Unusual Whales

First Republic bank is down by 77% despite receiving additional liquidity from the Feds and JPMorgan Chase

Unusual Whales -

Per CNBC

First Republic bank is one of the latest banks to see its stock drop by significant amounts after the collapse of Silicon Village Bank. As of press time, its shares have fallen by 77%, dropping by $62.59 to just $19.00.

This came despite the First Republic receiving more liquidity from the Feds and JPMorgan Chase. The bank raised $70 billion in unused liquidity before any Fed funding.

The Federal Reserve created a new Bank Term Funding Program, which gives banks loans for up to a year. The loans would be offered in return for Treasurys, or other forms of high-quality collaterals.

First Republic CEO Mike Roffler and founder Jim Herbert gave a statement regarding the situation and how the bank's capital and liquidity remained strong. It was shared that the bank's capital was at good levels.

Jim Herbert and Mike Roffler: “First Republic’s capital and liquidity positions are very strong, and its capital remains well above the regulatory threshold for well-capitalized banks,”

In comparison, First Republic did not have most of its funds concentrated in one industry like SVB. It was also noted that the bank had clients with large uninsured deposits, like businesses and wealthy individuals.

Chris Kotowski, an analyst at Oppenheimer, gave a statement in a note to clients regarding Silicon Valley Bank's collapse would affect other banks. These would include those that were less to more diverse ones.

Kotowski: “Unfortunately, one of the first consequences of SIVB’s collapse is probably that it will cause a flight of uninsured deposits from smaller, less diverse banks to larger, more diverse ones,”

Amid the collapse of SVB, $620 billion worth of unrealized losses were held by US banks by the end of 2022.

Sam Altman, the CEO of OpenAI, the company behind ChatGPT, started giving loans to other startups affected by the SVB collapse. These included startups like Rad AI, to which Altman extended a six-figure loan.

See flow at unusualwhales.com/flow.

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