Dive Brief:
- First Citizens Bank on Tuesday announced an updated $6.5 billion community benefits plan that extends the bank's community support to Northern California and Massachusetts following its takeover of much of Silicon Valley Bank, which collapsed in March.
- The commitment recognizes pre-existing SVB relationships, and replaces the five-year, $11.2 billion community benefits plan the regional lender announced in 2021, following its $900 million acquisition of Boston Private.
- The new commitment comes in addition to $3.1 billion that SVB had put toward the community benefits plan prior to First Citizens' acquisition of certain assets and liabilities of SVB from the Federal Deposit Insurance Corp. in March, according to a release.
Dive Insight:
Although First Citizens had no obligation to assume responsibility for SVB's prior community benefits plan, the Raleigh, North Carolina-based bank said it agreed to the addendum to further the bank's ongoing commitment to serve the communities where it does business.
"For its entire 125-year history, First Citizens Bank has taken great pride in our continuing efforts to support clients, customers and associates, as well as the communities in which we live and work," Frank Holding Jr., CEO of the $213.8 billion-asset bank, said in a statement. "This addendum is a testament to that ongoing commitment as we extend our legacy of giving back to the cities and towns we serve, while also helping grow vibrant and diverse communities and businesses."
The updated plan comes as a “huge relief” for the communities that stood to lose out on the investments following SVB’s collapse in March, Jesse Van Tol, CEO of the National Community Reinvestment Coalition, said in a statement Tuesday.
"First Citizens is honoring SVB's obligations where others might not have. Their eagerness to listen to and learn from our members, backed with this expansion of our previous community benefits agreement in 2021, should be an example to the industry,” he said. “This is how you show you're serious about uplifting the most neglected communities in your service area."
The plan includes $2.25 billion in small-business lending, $3.6 billion in Community Reinvestment Act development lending and investing and $650 million in residential mortgages to low- and moderate-income borrowers and in selected LMI census tracts, First Citizens said Tuesday.
The bank said it is also committing to $35 million in CRA grants or contributions, with $10 million of that sum dedicated to an affordable home mortgage subsidy program.
First Citizens assumed $110 billion of SVB’s assets, $56.5 billion in deposits and $72 billion in loans, after the Santa Clara, California-based firm was taken over by regulators in March.
“Now operating as a division of First Citizens Bank, Silicon Valley Bank has resumed serving some of the world's most innovative companies and investors,” First Citizens said Tuesday.
Meanwhile, First Citizens said it continues to execute a separate $16 billion community benefits plan associated with the firm’s 2022 acquisition of CIT Group. The bank said that plan remains on track to meet its own financial targets.
