RALEIGH –  North Carolina-based First Citizens will buy Silicon Valley Bank, the tech industry-focused financial institution that collapsed earlier this month, rattling the banking industry and sending shockwaves around the world. And investors embraced the deal, sending First Citizens shares up nearly 50% in trading Monday.

Shares were selling at $858.25 – up $275 from the open – as Wall Street examined terms of the deal. In late afternoon trading, shares climbed further to 887.48+304.93 , a jump of more than 52%.

In fact, analyst Chris Whalen of Whalen Global described it as a “tremendous deal.”

And the head of the N.C. Bankers Association had plenty of praise for First Citizens.

“First Citizens Bank has an established record of successful acquisitions, including purchases of failed banks in the aftermath of the 2008 financial crisis.  The bank already has a substantial presence in California, so SVB is not unfamiliar territory,” Peter Gwaltney, CEO of the bankers’ group, told WRAL TechWire. “This is an excellent transaction for the bank and its shareholders, which is naturally good for North Carolina.”

One big reason investors like the deal: As part of the deal, First Citizens is not taking on most of the $90 billion in US Treasuries that SVB was holding when regulators took over. It was the drop in value of those bonds — rather than losses on the loans that SVB had made — that created problems for SVB and the overall banking system.

First Citizens more than doubled its assets with this deal. It is now worth more than $219 billion.

The sale involves the sale of all deposits and loans of SVB to First-Citizens Bank and Trust Co., the FDIC said in a statement late Sunday. Customers of SVB automatically will become customers of First Citizens, which is headquartered in Raleigh. The 17 former branches of SVB will open as First Citizens branches Monday.

The acquisition gives the FDIC shares in First Citizens worth $500 million. Both the FDIC and First Citizens will share in losses and the potential recovery on loans included in a loss-share agreement, the FDIC said.

“First Citizens has a reputation for financial strength, exceptional customer service and prudent lending that spans 125 years. We have partnered with the FDIC to successfully complete more FDIC-assisted transactions since 2009 than any other bank, and we appreciate the confidence the FDIC has placed in us once again,” said Frank B. Holding, Jr., chairman and CEO of First Citizens, in the announcement of the deal. “We look forward to building relationships with our new customers and positioning our company for continued success as we affirm our commitment to support the integrity of our nation’s banking system.”

University of North Carolina at Chapel Hill chief economist Gerald Cohen explained his thoughts on the transaction.

“They’re [First Citizens] vying, I think, to be a major player in the national banking scene,” Cohen said.

First Citizens has a history of buying up failed banks to expand in recent years.

“That’s been part of their business model and they’ve been successful, and I think what it illustrates is they have a team of people who knows how to look for these diamonds in the rough let’s call them,” Cohen said.

NC Tech Association President Brooks Raiford says companies in the Triangle stand to benefit from having a bank closer to home.

“Many of the companies that were either already doing business with SVB or would be drawn to the kind of services that sort of bank tends to offer now have it available widely in this community,” Raiford said. “So, I think it is absolutely a boon to our area.”

First Citizens is the biggest of the top five banks in the Triangle with nearly $19 million in deposits locally as of the latest annual FDIC market share survey.

Frank B. Holding Jr., Chairman and CEO, First Citizens Bank (First Citizens photo)

The deal could reassure investors at a time of shaken confidence in banks, though the Federal Deposit Insurance Corp. and other regulators had already taken extraordinary steps to head off a wider banking crisis by guaranteeing that depositors in SVB and another failed U.S. bank would be able to access all of their money.

Customers of SVB will automatically become customers of First Citizens, which is headquartered in Raleigh. The 17 former branches of SVB will open as First Citizens branches Monday, the FDIC said.

Adrienne Cole, CEO of the Raleigh Chamber, praised First Citizens and its leadership about the deal.

“The Raleigh Chamber is pleased and excited for our member, First Citizens Bank, that made the purchase announcement of Silicon Valley Bank today.  Since their Chamber membership began in 1973, First Citizens has consistently been an important and involved member of our community and our Chamber, sharing our passion for growing our economy and region through initiatives focused on leadership development, transportation, and through broad support for our business community,” Cole said. “Additionally, First Citizens Bank Chairman and CEO Frank Holding, Jr. served as the Raleigh Chamber Board Chair in 2007-2008, and members of the First Citizens Bank team are consistently active in our events and programming.  We congratulate Raleigh-based First Citizens Bank and Frank Holding, Jr. and wish them continued success.”

Inside Silicon Valley Bank’s collapse: The many missed red flags

The collapse of Silicon Valley Bank on March 10 prompted the FDIC and other regulators to act to protect depositors to prevent wider financial turmoil.

The bank, based in Santa Clara, California, failed after depositors rushed to withdraw money amid fears about the bank’s health. It was the second-largest bank collapse in U.S. history after the 2008 failure of Washington Mutual.

On March 12, New York-based Signature Bank was seized by regulators in the third-largest bank failure in the U.S.

In both cases, the government agreed to cover deposits, even those that exceeded the federally insured limit of $250,000, so depositors at Silicon Valley Bank and Signature Bank were able to access their money.

Mid-sized San Francisco-based First Republic Bank, which serves a similar clientele as Silicon Valley Bank and appeared to be facing a similar crisis, was in turn battered by investors worried that it, too, might collapse. That led 11 of the biggest banks in the country to announced a $30 billion rescue package.

The acquisition of SVB by First Citizens gives the FDIC shares in the latter worth $500 million. Both the FDIC and First Citizens will share in losses and the potential recovery on loans included in a loss-share agreement, the FDIC said.

First Citizens Bank was founded in 1898 and says it has more than $100 billion in total assets, with more than 500 branches in 21 states as well as a nationwide bank. It reported net profit of $243 million in the last quarter.