North Carolina-based First Citizens Bank announced Monday that it has entered into an agreement to acquire Silicon Valley Bridge Bank from the Federal Deposit Insurance Corporation, bringing many tech companies’ business accounts under its umbrella.
Within 48 hours of Silicon Valley Bank going into receivership, federal officials announced that all customer deposits — even those beyond the $250,000 insured by FDIC — could be accessed at the start of business on March 13. The FDIC estimates that its Deposit Insurance Fund lost about $20 billion due to the collapse of Silicon Valley Bank. Those losses will be funded by a special assessment on banks, not taxpayers, according to the FDIC.
The collapse of Silicon Valley Bank caused panicked customers to withdraw funds from other regional banks throughout the world, including Signature Bank and Credit Suisse. New York-based Signature Bank was taken into receivership by the FDIC on March 12 and will soon be acquired by New York Community Bancorp. Switzerland-based UBS announced plans to acquire Credit Suisse last week.
By acquiring Silicon Valley Bank, First Citizens Bank said it will assume $110 billion in assets, $56 billion in deposits and $72 billion in loans. The FDIC stated the bank purchased the loans at a discount of $16.5 billion.
First Citizens Bank has also entered into a loss-share agreement with the FDIC to provide protection against potential losses on the loans.
All 17 branches of Silicon Valley Bridge Bank will now operate as Silicon Valley Bank, a division of First Citizens Bank. Silicon Valley Bank customers will not experience any interruption in access to their accounts, according to First Citizens.
Founded in 1898, First Citizens Bank operates more than 550 branches and offices in 23 states.
“First Citizens has a reputation for financial strength, exceptional customer service and prudent lending that spans 125 years,” Chairman and CEO of First Citizens Frank B. Holding, Jr. said in a statement. “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. 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.”