First Citizens grabs SVB wealth unit as part of broader deal

The addition of SVB Wealth, which has close to $16 billion in client assets, will help First Citizens expand in the California market.

First Citizens Bank & Trust Co.’s purchase of Silicon Valley Bank Monday included SVB’s registered investment advisor, which will give First Citizens a greater ability to expand in the wealthy California market and introduce wealth capabilities in the Northeast, according to the company.

“SVB’s Private Wealth business is a natural fit for our high-touch and sophisticated level of high-net-worth customer service and approach,” Frank Holding Jr., chief executive of Raleigh, North Carolina-based First Citizens, said in a statement.

SVB Wealth, the registered investment advisor, had close to $16 billion in client assets, according to its Form ADV.

SVB Wealth, which includes the bank’s 2021 acquisition of Boston Private Holdings, targeted wealthy Silicon Valley executives as banking and wealth management clients.

The acquisition transforms First Citizens into one of the top 15 U.S. banks, according to Bloomberg, with help from some favorable terms. First Citizens is buying about $72 billion of SVB’s assets at a discount of $16.5 billion, according to the Federal Deposit Insurance Corp.

The FDIC created Silicon Valley Bridge Bank National Association following the closure this month of Silicon Valley Bank.

[More: Silicon Valley Bank wealth management sale could be quick]

Silicon Valley Bank unraveled in less than 48 hours earlier this month after outlining a proposal to shore up capital. When that plan failed, a run on deposits forced the lender to take huge losses on sales of securities that had lost value as interest rates climbed. Shares of regional lenders across the U.S. have plummeted amid concern they too could fall victim to the same threats that destroyed SVB.

Bloomberg News contributed to this story.