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NEW YORK: First Citizens Bank will acquire significant holdings of fallen lender Silicon Valley Bank, a US banking agency announced late Sunday, as regulators seek to contain an industry crisis.

Under a transaction overseen by the US Federal Deposit Insurance Corporation, First Citizens agreed to purchase “substantially all loans and certain other assets, and assume all customer deposits and certain other liabilities of Silicon Valley Bridge Bank,” First Citizens said in a news release.

First Citizens said the purchase follows a competitive bidding process, with the prize including discounts on SVB’s loans, in addition to the California bank’s deposits, which have shrunk significantly since the bank came under federal receivership on March 10.

Shares of First Citizens rocketed higher Monday, along with other regional banks that have been pressured in the wake of the SVB collapse.

Near midday, First Citizens was up nearly 50 percent, while the embattled First Republic gained 16.1 percent. KeyCorp rose 3.8 percent and Comerica won 4.9 percent. Banking industry watchers had been hoping for an SVB purchase soon after it went under FDIC control. “It’s just a good look that the banks aren’t considered so broken that nobody would want them,” said Alexander Yokum, an analyst at CFRA Research.

SVB’s collapse sparked a crisis of confidence among the customers of similarly sized US banks, with many withdrawing their money and depositing it into bigger institutions seen as too big for the government to not bail them out in a crisis.

The turmoil also spread to Europe, where troubled Swiss lender Credit Suisse was taken over by UBS and shares of Deutsche Bank came under pressure last week. SVB, a key lender to the tech industry since the 1980s, became the biggest US bank to fail since 2008. Regulators seized it after a sudden run on deposits, creating Silicon Valley Bridge Bank, an entity that will be taken over by First Citizens from Monday.

Under the deal, the 17 former branches of SVB will open on Monday as “Silicon Valley Bank, a division of First Citizens Bank.”

The transaction includes the sale of $72 billion in assets at a discount of $16.5 billion, the FDIC said.

All the entity’s loans and deposits will now be managed by First Citizens, while the FDIC will retain some $90 billion in securities and other SVB assets.

First Citizens said it is adding $56 billion in deposits from SVB.

That number compares with $119 billion on March 10, according to the FDIC. The FDIC said it estimates the cost of SVB’s failure to its Deposit Insurance Fund (DIF) to be approximately $20 billion.

In addition to the discounted assets, First Citizens executives characterized the deal as beneficial in growing its exposure to the innovation and technology sector, where it is already a player through the Research Triangle Park hub in North Carolina.

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