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.
