FRC Stock Forecast 2025: First Republic Bank – First Republic Bank was a commercial bank and provider of wealth management services headquartered in San Francisco, California. It catered to high-net-worth individuals and operated 93 offices in 11 states, primarily in New York, California, Massachusetts, and Florida. On May 1, 2023, as part of the 2023 banking crisis, the FDIC announced that First Republic had been closed and sold to JPMorgan Chase.
About First Republic (FRC)
First Republic Bank engages in the provision of private banking, business banking, real estate lending, and wealth management, including trust and custody services. It operates through the Commercial Banking and Wealth Management segments. The Commercial Banking segment represents most of the operations, including real estate secured lending, retail deposit gathering, private banking activities, mortgage sales and servicing, and managing capital, liquidity, and interest rate risk.
The Wealth Management segment consists of the investment management activities of FRIM, First Republic Trust Company, FRTC Delaware, mutual fund activities through third-party providers, the brokerage activities of FRSC, and foreign exchange activities conducted on behalf of clients. The company was founded by James H. Herbert II in February 1985 and is headquartered in San Francisco, CA.
Foundation and first IPO
First Republic was founded in February 1985 by Jim Herbert, previously the founder and CEO of San Francisco Bancorp, which he sold to Atlantic Financial. First Republic began operations on July 1, 1985, as a California-chartered industrial loan company. It became a public company via an initial public offering on the Nasdaq in August 1986, selling stock at $10 a share. In 1993, First Republic acquired Silver State Thrift, a savings and loan association in Nevada.
In 1996, First Republic sought to shift to a banking charter to expand its offerings. It lobbied the Nevada Legislature to pass a law allowing the conversion of a Nevada thrift into a Nevada state bank. The law passed in July 1997, shortly after the First Republic completed a reverse merger of the larger California-chartered thrift into the Nevada-chartered Silver State Thrift subsidiary. After the passage of the law, the Nevada Thrift became a state-chartered bank, First Republic Savings Bank.
Acquisitions
In 1998, First Republic acquired Trainer Worthman & Co., and in December 2001, it acquired Starbuck, Tisdale & Associates for $13 million in cash and stock. In January 2000, First Republic acquired an 18% interest in Froley, Revy Investment Company Inc., and in 2002, it purchased the investment firm for $17 million in cash and stock. In 2004, it acquired the Private Client Asset Management division of Bay Isle Financial from Janus Capital Group. In 2006, the bank acquired the Bank of Walnut Creek.
Acquisition, sale, and second IPO
In September 2007, First Republic was acquired by Merrill Lynch for $1.8 billion in cash and stock. In July 2010, Bank of America, which acquired Merrill Lynch and thereby acquired First Republic, sold First Republic Bank to a group of private investors including Colony Capital, General Atlantic, and chairman James Herbert and former COO Katherine August DeWilde, for approximately $1 billion.
Thomas J. Barrack, Jr., the head of Colony, had been a board member prior to the Merrill Lynch deal and General Atlantic had been an early investor in the firm putting up about $5 million in 1987. An additional $800 million was provided by the investment consortium to meet new capital requirements established by U.S. regulators. In December 2010, the bank once again became a public company via an initial public offering, raising $280.5 million.
Later acquisitions
In November 2012, First Republic acquired Luminous Capital, a wealth management firm with $5.5 billion in assets, for $125 million. The 2015 acquisition was followed by in 2015, First Republic acquired Constellation Wealth Partners for $115 million.
In December 2016, led by then chief investment officer Hafize Gaye Erkan, the bank acquired Gradifi, a then 2-year-old startup that works with companies to help employees pay off student loan debt that counted PricewaterhouseCoopers, Natixis Global Asset Management, and Penguin Random House as customers.
In March 2018, the bank invested in CommonBond, a student loan financier, and in May of the same year, the company leased more office space at Rockefeller Center in New York City. 50 client advisors, who were part of First Republic’s Luminous acquisition, with $17 billion of assets under management, left the company in 2019.
Collapse
During the March 2023 United States bank failures, Fitch Ratings and S&P Global Ratings downgraded First Republic’s credit rating, citing “a high proportion of uninsured deposits” from wealthy customers who are more likely to move their money elsewhere and a loan-to-deposit ratio of 111%, meaning that it had lent out more money than it had in deposits from customers.
To alleviate concerns of a possible bank run and support any withdrawals of deposits, on March 16, 2023, eleven American banks including JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, and Truist Financial deposited $30 billion with First Republic. Despite the deposits, shares of the company declined.
