The banking colossus which funded so many energy transition startups only to collapse under its own weight has found a buyer which vows to continue the positive relationship with new technologies and venture capital.
Last last month First Citizens Bank announced it committed to acquiring assets of Silicon Valley Bank, only recently one of the nations’ largest lenders to next-gen and sustainability innovators, out of U.S. Federal Deposit Insurance Corp. receivership. California-based Silicon Valley Bank collapsed after unfortunate long-term investments in lower interest treasury bonds, having a thin percentage of deposits on hand and suffering a run on the institution after rumors about its solvency.
Raleigh, North Carolina-based First Citizens is acquiring the SVB assets as a whole bank purchase with some protection from the FDIC. The acquisition includes SVB’s $110 billion in assets, $56 billion in deposits and $72 billion in loans, according to the surviving bank.
"First Citizens has a proud history of growing organically and through strategic acquisitions that build our core capabilities in a careful and deliberate manner," Frank B. Holding Jr., First Citizen's CEO and Chairman said. "This transaction leverages our solid foundation to add significant scale, geographic diversity, compelling digital capabilities and most importantly, meaningful solutions for customers throughout their lifecycle. Specifically, we are committed to building on and preserving the strong relationships that legacy SVB's Global Fund Banking business has with private equity and venture capital firms. This transaction also will accelerate our expansion in California and introduce wealth capabilities in the Northeast.
Prior to its fall, Silicon Valley Bank was famous for its lending commitment to the region’s many climate tech startups. Last year, the bank promised to spend close to $5 billion over the next five years on loans and other financing to support sustainability technologies.
Silicon Valley Bank’s “Future of Climate Tech” report from last year expressed optimism about venture capital and revenues in this sector following the extreme challenges of the COVID-19 Pandemic. U.S. venture capital investment in clean energy and climate technologies rose 80 percent from 2020 to the end of 2021, reacing about $56 billion in commitments.
Among SVB’s company relationships included renewable energy firms such as Sunrun, Soltage, Plus Power, AES, Leeward Renewable Energy and Bloom Energy, among others listed on one of the bank’s web pages previously.
First Citizens' deal with the FDIC includes a five-year loss share agreement in which the feds would reimburse the bank for 50 percent of losses on commercial loans in excess of $5 billion, according to the institution’s press release about the acquisition.
