(Reuters) – Regulator Federal Deposit Insurance Corporation (FDIC) exercised its equity appreciation right in First Citizens BancShares Inc stock worth $500 million as part of a deal for the regional lender to buy failed Silicon Valley Bank.
The equity right was exercised on March 28, according to a filing on Friday.
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 Bank and wiped out more than half the market value of several other U.S. regional lenders.
U.S. regulators said on Monday they would backstop the deal for 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 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.
(Reporting by Mehnaz Yasmin in Bengaluru; Editing by Shounak Dasgupta)
