First Citizens shares jump 45% on ‘very good news’

Written by

Written on Mar 27, 2023

Reading time 2 minutes

First Citizens agrees to buy SVB loans and deposits at a deep discount.
Hightower's Stephanie Link reacts to the news on CNBC's "Squawk Box".
First Citizens shares are now up nearly 70% versus their recent low.

Frist Citizens BancShares Inc (NASDAQ: FCNCA) is trading about 45% up this morning after agreeing to buy Silicon Valley Bank assets at a deep discount.

Pro reacts to the stock market news

On Monday, the Federal Deposit Insurance Corporation said the Nasdaq-listed firm will assume roughly $72 billion worth of SVB loans and deposits at a discount of $16.5 billion.

Around $90 billion worth of assets of the recently collapsed bank will remain with the FDIC. Reacting to the stock market news on CNBC’s “Squawk Box”, Hightower’s Stephanie Link said:

I think this Silicon Valley Bank deal today is very good news. It provides confidence – that’s something we lost in the banking system over the last two weeks and the speed has been incredible.

Versus their recent low, First Citizens shares are now up nearly 70%.

Deal to boost First Citizens earnings

First Citizens confirmed the deal will result in a significant increase in earnings and said it’ll issue more specific guidance in the coming weeks.

According to the Federal Deposit Insurance Corporation, 17 locations that previously operated as the Silicon Valley Bank will now be under the banner of First Citizens BancShares Inc. Link added:

I’m also hearing that deposit situation is calming down so that’s really good news too.

In January, the Raleigh-headquartered firm had reported better-than-expected revenue for its fourth financial quarter. Wall Street currently has a consensus “overweight” rating on First Citizens shares that pay a dividend yield of 0.35% at writing.