First Republic Bank tanks 62% as US Regional Banks lose worth in spite of assurances from US regional lenders assure investors. The lenders have been doing their best to reduce the volatility after the collapse of the Silicon Valley Bank, but even after such measures, the bank’s worth continues to fall massively. The bank has already declared in public that they have more than $70 billion as liquidity which they think would be sufficient to insulate the bank from the present volatility.
First Republic Bank – The fall continues
The bank officials confirm that they have sufficient funds to insulate themselves from the present volatility and run the banking operations smoothly, as they have agreements with the “ Best in Business” like the US Federal Reserve and JP Morgan Chase. However, such assurances were not enough as the spiralling effects of the SVB crash continue to spread like fire. Even the KBW bank dropped 12%, which is considered to be the highest in the last 3 years.
“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 increases, diversifies and further strengthens First Republic’s existing liquidity profile,” the bank said.
Market Exposure of First Republic Bank
The First Republic Bank is a San-Francisco-based financial company and their clientele include mostly high-end banking clients. FRC stock fell from $115 to $31 in several days. While this magnitude of volatility is happening, investors might not be able to assign a meaningful P/E ratio to First Republic Bank, and it’s hard to know whether the company’s 3.5% dividend yield is reliable.
The First Republic Bank happens to be the 14th largest US bank who have more than $200 billion as their assets. There were multiple social media posts over the weekend showing people lining up at First Republic locations in Southern California to withdraw their money. But in the Bay Area, NBC Bay Area didn’t find any lines or as much concern on Monday.
Despite the failures of SVB and Signature Bank and concerns about more than a dozen other banks, experts said they still foresee a healthy future for most banks.
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