On March 19, S&P downgraded the bank’s credit rating further into junk by three grades saying that it “may not solve the substantial business, liquidity, funding, and profitability challenges that we believe the bank is now likely facing.” On that day, the bank’s capital shortfall was $13.5 billion, which The Wall Street Journal compared to the liquidity crisis of the Silicon Valley Bank (SVB) being a factor in its collapse.
In its first quarterly earnings release since the crisis, the bank noted that its customers withdrew $104.5 billion in deposits during the turmoil, but noted that outflows had stabilized in April. The significance of those outflows was explained by the number of high-net-worth clients at the bank, whose assets exceeding $250,000 would not have been protected by the Federal Deposit Insurance Corporation (FDIC).
First Republic noted it was “weighing strategic options” and aiming to reduce the size of its balance sheet. Since the majority of the bank’s long-term assets were in municipal bonds, First Republic was unable to make full use of the Bank Term Funding Program—an emergency lending program instated after the collapse of SVB—as those assets did not qualify as eligible collateral.
First Republic Bank
First Republic Bank: Current Status
First Republic Bank: Based in San Francisco, First Republic Bank catered primarily to affluent clients. In 2023, it shuttered its operations and was subsequently taken over by JPMorgan Chase. A significant factor contributing to its downfall was the vast amount of its deposits that went beyond the Federal Deposit Insurance Corp. (FDIC) coverage limit.
The FDIC insures up to $250,000 for each depositor per type of account. This means that in the event of a bank’s failure, the deposits are safeguarded up to this threshold. However, sums exceeding this limit typically fall outside the safety net.
Data analysis from S&P Global Market Intelligence revealed that, as of December 2022, a staggering 67.4% of First Republic’s deposits were not insured. The subsequent collapses of Silicon Valley Bank and Signature Bank heightened anxieties among First Republic’s clients with uninsured funds. This led to a massive withdrawal of deposits, further destabilizing the bank.
First Republic Bank: History And Collapse
First Republic Bank: First Republic, established in February 1985 by Jim Herbert, began as a California-chartered industrial loan company. By August 1986, it went public on the Nasdaq at $10 per share. In the 1990s, it transitioned from a thrift to a state-chartered bank, First Republic Savings Bank, after acquiring Silver State Thrift and lobbying for legislative changes in Nevada.
Over the years, First Republic made several acquisitions, including Trainer Worthman & Co., Starbucks, Tisdale & Associates, Froley, Revy Investment Company Inc., Bay Isle Financial’s Private Client Asset Management division, and Bank of Walnut Creek.
In 2007, Merrill Lynch acquired First Republic for $1.8 billion. However, in 2010, after Bank of America’s acquisition of Merrill Lynch, First Republic was sold to private investors, including Colony Capital and General Atlantic, for about $1 billion. By December 2010, First Republic re-entered the public market, raising $280.5 million through an IPO.
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Why Did First Republic Bank Fail?
First Republic Bank’s failure mirrored the challenges faced by Silicon Valley Bank (SVB) and Signature Bank, primarily due to a substantial volume of uninsured deposits and liquidity issues. Like SVB, First Republic catered to Silicon Valley startups, many of which held balances exceeding $250,000, as highlighted in news reports.
Several factors exacerbated the bank’s situation:
Uninsured Deposits:
A surge in uninsured deposits can trigger a bank run during investor panic. Over 67% of First Republic’s deposits were uninsured as of December 2022, reflecting its affluent clientele.
Liquidity Concerns:
The bank’s main revenue came from net interest income on loans and investment securities. A significant portion of its investments were tied up in less liquid real estate loans and municipal securities, which didn’t yield competitive interest rates. By December 2022, among mid-sized banks, First Republic had the highest ratio of loans and securities to uninsured deposits.
Credit Rating Downgrades:
Repeated downgrades from credit agencies, despite financial support, raised concerns about the bank’s liquidity, funding, and profitability. For instance, S&P Global Ratings downgraded First Republic Bank, citing these concerns.
Distrust in Regional Banks:
The earlier failures of Silicon Valley Bank and Signature Bank, coupled with credit rating downgrades, made investors wary of holding uninsured deposits in regional banks.
In response to the declining trust and dwindling deposits, First Republic sought assistance from the Federal Home Loan Bank Board (FHLB) and the Federal Reserve. It also secured a $30 billion cash boost from a group of 11 banks. Despite these efforts, its stock value plummeted from $122.50 on March 1, 2023, to a mere $1 by May 2023.
