Banking & Financial Institutions

First Citizens acquiring Silicon Valley Bank

FILE – The Silicon Valley Bank logo is seen at an open branch in Pasadena, Calif., on March 13, 2023. The Federal Deposit Insurance Corp. says First Citizens will acquire much of Silicon Valley Bank, whose collapse has rattled the banking industry (AP Photo/Damian Dovarganes, File)

First Citizens Bank & Trust Company will acquire Silicon Valley Bank, which unexpectedly failed earlier this month and rocked the U.S. financial landscape.

The North Carolina-based First Citizens announced on Monday an agreement with the Federal Deposit Insurance Company (FDIC) to acquire all of Silicon Valley Bank’s deposits and loans, which had been moved to an  FDIC-created bridge bank after the collapse, in a move that could calm anxious investors. 

Former Silicon Valley Bank customers will automatically become depositors of First Citizens, and the 17 former Silicon Valley branches will open as First Citizens branches on Monday, the FDIC said

The abrupt closure of California’s Silicon Valley Bank earlier this month marked the largest bank failure in the U.S. since the 2008 financial crisis, and was followed shortly by the closure of New York’s Signature Bank in what became the second-largest bank failure in that period. 

Silicon Valley Bank’s sale to First Citizens could reassure worried investors, though the FDIC and other regulators had already guaranteed Silicon Valley Bank and Signature Bank depositors, protecting deposits that exceeded the federally insured $250,000 limit, in an effort to ward off a broader bank-run crisis.

“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,” said Frank Holding, Jr., chairman and CEO of First Citizens parent company First Citizens BancShares.

The FDIC will retain about $90 billion of Silicon Valley Bank’s $167 billion in total assets, as of March 10, while First Citizens will acquire $72 billion at a discount of $16.5 billion, the FDIC said.

The Associated Press contributed to this report.

Tags banking FDIC Silicon Valley Bank

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