FDIC exercises rights in First Citizens, New York Community Bank stocks

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Regulator Federal Deposit Insurance Corporation (FDIC) exercised its equity rights in First Citizens BancShares Inc and New York Community Bancorp Inc as part of the deals to rescue failed lenders Silicon Valley Bank and Signature Bank.

The equity right to purchase $500 million in First Citizens was exercised on March 28, according to aon Friday. A spokesperson for the regulator confirmed FDIC also exercised its option to acquire shares of New York Community Bancorp.

FDIC took over Silicon Valley Bank on March 10 after depositors rushed to pull out their money in a bank run that also brought down Signature BankU.S. regulators said on Monday they wouldfor First Citizens to buy Silicon Valley Bank, triggering an estimated $20 billion hit to a government-run insurance fund.

First Citizens did not pay cash upfront for the Silicon Valley Bank deal. Instead, it said it granted equity appreciation rights in its stock to the FDIC that could be worth up to $500 million, a fraction of what Silicon Valley Bank was worth before it failed.from New York-based Signature Bank earlier this month.

Reporting by Mehnaz Yasmin in Bengaluru and Pete Schroeder in Washington; Editing by Shounak Dasgupta

 

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