Income of First Citizens Increases Following SVB Purchase

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First Citizens, a North Carolina lender with a long history of purchasing struggling banks, announced $9.5 billion in net income in the first quarter, up from $243 million the previous quarter, in a news statement on Wednesday (May 10).

The rise was enabled by First Citizens’ acquisition of SVB in late March, just two weeks after federal officials took over the California lender.

“We are confident that we will continue to deliver long-term value for our shareholders as we build on the significant strengths Silicon Valley Bank brings to the business, including exceptional talent and expertise, significant scale, geographic diversity, and meaningful solutions for customers,” said Chairman and CEO Frank B. Holding Jr. in a statement.

According to the results statement, deposits totalled $140 billion for the quarter, an increase of $50.6 billion “primarily due to SVB segment deposits of $49.26 billion.” According to Bloomberg, the $140 billion figure is higher than expert predictions of $119 billion.

The consequences of SVB’s bankruptcy and the subsequent failures of Signature and First Republic banks are still being felt.

While meeting customer preferences is still important for regional banks’ business growth, the concept of visiting a bank branch, meeting the manager, and spending time developing a personalized financial product appears to have vanished “as interactions become digital-first and classical bank runs make a comeback,” according to a report this week.

The financial crisis has shown corporate treasurers and CFOs that the idea that smaller banks offer little systemic risk no longer holds water.

Although many analysts believe the regional banking sector crisis will lead to a rush to “too-big-to-fail megabanks,” others believe the scenario might herald in a fundamental revolution in how the American financial system functions.