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Open Source: What does Raleigh’s ‘boring’ bank want with Silicon Valley?

I’m Brian Gordon, tech reporter for The News & Observer, and this is Open Source, a weekly newsletter on business, labor and technology in North Carolina.

Banking is best when it’s boring, the saying goes. By that standard, banking is not currently at its best. The collapse of Silicon Valley Bank earlier this month has the global banking system on edge, and as the dominoes fall, the North Carolina Triangle has plenty to gain or lose.

Banking news in the state usually revolves around Charlotte. The Queen City is home to Bank of America and Truist Bank. Wells Fargo, while headquartered in San Francisco, has a sizable presence there too. Banking is baked into Charlotte’s identity, along with the Hornets losing and NASCAR.

But this week, it’s been the Triangle linked with major banking developments, both nationally and internationally.

First Citizens wants to buy SVB? Really?

According to multiple reports this week, Raleigh’s First Citizens Bank is trying to acquire what’s left of Silicon Valley Bank.

Silicon Valley was known for working with dynamic early-stage tech startups. First Citizens is a traditional, family-owned institution that N.C. State finance professor Richard Warr favorably described as “boring.”

On Instagram, one person compared First Citizens buying Silicon Valley to “Billy Graham buying Studio 54.”

The First Citizens Bank building on Fayetteville Street in downtown Raleigh.
The First Citizens Bank building on Fayetteville Street in downtown Raleigh.

So, what’s First Citizens’ angle here?

The bank itself is tight-lipped about its strategy, refusing to confirm or deny whether it made a bid for Silicon Valley.

Warr suggested any Triangle-area bank with resources would benefit from capitalizing on Silicon Valley Bank’s relationships with tech companies. It has acquired 20 other banks since 2009, the company says, including purchasing CIT Group last year for $2.2 billion.

Yasser Boualam, an assistant professor of finance at UNC, said if First Citizens could strengthen its relationships with startups, it could have “significant positive spillover effects to the NC economy in the long run.”

The Federal Deposit Insurance Corporation (FDIC), which has managed Silicon Valley Bank since the lender collapsed on March 10, gave bidders until Friday night to make offers. “For guidance, we expect to announce our decision this weekend,” an FDIC spokesperson said in an email to The News & Observer on Wednesday.

What Credit Suisse sale could mean for RTP?

The other big banking news in the Triangle this week actually took place in Switzerland, where UBS acquired fellow Swiss bank (and major Research Triangle Park tenant) Credit Suisse for $3 billion.

Credit Suisse has been wracked by scandals over the years, including hefty fines for enabling clients to evade taxes. Known for catering to wealthy, international clients, Credit Suisse was reporting heavy losses even before Silicon Valley Bank fell.

Will the merger affect Triangle jobs?

State records indicate Credit Suisse employed around 2,300 people in the Triangle as of last year. Even before UBS stepped in, the company was in the process of cutting positions globally.

In 2017, North Carolina awarded Credit Suisse an incentive grant to create 1,200 jobs in the area. The state says this agreement remains intact for now. The company has already created roughly two-thirds of those positions, a mix of financial and technology roles.

Earlier this week, UBS’s chairman announced his company would downsize Credit Suisse’s investment division.

The dust hasn’t nearly begun to settle on this acquisition.

The entrance to the Credit Suisse campus in Research Triangle Park.
The entrance to the Credit Suisse campus in Research Triangle Park.

President Biden to visit Durham tech company

President Joe Biden plans to be in Research Triangle Park next week to visit the silicon chip manufacturer Wolfspeed.

It’s part of an “Investing in America” tour.

Last summer, Biden signed a bill that includes $52 billion for U.S. semiconductor manufacturing, known as the CHIPS Act. Wolfspeed, which is rapidly expanding its production of silicon carbide chips, expects to receive some CHIPS funding.

Avaya, more like A-bye-a

In the fall of 2020, the telecommunications company Avaya relocated its corporate offices from California’s Bay Area to the Triangle, where it took over an office complex in South Durham. One bankruptcy, a failed debt deal, a few investigations, multiple rounds of layoffs, and a cratered stock price later… and the company is out of the Triangle, and North Carolina all together.

Where did the company move its headquarters? Jersey.

The former Avaya headquarters in Durham near Research Triangle Park.
The former Avaya headquarters in Durham near Research Triangle Park.

Short Stuff: Red Hat’s anniversary

  • The Raleigh-raised, open-source software company Red Hat turns 30 years old on Sunday.

  • The NC Chamber honored former North Carolina emergency management director Mike Sprayberry at its 81st annual award ceremony at the Raleigh Convention Center on Wednesday. Many might remember Sprayberry for his calming presence during the daily COVID-19 updates at the height of the pandemic.

  • Triangle entrepreneur Robbie Allen raised $3 million from local venture funds for his Durham startup Bionic Health, which works to provide AI-driven health services.

  • Triangle tech openings sank 30% last month, new data provided by the NC Tech Association shows:

Open tech jobs plummeted last month in the Triangle
Open tech jobs plummeted last month in the Triangle

National Tech Happenings

TikTok’s CEO spoke before Congress on Thursday during a four-plus-hour committee hearing. He didn’t appear to assuage congressional members’ fervent distrust of the app and its connections to the Chinese government. Talk of a TikTok ban intensifies.

“The Age of AI has begun,” proclaimed billionaire Bill Gates on his blog (p.s. Bill Gates has a blog). He said “artificial intelligence is as revolutionary as mobile phones and the Internet.”

Speaking of AI, the chatbot Character.AI is being valued at $1 billion. It has no revenue.

Twitter will soon get rid of the blue checkmarks on verified accounts that don’t pay for Twitter Blue subscriptions. Welp, there goes my checkmark.

Thanks for reading!

Everyone made the same clock pun.
Everyone made the same clock pun.

This story was produced with financial support from a coalition of partners led by Innovate Raleigh as part of an independent journalism fellowship program. The N&O maintains full editorial control of the work.

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