On Monday, U.S. lender First Citizens BancShares announced it would acquire the deposits and loans of Silicon Valley Bank (SVB), the tech industry-focused financial institution that collapsed earlier this month, rattling the banking industry and sending shockwaves around the world.

The deal could reassure investors at a time of shaken confidence in banks. However, the Federal Deposit Insurance Corp. (FDIC) and other regulators had already taken extraordinary steps to head off a broader banking crisis by guaranteeing those depositors in SVB. As a result, another failed U.S. bank could access all of its money.

The FDIC, which took control of SVB earlier this month, said in a separate statement it had received equity appreciation rights in First Citizens stock with a potential value of up to $500 million as part of the deal.

First Citizens, which described itself as having completed more FDIC-assisted transactions since 2009 than any other bank, said the combined company would be resilient with a diverse loan portfolio and deposit base.

Under the deal, unit First-Citizens Bank & Trust Company will assume SVB assets of $110 billion, deposits of $56 billion and loans of $72 billion.

"Prudent risk management approach will continue to protect customers and stockholders through all economic cycles and market conditions," the statement said.

First, Citizens will also receive a line of credit from the FDIC for contingent liquidity purposes and will agree with the regulator to share some losses on commercial loans to provide further downside protection against potential credit losses.

Analysts said the move was positive for financial stability and the venture capital industry but only up to a point.

"I think First Citizens Bank’s acquisition of the SVB loan book and deposits does not add much to solve the number one issue that the U.S. banking system is now facing: deposits leaving smaller banks for larger banks or money market funds," said Redmond Wong, Greater China market strategist at Saxo Markets.

SVB was the largest bank to fail since the 2008 financial crisis when California regulators closed the bank on March 10, sparking massive market disruption and heightening stresses across the banking sector globally.

Based in Santa Clara, it was the 16th biggest lender in the U.S. at the end of last year, with about $209 billion in assets.

The crisis in confidence its collapse triggered also led to the failure of Signature Bank, whose deposits and loans will be taken over by a unit of New York Community Bancorp and forced Switzerland’s second-biggest bank, Credit Suisse, to agree to a rescue by rival UBS.

Worries about the global banking sector continue to grip investors, with shares in European lenders falling sharply on Friday, led by Germany’s Deutsche Bank. At the same time, authorities are also worried about the potential for a credit crunch.

Shares opened higher Monday, with German lender Commerzbank AG up 2.4% and BNP Paribas up 1.2%.

Investors worry that other banks also may crumble under the pressure of higher interest rates. On Friday, much of the focus was on Deutsche Bank, whose stock tumbled 8.5% in Germany, though it was back up about 3.6% in early trading Monday.

Venture capital business

The FDIC said SVB’s 17 former branches would begin operating as First Citizens branches from Monday. Customers of SVB will automatically become customers of First Citizens and will continue to be able to access their accounts through websites, mobile apps and branches, it noted.

North Carolina-based First Citizens said the deal would accelerate its expansion in California and give it wealth management capabilities in the northeast of the United States.

First Citizens was founded in 1898 and said it has more than 500 branches in 21 states and a nationwide bank. It reported a net profit of $243 million in the last quarter. It is one of the top 20 U.S. banks and says it is the largest family-controlled bank in the country.

"We are committed to building on and preserving the strong relationships that legacy SVB’s global fund banking business has with private equity and venture capital firms," said First Citizens Chief Executive Frank Holding Junior in the statement.

Headquartered in Raleigh, First Citizens has around $109 billion in assets and total deposits of $89.4 billion.

The FDIC said First Citizen’s purchase of about $72 billion of SVB’s assets came at a discount of $16.5 billion.

"The FDIC estimates the cost of the failure of Silicon Valley Bank to its Deposit Insurance Fund (DIF) to be approximately $20 billion. The exact cost will be determined when the FDIC terminates the receivership," it said.

The regulator added that approximately $90 billion in securities and other assets from SVB will remain in receivership for disposal.

Another U.S. regional lender, Valley National Bancorp, had also been vying to buy SVB, media reports over the weekend said.