First Citizens and Valley National compete to purchase Silicon Valley Bank

Amid reports that Pennsylvania-based Customers Bancorp was seeking potential co-investors for a bid to purchase the failed Silicon Valley Bank (SVB), two regional banks have emerged as contenders for the FDIC-controlled asset. First Citizens BancShares and Valley National Bancorp both filed bids with the Federal Deposit Insurance Corp. (FDIC) on Saturday (March 25).

Sources indicated that the FDIC is expected to select a new owner this weekend. Last week, the FDIC declared that there had been “substantial interest” from multiple parties and extended the deadline for bidders to the end of the week. In further news, the FDIC sold another failed bank, Signature Bank, to Flagstar Bank—a subsidiary of New York Community Bancorp.

The deal was a setback for the cryptocurrency industry that Signature Bank had once courted, as Flagstar’s bid did not include roughly $4 billion of deposits tied to the failed institution’s digital banking operations. Consequently, the FDIC revealed it would provide these deposits directly to customers whose accounts are associated with the digital banking business. The closing of both Silvergate Bank and Signature Bank has made it increasingly difficult for crypto services and investors to transfer traditional currencies, cutting off two crucial banking on-ramps for the digital asset industry.

Signature’s Signet platform—which enabled 24/7 real-time payments outside of traditional banking hours—remains under FDIC receivership and is subject to future arrangements. It is yet unclear what plans exist for the platform to come back online as an ongoing service.