First Republic Bank (FRC) says ‘liquidity position remains very strong’
By Sam Boughedda
First Republic Bank (NYSE:FRC) shares plummeted more than 30% in Friday trading as the market reaction to the news surrounding SVB Financial Group (NASDAQ:SIVB) grows, but FRC said in a filing that its “liquidity position remains very strong.”
SVB’s meltdown began Thursday after it revealed it had to sell billions of dollars worth of securities at a loss and was seeking to raise $2.25 billion in equity to shore up its balance sheet.
Banking stocks plunged ahead of the weekend as investors fled the sector, with the Federal Deposit Insurance Corporation stating that SVB has been shut down by the California Department of Financial Protection and Innovation.
First Republic Bank, which at the time of writing is down 22% at $74.50, was just one of several bank stocks impacted, but it tumbled a significant amount due to fears about its position.
However, the bank said Friday that its “deposit base is strong and very-well diversified.”
“First Republic’s liquidity position remains very strong. Sources beyond a well-diversified deposit base include over $60 billion of available, unused borrowing capacity at the Federal Home Loan Bank and the Federal Reserve Bank,” the company stated in the filing.
“First Republic’s very high-quality investment portfolio is stable and represents a modest percentage of total bank assets,” they added. “The investment portfolio is less than 15% of total bank assets. Of this, less than 2% of total bank assets is categorized as available for sale.”
The bank concluded by saying it has “consistently maintained a strong capital position” and has a “long-standing track record of exceptional credit quality.”