The Holdings (a surname that is not bad for a banker) have been three generations in charge of First Citizens, the bank founded in 1898 in North Carolina that has just been left with the remains of the shipwreck of Silicon Valley Bank (SVB).
A traditional, family-owned bank founded in a rural state to serve Johnston County farmers has swallowed up an entity accustomed to financing technology companies and venture capital firms, with gourmet and distinguished clients.
When RP Holding, the patriarch, died in 1957, his three sons, all under the age of 32, took over the entity.
Since 2009, the president of the board
(chairman)
and CEO of the bank is Frank B. Holding Jr., 61, and the vice president, his sister Hope Holding Bryant, 60, both from the third generation of bankers.
Their brother-in-law, Peter Bristow, 57, is president
.
Between the three of them they control more than 22% of the voting rights and are around 50% if the rest of the family members are added.
The Holding family has become much richer this Monday thanks to the fact that the shares of First Citizens have shot up 53% on the Stock Market for the purchase of SVB.
Investors have rewarded Holding's courage in launching itself in the midst of a financial storm to buy the bank that caused the storm.
Aware that many entities had a bad digestion in the financial crisis of 2008 after absorbing their rivals with problems, Holding has negotiated with the deposit guarantee fund all kinds of coverage against lawsuits, litigation or unforeseen losses in the loan portfolio .
To avoid risks, it has left cryptocurrencies and the branch in the Cayman Islands out of the operation.
And for the accounts to come out, it has kept the assets with a discount of 16,450 million euros and generous public financing.
It is an apparently winning bet for a bank that has grown strongly through acquisitions and that had already evolved from its rural origins into a financial entity that served the innovative hub of Raleigh, where its headquarters are located.
First Citizens bought some thirty entities in North Carolina in the last third of the last century, but it did not leave its State until the mid-1990s, when it acquired a bank in neighboring West Virginia.
The entity withstood the financial crisis of 2008 and took advantage of the Great Recession to spread throughout the country by remaining troubled banks.
Acquired Temecula Valley Bank (California) and Venture Bank of Lacey (Washington) in 2009;
with the Sun American Bank of Boca Raton (Florida) and the First Regional Bank of Los Angeles (California) in 2010, and with the United Western Bank of Denver and the Colorado Capital Bank of Castle Rock, both in Colorado, in 2011.
It continued with small and medium-sized purchases until it made its first big leap by absorbing CIT Group, an operation closed at the beginning of 2022 with which it practically doubled its size.
Now, by acquiring the remains of Silicon Valley Bank, it goes from 109,000 to 219,000 million in assets, doubling its size again.
Thus, the entity that in March 2020 had 41,594 million dollars in assets has multiplied its size by more than five in just three years and becomes one of the 15 largest banks in the United States.
First Citizens was, therefore, before this operation, a small bank, the size of the Spanish Bankinter, although with revenues and results more in line with those of Banco Sabadell, and with a market value of 8,400 million dollars (close to 13,000 million after the rise on Monday).
The entity earned 1,058 million dollars in 2022, double that of the previous year.
As of December 31, the group had 582 offices, of which 219 were in North Carolina, 126 in South Carolina and 68 in California.
It also has a presence in the multiple States where it has been buying other banks.
In the presentation to analysts of the operation on Monday, it figures its current number of branches at 550, to which are now added the 17 of the acquired SVB.
First Citizens closed 2022 with 10,375 full-time and 309 part-time employees, 61% women and 33% “ethnically diverse,” according to its annual report.
In said report, the bank was not misleading about its intentions: "We have explored and hope to continue exploring acquisition opportunities that we believe support our business strategies and can improve our profitability."
The best offer
The Federal Deposit Insurance Corporation (FDIC) received a total of 27 offers from 18 bidders for the assets of Silicon Valley Bank, as revealed by its president, Martin Gruenberg, in a statement sent to the Senate, where he appears on Tuesday.
These offers were for the commercial bank, for its private banking arm for high-end clients and for its assets.
Finally, First Citizens has prevailed and has retained the commercial banking business and its private banking arm.
The FDIC calculates that the rescue of the bank will cost about 20,000 million dollars, which will be covered by the contributions of the banks to the deposit guarantee fund.
After the spectacular pull in the stock market this Monday, what the FDIC has almost assured is to collect the 500 million that corresponds to it for the revaluation of the shares of First Citizens, according to the agreement reached by the parties.
In its presentation to analysts, Holding has assured not only that the operation is financially attractive, but that its bank wants to bet on the sectors and clients with which Silicon Valley Bank worked and maintain its extensive network of relationships.
He wants to work more with venture capital and technology companies and is committed to keeping the SVB employees who best know these sectors and the clients of the acquired bank on his staff.
Of course, the bank of
start-ups
, venture capital and their managers, was also one of the favorites of California wineries.
So with the purchase of the SVB, First Citizens also returns a bit to its origins as an agricultural bank.
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