In a major move, First Citizens Bank has announced that it is acquiring Silicon Valley Bank (SVB), which recently shut down its operations due to financial difficulties.
This move comes as a surprise to many, as SVB had been one of the biggest players in the banking sector.
The deal involves acquisition of approximately $72 billion worth of assets of Silicon Valley Bank at a reduced price of $16.5 billion. An estimated $90 billion in securities and other assets of the California-based lender will remain with the Federal Deposit Insurance Corporation (FDIC) for disposition.
First Citizens Bank, a major commercial bank in the US, will expand its services and presence with the acquisition while benefiting from SVB’s customer base and its experience in the tech industry. The deal is also beneficial to SVB’s former customers, as they will be able to access First Citizens Bank’s services.
Silicon Valley branches will now operate as First Citizens Bank, as the North Carolina-based lender taps into Silicon Valley’s vast talent pool and provide a platform for new ideas and innovation. This move is expected to further enhance First Citizens Bank’s presence in the region, while providing a new platform for the bank to connect with the tech industry.
Preserving the strong ties between legacy SVB’s Global Fund Banking business and private equity and venture capital firms, First Citizens Bank is set to accelerate its expansion in California and introduce wealth capabilities in the Northeast. This transaction will also allow SVB’s Private Wealth business to offer their high-net-worth customers a higher level of service and approach.
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