Silicon Valley Bank was bought by First-Citizens BancShares in March 2023

On March 27, 2023, the U.S. Federal Deposit Insurance Corporation (FDIC) arranged the sale of Silicon Valley Bank (SVB) to First-Citizens BancShares, a regional bank holding company based in North Carolina. This was not a typical acquisition—it was an emergency sale orchestrated by federal regulators after SVB failed on March 10, 2023, making it the second-largest bank failure in U.S. history.

The FDIC did not auction SVB to the highest bidder. Instead, regulators approached First-Citizens directly because the bank had the capital and infrastructure to absorb SVB's operations quickly. The deal included SVB's deposits, loans, and most of its assets. First-Citizens paid $16.7 billion in cash to the FDIC for the assets, and the FDIC covered the difference between what the assets were worth and what depositors were owed.

For SVB customers, the sale meant their accounts transferred to First-Citizens automatically. No action was required on their part. The FDIC may provide all deposits up to $250,000 per depositor, per account type, at the failed bank—a protection that applied regardless of who bought it.

Key Takeaways

  • First-Citizens BancShares purchased Silicon Valley Bank's deposits and assets through an FDIC-arranged emergency sale, not a competitive bidding process.
  • SVB customers' accounts moved to First-Citizens on March 27, 2023, and the FDIC insured deposits up to $250,000 per account type.
  • Deposits over $250,000 were not automatically protected by FDIC insurance, though the FDIC later announced a temporary may provide for all SVB deposits to prevent broader banking instability.
  • First-Citizens integrated SVB's operations into its own systems over the following months, which affected how customers accessed accounts and made payments.

Why SVB failed and why First-Citizens was chosen

Silicon Valley Bank collapsed because it held a large portfolio of long-term bonds purchased when interest rates were low. When the Federal Reserve raised interest rates sharply in 2022 and early 2023, the value of those bonds fell dramatically. SVB could not sell them without taking massive losses. When depositors—mostly technology companies and venture capital firms—began withdrawing money in March 2023, SVB did not have enough liquid cash to meet the demand.

The FDIC chose First-Citizens because it was one of the few banks with enough capital to absorb SVB's $209 billion in assets without requiring a lengthy approval process. Speed mattered: regulators wanted to prevent panic from spreading to other regional banks. First-Citizens had experience managing large acquisitions and the operational capacity to migrate SVB's customers to its systems.

The sale preserved the banking system's stability. Without a buyer, the FDIC would have had to liquidate SVB's assets over time, which could have triggered losses for uninsured depositors and potentially destabilized other banks holding similar bond portfolios.

What happened to deposits over $250,000

Standard FDIC insurance covers up to $250,000 per depositor, per account type, at a failed bank. SVB had many depositors with balances well above that limit—venture capital firms, startups, and other businesses held millions in the bank. Those uninsured deposits were at risk of loss when SVB failed.

However, on March 13, 2023, three days after SVB's failure, the U.S. Treasury Department, the Federal Reserve, and the FDIC announced an extraordinary measure: they would may provide all SVB deposits, regardless of amount, through a temporary program called the Bank Term Funding Program (BTFP). This was not standard practice—it was a one-time decision to prevent a broader banking crisis. The may provide meant that even depositors with $10 million in SVB accounts would recover their full balance.

This temporary may provide applied only to SVB and Signature Bank (which also failed around the same time). It did not change FDIC insurance rules for other banks, and it expired in December 2023. For SVB specifically, it meant that all customer deposits were protected, which reduced the urgency for account holders to move their money.

How customer accounts moved to First-Citizens

When First-Citizens took over SVB on March 27, 2023, customer accounts transferred automatically. Depositors did not need to sign new paperwork or open new accounts—their existing accounts simply became First-Citizens accounts. The FDIC handled the technical transfer of account data, balances, and transaction history.

However, the transition was not seamless for all customers. First-Citizens had to integrate SVB's systems with its own, which took time. Some customers experienced delays accessing their accounts online or making wire transfers in the days immediately after the sale. First-Citizens prioritized restoring access to checking accounts and payment systems before fully integrating other services.

