this Report.
(b) Pro Forma Financial Information
Pursuant to Item 9.01(a)(3) and (b)(2), no pro forma financial information is being filed with this Report. To the extent that pro forma financial information is required by this Item, it will be filed in an amendment to this Report.
(d) Exhibits
The following exhibits accompany this Report.
| Exhibit |
Description | |
| 99.1 | Investor Presentation dated March 27, 2023 | |
| 99.2 | Press Release dated March 27, 2023 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
Disclosures About Forward-Looking Statements
This Report may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the financial condition, results of operations, business plans and future performance of BancShares. Words such as “anticipates,” “believes,” “estimates,” “expects,” “predicts,” “forecasts,” “intends,” “plans,” “projects,” “targets,” “designed,” “could,” “may,” “should,” “will,” “potential,” “continue,” “aims” or other similar words and expressions are intended to identify these forward-looking statements. These forward-looking statements are based on BancShares’ current expectations and assumptions regarding BancShares’ business, the economy, and other future conditions.
Because forward-looking statements relate to future results and occurrences, they are subject to inherent risks, uncertainties, changes in circumstances and other factors that are difficult to predict. Many possible events or factors could affect BancShares’ future financial results and performance and could cause the actual results, performance or achievements of BancShares to differ materially from any anticipated results expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others, general competitive, economic, political, geopolitical events (including the military conflict between Russia and Ukraine) and market conditions, the financial success or changing conditions or strategies of BancShares’ customers or vendors, fluctuations in interest rates, actions of government regulators, including the recent and projected interest rate hikes by the Board of Governors of the Federal Reserve Board (the “Federal Reserve”), the potential impact of decisions by the Federal Reserve on BancShares’ capital plans, adverse developments with respect to U.S. or global economic conditions, including the significant turbulence in the capital or financial markets, the impact of the current inflationary environment, the impact of implementation and compliance with current or proposed laws, regulations and regulatory interpretations, the availability of capital and personnel, and the failure to realize the anticipated benefits of BancShares’ previous acquisition transactions, including the acquisition announced in this Report and the recently completed transaction with CIT Group Inc., which acquisition risks include (1) disruption from the transactions with customer, supplier or employee relationships, (2) the possibility that the amount of the costs, fees, expenses and charges related to the transactions may be greater than anticipated, including as a result of unexpected or unknown factors, events or liabilities, (3) reputational risk and the reaction of the parties’ customers to the transactions, (4) the risk that the cost savings and any revenue synergies from the transactions may not be realized or take longer than anticipated to be realized, (5) difficulties experienced in the integration of the businesses, and (6) the ability to retain customers following the transactions.
Except to the extent required by applicable laws or regulations, BancShares disclaims any obligation to update forward-looking statements or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. Additional factors which could affect the forward-looking statements can be found in BancShares’ Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and its other filings with the Securities and Exchange Commission.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| First Citizens BancShares, Inc. | ||||||
| (Registrant) | ||||||
| Date: March 27, 2023 | By: | /s/ Craig L. Nix | ||||
| Name: | Craig L. Nix | |||||
| Title: | Chief Financial Officer | |||||
First Citizens Bank Announces Acquisition of Silicon Valley Bridge Bank, N.A. March 27, 2023 + SVB Private | Silicon Valley Bridge Bank Exhibit 99.1
Disclosures Forward Looking Statements This investor presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the financial condition, results of operations, business plans and future performance of First Citizens BancShares, Inc. ("BancShares") and its wholly owned subsidiary, First-Citizens Bank & Trust Company (“First Citizens”). Words such as “anticipates,” “believes,” “estimates,” “expects,” “predicts,” “forecasts,” “intends,” “plans,” “projects,” “targets,” “designed,” “could,” “may,” “should,” “will,” “potential,” “continue”, “aims” or other similar words and expressions are intended to identify these forward-looking statements. These forward-looking statements are based on BancShares’ current expectations and assumptions regarding BancShares’ business, the economy, and other future conditions. Because forward-looking statements relate to future results and occurrences, they are subject to inherent risks, uncertainties, changes in circumstances and other factors that are difficult to predict. Many possible events or factors could affect BancShares’ future financial results and performance and could cause the actual results, performance