Shares of First Republic Bank have plummeted, as global bank shares declined broadly amid several regional bank failures.


First Republic Bank’s share price has come under pressure from investors in the wake of the collapse of Silicon Valley Bank. S&P Global Ratings lowered First Republic’s credit rating from A- to BB+, downgrading it to “junk” status. Similarly, Fitch Ratings also marked the troubled lender’s Long-Term Issuer Default Rating at BB. Although several of the nation’s largest banks provided First Republic with a financial lifeline shares remain under pressure as the bank announced that it was suspending its dividend. U.S. regulators have already taken extraordinary actions to backstop bank depositors in the past week in hopes of calming the markets and stabilizing the broader industry.

Our portfolios

As of February 28, 2023, our portfolios’ holdings in shares of First Republic Bank are as follows:

Outlook*

Despite the moves to dampen the fears of depositors, equity holders of First Republic are reacting to the new reality of downgraded credit ratings and a suspension of dividends. It is also worth noting that, despite the extraordinary moves by Fed and Treasury officials to backstop all deposits at Silicon Valley Bank, FDIC insurance officially remains at $250,000 per depositor account. While equity investors continue to price in the uncertainty surrounding the current situation, we do take note that debt investors remain a bit more sanguine given the relatively modest move in banking sector credit spreads.

SEI and our managers will continue to actively monitor and manage our holdings in this sector.






















Important information

This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results.

Statements that are not factual in nature, including opinions, projections and estimates, assume certain economic conditions and industry developments and constitute only current opinions that are subject to change without notice. Nothing herein is intended to be a forecast of future events, or a guarantee of future results.

Certain economic and market information contained herein has been obtained from published sources prepared by other parties, which in certain cases have not been updated through the date hereof. While such sources are believed to be reliable, neither SEI nor its affiliates assumes any responsibility for the accuracy or completeness of such information and such information has not been independently verified by SEI.

There are risks involved with investing, including loss of principal. The value of an investment and any income from it can go down as well as up. Investors may get back less than the original amount invested. Returns may increase or decrease as a result of currency fluctuations. Past performance is not a reliable indicator of future results. Investment may not be suitable for everyone.

This material is not directed to any persons where (by reason of that person's nationality, residence or otherwise) the publication or availability of this material is prohibited. Persons in respect of whom such prohibitions apply must not rely on this information in any respect whatsoever.

The information contained herein is for general and educational information purposes only and is not intended to constitute legal, tax, accounting, securities, research or investment advice regarding the strategies or any security in particular, nor an opinion regarding the appropriateness of any investment. This information should not be construed as a recommendation to purchase or sell a security, derivative or futures contract. You should not act or rely on the information contained herein without obtaining specific legal, tax, accounting and investment advice from an investment professional.

Information provided in Canada by SEI Investments Canada Company, the Manager of the SEI Funds in Canada. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments and the use of an asset allocation service. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

*The views contained herein are not to be taken as advice or a recommendation to buy or sell any investment in any jurisdiction. Our outlook contains forward-looking statements that are judgments based upon our current assumptions, beliefs and expectations. If any of the factors underlying our current assumptions, beliefs or expectations change, our statements as to potential future events or outcomes may be incorrect. We undertake no obligation to update our forward-looking statements.