FRC Stock: Price History
Founded in 1985, First Republic Bank made its foray into the public market a year later. In August 1986, it debuted on the Nasdaq, with stocks priced modestly at $10 a share. This initial offering showcased the bank’s potential, with investors keenly watching its focus on high-net-worth clients and personalized banking services.
The 1990s saw First Republic Bank expanding its horizons. With strategic acquisitions and a shift to a banking charter, the bank’s stock began to reflect its growing stature in the industry. The acquisition of Silver State Thrift and the subsequent transition to a state-chartered bank, First Republic Savings Bank, boosted investor confidence, leading to a steady uptick in stock prices.
FRC Stock Price Prediction
FRC Stock Price Prediction 2023 I FRC Stock Forecast 2023
In 2023, FRC’s stock price is anticipated to average around $0.2. The minimum is projected at $0.08, while the maximum could soar to $0.5. These predictions are rooted in JP Morgan’s acquisition of First Republic Bank, which has not only safeguarded users’ funds but also instilled a renewed sense of trust among existing and potential customers.
FRC Stock Price Prediction 2024 I FRC Stock Forecast
As we move into 2024, FRC’s stock price is expected to witness a positive uptrend, with an average of approximately $3.2. The year might see a low of $3 and a peak of $3.5. The continued trust and influx of customers, post the JP Morgan acquisition, will likely be the driving force behind this growth.
FRC Stock Price Prediction 2025 I FRC Stock Forecast 2025
By 2025, the stock price for FRC is projected to average around $6.5. The potential minimum for this year could be $6.2, while the maximum might touch $7. This growth can be attributed to the bank’s consistent efforts to expand its customer base and the continued trust it garners in the market.
FRC Stock Price Prediction 2026 I FRC Stock Forecast 2026
Heading into 2026, FRC’s stock price is predicted to maintain a steady rise, averaging at about $10. The year’s low is expected to be around $9.5, with a potential high of $11. The bank’s strategic initiatives to enhance customer experience and its robust growth trajectory post-acquisition will play pivotal roles in this positive shift.
FRC Stock Price Prediction 2027 I FRC Stock Forecast 2027
For 2027, FRC’s stock is forecasted to average around $14, with a minimum of $13.5 and a maximum reaching up to $15. The bank’s consistent growth, coupled with its commitment to ensuring customer trust and satisfaction, will be the primary drivers behind this upward trend.
FRC Stock Price Prediction 2028 I FRC Stock Forecast 2028
In 2028, the stock price for FRC is projected to hover around an average of $18, with potential lows and highs at $17.5 and $19, respectively. The bank’s continued focus on innovation and customer-centric services will likely fuel this growth.
FRC Stock Price Prediction 2029 I FRC Stock Forecast 2029
By 2029, FRC’s stock price is anticipated to average at about $22, with a potential low of $21.5 and a high of $23. The bank’s consistent efforts to adapt to changing financial landscapes and its commitment to its clientele will be key growth factors.
FRC Stock Price Prediction 2030 I FRC Stock Forecast 2030
Rounding off the decade, in 2030, FRC’s stock is projected to maintain an average of around $26. The year might see a minimum of $25.5 and a peak of $27. The bank’s strategic vision, combined with its efforts to continually enhance its offerings, will be instrumental in achieving this growth.
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How to buy FRC stock on Public?
The following steps help to know, How to buy FRC stock on Public.
Step 1: Sign up for a brokerage account on Public
It’s easy to get started. You can sign up for an account directly on our website or by downloading the Public app for iOS or Android.
Step 2:Add funds to your Public Account
There are multiple ways to fund your Public account—from linking a bank account to making a deposit with a debit card or wire transfer.
Step 3: Choose how much you’d like to invest in FRC stock
Navigate to the Explore page. Then, type FRC into the search bar. When you see FRC stock appear in the results, tap it to open up the purchase screen.
Step 4: Manage your investments in one place
You can find your newly purchased FRC stock in your portfolio—alongside the rest of your stocks, ETFs, crypto, treasuries, and alternative assets.
Will FRC Stock Recover?
Will FRC Stock Recover?: A May report by CBS News, referencing a JPMorgan spokesperson, stated that FRC stockholders would not be receiving shares in JPMorgan. This implies that FRC stockholders have probably faced significant losses due to First Republic’s downfall, bearing the full impact of their stock investment.
