Sep. 15--First Citizens Bank's second major acquisition of a failed bank in two months may not be its last.

The Raleigh-based bank announced late Friday that it acquired the operations of Venture Bank, which has 18 branches in the Puget Sound region of Washington where Microsoft is headquartered, after it was taken over by the Federal Deposit Insurance Corp. That purchase followed July's acquisition of virtually all the assets of an 11-branch Southern California bank, Temecula Valley Bank.

Tony Plath, a finance professor at UNC-Charlotte, predicts First Citizens will forge ahead with at least two more such deals.

The "sweetheart deals" that the FDIC is offering after it takes over troubled banks are just too good for banks that have a solid financial foundation to pass up, Plath said.

"I wouldn't be surprised if they did more," agreed investment banker Bill Wagner of Howe Barnes Hoefer & Arnett. "These FDIC acquisitions are highly attractive."

To be sure, Plath expects First Citizens to be selective with its deals.

The Venture and Temecula Valley deals, he noted, put First Citizens in markets with desirable demographics: highly educated and highly affluent.

"They aren't going to do this in Michigan or Ohio or upstate New York," said Plath.

How it grew

The 111-year-old First Citizens became a regional behemoth under the late Lewis Holding, who died last month at the age of 81. When Holding was named president in 1957, the bank had more than $200 million in assets and operated in just 17 counties in central and Eastern North Carolina. Holding led the bank for more than 50 years and steadily expanded it into new territories, including the creation of the IronStone Bank subsidiary.

Friday's deal gives corporate parent First Citizens BancShares a total of 430 branches: 373 under the First Citizens brand in seven states and 57 under the IronStone brand in 12 states. The corporate parent has $17.3 billion in assets, not counting the assets acquired in the Temecula and Venture deals.

First Citizens spokeswoman Barbara Thompson also left the door open for more acquisitions.

"We're always looking for new opportunities," she said.

First Citizens' conservative banking practices have enabled it to eschew the federal stimulus money that many large regional and national banks have relied on since the recession hit. That conservatism made it one of the select few that can afford to buy troubled banks today, Plath said.

Details under wraps

First Citizens is publicly traded but notoriously tight-lipped about its operations. The Holding family, which includes Chairman and CEO Frank Holding Jr., owns a majority of First Citizens' stock, making it one of the largest family-controlled banks in the country.

First Citizens shares closed Monday at $134.73, down 66 cents. The stock is down about 12 percent in the past year.

First Citizens acquired about $874 million of Venture Bank's $970 million in assets. The FDIC will retain the remaining assets.

The bank also has a loss-share agreement on about $715 million of the assets. Details of that agreement haven't been released, but Plath said he expects it to be similar to the loss-share agreement that First Citizens agreed to in the Temecula Valley deal. Under that agreement, the FDIC absorbs 95 percent of losses in excess of $464,000, and a lesser amount of losses below that threshold.

The FDIC essentially gave Temecula's deposits and most of its assets to First Citizens in exchange for the loss-share agreement, Plath said.

"Being at the right place at the right time is creating a tremendous amount of shareholder value for First Citizens," he said.

david.ranii@newsobserver.com or 919-829-4877

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