FRC Stock: Why RBC’s Gerard Cassidy Is Betting Big on First Republic Bank


  • First Republic (FRC) stock is soaring today.
  • Yesterday RBC Capital’s Gerard Cassidy said that “confidence will return to First Republic.”
  • The analyst added that several regional banks reported that they are not experiencing major deposit outflows.
FRC stock - FRC Stock: Why RBC’s Gerard Cassidy Is Betting Big on First Republic Bank

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RBC Capital’s Gerard Cassidy yesterday told Bloomberg News that First Republic’s (NYSE:FRC) “credit quality is superb.” Furthermore, he contended that “confidence will return to First Republic.” In early trading today, FRC stock is soaring 33% to $16.18.

As a managing director at RBC, Cassidy is also its head of U.S. Bank Equity Strategy and a large-cap bank analyst there.

Cassidy Sees “No Evidence of Deposit Flight”

After speaking with multiple regional banks, Cassidy reported that he was seeing “no evidence of deposit flight.” The amount of deposits being withdrawn from them has been “relatively normal,” he stated.

Many of those who are bearish on U.S. stocks in general and regional banks, in particular, have argued that regional banks’ deposits are likely to drop sharply, forcing them to sharply curtail their lending and badly hurting the American economy.

Other First Republic News

A group of CEOs of America’s largest banks, led by JPMorgan’s (NYSE:JPM) Jamie Dimon, is developing new plans to prevent First Republic from failing, The Wall Street Journal reported last night. The banks are holding “preliminary” discussions and are considering investing in FRC, according to the newspaper.

Last week, 11 major banks placed $30 billion in First Republic, which has suffered major deposit outflows since Silicon Valley Bank failed earlier this month. The large banks could alter “some or all of the $30 billion in deposits into a capital infusion” into FRC.

The Performance of FRC Stock

Despite today’s huge rally by FRC stock, the bank’s shares have still tumbled 59% over the last five trading days, and they have sunk 87% so far in 2023.

On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

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