Customers who had linked their SVB accounts to third-party payment systems—payroll processors, accounting software, or peer-to-peer payment apps—had to update those connections to point to First-Citizens. SVB's routing number changed, which affected automated payments and direct deposits. First-Citizens provided guidance on how to update these connections, but the process required action from account holders.

First-Citizens' integration of SVB operations

First-Citizens did not keep SVB as a separate brand. Instead, it folded SVB's operations into First-Citizens' existing structure over several months. This meant that SVB customers gradually transitioned to First-Citizens' online banking platform, mobile app, and customer service systems. By mid-2023, most SVB accounts were fully integrated into First-Citizens' infrastructure.

The integration included changes to account features and fee structures. Some SVB customers had access to specialized services for venture capital and technology companies—services that First-Citizens did not offer in the same way. Those customers had to decide whether to stay with First-Citizens or move their accounts to another bank that specialized in their industry.

First-Citizens also had to decide which SVB employees to retain. The bank kept many SVB staff members, particularly those with relationships to major customers, but also consolidated some back-office functions. This meant that some SVB employees were laid off as part of the integration process.

Payment processing and transaction timelines after the sale

When accounts transferred to First-Citizens, the bank's payment processing systems took over. This affected how long wire transfers, ACH payments, and other transactions took to clear. First-Citizens' processing timelines were similar to SVB's for most transaction types, but there were differences in how the bank handled certain edge cases.

Wire transfers initiated before March 27, 2023, were processed according to SVB's rules. Wire transfers initiated after the sale were processed according to First-Citizens' rules. For most customers, this made no practical difference—domestic wire transfers still took one business day, and international wires still took two to three business days. However, customers who had pending transactions during the transition period sometimes experienced delays as the two banks' systems communicated with each other.

Customers who had set up automatic payments through SVB's bill pay system had to verify those payments were still active after the transfer. Some automatic payments were interrupted during the migration, and account holders had to re-enter payment instructions into First-Citizens' system. The bank sent notifications about this, but some customers missed the messages and discovered the problem when a payment failed to go through.

What this means for your account if you banked at SVB

If you had an account at SVB when it failed, your account is now at First-Citizens. Your deposit is insured up to $250,000 (or fully protected if it was covered by the temporary may provide). You can access your money through First-Citizens' online banking, mobile app, or by visiting a First-Citizens branch.

If you want to move your account to a different bank, you can do so at any time. First-Citizens will provide you with your account history and help you set up transfers to another institution. There is no penalty for closing your account or moving your money.

If you had a loan or line of credit with SVB, that obligation transferred to First-Citizens as well. You will make payments to First-Citizens going forward, and the terms of your loan remain the same unless First-Citizens explicitly notifies you of changes.

Frequently Asked Questions

Did I lose money when SVB failed?

If your deposit was $250,000 or less, no—the FDIC insured your full balance. If your deposit was over $250,000, the temporary may provide announced on March 13, 2023, protected your full balance as well. SVB depositors did not lose money, even those with balances far above the standard insurance limit.

Do I have to use First-Citizens now, or can I move my money?

You can move your money to another bank whenever you want. Contact First-Citizens to request a wire transfer or ACH transfer to your new bank, or visit a First-Citizens branch to withdraw cash. There is no fee or penalty for moving your account.

What if I had a wire transfer pending when SVB failed?

Wire transfers initiated before March 27, 2023, were processed according to SVB's systems and rules. If your wire was sent, it should have arrived at its destination. If it was still pending when the bank failed, contact First-Citizens to find out whether it was completed or cancelled. You may need to re-initiate the transfer.

Will my automatic payments still work at First-Citizens?

Some automatic payments were interrupted during the account transfer. Log into your First-Citizens account and verify that your bill pay and automatic transfer settings are still active. If a payment failed to go through, you may need to re-enter it into First-Citizens' system.

Can I still access my account online?

Yes. First-Citizens migrated SVB accounts to its online banking platform. You may need to reset your password or update your login credentials. First-Citizens sent instructions to account holders during the transition, but you can also contact customer service for help accessing your account.