NC bidder emerges for Silicon Valley Bank. What to know about First Citizens Bank
With its deadline for accepting bids approaching, the federal government says it expects to announce a buyer for the failed Silicon Valley Bank within the next few days.
Multiple reports indicate the Raleigh-based First Citizens Bank made an offer — a move that, if successful, could transform the 125-year-old, family-run institution.
The Federal Deposit Insurance Corporation (FDIC), which has managed Silicon Valley Bank since the lender collapsed on March 10, gave bidders until Friday night to make offers.
“For guidance, we expect to announce our decision this weekend,” FDIC spokesperson David Barr said in an email to The News & Observer on Wednesday.
Earlier this week, multiple national outlets, including Bloomberg, Reuters and Axios, reported through unnamed sources that First Citizens had submitted a bid for Silicon Valley. The government is marketing the failed bank as two entities, Silicon Valley Bridge Bank and its private wealth management division.
On Thursday morning, The N&O asked First Citizens if it had made an offer to buy some or all of Silicon Valley. First Citizens spokesperson Angela English reiterated the statement the company provided on Monday, saying “it is First Citizen Bank’s policy not to comment on market rumors or speculation.”
What is First Citizens Bank?
According to a Federal Reserve database, First Citizens was the 30th largest bank in the country by consolidated assets at the end of last year. It operates 582 branches and offices nationwide, 60% of which were in North Carolina or South Carolina. It is the Carolinas’ fourth largest bank, behind Bank of America, Truist, and Wells Fargo, and employs more than 2,000 in the Triangle area, according to Wake County Economic Development.
First Citizens was founded in Johnston County in 1898, and for most of the past century, it’s been helmed by three generations of the Holding family. Frank Holding Jr. currently serves as CEO.
Recent track-record of buying other banks
Acquiring another bank wouldn’t be out of the ordinary for First Citizens.
In January 2022, its parent company First Citizens BancShares purchased New York-based CIT Group for approximately $2.2 billion. According to English, First Citizens has bought more than 20 FDIC-backed banks since 2009.
Yet many have been surprised that a traditional bank like First Citizens had reported interest in Silicon Valley Bank, which geared its services to technology startups. It is also unclear how many of Silicon Valley’s preexisting accounts will remain after a bank run doomed the institution earlier this month.
But some see strategy in a Triangle-area bank acquiring an institution with deep ties in the startup ecosystem.
“If I was running a Raleigh-based bank in the Research Triangle Park, which is basically seeing a massive growth in tech and biopharma industries, building connections with a bank that specializes in that might make some sense,” said Richard Warr, a finance professor at North Carolina State University.
This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work.
Open Source
Do you enjoy Triangle tech news? Subscribe to Open Source, The News & Observer's weekly technology newsletter and look for it in your inbox every Friday morning. Sign up here.
