First Republic stock up 24% as FR deal for Silicon Valley Bank lifts banks - ONE SICK BANK BOUGHT ANOTHER SICK BANK. FDIC easy to clean both

Submitted by No_Flatworm8955 t3_123lsfj in wallstreetbets

First Republic stock up 24% as First Citizens deal for Silicon Valley Bank lifts banks

7:37 am ET March 27, 2023 (MarketWatch) Print

By Barbara Kollmeyer and Steve Gelsi

Bank stocks rise after sharp stock drops in recent weeks following the demise of Silicon Valley Bank

Shares of First Republic Bank surged 24% in premarket trading on Monday and led a swathe of regional lenders higher, following news of that failed Silicon Valley Bank finally has a buyer and at least one analyst upgrade in the sector.

The Federal Deposit Insurance Corp. announced earlier on Monday that First Citizens BancShares Inc. (FCNCA) has entered a deal to assume all loans and deposits of Silicon Valley Bridge Bank, which was created by the FDIC following the closure of Silicon Valley Bank.

First Citizens BancShares stock is rallying by nearly 24%.

See: First Citizens enters agreement to buy Silicon Valley Bridge Bank, says FDIC

Bloomberg reported that U.S. authorities are studying ways to enhance their emergency lending facility for banks in a way that would buy more time for First Republic (FRC) to stabilize a drop in deposits.

First Republic has lost 90% of its value in less than two weeks, hitting an all-time low of $12.18 a share last Monday, amid jitters around its overlap with Silicon Valley Bank.

Citi on Monday upgraded shares of M&T Bank Corp. (MTB) and KeyCorp. (KEY) to buy as offering an attractive risk/reward after an analysis of bank balance sheets. KeyCorp. offers the largest benefit from repricing of fixed assets, which will help its profits in 2024 and 2025, Citi analyst Keith Horowitz said.

M&T Bank ranks as a "high-quality play and we see excellent value" for a bank with peer-leading returns and the strongest capital position, he said.

Shares of KeyCorp rose 7% in premarket trades, while M&T Bank is up about 3%.

Hard-hit bank stocks snapped back. PacWest Bancorp (PACW) climbed 8% and Zions Bancorp (ZION) rose 3% .

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.

-Barbara Kollmeyer

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

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VisualMod t1_jdv2v91 wrote

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1

VisualMod t1_jdv2vp6 wrote

>This is good news for the banking sector and should help to stabilize First Republic Bank. However, I still think that there are some risks associated with this company and its exposure to the Silicon Valley market.

0

blue-shirt-guy t1_jdv5ycy wrote

As someone who bought on Friday at 11.94, you love to see it…

3

StritPlunGrateNud t1_jdv64g0 wrote

Hope the put holders get wiped out and the outright shorts get margin called

2

Merteswagger t1_jdv6iqp wrote

> ONE SICK BANK BOUGHT ANOTHER SICK BANK

You know that First Republic and First Citizens are different banks right?….?

171

jepifhag t1_jdv6oqd wrote

While it must be fun to play these games..... I'm noticing musical chairs in the market.

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Blackout38 t1_jdv7aua wrote

On Wallstreet bets, we only care that the first words are the same so that means they are the same company.

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Remington82 t1_jdv7er5 wrote

Delete this, it's wrong. First Citizens bought SVB, it wasnt First Republic doing the buying

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rick_moronis t1_jdvfbz1 wrote

Does anyone notice how bad the SVB balance sheet is/must be? I feel like I'm taking crazy pills. Sure, this probably isn't too bad of a deal for FC, but it should say something about the wider banking sector and everyone's balance sheets. The amount the FDIC is getting stuck with is nuts.

First of all, the actual price is "Rights linked to the stock of First Citizens, which could be worth up to $500 million." So... very little at most, or maybe nothing at all. And we were told there were a lot of bidders that they needed to weed through? What, a bunch of $1 bids?!

Second, the FDIC is retaining $90 billion in assets? FC didn't even want half of the fucking assets on the balance sheet?