or achievements of BancShares to differ materially from any anticipated results expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others, general competitive, economic, political, geopolitical events (including the military conflict between Russia and Ukraine) and market conditions, the financial success or changing conditions or strategies of BancShares’ customers or vendors, fluctuations in interest rates, actions of government regulators, including the recent and projected interest rate hikes by the Board of Governors of the Federal Reserve Board (the “Federal Reserve”), the potential impact of decisions by the Federal Reserve on BancShares’ capital plans, adverse developments with respect to U.S. or global economic conditions, including the significant turbulence in the capital or financial markets, the impact of the current inflationary environment, the impact of implementation and compliance with current or proposed laws, regulations and regulatory interpretations, the availability of capital and personnel and the failure to realize the anticipated benefits of BancShares’ previous acquisition transactions, including the acquisition announced in this investor presentation and the recently completed transaction with CIT Group Inc., which acquisition risks include (1) disruption from the transactions with customer, supplier or employee relationships, (2) the possibility that the amount of the costs, fees, expenses and charges related to the transactions may be greater than anticipated, including as a result of unexpected or unknown factors, events or liabilities, (3) reputational risk and the reaction of the parties’ customers to the transactions, (4) the risk that the cost savings and any revenue synergies from the transactions may not be realized or take longer than anticipated to be realized, (5) difficulties experienced in the integration of the businesses, and (6) the ability to retain customers following the transactions. Except to the extent required by applicable laws or regulations, BancShares disclaims any obligation to update forward-looking statements or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. Additional factors which could affect the forward-looking statements can be found in BancShares’ Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and its other filings with the Securities and Exchange Commission.
A leading relationship bank serving customers’ unique needs Note – Financial information for First Citizens BancShares, Inc. is as of December 31, 2022. Financial information for Silicon Valley Bridge Bank, N.A. is as of March 24, 2023 as reported by the FDIC. All financial information is subject to change based on closing balance sheet. (1) In connection with the transaction, First Citizens has the option, but not the obligation, to purchase or lease these branches and offices, as applicable. Standalone Assets $109 B Loans & leases $71 B Deposits $89 B $219 B – Total assets $145 B – Deposits $143 B – Loans & leases Standalone Assets $110 B Loans & leases $72 B Deposits $56 B Branches & Private Banking Offices: First Citizens (550) Silicon Valley Bridge Bank (17) (1) Expands our nationwide franchise adding scale in attractive West Coast and Northeast markets California Arizona New Mexico Texas Oregon Washington Wisconsin Oklahoma Colorado Missouri Florida Georgia Tennessee West Virginia South Carolina North Carolina (HQ) Virginia Maryland Kansas Nebraska Nevada Hawaii Massachusetts Creating valuable scale, enhancing product offerings and bolstering presence in attractive markets.
Opportunity for long-term stockholder value creation Expanding our portfolio and unlocking new business opportunities Unlocks incremental top-line growth by adding legacy SVB’s Global Fund Banking business to serve private equity and venture capital clients and introducing First Citizens’ consumer, business services, wealth and commercial offerings to legacy SVB clients. Accelerates growth of First Citizens’ wealth business by adding the digital capabilities, talent, and solutions of SVB Private. Building on our capabilities in the innovation and technology sectors Combines First Citizens’ tradition of relationship banking, creativity, and stability with the strengths, relationships and expertise of legacy SVB’s talented employees. Positions First Citizens to further serve venture-backed companies and tech startups in the Research Triangle Park and nationwide through the addition of legacy SVB’s customer and employee base. Diversifying our client base while continuing to prioritize relationship banking Leverages deep client relationships served by legacy SVB’s Global Fund Banking business to expand reach of First Citizens to the venture capital and private equity communities. Continues First Citizens and legacy SVB’s shared approach to relationship banking and offering highly tailored solutions to serve unique needs of all customers. Maintaining our fortress balance sheet and culture of strong risk management Capital ratios remain robust and remain within target ranges post-acquisition. Liquidity remains strong and stable, driven by a conservatively managed investment portfolio, and is enhanced by the transaction, which creates additional balance sheet funding and access to additional contingent funding. Shared-loss agreement with the FDIC limits credit risk on the acquired loan portfolio. Continued commitment to First Citizens’ strong culture of risk management.
