First Citizens intends to buy Silicon Valley Bank

U.S. regulators said Monday that they would support a deal to buy bankrupt Silicon Valley Bank by regional lender First Citizens BancShares, which would result in about $20 billion being transferred to the state insurance fund.

The deal came to light after the Federal Deposit Insurance Corporation (FDIC) acquired Silicon Valley Bank on March 10 after a deposit leak amid a bank raid that also brought down Signature Bank and destroyed more than half the market value of several other banks.

The FDIC hopes the deal with First Citizens will minimize the impact on the deposit guarantee fund it manages to fund the bank bailouts. The fund is not funded by U.S. taxpayer money, but by a tax on the entire banking sector.

According to the agency, the sale would cost the FDIC's deposit guarantee fund about $20 billion. That amount is in addition to the $2.5 billion the FDIC lost when it sold Signature Bank to New York Community Bancorp a week ago.

The FDIC will be able to exercise these rights between March 27 and April 14. The amount of money received will depend on the value of First Citizens' stock. First Citizens stock rose 50 percent in premarket trading Monday to $874.75.

First Citizens, which describes itself as the bank that has done the most transactions under the FDIC since 2009, said the combined company would be sustainable with a credit portfolio and a diversified deposit base.