First Citizens will acquire much of Silicon Valley Bank, the tech-focused financial institution that collapsed this month, setting off a chain reaction that caused a second bank to fail and tested faith in the global banking sector.
The Federal Deposit Insurance Corp. and other regulators had already taken extraordinary steps to head off a wider banking crisis by guaranteeing that depositors in SVB and failed Signature Bank would be able to access all of their money.
While more than half of Silicon Valley’s assets will remain in U.S. receivership, the First Citizens deal announced late Sunday, at least initially, seemed to achieve what regulators have sought: a shoring up of trust in U.S. regional banks.
At the opening bell Monday, shares of midsized banks like Keycorp, Zions and First Horizon rose 8%. First Republic Bank, which received a $30 billion rescue package from 11 of the biggest banks in the country as it teetered in the wake of the Silicon Valley collapse, jumped 23%.
Customers of SVB will automatically become customers of First Citizens, which is headquartered in Raleigh, North Carolina. The 17 former branches of SVB will open as First Citizens branches Monday, the FDIC said.
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