iStock illustration

While only about one-third of Silicon Valley’s deposits remained at the bridge bank following the bank run and its aftermath, North Carolina-based First Citizens Bank & Trust Co. expects to bring back some of those former deposits and customers.

First Citizens announced an agreement with the FDIC early this morning to acquire deposits from the failed Silicon Valley Bank and purchase substantially all of its loans.

The deal includes SVB Private Bank, which SVB had launched after acquiring Boston Private in 2021. While the FDIC last week had said it would accept separate bids for the private bank, First Citizens ended up taking both parts of the defunct lender.

Frank Holding Jr., First Citizens’ chairman and CEO, said during a conference call this morning to discuss the deal that acquiring SVB would strengthen its nationwide presence and position the bank to become more competitive nationally. The bank now operates in 23 states. First Citizens plans to add a total of 20 SVB branches and wealth offices to its network.

“We are also pleased to add a strong wealth franchise serving the Northeast, one of the country’s most desirable markets,” Holding said.

Holding added that acquiring the private bank would accelerate the growth of First Citizens own wealth franchise.

“We believe SVB’s private wealth business is a natural fit for our high-touch customer service model and approach,” Holding said.

First Citizens has added all SVB employees to its staff. Holding said the bank has long admired and respected the passion and commitment of SVB’s employees toward their customers.

“We look forward to bringing our proven approach to new markets and learning from the legacy SVB market experts who will be joining us,” Holding said. “By leveraging the combined talent and experience of our two banks, we are confident we can deliver new levels of service and expertise to depositors and borrowers alike.”

The deal doubles First Citizens assets and loans to $219 billion in total assets and $143 billion in loans and leases. The bank also acquired $56 billion in deposits, far less than the more than $174 billion in deposits SVB held before the bank run started. The new deposits will give First Citizens $145 billion in total deposits.

Craig Nix, First Citizens chief financial officer, said 63 percent of SVB’s deposits are non-interest-bearing demand deposits and will help increase First Citizens core deposits. He added that, despite the run-off of SVB deposits, First Citizens expects some customers to return.

“[I]t is our intent to embrace the talent of our legacy SVB employees, embrace their business capabilities and reiterate to their clients that First Citizens has an unwavering focus on holistic client relationships,” Nix said. “Ultimately we believe that some of these clients will move business that left back to us as depositors around the country know that their deposits are safe with First Citizens.”