First Republic Bank (FRC) Losses Over 60% in Shares as Investors Worry Over Financial Strength Following SVB’s Collapse

Shares of First Republic Bank (FRC) have been in the red for the past year, shedding more than 48% in the last twelve months.

The shares of American foreign exchange company First Republic Bank (NYSE: FRC) plunged over 60% in pre-market trading due to investors’ worries about its financial strength. Meanwhile, the bank has been addressing concerns about its liquidity following the unfortunate incident with Silicon Valley Bank (NASDAQ: SVBB). The SVB challenge started when it proposed a $1.25 billion offering of its common stock to shore up its balance sheet. The company had said on March 8 that the proceeds would be diverted towards the $1.8 billion hole caused by a loss-making portfolio sale. The offering raised questions driving investors to panic, and the bank reached its lowest level since 2016.

After, CEO Gregory Becker reached out to clients to assuage their fears and assure them of their funds’ security with the bank. However, multiple portfolios began to pull out their funds from Silicon Valley Bank, resulting in a massive selloff in the banks’ stock. The company recorded its worst week in 10 years, trading at $81.10 per share.

SVB’s Collapse Affects First Republic Bank (FRC) Stock

First Republic Bank saw its shares fall 15% as SVB experienced a rapid cash outflow last week. The company dropped further, losing over 50% as the Federal Deposit Insurance Corporation (FDIC) shut down Silicon Valley Bank. Investors’ concern about the foreign exchange company remains despite the company’s assurance. First Republic Bank saw its shares drop following the declaration of unused liquidity. The company revealed over $70 billion in unused liquidity to fund operations from an agreement that included financial services company JPMorgan Chase & Co (NYSE: JPM) and the US Central Bank. The bank also assured of the availability of additional liquidity via the Fed’s new lending facility. It explained:

“The additional borrowing capacity from the Federal Reserve, continued access to funding through the Federal Home Loan Bank, and ability to access additional financing through JPMorgan Chase & Co. increases, diversifies, and further strengthens First Republic’s existing liquidity profile.”

Shares of First Republic Bank (FRC) have been in the red for the past year, shedding more than 48% in the last twelve months. The company has also lost 32.92% since the year started and plunged further by 31.78% in the last three months. Over the past month, First Republic Bank has plummeted more than 40% and missed 33.02% in the last five days. With a market valuation of nearly $15 billion, the American full-service bank and wealth management company’s stock trades down 63.42% to $29.91. This follows a close of $81.76.

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Ibukun Ogundare

Ibukun is a crypto/finance writer interested in passing relevant information, using non-complex words to reach all kinds of audience.
Apart from writing, she likes to see movies, cook, and explore restaurants in the city of Lagos, where she resides.