FRC Stock fell 90%; Will the downfall resume In First Republic Bank?
The FRC stock price has plummeted by more than 90% since March, when it was trading at $110 per share. In the previous trading session stock price has dropped by -43.30% and currently trading at $3.51. Shorting continues in the stock and the selling volume is also incline in previous sessions. FRC stock volume in the last trading session was 176.848 Million with a market cap of 22.346 Million.
First Republic Bank is a bank that specializes in private banking, business banking, and private wealth management services. It is based in San Francisco, California, and has offices in 11 states. FRC Bank mainly serves high-net-worth people and businesses who value personal connections and relationship banking.
Why did FRC Stock Collapse?
First Republic Bank was one of the banks that suffered from the banking panic that followed the failure of Silicon Valley Bank and Signature Bank. The bank was exposed to unprofitable startups and wealthy individuals with complex financial needs. The bank also had a high percentage of uninsured deposits, which exceeded the $250,000 limit that is guaranteed by the Federal Deposit Insurance Corporation (FDIC)
The bank tried to stem the outflow by selling some of its assets at a loss, such as low-interest mortgages that it offered to its affluent customers. It also received $30 billion in funding from a group of large banks, including JPMorgan Chase and Bank of America, as part of a rescue plan orchestrated by regulators
Impact on Customers and Shareholders
The bank’s collapse has had a negative impact on its customers and shareholders. Customers who had uninsured deposits above $250,000 may lose some or all of their money if the bank is liquidated or sold at a discount. Customers who had loans or mortgages with the bank may face higher interest rates or stricter terms if their loans are transferred to another lender.
The shareholders who owned FRC stock have seen their investment value shrink dramatically. The stock price has fallen from over $200 per share in February to less than $4 per share on Tuesday. The stock price may fall further if the bank is declared insolvent or taken over by regulators. The shareholders may also face legal actions or investigations from regulators or other parties who may accuse them of fraud or negligence.
Is Reversal Possible in FRC Stock?
Source: Tradingview
First Republic Bank (NYSE: FRC) doesn’t follow technical analysis because of the free fall in stock price. However, the share price is currently trading below the key moving averages like 20, 50, 100, and 200 EMA showing extreme bearishness. MACD line is in the bearish territory indicating a negative scenario. RSI is oversold zone at 19.60 below the 15 SMA line showcasing strong bearishness in the FRC stock price.
Conclusion
The bank’s fate is uncertain, as it encounters several challenges and uncertainties. The bank stated it was exploring “strategic options” to strengthen its position, such as cutting costs, raising capital, or finding a buyer. However, analysts said that the bank’s prospects were bleak, as it had few attractive assets to sell and few potential buyers to acquire it
First Republic Bank’s stock plunge is a stark reminder of the risks and uncertainties that investors face in the banking sector. The sector is undergoing rapid changes and challenges due to factors such as the COVID-19 pandemic, rising interest rates, increasing competition, and evolving regulations.
Disclaimer
This article is only for information and education purposes. It is not financial, investment, or trading advice. Investing and trading involve risk. You should consider your situation and risk tolerance before making any investment decisions.
