First Citizens BancShares Inc. is thinking about making a bid for Silicon Valley Bank after it recently went into FDIC receivership over worries from its long-standing tech startup clientele. The Raleigh, North Carolina-based lender is one of several prospective purchasers in the auction process for the bankrupt bank, according to sources with knowledge of the situation. Offers are due on Sunday morning. First Citizens may decide not to submit a bid, and there hasn’t been a definitive decision made, but at least one other bidder is actively considering Silicon Valley Bank. For First Citizens, who last year paid over $2 billion to purchase the commercial lender CIT Group Inc., the proposed acquisition of Silicon Valley Bank would be a big step.
Depending on whether any bids are received, the FDIC will decide on Sunday whether to seek a full sale or a breakup of Silicon Valley Bank. Despite the fact that the situation is still private, a few possible bidders have expressed interest in the bankrupt bank’s data room. Outside of regular business hours, representatives for both First Citizens and the FDIC declined to comment on the situation. Yet, First Citizens would have a large chance to increase its presence in the ecosystem of tech startups with the potential acquisition of Silicon Valley Bank.
Financial institutions are increasingly attempting to participate in Silicon Valley’s thriving tech startup environment as technology continues to disrupt the banking sector. With its established clientele and ties within the sector, Silicon Valley Bank can be a desirable acquisition target for banks aiming to increase their market share. In general, the possible acquisition of Silicon Valley Bank by First Citizens BancShares Inc. shows the banking industry’s continued trend of consolidation and the significance of technology and innovation to the sector’s growth strategy.
