Report: First Citizens Bank Could Buy SVB

First Citizens Bank is reportedly offering to purchase failed lender Silicon Valley Bank.

According to a Sunday (March 19) Bloomberg News report, the North Carolina-based financial institution is one of a handful of suitors for Silicon Valley Bank (SVB).

The report, citing people familiar with the matter, said the Federal Deposit Insurance Corp. (FDIC) will weigh offers before deciding Sunday whether to sell SVB or break it up. The sources added that First Citizens had made an earlier offer for SVB that was rejected.

PYMNTS has reached out to both the FDIC and First Citizens for comment but has not yet received a reply.

Silicon Valley was taken over by the FDIC earlier this month after its customers — primarily tech startups — pulled their deposits.

The collapse of this bank — coupled with the subsequent failure of Signature Bank and the self-liquidation of Silvergate earlier in the week — had shaken the banking world, leading to worries about future runs as well as calls from Washington to beef up banking regulations.

For example, Sen. Elizabeth Warren and some of her Democratic peers last week introduced legislation to repeal 2018 deregulations, which they say allowed for SVB’s collapse and the closure of Signature Bank. The proposed bill is dubbed the “Secure Viable Banking Act,” or the “SVB Act.”

And Securities and Exchange Commission Chair Gary Gensler on Wednesday (March 15) said that SVB’s dramatic downfall was “a reminder of the importance of these resiliency projects for everyday Americans,” while proposing a strengthening of “the guardrails of finance.”

Speaking in advance of his agency’s issuance of regulatory proposals around cybersecurity and data protection, Gensler added, “Lest we forget, 8 million Americans lost their jobs, millions of families lost their homes, and small businesses across the country folded as a result of the financial crisis of 2008. To that end, I think the SEC has a responsibility to help protect for financial stability.”

Meanwhile, the FDIC has changed its mind on sharing losses if that moves the sale of SVB and Signature Bank, per a report last week by the Financial Times.

The regulator had previously vetoed sharing losses but is now open to negotiating on the topic after an earlier auction of SVB drew little interest.

FDIC officials told Senate Republicans last week that because regulators have said that a failure of SVB would pose a threat to the entire financial system, the FDIC can also offer additional incentives to possible buyers.