Third, "The deal for the bank...[included the purchase of about $72 billion in loans, at a discount of $16.5 billion....]". Uh... WHAT? and the other $90 billion was left behind? This was the 'good' $72 billion? Is that 77% off? This looks more and more like a bailout of FC to be honest. FDIC said "who needs the cash from SVB balance sheet? we can shift those deposits over to FC and stuff a hole in their balance sheet so we're not doing this again in North Carolina next week."

Fourth, the FDIC and FC share in losses from here 50/50 up to 5 billion, so the FDIC could still lose another 2.5 billion.

If the rest of the regional banks balance sheets look like this then God help us.

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Fit-Boomer t1_jdvhp7c wrote

I didn’t know that First Citizens bank is “sick”.

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rick_moronis t1_jdvoogb wrote

Replying to memestockwatchlist (#2,392,219)

There are non-hold to maturity, which are treasuries and MBS that are marked to market regularly. Then there are HTM assets which are also treasuries and MBS that they don't mark to market. Then there are loans that are by nature HTM unless the bank is unwound - which also happen to have the longest duration risk. My guess would be that they left behind $90 billion in loans written at 2.5% because it is a waste of capital to tie it to that income stream.

The way you compensate someone for the increase in rates since the contracts were written is to drop the price (price and yields inversely correlated). So the HTM assets would be handed off at a steep discount (if they were handed off at all) to compensate FC for the new rates. If kept on FC balance sheet, they will continue to gain/lose based on market rates. Alternatively, they can be sold immediately into the treasury/mbs market which just turns to cash and is put on the balance sheet (they would realize no loss, personally, from this sale because the FDIC already took the loss when re-sold to FC).

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blue-shirt-guy t1_jdvt66q wrote

Replying to dbdank (#2,392,173)

Confidence that contagion can be avoided and future bank runs not as big of a threat since bank clients see positive outcome from the SVB situation. Less bank run threat is good for First Republic.

2

Dorktastical t1_jdvys0d wrote

If we care, we saw it all on our watchlist and RSS feed already so stfu

1

Rufuz42 t1_jdwp9in wrote

This post is a like a WSB chefs kiss. Wrong in the stupidest way possible but also is a long text post with hyperlinks so it looks legit to passers by. Nice.

2

JDanielJr7 t1_jdwyy99 wrote

Buy and/or hold First Republic. Put a saddle on that horsey and ride it up to the top of that mountain.

1

Suspended_9996 t1_jdxjyrl wrote

2023-03-27

frc-13.82 usd (+11.81%)

Day's Range: 13.46 - 16.38 usd

1

jsp4004 t1_jdyd88m wrote

The usa has japanese women doing american football , chinese and Russian propoganda outlets , Jews run hollywood , with every race religion and whatever in the usa while idiot old fuckers like trump and biden pretend to be crime fighting heros on tv and stupid shit

1

jsp4004 t1_jdydhz5 wrote

That fox news has been running treason propganda with impunity in the usa for decades with shows the usa military is ignorant or stupid same with other propoganda outlets etc

1

jsp4004 t1_jdydp7c wrote

But since people make up bullshit anyway. Americans should just unite and make up another institution that has higher made up authority than the cia and FBI and whatever other bullshit that was made the fuck up

1

jsp4004 t1_jdydw4z wrote

Hey everybody let's get together and make a building and give ourselves authority and legitimacy that over seas the united states fbi and CIA and DOJ and supreme court and usa military etc etc etc

1

jsp4004 t1_jdye0zk wrote

That's what every other idiot in the usa did

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jsp4004 t1_jdye75x wrote

FBI must be NARCISSISTIC along with cia and polticians and propogandist. And idiot actors that work at fox news. All the fox news propogandist are NARCISSISTIC

1

jsp4004 t1_jdyf2kw wrote

Oh Iook at me I'm the president time to get rid of the deep state and fight for americans and do a false flag and blame the chinese. Oh wait that was what trumps old dumbass did.

1

jsp4004 t1_jdyfcbl wrote

Maybe silicon valley bank shoulda just got tax payer money for 50 years and made the fed the fuck up and got tax payer money from nato and the european union and shit

1