The recent collapse of Silicon Valley Bank presented an opportunity for First Citizens Bank, a North Carolina-based bank owned by the Holding Family. With a wealth of experience buying failed banks, First Citizens acquired assets from SVB at a significant discount, making it one of the largest 20 banks in the US.
According to Forbes, First Citizens’ growth has been accelerated through the purchases of more than 20 failed small banks since the 2008 global financial crisis. These acquisitions were made with the assistance of the FDIC, which operates the deposit insurance fund for depositors at US banks.
The Holding Family, which collectively owns about 20% of the stock in First Citizens, has nearly 50% of the voting power, according to SEC filings. The family’s stake was worth $2.7 billion after a 54% stock price surge following the SVB deal. First Citizens’ assets jumped from $16.7 billion at the end of 2008 to $219 billion after the SVB transaction.
Before the SVB agreement, First Citizens’ largest deal was the $2.2 billion buyout of bankrupt CIT Group in January 2022. Under terms of the SVB deal, First Citizens is taking over $119 billion in deposits and $72 billion worth of the failed bank’s loans for a $16.5 billion discount. The FDIC will hold onto about $90 billion worth of securities and other assets.
First Citizens Bank, which began as Bank of Smithfield in 1898, was founded to focus on farmers in Johnston County, North Carolina. Robert Powell Holding, the current CEO Frank Holding Jr.’s grandfather, became president in 1935. Holding Jr., who earned an MBA from the University of Pennsylvania’s Wharton School, has been at the bank his entire professional career and was named CEO of First Citizens in 2008.