: First Citizens’ stock notches largest one-day rally ever on deal for Silicon Valley Bridge Bank

by | Mar 27, 2023 | Stock Market

First Citizens Bancshares Inc.’s stock rallied 54% Monday in its largest-ever single-day rise after the company agreed to assume all the deposits and loans of Silicon Valley Bridge Bank from the Federal Deposit Insurance Corp., the regulator announced on Monday. As of Monday, the 17 former branches of Silicon Valley Bank will operate as First Citizens
branches, FDIC said. The FDIC has been trying to auction off Silicon Valley Bank for about two weeks, since it became the largest U.S. bank to go bust since Washington Mutual in 2008.

The FDIC created Silicon Valley Bridge Bank N.A. on March 13, following the closure of Silicon Valley Bank by the California Department of Financial Protection and Innovation. First Citizens Bancshares’ stock ended the day’s trading at $895.61, up 53.7% and approaching the stock’s all-time high of $907.04 on Sept. 2, 2021, according to FactSet data. The stock’s rise eclipsed its previous record of a 21.4% gain on March 23, 2009, as Wall Street cheered the deal. “[The] transaction … adds further low-risk growth to a healthy investment thesis,” Janney Montgomery Scott analysts said in a research note. The firm reiterated its buy rating and said the stock will “significantly benefit” First Citizens’ tangible book value. First Citizens Bancshares said the deal would “significantly” boost its earnings but said it would provide more specific guidance going forward. The bank already has exposure to Silicon Valley Bank’s venture-capital world through its business with companies in North Carolina’s Research Triangle, said Frank B. Holding Jr., the chair and CEO of Raleigh, N.C.-based First Citizens Bancshares. Also read: First Citizens grows bigger with Silicon Valley Bank deal, but not big enough to move to next regulatory level The bank’s track record with the FDIC in buying distressed banks such as CIT Bank, along with its conservative approach and strong balance sheet, helped it prevail in the government’s auction for Silicon Valley Bank, Holding s …

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