First Citizens BancShares is the IBD Stock Of The Day for Friday. A member of the IBD 50 list, First Citizens stock is approaching a buy point and sitting on a 91% run-up this year.
The Raleigh, N.C.-based bank got a big earnings boost thanks to a sweetheart deal in buying Silicon Valley Bank assets in March after that bank collapsed earlier that month. Santa Clara, Calif.-based Silicon Valley Bank operated as one of the largest banking partners for the tech industry and startups prior to being placed in receivership under the Federal Deposit Insurance Corporation on March 10.
First Citizens purchased all the deposits and loans for Silicon Valley Bank, the FDIC announced March 26. The transaction included $72 billion of Silicon Valley assets at a discount of $16.5 billion, according to the release. The FDIC retained roughly $90 billion in assets and securities in receivership for deposition and received equity appreciation rights of FCNCA stock worth up to $500 million as part of the deal.
First Citizens earnings climbed 6% in Q1, accelerating to 212% growth in the second quarter. For the bank's Q3 results on Oct. 26, First Citizens reported 169% earnings growth on a 112% spike in revenue. First Citizens posted triple-digit revenue growth the past seven quarters, although its torrid pace slowed the last two quarters.
"We continued to make great progress in our integration efforts with SVB," First Citizens CEO Frank Holding Jr. said in the report. "We continue to increase awareness that SVB is open for business and that we remain dedicated to supporting the innovation economy."
Wedbush analyst David Chiaverini added First Citizens to the firm's Best Ideas List on Nov. 3 and maintained its outperform rating and $1,800 price target, according to thefly.com. Wedbush forecasts at least a mild recession in the U.S. as its best-case macro scenario for 2024. First Citizens should be able to navigate through that environment given its high capital ratio relative to peers, strong tangible book value growth and expected EPS accretion from the SVB deal.
First Citizens Stock
Shares have been bobbing over and under the 1450.56 buy point for a cup-with-handle base. FCNCA stock is also actionable as it bounces off its 21-day exponential moving average and breaks a short trendline.
First Citizens has a perfect 99 EPS Rating. The stock has a 98 Composite Rating, which combines various technical indicators into one easy-to-read score. First Citizens' relative strength line is off late October highs and has a strong 96 RS Rating.
FCNCA stock vaulted about 91% so far this year and is nearing its record high 1512.07 from early August.
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