"Acquired 20 Failed Banks... First Citizens Pursues SVB Acquisition"

Shift to Selling in Parts After Failed Sale Attempt

As Silicon Valley Bank (SVB) in the United States shifts toward a breakup sale, First Citizens BancShares (hereinafter First Citizens) is reportedly set to submit a bid, Bloomberg reported on the 20th (local time).

According to Bloomberg, citing sources, First Citizens, a potential acquirer, plans to participate in the bidding for each business unit of SVB with the Federal Deposit Insurance Corporation (FDIC), the bankruptcy trustee of SVB.

[Image source=Reuters Yonhap News]

First Citizens had previously participated in the bid for the entire sale of SVB last week, but the deal reportedly fell through as they submitted a very low price at that time.

With a 125-year history, First Citizens has acquired more than 20 banks that went bankrupt since the global financial crisis in 2008. As of the end of last year, First Citizens’ total assets stood at $109 billion (approximately 143 trillion KRW), ranking it within the top 30 U.S. commercial banks, about half the size of SVB’s total assets. Its total deposits amount to $89.4 billion (approximately 117 trillion KRW).

First Citizens’ stock price, which had fallen 33% this year, surged more than 13% intraday on the day news of the SVB acquisition attempt broke, closing up 10.47% at $562.34.

The FDIC initially planned to receive bids for SVB from buyers by the 19th, but when no suitable acquirer emerged, it shifted to a breakup sale approach, dividing SVB into at least two business units, including the deposit business and asset management business. The deadline for bid submissions is set between the 22nd and 24th.

SVB collapsed after a liquidity crisis surfaced recently, followed by a bank run where depositors, including startups, withdrew over $40 billion (approximately 52.2 trillion KRW) in a single day. This is the second-largest bank failure in U.S. commercial banking history. Subsequently, the U.S. Treasury, Federal Reserve (Fed), and FDIC implemented rescue measures to prevent the crisis from spreading, but concerns in the financial sector have not subsided.

Following SVB’s collapse, the deposits and some loan assets of Signature Bank, which filed for bankruptcy on the 12th, are set to be acquired by Flagstar Bank, a subsidiary of New York Community Bancorp (NYCB). SVB’s former parent company, SVB Financial Group, has filed for bankruptcy protection with U.S. authorities and is seeking buyers.

After SVB was closed on the 10th, the FDIC was appointed as the bankruptcy trustee, integrating SVB into the U.S. Fed system and severing its relationship with SVB Financial.