RALEIGH, N.C. — Raleigh’s First Citizens Bank is buying most of Silicon Valley Bank, the tech-focused financial institution which collapsed earlier this month.
First Citizens will acquire all deposits and loans of the former Silicon Valley Bank in exchange for company stock worth up to $500 million, the Federal Deposit Insurance Corporation announced Sunday. The FDIC had controlled Silicon Valley Bank since it failed following a bank run on March 10.
In the agreement, all Silicon Valley depositors will automatically transfer to First Citizens, and on Monday, the 17 former Silicon Valley branches will open as First Citizens Bank locations.
“First Citizens has a proud history of growing organically and through strategic acquisitions that build our core capabilities in a careful and deliberate manner,” said First Citizens CEO Frank Holding, Jr., in a statement Monday. “This transaction leverages our solid foundation to add significant scale, geographic diversity, compelling digital capabilities and most importantly, meaningful solutions for customers throughout their lifecycle.”
Holding added the deal will “accelerate” the company’s expansion goals in California and the Northeast.
First Citizens and the FDIC entered a loss-share agreement which ensures both parties will share in the potential recovery and losses on loans, the government and bank announced.
The FDIC had given bidders until Friday night to make offers. Last week, First Citizens emerged as a potential buyer according to multiple reports.
What is First Citizens Bank?
According to a Federal Reserve database, First Citizens was the 30th largest bank in the country by consolidated assets at the end of last year. It operates 582 branches and offices nationwide, 60% of which were in North Carolina or South Carolina. It is the Carolinas’ fourth largest bank, behind Bank of America, Truist, and Wells Fargo, and employs more than 2,000 in the Triangle area, according to Wake County Economic Development.
First Citizens was founded in Johnston County in 1898, and for most of the past century, it’s been helmed by three generations of the Holding family.
Silicon Valley isn’t the first major purchase First Citizens has made in recent years.
In January 2022, its parent company First Citizens BancShares purchased New York-based CIT Group for approximately $2.2 billion. According to First Citizens spokesperson Angela English, First Citizens has bought more than 20 FDIC-backed banks since 2009.
In its purchase of Silicon Valley, First Citizens will take on $110 billion in assets, $56 billion in deposits, and $72 billion in loans, the company said Monday.
“We have partnered with the FDIC to successfully complete more FDIC-assisted transactions since 2009 than any other bank, and we appreciate the confidence the FDIC has placed in us once again,” Holding said. “We look forward to building relationships with our new customers and positioning our company for continued success as we affirm our commitment to support the integrity of our nation’s banking system.”
