First-Citizens Bank & Trust Company Reaches Termination Agreement With FDIC To End Shared-Loss Agreement Related To Silicon Valley Bridge Bank Acquisition, Eliminating Future Loss Sharing And Reporting Obligations

On April 7, 2025, First-Citizens Bank & Trust Company ("FCB"), a North Carolina chartered commercial bank and direct, wholly owned subsidiary of First Citizens BancShares, Inc. ("BancShares"), entered into a Termination Agreement (the "Termination Agreement") with the Federal Deposit Insurance Corporation (the "FDIC") to provide for the early termination of the commercial shared-loss agreement (the "Shared-Loss Agreement") executed by and between FCB and the FDIC in connection with FCB's acquisition of certain assets and assumption of certain liabilities of Silicon Valley Bridge Bank, N.A. in an FDIC-assisted transaction (the "SVBB Acquisition") on March 27, 2023 (the "SVBB Acquisition Date").

The Shared-Loss Agreement covered an estimated $60 billion of loans (collectively, the "covered assets") at the SVBB Acquisition Date. Under the terms of the Shared-Loss Agreement, the FDIC agreed to reimburse FCB for 0% of losses of up to $5 billion with respect to covered assets and 50% of losses in excess of $5 billion with respect to covered assets ("FDIC loss sharing"), and FCB agreed to reimburse the FDIC for 50% of recoveries related to such covered assets ("FCB reimbursement"). The Shared-Loss Agreement provided for FDIC loss sharing for five years and FCB reimbursement for eight years. As a result of entering into the Termination Agreement, all rights and obligations of the parties under the Shared-Loss Agreement terminated as of the effective date of the Termination Agreement (the "Termination Date"), including FCB's reporting covenants and obligations related to FDIC loss sharing and FCB reimbursement. As of the Termination Date, no payments or other obligations are due or outstanding by FCB or the FDIC under the Shared-Loss Agreement. The Termination Agreement includes transition provisions for the benefit of FCB's related debt agreements with the FDIC, all of which survive termination of the Shared-Loss Agreement, including the purchase money note payable by FCB (the "Purchase Money Note"), which had an outstanding principal amount of $35.99 billion as of December 31, 2024, and bears interest at a fixed rate of 3.50% per annum until its maturity in March 2028.

The decision to terminate the Shared-Loss Agreement was motivated, in part, by FCB's determination that the likelihood of reaching the $5 billion loss threshold during the five-year period covered by the Shared Loss Agreement was remote. Additionally, the Termination Agreement will eliminate the reporting responsibilities associated with the Shared-Loss Agreement.