First Citizens BancShares, Inc. (FCNCA, Financial)
First Citizens BancShares is a leading regional bank with a history of solid financial results through the economic cycle. The company has a low-cost deposit franchise, a history of prudent lending and an attractive geographic footprint concentrated in Southeast and West Coast U.S. markets. First Citizens has produced impressive results over the last 14 years under the leadership of CEO Frank Holding. Specifically, the company has generated meaningful growth in tangible book value per share driven by strong operating results and accretive acquisitions. As a result, First Citizens has been one of the best-performing bank stocks over this period. Although we have owned First Citizens in the Oakmark Select Fund since early 2021, First Citizens’ purchase of Silicon Valley Bank out of FDIC receivership this March drove a significant increase in both the intrinsic value and the market cap—thereby creating an opportunity for us to initiate a position in the Oakmark Fund. The stock is currently trading at a discount to its tangible book value per share and at a high-single digit multiple of our estimate of normalized earnings. We view this price as attractive for such a high-quality and well-managed banking franchise.
From Bill Nygren (Trades, Portfolio)'s Oakmark Fund second-quarter 2023 commentary.
