First Citizens shares hit record high in wake of SVB purchase
(Reuters) - Shares of First Citizens BancShares Inc climbed to a record high on Tuesday, extending gains for a second day after scooping up the assets of failed peer Silicon Valley Bank.
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First Citizens rallied as much as 7.2%, briefly hitting an all-time peak of $959.99 before paring gains. It was last up almost 2%.
Trading in other bank stocks on Wall Street remained tepid, with the S&P 500 banks index dipping 0.1% and down over 20% in March.
First Citizens, which has built a reputation of buying troubled rivals, on Monday bought all of SVB's loans and deposits, giving the Federal Deposit Insurance Corp (FDIC) equity rights in its stock worth as much as $500 million in return.
Investors sent a record net $236 million into the iShares Regional Bank ETF over the last two weeks, evidence that some investors are betting on a rebound in fundamentally strong regional lenders following the recent sell-off. The ETF was up 0.3% on Tuesday.
SVB's collapse has triggered the worst banking shock since the 2008 crisis. Policymakers, regulators and central banks have emphasized that the turmoil is not a precursor to another global financial crisis.
"Essentially, the risk model was not at all aligned with reality," Michael Barr, the Federal Reserve's vice chairman for supervision, told lawmakers on Tuesday, speaking of SVB.
Shares of SVB Financial Group, which operated Silicon Valley Bank, traded on Tuesday as an over-the-counter stock and were last at 28 cents per shares, down from about $268 before the bank's collapse, an all but complete loss for its shareholders.
(Reporting by Noel Randewich; Editing by Marguerita Choy)