First Citizens Bank received a $16.5 billion discount in its acquisition of Silicon Valley Bank’s loan book. Call it what you want, Keith McCullough says, but this is a government bailout.
“It’s a good deal if you can get it,” explains Hedgeye’s CEO in this clip from The Call @ Hedgeye. “The FDIC is underwriting First Citizens’ deal. I hope anybody who doesn’t call this a bailout really feels smart about it.”
The discount comes at the expense of taxpayers, and will presumably lead other banks to seek similar bargains in the future.
“Now that the market has seen the deal First Citizens got, it might make it more of a challenge for First Republic than it already was,” explains Financials analyst Josh Steiner. “Everybody’s going to want that deal now. That’s the rub.”
Watch the full clip above.