Communities Employees Stockholders Clients Delivers value across the stakeholder universe A shared commitment to long-term customer relationships. Expanded capabilities and products strengthen our position as a full-service financial services destination that supports customers’ needs through the entire life cycle. Combines industry-leading expertise and market-leading franchises to meet the needs of a broader customer base. Pairs our banking experience and fortress balance sheet with the expertise and talent of Silicon Valley Bank’s teams to deliver an exceptional banking experience. Common relationship-based client service model. Meaningful synergies through combining capabilities and leveraging common platforms, vendors, and technologies. Cross-selling opportunities to legacy SVB customers. Access to larger talent pool and faster implementation of wealth expansion. Increases our reach with a right to acquire 17 branches which would bring our total footprint to 567 offices across 23 states. Positions combined company to be more competitive on a national scale. Strong risk management culture and commitment to credit quality. Shared culture that prioritizes client relationships and an innovative approach to serving entrepreneurial customers. Adds significant scale, geographic diversity and compelling digital capabilities, which will lead to additional career opportunities and mobility. Focus on diversity, inclusion and professional development. Shared commitment to support small businesses, middle market and other business owners affected by recent events in the banking sector. Limited overlap and differentiated models minimize disruption to the communities we serve. Committed to making positive and lasting impacts on our communities through our business activities, our volunteer and charitable efforts and our adherence to the highest ethical standards.
Acquired certain assets and assumed certain liabilities of Silicon Valley Bridge Bank, N.A. from the FDIC We acquired total assets of $110.1 billion with a $16.5 billion discount bid on assets, consisting of: $72.1 billion in loans $56.5 billion in deposits No investment securities acquired Option to purchase all bank branches and corporate locations. Retaining employees in the acquired revenue-producing businesses and those necessary to manage operations to support those businesses. FDIC received a value appreciation instrument from First Citizens BancShares, Inc. valued at up to $500 million (payable in cash) and exercisable until April 14th, 2023. Acquisition details Preliminary Acquired Assets & Liabilities (1) ($ in millions) All regulatory approvals received and transaction has closed. All branches now operating as a division of First Citizens Bank. All depositors will continue to have access to their funds. Integration Transaction structured to limit liquidity and credit risks to First Citizens: Asset discount and loss share agreement with the FDIC provides downside protection against credit risk. Five-year loss share agreement stipulates that the FDIC will reimburse First Citizens for 50% of losses on commercial loans in excess of $5 billion. Entered into a liquidity facility with the FDIC to provide additional contingent funding if needed. Downside protections (1) Assets and liabilities as of March 24, 2023 as provided by the FDIC. Subject to change based on closing balance sheet. Asset and liability data does not include purchase accounting marks. (2) In connection with the acquisition, First Citizens entered into a five-year $35 billion note payable to the FDIC bearing an annual interest rate of 3.50%. Amount is estimated based on the March 24, 2023 balance sheet provided by the FDIC. Subject to change based on closing balance sheet. Assets Cash $ 35,264 Gross loans 72,114 Earning assets $ 107,378 Other assets 2,704 Total assets $ 110,082 Liabilities Deposits $ 56,491 Borrowings (2) 34,605 Other liabilities 2,536 Total liabilities $ 93,632 Discount bid on assets $ 16,450
Our liquidity and capital position remains strong, stable and sound We strive to maintain strong liquidity and capital positions and our risk appetite for liquidity is low. Note - The “pro forma” financial data included herein has not been prepared in accordance with Article 11 of the SEC’s Regulation S-X, is presented for informational purposes only and may differ materially from the Regulation S-X compliant pro forma financial statements. We conservatively manage our investment portfolio, focusing on short duration High Quality Liquid Securities that are either directly, or indirectly, guaranteed by the U.S. government. At December 31, 2022, First Citizens’ AFS securities totaled $9 B with a duration of 3.5 years and HTM securities totaled $10 B with a duration of 5.0 years. Conservative & stable investment portfolio management Our liquidity position is immediately strengthened by the transaction