First Republic faces the risk of deposit outflows after the failure of several banks spooked investors and customers.
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S&P Global Ratings downgraded its issuer credit rating on First Republic Bank FRC by four notches to BB-plus from A-minus on Wednesday, placing it in speculative grade, or ‘junk,’ status. The move come after it had put the bank on review for a downgrade late Tuesday. The agency cited concerns about increased wholesale borrowings further weighing on the regional bank’s net interest margin. “We believe the risk of deposit outflows is elevated at First Republic Bank despite the actions of federal banking regulators and the bank actively increasing its borrowing availability to mitigate risk associated with the bank failures…
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