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First Republic Bank

Bernstein Liebhard LLP announces that a securities class action lawsuit has been filed on behalf of investors who purchased or acquired First Republic Bank (“First Republic” or the “Company”) (NYSE: FRC) securities between January 14, 2021 and March 14, 2023, inclusive. The lawsuit seeks to recover First Republic shareholders’ investment losses.

If you purchased securities in First Republic between January 14, 2021 and March 14, 2023, inclusive, and would like to discuss your legal rights and/or options, please click “Join Class Action” above.

First Republic is a California state-chartered bank and trust company that provides private banking, private business banking, and private wealth management.  Throughout the Class Period, First Republic and its executives repeatedly touted the Company’s “safe and sound” business model, assuring investors that First Republic was strongly-positioned – particularly due to its purportedly “diversified deposit base” – to weather a variety of economic conditions, and downplayed the risks that rising interest rates posed to the Company’s net interest income (“NII”) and net interest margin (“NIM”).  These were both critical financial metrics that calculated the income generated on the Company’s interest-earning assets and the value of the Company’s mortgage loan portfolio.

On October 14, 2022, the Company announced disappointing third quarter 2022 financial results, reporting that First Republic’s NII growth had slowed to 20.6% year-over-year (down from 24.1% year-over-year growth the prior quarter) and its NIM had plummeted to 2.71% (down from 2.80% the prior quarter).  First Republic attributed the decrease in the Company’s NIM to “average funding costs increasing more rapidly than the offsetting increase in the average yields on interest-earning assets.”

On this news, the price of First Republic common stock declined by $22.14 per share, or more than 16%, to close at $112.59 per share on October 14, 2022.

On March 8, 2023, SVB Financial Group (“SVB”), the parent company of Silicon Valley Bank (considered by many analysts to be a peer bank of First Republic) announced that it was seeking to raise approximately $2.25 billion in capital due to continued higher interest rates, pressured public and private markets, and elevated levels of deposit attrition. SVB also disclosed that it had sold “substantially all of its available for sale securities portfolio,” incurring a loss of approximately $1.8 billion. In response, SVB’s depositors rushed to withdraw their funds out of fear over SVB’s solvency.  On March 10, 2023, SVB collapsed and regulators seized control of the bank, placing SVB in FDIC receivership. Investors immediately began to question First Republic’s ability to withstand the interest rate environment and remain solvent.

On this news, the price of First Republic common stock declined by an astonishing $83.79 per share, or more than 72% over three trading sessions, to a closing price of $31.21 per share on March 13, 2023.

On March 15, 2023, after the end of the Class Period, S&P Global Ratings (“S&P”) downgraded its long-term issuer credit rating and preferred stock issue rating for First Republic due to the risks of deposit outflows leading to increased funding costs.  That same day, Fitch Ratings (“Fitch”) announced that it had also downgraded First Republic’s credit rating, observing that “FRC’s funding and liquidity profile has changed and represents a ‘weakest link.’”

On this news, the price of First Republic common stock declined by $8.47 per share, or more than 21%, to close at $31.16 per share on March 15, 2023.

If you wish to serve as lead plaintiff, you must move the Court no later than June 23, 2023. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. Your ability to share in any recovery doesn’t require that you serve as lead plaintiff. If you choose to take no action, you may remain an absent class member.

Since 1993, Bernstein Liebhard LLP has recovered over $3.5 billion for its clients. In addition to representing individual investors, the Firm has been retained by some of the largest public and private pension funds in the country to monitor their assets and pursue litigation on their behalf. As a result of its success litigating hundreds of lawsuits and class actions, the Firm has been named to The National Law Journal’s “Plaintiffs’ Hot List” thirteen times and listed in The Legal 500 for ten consecutive years.

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Contact Information:

Peter Allocco
Bernstein Liebhard LLP
(212) 951-2030