First Republic Bank is hemorrhaging value for another day, with the midsize bank’s stock falling nearly 35% shortly after open on Thursday.
The San Francisco-based bank has been struggling to keep its head above water following the collapses of Silicon Valley Bank and crypto lender Signature Bank. In the past five days, First Republic has seen 71% of its total value evaporate.
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Following SVB’s collapse, banks that have a high number of uninsured deposits have encountered increased scrutiny. First Republic had the third-highest rate of uninsured deposits, following SVB and Signature Bank.
First Republic got more bad news this week when the S&P slashed its rating to junk status. The credit rating agency downgraded the bank’s long-term issuer credit rating to BB+ from A-. The group said the bank has a higher risk of depositors pulling out their money, even after government action this week to stop a run on the banks.
The bank is now exploring its next moves, including a sale, Bloomberg reported.
First Republic announced on Sunday, ahead of markets opening, that it has about $70 billion in unused liquidity and has “diversified its financial position through access to additional liquidity from the Federal Reserve Bank and JPMorgan Chase & Co.”
“First Republic’s capital and liquidity positions are very strong, and its capital remains well above the regulatory threshold for well-capitalized banks,” bank founder Jim Herbert and CEO Mike Roffler said. “As we have done since 1985, we operate with an emphasis on safety and stability at all times while maintaining a well-diversified deposit base."
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Other banks also dropped upon market open on Thursday. PacWest Bankcorp was down by more than 14%, while Western Alliance fell by nearly 15%.
The decline comes the same day that the Swiss central bank agreed to loan Credit Suisse up to more than $50 billion to shore up confidence in the megabank. Credit Suisse was up over 30% at one point on Thursday as investors felt more confident about its financial health.