North Carolina-based First Citizens Bank & Trust on Monday announced that it had agreed to purchase all loans and deposits from California-based Silicon Valley Bank (SVB).

A statement by First Citizens said it would purchase "all loans and certain other assets, and assume all customer deposits and certain other liabilities of Silicon Valley Bridge Bank."

"The transaction," the bank said, "is structured as a whole bank purchase with loss share coverage."

The Silicon Valley Bridge Bank was created by US banking authorities after SVB's March 10 collapse.

News of the sale became public late Sunday when the Federal Deposit Insurance Corporation (FDIC), a US government deposit insurer, announced its approval of the proposed sale.

The FDIC said SVB depositors would "automatically become depositors of First Citizens Bank," noting the sale would cover $119 billion (€110.5 billion) in deposits, and $72 billion (€66.8 billion) in assets.

First Citizens said all of SVB's 17 branches would open Monday as "Silicon Valley Bank, a division of First Citizens Bank."

Why was SVB's collapse significant?

SVB, a tech startup bank founded in the 1980s, collapsed after a run by depositors over concerns about its future. It was the 16th largest bank in the US.

SVB's demise sent shockwaves through the global banking sector, which saw further collapses and takeovers, most notably the emergency takeover of Credit Suisse by rival UBS on March 19, and a steep drop in the value of Deutsche Bank shares Friday.

SVB's collapse was the second largest in US history and the largest since the 2008 financial crisis.

Its implosion caused the FDIC, the US Treasury and the US Federal Reserve to take action to ensure SVB depositors could access their cash. The Fed also moved to create a new bank lending tool in an effort to stave off similar quick collapses in the future.

As part of the sale, the FDIC will extend First Citizens a new line of credit to ensure liquidity as well as an agreement that will allow the bank to share losses with the insurer.

In a statement, the FDIC said that it "estimates the cost of the failure of Silicon Valley Bank to its Deposit Insurance Fund (DIF) to be approximately $20 billion." The exact cost, it said, "will be determined when the FDIC terminates the receivership."

First Citizens has roughly $109 billion in assets and total deposits valued at $89.4 billion.

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