'And they claim crypto is risky': Twitter users on SVB, worth $40 bn a year ago, getting sold for $500 mn

First Citizens BancShares Inc on Monday bought all the loans and deposits of Silicon Valley Bank and gave the Federal Deposit Insurance Corp equity appreciation rights in its stock worth as much as $500 million in return.

Twitter users had a field day over this deal because SVB was worth $40 billion a year ago and it got sold at near 99% decline in value.

"And they claim crypto is risky," quipped a Twitter user. 

"Huge destruction in value," said another Twitter user.

"The public is very unaware of how fragile the banking system can be," said another Twitter user. 

Seventeen former SVB branches will open as First Citizen branches on Monday. First Citizen acquires about $72 billion in SVB assets at a discount of $16.5 billion and the estimated cost of SVB's failure to FDIC's deposit insurance fund is about $20 billion, the FDIC said.

North Carolina-based First Citizens said in a statement it did not buy other assets or debts of SVB Financial Group, the former parent company of Silicon Valley Bank.

The collapse of SVB little more than two weeks ago has reverberated around the world, sending US depositors fleeing smaller banks for larger cousins while the hit to confidence forced Credit Suisse into the arms of rival UBS last week.

The SBV deal comes after several weeks of looking for a suitor and after the FDIC called for separate offers for SVB Private and SVB.

First Citizens said it wants to build on SVB's venture capital business and it will accelerate an expansion in California.

SVB was the largest bank since the 2008 financial crisis to collapse when California regulators closed it on March 10, sparking a major turmoil in the global banking sector.

Wall Street's main indexes climbed on Monday as worries about the banking sector eased following a buyout deal for the deposits and loans of the failed Silicon Valley Bank.

First Citizens' shares jumped 44.7%, while First Republic Bank surged 27% on a report that US authorities were considering more support for banks, which could give the embattled regional lender more time to shore up its balance sheet.

Regional banks Western Alliance Bancorp and PacWest Bancorp also climbed 4.8% and 6%, respectively.

Shares of major US banks JPMorgan Chase & Co, Citigroup and Bank of America advanced between 1.6% and 3.3%.

With inputs from Reuters