Silicon Valley Bank (SVB), which was closed by regulators on March 10, has been acquired by First Citizens Bank. The North Carolina-based bank purchased approximately $72 billion of SVB’s deposits and loans at a $16.5 billion discount, while the Federal Deposit Insurance Corporation (FDIC) retains around $90 billion of the bank’s assets in receivership.
SVB, a prominent lender to U.S. tech businesses, had total assets valued at $167 billion. The bank faced financial difficulties after investing customer deposits in U.S. government bonds. As interest rates rose, the value of these bonds declined, and SVB was forced to sell them at a loss when customers began withdrawing their deposits. This led to the bank’s rapid collapse within 48 hours, sparking a crisis of confidence in the markets, affecting Credit Suisse, and causing significant declines in share prices globally, including at Deutsche Bank.
First Citizens Bank, headquartered in Raleigh, North Carolina, has a history of acquiring failed U.S. banks. According to the FDIC, this marks its sixth acquisition in the past decade, adding to its track record of 17 failed banks since 2009. First Citizens, which employs over 8,000 people and manages assets exceeding $100 billion, will reopen SVB’s 17 former branches under its branding, expanding its network to over 500 branches across 22 states.
The FDIC stated that retaining more than $70 billion of rescued assets in the private sector would “maximize recoveries” and that the acquisition by First Citizens “minimizes disruptions for loan customers.” The deal will enhance First Citizens Bank’s scale, geographic diversity, and digital capabilities, and it will integrate SVB’s Private Wealth business, supporting high-net-worth customer service and accelerating First Citizens’ expansion in California and the Northeast.
This acquisition further underscores First Citizens Bank’s successful strategy in expanding through the purchase of failed banks, reinforcing its commitment to prudent lending and the stability of the U.S. banking system.
