First Citizens BancShares is Wednesday's selection for IBD 50 Stocks To Watch, as the parent of First Citizens Bank is near a buy point out of a flat base.
Shares rose to an all-time high 1,551.53 on Tuesday, surpassing a buy point of 1,528.12. First Citizens stock looked to build on those gains in premarket action Wednesday, but gave back those winnings. It was down 1.6% in recent action but remained within striking distance of the buy point.
According to IBD MarketSmith chart analysis, First Citizens Bank has been in a base-on-base formation ever since it acquired the assets of Silicon Valley Bank in March 2023. Shares rose in strong volume and rebounded from the 50-day moving average in the base after fourth-quarter results on Jan. 26.
Sales growth for First Citizens Bank has been steady over the past seven quarters, ranging from 99% to 641%. Earnings have also kept up and have ranged from 12% to 212%. For the fourth quarter, sales grew 99% to $2.5 billion while earnings of $46.58 a share surged 122%. The company will pay a dividend of $1.64 per share to shareholders on record as of Feb. 29.
First Citizens Bank Acquires Silicon Valley Bank Assets
First Citizens stock gapped up after news that it would acquire all the assets of Silicon Valley Bank. In an agreement with the Federal Deposit Insurance Corporation, the bank acquired $110 billion in assets which included $56 billion in deposits and $72 billion in loans. The bank also got a line of credit from the FDIC for contingent liquidity protection and added downside protection against credit losses.
However, in the fourth quarter, the company noted that "Deposits in the SVB segment declined by $1.49 billion, primarily due to continued client cash burn and muted fundraising activity in the innovation economy."
First Citizens stock has a Composite Rating of 95 and an ideal EPS Rating of 99. The Relative Strength Rating is also an impressive 91. It also leads the Southeast banks group. The regional bank offers general banking services through more than 500 branches across 30 states.
The stock gained 87% in 2023 versus the S&P 500's 24% gain. The stock also outperformed its group's 20% gain.
Mutual funds own 50% of outstanding shares. More funds have been net buyers of First Citizens Bank stock over the past five quarters. Over more recent weeks, strong interest from fund managers has given the stock an Accumulation/Distribution Rating of B-. The Fidelity Contrafund (FCNTX) holds shares of First Citizen Bank.
Among exchange traded funds, the iShares U.S. Regional Banks ETF and the First Trust Nasdaq Bank ETF also hold shares.
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