First Republic recently saw its shares jump 20% as the market still recovers from the collapse of Silicon Valley Bank.
The shares of First Republic Bank (NYSE: FRC) spiked 40% on Tuesday. FRC’s ascension also came amid an ongoing rebound among other regional banks from yesterday’s sell-off. On Monday, the SPDR S&P Regional Banking ETF (KRE) declined by 12.3% to record its most significant one-day loss in three years.
First Republic’s executive chairman Jim Herbert recently said in a media session that the bank was operating as usual. Furthermore, Herbert added that First Republic was not experiencing significant outflows nor mass depositor exodus.
Regional banks plummeted sharply on Monday as a spillover effect from the bankruptcy of Santa Clara-based Silicon Valley Bank. At the time, US regulators also went to great lengths to backstop all depositors in the sunken commercial bank.
First Republic Shares among Best-Performing in Tuesday Premarket Trade
Early Tuesday, First Republic shares ranked among the best-performing entities in the SPDR S&P Regional Banking ETF. The exchange-traded fund was up 5% during a premarket session which also saw all-round increases from other names. These include PacWest (NASDAQ: PAWC), which surged approximately 30%, and KeyCorp (NYSE: KEY), which gained 15%. In addition, the shares of Salt Lake City-based bank holding company Zions Bancorporation (NASDAQ: ZION) advanced 10% in Tuesday’s premarket trade. Meanwhile, multifaceted, multinational Charles Schwab (NYSE: SCHW) also rebounded by 8% during the same period after suffering a 12% slide Monday.
During the drawdown yesterday, Charles Schwab defended the bank’s portfolio and eased fears of a banking crisis. According to Schwab, “focusing attention on unrealized losses within HTM (Held-to-Maturity portfolio) has two logical flaws. First, those securities will mature at par, and given our significant access to other sources of liquidity, there is very little chance that we’d need to sell them prior to maturity (as the name implies).”
Furthermore, Charles Schwab, which currently seems unlikely to offload HTM securities to meet deposit withdrawal requests, also added:
“By looking at unrealized losses among HTM securities, but not doing the same for traditional banks’ loan portfolios, the analysis penalizes firms like Schwab that in fact have a higher quality, more liquid, and more transparent balance sheet.”
On Monday, First Republic plunged 60% to lead the decline in bank stocks despite the government’s backstop of Silicon Valley Bank. The bank was among the beneficiaries that had received extra liquidity from the Federal Reserve and New York-based banking giant JPMorgan (NYSE: JPM).
Nonetheless, First Republic recorded its worst week in a decade after seeing multiple portfolios pulling out their funds. During this period, the company traded at $81.10 per share.
Founded in 1985, First Republic operates as a full-service bank and wealth management entity. The company’s extensive suite of services includes personal banking, business banking, and wealth management services. These services cater to low-risk, high-net-worth individuals (HNWIs) and seek to provide a personalized customer experience.
First Republic also delivers relationship-based services via preferred banking or trust offices in the US.
First Republic is headquartered in San Francisco and operates in New York City and Jackson, Wyoming.