resulting from the infusion of ~$35 B in cash, and the FDIC contingent liquidity facility which provides additional contingent funding. Combined company has total liquidity that covers uninsured deposits by over 175%. Pro forma liquidity coverage is strong and stable First Citizens has a history of being well-capitalized. Capital ratios including CET1 and Tier 1 Leverage remain strong and within target operating ranges. Pro forma capital within target ranges In an abundance of caution, increased our borrowings from the FHLB in March to approximately $9 B which increased our pre-acquisition cash position from $4 B to $10 B. Moved more than $4 B in unencumbered HTM securities to the FHLB to provide an opportunity for increased borrowing capacity. Our legacy deposit base acts as a source of strength and stability and we expect to have the continued ability to stimulate core deposit growth through reasonable and effective pricing strategies. Since December 31, 2022, our deposits have grown by more than $1.3 B. Proactively improved on balance sheet liquidity
Expanding First Citizens’ deposit base $89 B Time deposits Noninterest-bearing demand Money market & savings Checking with interest $56 B Money market & savings Noninterest-bearing demand Checking with interest Time deposits Pro Forma Acquiring ~$56 B of deposits, of which 63% are noninterest bearing-demand deposits. Provides combined bank with access to a more geographically diverse deposit base and increases noninterest-bearing deposits to greater than 40% of total deposits on a combined basis. Our nationwide, digital Direct Bank acts as a channel to quickly and efficiently add balances through competitive product offerings. $145 B Money market & savings Noninterest-bearing demand Checking with interest Time deposits Note – The “pro forma” financial data included herein has not been prepared in accordance with Article 11 of the SEC’s Regulation S-X, is presented for informational purposes only and may differ materially from the Regulation S-X compliant pro forma financial statements. Financial information for First Citizens BancShares, Inc. is as of December 31, 2022. Financial information for Silicon Valley Bridge Bank, N.A. is as of March 24, 2023 as provided by the FDIC. All financial information is subject to change based on closing balance sheet. Highlights
Combined loan portfolios are well-diversified limiting concentration risk Legacy SVB’s commercially-focused portfolio complements First Citizens’ client strategy bringing a strong Global Fund Banking business with deep private equity and venture capital relationships. Acquired portfolio has a low loss history and aligns to reflect prudent credit risk management aligning well with First Citizens credit culture. Significant downside protection through credit loss sharing with FDIC and asset discount. Diversifies our loan portfolio and business mix further, particularly across technology, life sciences / healthcare and wealth. Highlights Pro Forma 19% $72 B Global Fund Banking Other Private Bank Technology & Life Science / Healthcare Other General Bank Commercial Finance Mortgage Branch Network & Wealth $71 B 19% $143 B Real Estate Finance Global Fund Banking Equipment Finance Private Bank Mortgage Technology & Life Science / Healthcare Commercial Finance Real Estate Finance Equipment Finance Commercial Services Branch Network & Wealth Other Commercial Services Note – The “pro forma” financial data included herein has not been prepared in accordance with Article 11 of the SEC’s Regulation S-X, is presented for informational purposes only and may differ materially from the Regulation S-X compliant pro forma financial statements. Financial information for First Citizens BancShares, Inc. is as of December 31, 2022. Financial information for Silicon Valley Bridge Bank, N.A. is as of March 24, 2023 as provided by the FDIC. All financial information is subject to change based on closing balance sheet.
Key Takeaways Adds significant scale, geographic diversity, capabilities and solutions for our customers. Financially attractive transaction with favorable downside protections against liquidity and credit risk. 1 Proven track record of prudent risk management with a strong liquidity position and capital ratios within or above target ranges post acquisition. Committed to serving the innovation economy and preserving legacy SVB’s strong relationships. Expands talent and expertise with shared commitment to deep, longstanding client relationships. 2 3 4 5
Exhibit 99.2
|
NEWS RELEASE | |||
| For Immediate Release | Contacts: | Barbara Thompson | ||
| March 27, 2023 | Corporate Communications | |||
| First Citizens Bank | ||||
| 919-716-2716 | ||||
| Deanna Hart | ||||
| Investor Relations | ||||
| First Citizens Bank | ||||
| 919-716-2137 | ||||
First Citizens Bank Enters into Whole Bank Purchase
of Silicon Valley Bridge Bank, N.A.