The FDIC’s insurance fund will prioritize general trade creditors followed by unsubordinated debt holders. As an FDIC spokesperson informed CBS, “Shareholders are at the end of the queue if any proceeds remain.” In straightforward terms, FRC’s chances of recovery are bleak. The bank has been shut down by the FDIC, with its assets acquired by JPMorgan. While there’s a slim chance that the over-the-counter FRC stock (listed as FRCB) might recoup some losses, it remains a distant possibility.
Conversely, it’s noteworthy that JPMorgan Chase (JPM) stock has seen a significant rise post the First Republic acquisition. From a trading price of $127 in April, JPM’s stock has surged to $145, marking an increase of over 15% within this span. Thus, investing in JPMorgan appears to be a more prudent choice currently.
The bottom line: This is likely the end for FRC
The resolution of First Republic’s collapse leaves virtually no room for FRC’s recovery. The stock is not traded on major exchanges, while the bank has been closed and its assets sold to JPMorgan. Frankly, it’s hard to envision a scenario where FRC recovers. While the first half of 2023 introduced a lot of anxiety to the banking sector, the situation in the market has stabilized since then. In fact, the Federal Reserve has recently paused rate hikes leading many investors to believe that the economy is on the path to recovery and that a recession in 2023 has been avoided.
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Conclusion
In early 2023, First Republic Bank was among several regional banks that faced failure, largely due to bank runs. These were exacerbated by the substantial amount of uninsured deposits they held, coupled with financial challenges stemming from the prevailing interest rate landscape.
For the security of your funds, it’s advisable to maintain a balance below the FDIC insurance cap of $250,000 in your bank account. If you have a larger sum to deposit, consider opening an account with another bank. The aftermath of the First Republic’s downfall offers little hope for FRC’s resurgence. The stock isn’t listed on primary exchanges, and the bank’s closure led to JPMorgan acquiring its assets. Candidly, the prospects of FRC bouncing back seem bleak.
Though the initial months of 2023 brought turbulence to the banking industry, the market has since found its footing. The Federal Reserve’s recent decision to halt rate increases has bolstered investor confidence, suggesting that the economy is on an upward trajectory and dispelling fears of a 2023 recession.
FRC Stock Forecast 2025, Frequently Asked Questions (FAQs)
Will FRC recover?
To put it bluntly, no, FRC won’t recover. The bank has been closed by the FDIC, and its assets have been sold to JPMorgan. There is a possibility that the over-the-counter price for FRC stock (trading under the FRCB symbol) will recover some of the losses, but that’s also highly unlikely.
Why did FRC drop?
FRC’s market downfall was a result of a bank run on First Republic which was sparked by the banking crisis in the US and rising interest rates. Since the First Republic was incapable of covering the deposits of all its customers, the bank was closed by the FDIC and its stock was delisted from the NYSE. During the turmoil, the price of FRC stock dropped by more than -97%.
What happens to FRC stockholders?
According to a May report from CBS News that cited a spokesperson from JPMorgan, FRC stockholders won’t receive stock in JPMorgan. That essentially means that FRC stockholders have likely been wiped out in First Republic’s collapse and will bear the full brunt of their stock investment loss.
Does FRC stock pay dividends?
Yes, the FRC stock pays a dividend to its shareholders. The current dividend yield is 2,250.00%
What is the FRC stock price target?
The target price for FRC stock is $9 based on the average of what a group of analysts think FRC stock could be worth at a future date. This is not a prediction by Public.com
What is the future price of FRC stock?
The average one-year price target for FRC / First Republic Bank is $91.8. The forecasts range from a low of $90.9 to a high of $94.5. A stock’s price target is the price at which analysts consider it fairly valued with respect to its projected earnings and historical earnings.
Is FRCB a good stock to buy?
First Republic Bank currently has an average brokerage recommendation (ABR) of 3.00 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by eight brokerage firms.
Does FRCB have any value?
Total Valuation – FRCB has a market cap or net worth of $3.72 million. The enterprise value is $10.66 billion.
Should I hold my FRC stock?
Hence the analyst’s rating on the stock: “neutral,” or in other words: “hold.” As Chiaverini explains, First Republic might still end up selling itself, if it can work out a deal in which a would-be acquirer receives guarantees from the FDIC that it will not incur losses from First Republic’s impaired investments.
Is FRC safe to invest in?
While the current banking crisis isn’t anything like what happened between 2007 and 2009, it’s hard to know what will happen with investor sentiment. Since that’s what dictates stock prices, even after a huge price decline, First Republic’s stock is still a risky proposition.
How low will FRC stock go?
This is based on 16 Wall Street analysts 12-month price targets, issued in the past 3 months. The highest analyst price target is $150.00, the lowest forecast is $8.00.
