First Citizens Bank jumps 50% after deal to acquire assets of collapsed Silicon Valley Bank
Shares of First Citizens Bank surged as much as 50% on Monday after it was announced that the bank hadThe Nasdaq-listed shares hit an intraday high of $881, its highest in over a year.
The Federal Deposit Insurance Corporation said the Raleigh, North Carolina-based bank will acquire $72 billion worth of SVB assets at a $16.5 billion discount. First Citizens will also take over 17 branches of SVB. The FDIC estimates the cost of the failure of SVB to the agency will be approximately $20 billion, per aSVB collapsed on March 10 after a bank run, sending shockwaves through global financial markets and steep sell-off in bank stocks on contagion concerns. Crypto bank Silvergate wound down operations earlier in the same week, while Signature Bank was shuttered by regulators and taken over by the FDIC the weekend following SVB's fall.
The chaos follows a year of rate hikes by the Federal Reserve's as it tightens monetary policy in response to high inflation, moves that have weighed heavily on stock and bond prices. , says the ongoing banking turmoil, along with the Fed's rate hikes will cause more volatility in financial markets.
"Financial conditions are likely to tighten, increasing the risk of an economic hard landing even if central banks ease off on interest rate hikes," Haefele said in a recent note."In the months ahead, various banks are likely to restrict lending in order to build up their liquidity buffers."
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