First Citizens Bank is buying most of the business of Silicon Valley Bank, the US tech lender that failed earlier this month.
The Federal Deposit Insurance Corporation (FDIC) said in a statement late Sunday it had agreed that First-Citizens Bank & Trust Company would buy all of SVB’s deposits and loans that were transferred to a bridge bank in the wake of its collapse.
Seventeen former branches of SVB will begin operating as “Silicon Valley Bank, a division of First Citizens Bank,” on Monday, First Citizens said. SVB customers should continue to use their current branch until they receive notice from First Citizens Bank that systems have been converted to allow full service banking at its wider branch network, FDIC added.
SVB was shut down by regulators on Friday, March 10, after clients withdrew $42 billion in a single day. It was the second-largest bank failure in US history, after Washington Mutual in 2008.
First Citizens said in a statement that it would assume SVB assets of $110 billion, deposits of $56 billion and loans of $72 billion. It has also entered into an agreement with the FDIC to provide protection against potential credit losses.
“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,” First Citizens chairman and CEO Frank B. Holding said in the statement.
“Specifically, we are committed to building on and preserving the strong relationships that legacy SVB’s Global Fund Banking business has with private equity and venture capital firms,” he added.