First Republic Bank (NYSE:FRC) stock is falling on Monday after the company was hit with a credit downgrade.
The news comes from Standard & Poor, which dropped the company’s credit rating from BB+ to B+. This is worth noting as Standard & Poor already dropped the company’s credit rating to BB+ last week.
All of this follows the recent fallout of SVB Financial (NASDAQ:SIVB). That sent bank stocks lower and FRC stock was among those strongly affected by the news. Today’s drop comes after other banks invested money in First Republic Bank in an attempt to curb a larger banking crash.
Standard & Poor’s reason for the credit rating drop is included below, as collected from CNBC:
“The deposit infusion from 11 U.S. banks, the company’s disclosure that borrowings from the Fed range from $20 billion to $109 billion and borrowings from the Federal Home Loan Bank (FHLB) increased by $10 billion, and the suspension of its common stock dividend collectively lead us to the view that the bank was likely under high liquidity stress with substantial deposit outflows over the past week.”
FRC Stock Movement Today
With today’s news comes heavy trading of FRC stock. Some 14 million shares are on the move as of this writing, which is already above its daily average trading volume of about 13.9 million shares. This has FRC stock dropping 17.5% on Monday morning.
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On the date of publication, William White 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 InvestorPlace.com Publishing Guidelines.