The winning bidder in the government’s auction of Silicon Valley Bank’s main assets received several concessions to make the deal happen.First Citizens BancShares is acquiring $72 billion in SVB assets at a discount of $16.5 billion, or 23%, according to a Sunday release from the Federal Deposit Insurance Corporation.The deal doubles First Citizens’ asset size, catapulting it to $219 billion in total assets, according to the bank’s presentation. It is gaining all the loans and deposits of SVB, as well as 17 branches, the FDIC said.But even after the deal closes, the FDIC remains on the hook to dispose of about $90 billion in SVB assets being kept in receivership. The sale excludes investment securities, meaning the FDIC is stuck with SVB’s bonds that have dropped in value, and which helped spark the firm’s demise.And the FDIC agreed to a five-year loss-sharing deal on commercial loans First Citizens is taking over, as well as a $70 billion credit line in case customers pull more deposits, the North Carolina-based bank said Monday.The FDIC is also giving First Citizens a five-year, $35 billion loan at a favorable 3.5% interest rate to help finance the deal, First Citizens said Monday during an investor call. In exchange, the FDIC is getting equity rights in the bank that could be worth up to $500 million.All told, the SVB failure will cost the FDIC’s Deposit Insurance Fund about $20 billion, the agency said. That makes the SVB failure the costliest in history of the deposit insurance fund, which began operating in 1934. The cost will be borne by higher fees on American banks that enjoy FDIC protection.Shares of First Citizens shot up 55% in trading Monday.Underwhelming interestThe deal terms may be explain …
