Silicon Valley Bank to be acquired by North Carolina-based First Citizens Bank

North Carolina-based First Citizens Bank & Trust will buy Silicon Valley Bank, the tech-focused financial institution whose collapse earlier this month rattled the banking industry and sent shock waves around the world.

The deal could reassure investors at a time of shaken confidence in banks, though 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 another failed U.S. bank would be able to access all of their money.

Customers of SVB automatically will become customers of First Citizens, which is headquartered in Raleigh, N.C. The 17 former branches of SVB will open as First Citizens branches Monday, the FDIC said.

SVB, based in Santa Clara, failed after depositors rushed to withdraw money amid fears about the bank’s health. It was the second-largest bank collapse in U.S. history after the 2008 failure of Washington Mutual. Two days later, New York-based Signature Bank was seized by regulators in the nation’s third-largest bank failure.

In both cases, the government agreed to cover deposits, even those that exceeded the federally insured limit of $250,000, so that depositors were able to access their money.

New York Community Bank agreed to buy a significant chunk of Signature Bank in a $2.7-billion deal a week ago, but the search for a buyer for SVB took longer.

The acquisition of SVB, announced late Sunday, involves the sale of all deposits and loans to First Citizens, totaling about $72 billion, the FDIC said in a statement late Sunday. The assets were purchased at a discount of $16.5 billion.

The acquisition gives the FDIC shares in the latter worth $500 million. Both the FDIC and First Citizens will share in losses and the potential recovery on loans included in a loss-share agreement, the FDIC said.

First Citizens Bank was founded in 1898 and says it has more than $100 billion in total assets, with more than 500 branches in 21 states as well as a nationwide bank. It reported net profit of $243 million in the last quarter. It is one of the top 20 banks in the U.S. and says it is the largest family-controlled bank in the country.