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    North Carolina bank acquires collapsed Energy Transition lender Silicon Valley Bank's assets

    April 10, 2023
    First Citizen's acquisition out of federal receivership noted that opportunity to increase its geographic footprint while building on the collapsed Silicon Valley Bank's once robust relationship with venture capital and, presumably, clean energy startups.
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    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.

    About the Author

    Rod Walton, EnergyTech Managing Editor | Senior Editor

    For EnergyTech editorial inquiries, please contact Managing Editor Rod Walton at [email protected].

    Rod Walton has spent 15 years covering the energy industry as a newspaper and trade journalist. He formerly was energy writer and business editor at the Tulsa World. Later, he spent six years covering the electricity power sector for Pennwell and Clarion Events. He joined Endeavor and EnergyTech in November 2021.

    Walton earned his Bachelors degree in journalism from the University of Oklahoma. His career stops include the Moore American, Bartlesville Examiner-Enterprise, Wagoner Tribune and Tulsa World. 

    EnergyTech is focused on the mission critical and large-scale energy users and their sustainability and resiliency goals. These include the commercial and industrial sectors, as well as the military, universities, data centers and microgrids. The C&I sectors together account for close to 30 percent of greenhouse gas emissions in the U.S.

    He was named Managing Editor for Microgrid Knowledge and EnergyTech starting July 1, 2023

    Many large-scale energy users such as Fortune 500 companies, and mission-critical users such as military bases, universities, healthcare facilities, public safety and data centers, shifting their energy priorities to reach net-zero carbon goals within the coming decades. These include plans for renewable energy power purchase agreements, but also on-site resiliency projects such as microgrids, combined heat and power, rooftop solar, energy storage, digitalization and building efficiency upgrades.

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