First Citizens Bank, a North Carolina-based financial institution, has purchased all deposits and loans from Silicon Valley Bank (SVB) after the latter’s collapse on March 10, 2023.
First Citizens Bank acquired roughly $72 billion of SVB assets at a discount of $16.5 billion, while $90 million in securities will remain with the Federal Deposit Insurance Corp. for future disposition.
As part of the deal, the FDIC gets equity appreciation rights in First Citizens worth as much as $500 million. All 17 U.S.-based Silicon Valley Bank branches will begin operating as “Silicon Valley Bank, a division of First Citizens,” by the start of business on March 13, 2023.
First Citizens CEO Frank Holding Jr. has expressed the bank’s commitment to preserving SVB’s strong relationships with venture capital and private equity firms, adding that the transaction would accelerate the bank’s expansion in California and introduce wealth capabilities in the Northeast.
First Citizens will assume $110 billion of SVB assets, including $56 billion of deposits and $72 billion of loans. The acquisition was announced on March 13, 2023.
SVB’s $9.5 billion venture capital arm had previously invested directly in four cybersecurity startups.
SVB Capital participated in a March 2021 $133 million Series C funding round for blockchain security startup Fireblocks, a June 2021 $35 million Series B funding round for cloud security startup Redacted, a $100 million Series E funding round for blockchain data platform Chainalysis, and a $30 million Series B funding round for payments monitoring vendor ThetaRay in 2018. SVB had a larger footprint in loans and deposits for cybersecurity vendors, including cybersecurity startup Horizon3.ai.
The acquisition comes less than two weeks after HSBC bought the U.K. subsidiary of Silicon Valley Bank for $1, and Canada’s government took control of SVB’s Canadian branch.
