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First Citizens Bancshares Inc.’s stock skyrocketed Monday, fueled by the company’s agreement to assume all the deposits and loans of Silicon Valley Bridge Bank from the Federal Deposit Insurance Corp.
The stock climbed 54% Monday, hitting a 52-week high of $910, according to FactSet data. The S&P 500
SPX,
rose 0.16% Monday.
Stocktwits, a social platform for investors and traders, highlighted a frenzy of activity around First Citizens’
FCNCA,
stock. The stock quickly climbed to be the No. 2-trending stock on the platform as the markets opened Monday, with traders looking to take advantage of short-term opportunities.
“Participants on the platform remain extremely bearish as many anticipate the surge in price may drop soon,” Stocktwits told MarketWatch via email.
Related: First Citizens enters agreement to buy Silicon Valley Bridge Bank, says FDIC
In a statement released Sunday night, the FDIC announced that the 17 former branches of Silicon Valley Bank will operate as First Citizens branches starting Monday. Silicon Valley Bridge Bank N.A. was created by the FDIC on March 13, following the closure of Silicon Valley Bank by the California Department of Financial Protection and Innovation.
“The message volume stats on Stocktwits will likely continue to pick up significantly in the days ahead if prices continue to rally, as it typically takes a few days for people to rotate back into discussing the names that are moving,” StockTwits told MarketWatch. “However, message volume on the platform is extremely high compared to a month prior.”
Silicon Valley Bank, formerly a unit of SVB Financial Group, based in Santa Clara, Calif., suffered a run on deposits earlier this month that forced the government to take the bank into receivership. Regulators stepped in to guarantee uninsured deposits.
Related: After Silicon Valley Bank collapse, startups describe ‘roller coaster of emotions’
People are still digesting the Silicon Valley Bank news, according to Tommy Tranfo, head of community at Stocktwits, but the initial reaction on the platform is that “it was a super positive purchase” for First Citizens Bancshares, he told MarketWatch.
While First Citizens is trending, the conversation around First Republic Bank
FRC,
remains more active, Tranfo said. While the deal has had positive ramifications for the rest of the banking sector, the story seems to be that the downtrend, and future uncertainty, are still intact, he added. “Investors and traders on the streams are mostly evaluating these stocks from a technical point of view, and the popular banking stocks in the space, like $FRC, have yet to break their downtrend,” Tranfo said.
Popular banking stocks like First Republic Bank, PacWest Bancorp
PACW,
Western Alliance Bancorp
WAL,
and the regional banking EFT KRE
KRE,
were all names that experienced a pop at the open but failed to maintain their initial levels throughout the day, according to Tranfo. “The community believes that this price action is telling us that the market is still waiting for the next shoe to drop and that more failures may come.”
First Citizens Bancshares’ stock has risen 18.3% in 2023, outpacing the S&P 500’s gain of 3.6%.
Additional reporting by Steve Gelsi.
