The bank consolidation game continues.
On Sunday, The Federal Deposit Insurance Corporation (FDIC) announced a deal had come together for the purchase of Silicon Valley Bank (SVB).
The buyer is First Citizens Bank & Trust, which is based in North Carolina and can trace its beginnings back to 1898, according to its website. It will acquire all of the loans and deposits of SVB. It will also assume the operation of its 17 locations, effective Monday.
“Customers… should continue to use their current branch until they receive notice from First–Citizens Bank & Trust Company that systems conversions have been completed,” the FDIC wrote.
SVB’s collapse happened earlier this month, and with the financial sector already dealing with rising interest rates and a collapsed cryptocurrency market, panic ensued, and the resulting contagion temporarily destabilized the stock prices of smaller banks. Signature Bank in the U.S. also faced a bank run, was taken over by the FDIC, and acquired by New York Community Bank. Switzerland-based Credit Suisse, which had long struggled under the weight of scandal, was purchased by competitor UBS.
SVB’s main clientele had been startups and venture capitalists and was the “most popular” bank in that group, Elizabeth Yin, general partner at Hustle Fund, previously told Entrepreneur.
But this deal was somewhat expected.
The FDIC took control of SVB a few days after it experienced a bank run earlier this month and created an entity called Silicon Valley Bridge Bank, “to stabilize the institution and market the franchise,” as the FDIC wrote in its press release, meaning the government entity would then find a buyer to take over SVB.
Bloomberg reported on Sunday that First Citizens was in “advanced talks” to acquire the bank, “according to people familiar with the matter.”