SVB collapse: First Republic Bank stock crashes

First Republic Bank’s stock fell nearly 35% on Thursday, shortly after it opened.

Following the collapses Silicon Valley Bank and Signature Bank, the San Francisco-based bank is struggling to stay afloat. First Republic has lost 71% of its value in the last five days.

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Banks with high levels of uninsured deposits were subject to increased scrutiny after SVB’s collapse. First Republic was the bank with the highest rate of uninsured deposits. This followed SVB and Signature Bank.

First Republic was hit with more bad news when the S&P reduced its rating to junk status. The agency’s credit rating downgraded First Republic’s long-term issuer credit rating from A+ to BB+. The group claimed that there is a greater risk of depositors withdrawing money at the bank, even though the government took action to stop a bank panic this week.

The bank is currently exploring its next move, which may include a sale. Bloomberg reported.

First Republic declared on Sunday, before markets open, that it has approximately $70 trillion in unused liquidity. “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,” Jim Herbert, the bank’s founder, and Mike Roffler CEO 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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On Thursday, other banks saw their stock drop upon opening of the market. PacWest Bankcorp dropped more than 14%, and Western Alliance lost nearly 15%.

This decline is occurring on the same day as the Swiss central bank approved to lend Credit Suisse more than $50 billion to boost confidence in the megabank. Credit Suisse surged by over 30% as investors became more confident about its financial future.