Acquisition affirms First Citizens’ commitment to support Silicon Valley Bank depositors and borrowers
| • | Transaction is structured to preserve First Citizens’ solid financial position |
| • | Combined company remains resilient and secure with diverse loan portfolio and deposit base |
| • | Combination builds on First Citizens’ significant expertise and renowned franchises to meet the needs of a broader customer base |
| • | Allows First Citizens to build on its experience with innovation hubs by leveraging Silicon Valley Bank’s strength in serving the private equity, venture capital and technology sectors |
| • | Transaction brings together complementary strengths of both banks’ middle market commercial banking and private banking capabilities and leverages common platforms, vendor partners and technologies |
| • | Prudent risk management approach will continue to protect customers and stockholders through all economic cycles and market conditions |
RALEIGH, N.C. — First-Citizens Bank & Trust Company (“First Citizens Bank”), a subsidiary of Raleigh-headquartered First Citizens BancShares, Inc. (“First Citizens”) (Nasdaq: FCNCA), announced today that it has entered into an agreement with the Federal Deposit Insurance Corporation (FDIC) to purchase out of FDIC receivership substantially all loans and certain other assets, and assume all customer deposits and certain other liabilities of Silicon Valley Bridge Bank, N.A. The transaction is structured as a whole bank purchase with loss share coverage. First Citizens was selected to complete this transaction through a competitive bidding process.
Frank B. Holding, Jr., chairman and CEO of First Citizens, said: “First Citizens has a reputation for financial strength, exceptional customer service and prudent lending that spans 125 years. We have partnered with the FDIC to successfully complete more FDIC-assisted transactions since 2009 than any other bank, and we appreciate the confidence the FDIC has placed in us once again. We look forward to building relationships with our new customers and positioning our company for continued success as we affirm our commitment to support the integrity of our nation’s banking system.”
As part of the agreement, First Citizens Bank will assume Silicon Valley Bridge Bank, N.A. assets of $110 billion, deposits of $56 billion and loans of $72 billion, based on latest information provided by the FDIC. First Citizens Bank will additionally receive an available line of credit from the FDIC for contingent liquidity purposes. In addition, First Citizens Bank has entered into a loss share agreement with the FDIC to provide further downside protection against potential credit losses. First Citizens Bank will not acquire any of the assets, common stock, preferred stock, debt or assume any other obligations of SVB Financial Group, the former holding company of Silicon Valley Bank (“SVB”).
On March 27, 2023, the 17 legacy Silicon Valley Bridge Bank, N.A. branches will begin operating as Silicon Valley Bank, a division of First Citizens Bank.
Corporate Communications Department-FCC 17 PO Box 27131 Raleigh, NC 27611-7131
There will be no immediate change to customers’ current accounts, and they will be able to continue to access their accounts as they do today — through their current websites, mobile apps and branch locations. They can continue to use their checks and cards and will still have ATM and online access to their accounts. Loan customers should continue making loan payments as usual. Customers will be notified of any future account changes in advance.
“First Citizens has a proud history of growing organically and through strategic acquisitions that build our core capabilities in a careful and deliberate manner,” said Holding. “This transaction leverages our solid foundation to add significant scale, geographic diversity, compelling digital capabilities and most importantly, meaningful solutions for customers throughout their lifecycle. Specifically, we are committed to building on and preserving the strong relationships that legacy SVB’s Global Fund Banking business has with private equity and venture capital firms. This transaction also will accelerate our expansion in California and introduce wealth capabilities in the Northeast. SVB’s Private Wealth business is a natural fit for our high-touch and sophisticated level of high-net-worth customer service and approach.”
INVESTOR CALL DETAILS
First Citizens will host a conference call and webcast to discuss the company’s acquisition on Monday, March 27, 2023, at 8:30 a.m. Eastern time.
