June 6, 2023

Brighton Journal

Complete News World

First Nationals stock rally as SVB collapse was the winner for the bank

The Silicon Valley bank collapse in March was, in large part, a huge problem for bank stocks, especially stocks in smaller regional lenders. But one person’s pain can be another’s gain, First Citizens Bancshares shows.

Now, the acquisition is paying off.

On Wednesday, First Citizens reported first-quarter net profit of $9.52 billion, up from $257 million in the fourth quarter of last year. Of note is the $9.82 billion initial gain, net of tax, from the acquisition of SVB – which is approximately $10 billion.

Shares in First Citizens jumped 8% in early US trading, while

Standard & Poor’s 500

It was up 0.2%. This continues to extend the stock’s outperformance.

Announcement – scroll to continue

while the

SPDR S&P Regional Banking ETF

(KRE) has lost 35% since March 8 — in the days before the Silicon Valley crash — shares of First Citizens are up 61%. The only stock in the KRE that has gained since March 8 is New York Community Bancorp (NYCB), which acquired Signature Bank.

Another lender closed down by the FDIC the same weekend as SVB. But while the NYCB has gained nearly 19% over the same period, that’s nothing like the progress First Nationals saw.


Europe’s largest bank, it also benefited from the collapse of SVB, after it stepped in to buy the UK arm of Bank of California for £1 ($1.27) in March. The British bank said earlier this month that it made a temporary gain of $1.5 billion from the deal.

In its earnings presentation, First Citizens highlighted that its acquisition of SVB will allow it to expand into the innovation economy and accelerate the growth of its wealth business. The Raleigh-based bank said the SVB footprint will help the group expand its presence in high-growth West Coast and Northeast markets, and that the acquisition would immediately add to its earnings per share.

First Citizens Chairman and CEO Frank P. “In an environment of macroeconomic challenges and uncertainties, we continue to operate with strong capital and liquidity conditions. We remain encouraged by our clients’ resilience in the face of high inflation and rising interest rates and look forward to continuing to support them.”

Write to Jack Denton at [email protected]