First Citizens' stock touches all-time high on first-quarter earnings, while Valley National shares drop

By Steve Gelsi

It's been about a year since First Citizens bought Silicon Valley Bank

First Citizens Bancshares Inc.'s stock touched an all-time high Thursday on stronger-than-expected profit and a boosted outlook for net interest income, roughly a year after the big regional bank acquired the beleaguered Silicon Valley Bank.

Meanwhile, Valley National Bancorp's stock (VLY) moved into the red by 2% on a business outlook that disappointed Wall Street.

First Citizens' stock (FCNCA) jumped nearly 8% despite losses in the broad market on Thursday. During the session, the stock rose as much as 8.04% to $1771.41 a share, which would be a new all-time high, according to Dow Jones Market Data.

The stock is on track to book its largest daily rise since it rose 8.67% on Oct. 26, 2023.

The bank said its first-quarter profit rose to $716 million, or $49.26 per diluted common share, up 43% from $499 million, or $34.33 per share, in the year-ago quarter.

The company's adjusted profit of $52.92 a share handily topped the FactSet consensus estimate of $43.80 a share.

"We posted solid loan and deposit growth and credit quality held up well," Chief Executive Frank B. Holding said in a statement. "Our capital and liquidity levels increased, positioning our balance sheet well for further growth."

The bank continues to "successfully execute" its integration efforts with Silicon Valley Bank, "which is accelerating the momentum of our franchise," Holding said.

Also read: First Citizens draws 'buy' rating after bulking up from purchase of Silicon Valley Bank

Citi analyst Keith Horowitz reiterated a neutral rating on First Citizens and said the bank's results were "much better than expected," including a core beat on preprovision net revenue, along with "significantly lower" credit costs.

The bank also boosted its 2024 outlook for net interest income to a range of $7.1 billion to $7.3 billion from its earlier forecast of $6.9 billion to $7.1 billion.

Valley National's first-quarter earnings of 19 cents a share fell a penny short of the FactSet consensus estimate of 20 cents a share.

On the plus side, its revenue of $455 million topped the analyst estimate of $451.5 million.

Citi analyst Ben Gerlinger said he expected Valley National shares to come under pressure due to the bank's 2024 outlook that signaled a "net reduction in earnings per share trends" and a continued buildup of reserves.

Valley National cut its 2024 forecast for net interest income to a range of 0% to 2% growth, from its earlier projection of 3% to 5% growth.

The bank said the downward revision was due to slower loan growth and a "modest funding mix-shift" in the first quarter.

-Steve Gelsi

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04-25-24 1303ET

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