First Citizens BancShares Inc. to Acquire Silicon Valley Bank

News broke late Sunday that First Citizens BancShares Inc. is close to a deal to acquire failed Silicon Valley Bank from the Federal Deposit Insurance Corp.

According to Bloomberg News, the deal could be announced as soon as Sunday night, though a final decision has not yet been made. It remains unclear how much First Citizens plans to pay for the bank.

The FDIC and First Citizens Refuse to Confirm the Deal

In an email Sunday, the FDIC said it would not confirm or comment on submitted bids or whether it has selected a bidder. First Citizens declined to comment on the deal.

Valley National Bancorp Also Bidding for Silicon Valley Bank

The FDIC has been trying to auction off Silicon Valley Bank for about two weeks, since it became the largest U.S. bank to go bust since Washington Mutual in 2008. Earlier Sunday, Bloomberg reported that Valley National Bancorp was also vying to buy Silicon Valley Bank.

First Citizens’ Acquisition Strategy

Last week, Bloomberg reported that North Carolina-based First Citizens, which has bought 20 failed banks since 2009, was pursuing an acquisition of Silicon Valley Bank. First Citizens’ acquisition strategy fits into CEO Frank Holding’s long-term vision of buying deals that expand the bank’s footprint and fit with its already strong credit culture.

First Citizens Shares Down Year to Date

First Citizens shares have sunk 23% year to date — mostly over the past month — and are down 15% over the past 12 months, compared to the S&P 500’s 3.4% gain in 2023 and 13% decline over the past year.

Conclusion

The acquisition of Silicon Valley Bank by First Citizens BancShares Inc. is expected to generate considerable regulatory interest given the nature of the bank and its geographical presence within California. If the deal goes through, First Citizens would become the latest bank to acquire failed institutions in hopes of expanding its reach and gaining a foothold in new markets.