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First Republic Bank (NYSE:FRC) Slumps 62%, Bears the Brunt of SIVB Fallout

Story Highlights

Shares of First Republic Bank are down about 62% in the pre-market session. The SIVB fallout weighed on FRC stock.

The collapse of SVB Financial Group (NASDAQ:SIVB) weighed on First Republic Bank’s (NYSE:FRC) stock. Shares of this leading private bank and wealth management company fell about 33% in the last three trading days. Moreover, FRC stock is down another 62% in the pre-market session today.

This slump in FRC stock comes despite management’s efforts to reassure investors. Recently, FRC announced that it has strengthened and diversified its financial position. In this regard, the bank secured additional funding from JPMorgan (NYSE:JPM) and the Federal Reserve.

The FRC now has a total of more than $70 billion in available and unused liquidity to fund its operations. This amount excludes the additional liquidity it is eligible to receive under the Federal Reserve’s new Bank Term Funding Program. 

According to First Republic’s management, the pressure on FRC stock seems unwarranted, given the bank’s solid credit quality, low NPAs (non-performing assets), and deposit growth. 

Highlighting the liquidity of FRC, its CEO Mike Roffler said that FRC’s “capital and liquidity positions are very strong.” Also, the bank’s capital is well above the regulatory threshold. 

Meanwhile, Andrew Liesch of Piper Sandler believes that the downward pressure on FRC stock is “largely overblown.” Liesch noted that FRC’s deposit base is well diversified, with no single sector accounting for over 9% of deposits. 

What’s the Prediction for FRC Stock?

FRC stock has a Moderate Buy consensus rating on TipRanks based on 11 Buys, five Holds, and one Sell. Meanwhile, analysts’ average price target of $144.12 implies 76.27% upside potential. 

While analysts are cautiously optimistic about FRC stock, the negative investors’ sentiments will likely pressure its stock in the short term.

Meanwhile, learn more about the companies affected by SVB’s collapse here.

How can investors see the warning signs of a company at risk? Join TipRanks’ webinar to learn more.


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