A family-controlled community bank that became a top-20 US bank overnight by acquiring Silicon Valley Bank's assets — now generating $2B+ in annual earnings with a fortress balance sheet
John Huber
Saber Capital Management
“John Huber: 'The best investment opportunities often come from situations where the market is applying the wrong frame. First Citizens is being valued as a community bank when it's actually a top-20 institution with a world-class technology banking franchise.'”
The Business
- First Citizens BancShares is a top-20 US bank by assets, headquartered in Raleigh, North Carolina, founded in 1898 and still controlled by the Holding family
- The 2023 acquisition of Silicon Valley Bank's assets transformed the company, adding a premier technology and life sciences banking franchise
- The combined bank operates through General Banking (community banking), SVB Commercial (tech/venture banking), and Direct Banking segments
- FY2025: $9.0B revenue, $2.1B net income, $165 EPS with 13 million diluted shares outstanding
Why They Own It
“John Huber: 'The best investment opportunities often come from situations where the market is applying the wrong frame. First Citizens is being valued as a community bank when it's actually a top-20 institution with a world-class technology banking franchise.'”
- First Citizens made the deal of the decade: acquiring SVB assets from the FDIC at a massive discount, creating $16.5B in bargain purchase gains
- The SVB franchise brought a high-quality technology and venture banking business that generates premium returns — now integrated into FCNCA
- FY2025: $9.0B revenue, $2.1B net income, $165 EPS — a top-20 US bank earning at a high level post-integration
- Family-controlled since 1898 — the Holding family's conservative, long-term approach aligns management with shareholders
- Still trades at a discount to tangible book value despite the transformed franchise quality — deep value by any measure
What the investor sees
First Citizens trades at approximately $1,900/share with a market cap of ~$25B. At 12x earnings and below tangible book value, Huber sees the stock as significantly undervalued for a high-quality bank franchise. The market is applying a regional bank discount despite FCNCA now being a top-20 institution with a premier technology banking franchise. As SVB integration completes and earnings power stabilizes, the stock should re-rate to a premium valuation.
Financial Snapshot
$9.0B
revenue FY2025
$2.1B
net income
~$25B
market cap
$165
eps
$1.4B
free cash flow
1898
founded
Top 20 by assets
us bank rank
Completed March 2023
svb acquisition
The Moat
- SVB technology banking franchise — the premier bank for venture-backed startups, tech companies, and life sciences firms, with deep client relationships
- Family control since 1898 — multi-generational conservative management with a track record of smart acquisitions through crises
- Diversified banking model — community banking, technology banking, and direct banking segments provide revenue diversification
- Scale advantages as a top-20 bank — access to capital markets, risk management infrastructure, and regulatory expertise
- Deposit franchise strength — sticky customer relationships across both traditional and technology banking segments
What Could Go Wrong
SVB integration execution — combining two very different banking cultures (community vs. tech/venture) is operationally complex
Technology sector concentration — the SVB franchise is heavily exposed to tech/venture, which can be cyclical
Interest rate sensitivity — bank earnings are impacted by the yield curve shape and rate changes
Regulatory risk — as a larger institution post-SVB acquisition, FCNCA faces increased regulatory scrutiny and compliance costs
Revenue decline — FY2025 revenue fell 3.2% and net income declined 21%, suggesting some integration headwinds
Catalysts
- SVB integration synergies — cost savings and cross-selling opportunities as the integration matures
- Earnings normalization — as one-time integration costs roll off, underlying earnings power should become clearer
- Re-rating to appropriate bank multiples — a top-20 bank should trade at 1.2-1.5x tangible book value, not below it
- Technology banking recovery — as venture capital activity rebounds, the SVB franchise benefits from increased deal flow
- Share buybacks at discount to book value — highly accretive capital return
In Their Own Words
“John Huber: 'Family-controlled businesses with multi-generational track records of conservative management are exactly the kind of banks you want to own. The Holding family has steered First Citizens through every crisis since 1898.'”
“John Huber: 'When you can buy a high-quality bank at a discount to tangible book value, the margin of safety is enormous. You're paying less for the company than the value of its net assets.'”