A Wednesday posting from the Federal Deposit Insurance Corp., revealing all 25 bids for the assets of Silicon Valley Bank in the wake of its March failure, pulls back the covers on six potential strategies from bidders.
Raleigh, North Carolina-based First Citizens BancShares won the auction, with an agreement to assume $110 billion of SVB’s assets, $56.5 billion in deposits and $72 billion in loans.
The FDIC on Wednesday listed the other companies that bid — and listed the individual bids — but did not reveal which offers came from whom.
The posting also delineates between bids for SVB’s deposits and assets; the failed bank’s asset pools; and for SVB’s private bank. The FDIC split the auction process, allowing bidders to make separate offers for the private-banking unit, a vestige of Boston Private that SVB acquired for $900 million in 2021.
Some of the bidders on the FDIC’s Wednesday list are banks and firms that observers might expect to participate. Others constitute a surprise.
1. Big regionals looking to grow
PNC and Citizens Bank — each of which submitted bids for SVB — represent the usual suspects.
PNC had been linked as a possible acquirer when the FDIC sought bids in the weekend after SVB’s closure but reportedly decided against it. That initial process sputtered amid a dearth of bids for the whole unit, and the FDIC opted to hold a second auction.
But PNC remained active during the March crisis. It was one of 11 banks to collectively infuse First Republic with $30 billion in deposits in an attempt to save that bank. It then reportedly submitted a bid to acquire First Republic, as did Citizens. But each lost out to JPMorgan Chase.
PNC and Citizens would make sense as potential buyers. PNC is solidly in the tier of U.S. banks just below the four largest — and has had nearly two years to digest its $11.6 billion acquisition of BBVA. Citizens, likewise, has had almost the same time frame to plot its growth plan after picking up 80 East Coast branches from HSBC.
2. Canadian banks
One of the more intriguing narratives in bank mergers and acquisitions over the past year and a half has been intensifying competition among Canadian banks to expand their presence south of the border. BMO beat out TD to purchase Bank of the West from BNP Paribas for $16.3 billion at the end of 2021.
Fresh off its loss, TD proposed acquiring Memphis, Tennessee-based First Horizon for $13.4 billion. That merger collapsed last week after the larger lender acknowledged it couldn’t predict a timeline to regulatory approval from the Office of the Comptroller of the Currency or the Federal Reserve.
Royal Bank of Canada opted not for U.S. expansion but to acquire HSBC’s footprint in Canada.
That leaves Scotiabank and the Canadian Imperial Bank of Commerce as the two largest lenders in the country that hadn’t made a public bid to grow southward.
Scotia and CIBC each submitted bids in the SVB sweepstakes, the FDIC disclosed Wednesday.
3. A moonshot for smaller banks
Four banks with less than $100 billion in assets submitted offers for all or part of SVB. That ranges from $56 billion-asset Valley National Bank to $2.8 billion-asset Northeast Bank, based in Portland, Maine.
Valley, a Wayne, New Jersey-based lender, is no stranger to the M&A sphere. It acquired the U.S. arm of Israel’s Bank Leumi in a $1.15 billion deal in 2021. The New York Times reported it submitted a bid early in the FDIC’s second auction for SVB.
Arkansas-based Centennial Bank and Florida-based BankUnited also submitted bids, the FDIC said Wednesday.
Brex put in a bid, the FDIC reported Wednesday, though it remained unclear whether such a move would give the San Francisco-based fintech a banking license.
5. Private banks/asset and wealth managers
Ten of the 25 bids the FDIC logged came for SVB’s private bank. Blackstone and Apollo Global Management were among the firms that reportedly had early interest in SVB’s assets. Wednesday’s list included reported offers from the likes of Stifel, Safra and Sixth Street, along with smaller firms such as Bayview Acquisitions, Lido Advisors, Reverence Capital and Creative Planning.
6. Niche lenders
The remaining bid, focused on SVB’s wine-lending portfolio, presumably came from AG Wine Group. Silicon Valley Bank executives sought to revamp the wine portfolio in the week after SVB’s failure in preparation for a potential sale.