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First Republic stock rises 25% to lead regional bank stocks higher after SVB finds a buyer

A pedestrian walks by the First Republic Bank headquarters on March 13, 2023 in San Francisco, California.First Republic Bank’s HQ in San Francisco.

Justin Sullivan/Getty Images

  • First Republic and other bank stocks jumped in Monday’s premarket on news that SVB has a buyer.
  • First Citizens Bank has agreed to buy much of Silicon Valley Bank’s assets, the FDIC said.
  • The rebound in regional bank stocks reflect easing investor fears around a possible banking crisis.

First Republic Bank shares rose as much as 29% in premarket trading Monday after news that collapsed Silicon Valley Bank has finally found a buyer after a two-week search.

First Citizens Bank has agreed to purchase a big chunk of SVB’s assets and will take on all of its deposits and loans, the FDIC said late Sunday. The agency has been seeking a buyer since seizing the California-based lender over two weeks ago.

Shares of First Republic Bank were up about 27% at $15.70 at 7:33 a.m. ET Monday, after rising almost 30%. Embattled FRB itself secured a $30 billion rescue package from larger rivals last week, and its shares are down nearly 90% this year so far.

San Francisco-based First Citizens Bank & Trust Co. has agreed to acquire about $72 billion of assets at a discount of $16.5 billion from Silicon Valley Bridge Bank, which was set up by the FDIC to protect the failed SVB’s customer deposits. The FDIC will hold onto another $90 billion in assets.

The move has further helped settle jitters about the health of the banking sector after the collapse of SVB and the forced takeover of Credit Suisse by UBS.

“Helping to repair sentiment towards the sector was the news that First Citizens Bank is to buy $72 billion of Silicon Valley Bank assets at a discount of $16.5 billion. Together with HSBC’s purchase of SVB’s UK operations and UBS’ takeover of Credit Suisse, investors will be hoping for some stability from now on in the broader sector,” Russ Mould, investment director at AJ Bell, said in a note.

First Republic’s gains led a pack of US regional bank stocks higher, after they were hit hard by the banking turmoil that rippled through the market this past month. PacWest added 12%, Western Alliance Bancorp rose 7%, and Zions Bancorp was up 5% in Monday’s premarket at last check.

SVB was shut down and taken over by regulators on March 10 after a historic bank run on its deposits that sent shockwaves through the US banking system. The uptick in regional bank stocks now reflect an easing in investor fears of further banking turmoil.

Read the original article on Business Insider
Categories
Audio Posts and Shared Links Audio Sources - Full Text Articles

First Republic stock rises 25% to lead regional bank stocks higher after SVB finds a buyer

A pedestrian walks by the First Republic Bank headquarters on March 13, 2023 in San Francisco, California.First Republic Bank’s HQ in San Francisco.

Justin Sullivan/Getty Images

  • First Republic and other bank stocks jumped in Monday’s premarket on news that SVB has a buyer.
  • First Citizens Bank has agreed to buy much of Silicon Valley Bank’s assets, the FDIC said.
  • The rebound in regional bank stocks reflect easing investor fears around a possible banking crisis.

First Republic Bank shares rose as much as 29% in premarket trading Monday after news that collapsed Silicon Valley Bank has finally found a buyer after a two-week search.

First Citizens Bank has agreed to purchase a big chunk of SVB’s assets and will take on all of its deposits and loans, the FDIC said late Sunday. The agency has been seeking a buyer since seizing the California-based lender over two weeks ago.

Shares of First Republic Bank were up about 27% at $15.70 at 7:33 a.m. ET Monday, after rising almost 30%. Embattled FRB itself secured a $30 billion rescue package from larger rivals last week, and its shares are down nearly 90% this year so far.

San Francisco-based First Citizens Bank & Trust Co. has agreed to acquire about $72 billion of assets at a discount of $16.5 billion from Silicon Valley Bridge Bank, which was set up by the FDIC to protect the failed SVB’s customer deposits. The FDIC will hold onto another $90 billion in assets.

The move has further helped settle jitters about the health of the banking sector after the collapse of SVB and the forced takeover of Credit Suisse by UBS.

“Helping to repair sentiment towards the sector was the news that First Citizens Bank is to buy $72 billion of Silicon Valley Bank assets at a discount of $16.5 billion. Together with HSBC’s purchase of SVB’s UK operations and UBS’ takeover of Credit Suisse, investors will be hoping for some stability from now on in the broader sector,” Russ Mould, investment director at AJ Bell, said in a note.

First Republic’s gains led a pack of US regional bank stocks higher, after they were hit hard by the banking turmoil that rippled through the market this past month. PacWest added 12%, Western Alliance Bancorp rose 7%, and Zions Bancorp was up 5% in Monday’s premarket at last check.

SVB was shut down and taken over by regulators on March 10 after a historic bank run on its deposits that sent shockwaves through the US banking system. The uptick in regional bank stocks now reflect an easing in investor fears of further banking turmoil.

Read the original article on Business Insider
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