First Citizens BancShares Inc. (FCNCA.O) has completed its acquisition of Silicon Valley Bank (SVB) in a deal that has been highly anticipated in the banking industry. The move comes after a tumultuous period for Silicon Valley Bank that culminated in its collapse on March 10, 2023, and subsequent takeover by the Federal Deposit Insurance Corporation (FDIC).
The Move Comes After a Series of Events Led to the Collapse of Silicon Valley Bank
Silicon Valley Bank, which was once the 16th largest bank in the US with assets worth over $200 billion, had been struggling for some time before its ultimate collapse. Customers had withdrawn $42 billion in deposits in just 48 hours, leading to a classic run on the bank that ultimately sealed its fate.
The FDIC stepped in and transferred all deposits to a newly created bridge bank, and First Citizens Bank has now taken over the assets and liabilities of Silicon Valley Bank, including its branches and operations.
The acquisition by First Citizens Bank is a significant move in the banking industry, given Silicon Valley Bank’s reputation for catering to the technology industry. It is expected that the acquisition will allow First Citizens Bank to expand its footprint in the tech industry and capitalize on the potential growth opportunities it offers.
There had been reports of other potential buyers vying for Silicon Valley Bank, including JPMorgan and Morgan Stanley, but it was First Citizens Bank that ultimately secured the deal. The terms of the acquisition have not been disclosed, but it is believed to have been a competitive process.
Overall, the acquisition of Silicon Valley Bank by First Citizens Bank is a groundbreaking move in the banking industry that will have significant implications for the tech industry as a whole. It represents a bold move by First Citizens Bank to expand its reach and capitalize on the potential growth opportunities in the tech industry.