To access this call, dial:
United States: 1-833-470-1428
Canada: 1-833-950-0062
All other locations: 1-404-975-4839
Access code: 670916
The investor presentation and this news release are available on the company’s website at ir.firstcitizens.com, and the conference call will be webcast live at this same location.
A replay of the call will be available until Monday, April 17, 2023, by calling 1-866-813-9403 (United States and Canada) or 1-929-458-6194 (all other locations) and referencing access code 720812. A webcast archive of the conference call will be available through April 17, 2023, at ir.firstcitizens.com.
For more information about First Citizens, customers can visit firstcitizens.com.
The California Department of Financial Protection and Innovation closed SVB of Santa Clara, Calif., on March 10, 2023, and appointed the FDIC as receiver. Afterward, the FDIC transferred all the deposits of the former Silicon Valley Bank to Silicon Valley Bridge Bank, N.A., operated by the FDIC.
BofA Securities, Inc. is serving as exclusive financial advisor to First Citizens and Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, LLP acted as legal advisor.
About First Citizens
First Citizens Bank helps personal, business, commercial and wealth clients build financial strength that lasts. Founded in 1898 and headquartered in Raleigh, N.C., First Citizens provides a unique legacy of strength, stability and long-term thinking that has spanned generations. First Citizens offers an array of general banking services including a network of more than 550 branches and offices in 23 states; commercial banking expertise delivering best-in-class lending, leasing and other financial services coast to coast; and a nationwide direct bank. Parent company First Citizens BancShares, Inc. (NASDAQ: FCNCA) is a top 20 U.S. financial institution with more than $219 billion in assets. First Citizens Bank, Member FDIC. In 2023, the bank is celebrating the 125th anniversary of its founding. Discover more at firstcitizens.com.
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Forward-Looking Statements
This communication may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 regarding the financial condition, results of operations, business plans and future performance of First Citizens. Words such as “anticipates,” “believes,” “estimates,” “expects,” “predicts,” “forecasts,” “intends,” “plans,” “projects,” “targets,” “designed,” “could,” “may,” “should,” “will,” “potential,” “continue,” “aims” or other similar words and expressions are intended to identify these forward-looking statements. These forward-looking statements are based on First Citizens’ current expectations and assumptions regarding First Citizens’ business, the economy, and other future conditions.
Because forward-looking statements relate to future results and occurrences, they are subject to inherent risks, uncertainties, changes in circumstances and other factors that are difficult to predict. Many possible events or factors could affect First Citizens’ future financial results and performance and could cause the actual results, performance or achievements of First Citizens to differ materially from any anticipated results expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others, general competitive, economic, political, geopolitical events (including the military conflict between Russia and Ukraine) and market conditions, the financial success or changing conditions or strategies of First Citizens’ customers or vendors, fluctuations in interest rates, actions of government regulators, including the recent and projected interest rate hikes by the Board of Governors of the Federal Reserve Board (the “Federal Reserve”), the potential impact of decisions by the Federal Reserve on First Citizens’ capital plans, adverse developments with respect to U.S. or global economic conditions, including the significant turbulence in the capital or financial markets, the impact of the current inflationary environment, the impact of implementation and compliance with current or proposed laws, regulations and regulatory interpretations, the availability of capital and personnel, and the failure to realize the anticipated benefits of First Citizens’ previously announced acquisition transaction(s), including the acquisition announced in this communication and the recently-completed transaction with CIT Group Inc., which acquisition risks include (1) disruption from the transactions with customer, supplier or employee relationships, (2) the possibility that the amount of the costs, fees, expenses and charges related to the transactions may be greater than anticipated, including as a result of unexpected or unknown factors, events or liabilities, (3) reputational risk and the reaction of the parties’ customers to the transactions, (4) the risk that the cost savings and any revenue synergies from the transactions may not be realized or take longer than anticipated to be realized, (5) difficulties experienced in completing the integration of the businesses and (6) the ability to retain customers following the transactions.
Except to the extent required by applicable law or regulation, First Citizens disclaims any obligation to update such factors or to publicly announce the results of any revisions to any of the forward-looking statements included herein to reflect future events or developments. Additional factors which could affect the forward-looking statements can be found in First Citizens’ Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and its other filings with the Securities and Exchange Commission.