LOS ANGELES--(BUSINESS WIRE)--The Law Offices of Frank R. Cruz announces that a class action lawsuit has been filed on behalf of persons and entities that purchased or otherwise acquired First Republic Bank (“First Republic” or the “Company”) (NYSE: FRC) securities between January 14, 2021 and March 14, 2023, inclusive (the “Class Period”). First Republic investors have until June 23, 2023 to file a lead plaintiff motion.
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On October 14, 2022, First Republic released its third quarter 2022 financial results, reporting a slowdown of the Company’s net interest income growth to 20.6% year-over-year and a net interest margin decrease to 2.71%. The Company explained that the decrease was due to “average funding costs increasing more rapidly than the offsetting increase in the average yields on interest-earning assets.” On this news, First Republic’s stock price fell $22.14, or 16.4%, to close at $112.59 per share on October 14, 2022, thereby injuring investors.
Then, following the collapse of SVB Financial Group (“SVB”) on March 10, 2023, First Republic investors began to question the Company’s ability to withstand the interest rate environment and remain solvent. In response, First Republic’s stock price fell $83.79, or 72.9%, to close at $31.21 per share on March 13, 2023.
Then, on March 13, 2023, several analysts downgraded their ratings of First Republic due to the risks of deposit outflows leading to increased funding costs, observing that the Company’s “funding and liquidity profile has changed and represents a ‘weakest link.’” On this news, First Republic’s stock price fell $8.47, or 21.4%, to close at $31.16 per share on March 15, 2023, thereby injuring investors further.
The complaint filed in this class action alleges that throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants misrepresented the strength of the Company’s balance sheet and liquidity position, while also understating the significant pressure rising interest rates posed to First Republic’s business model. Defendants also misrepresented the strength of the Company’s ability to deliver consistent results across different interest rate environments, the diversity of the Company’s deposit funding base, and the Company’s ability to generate net interest income growth and maintain stable net interest margin, and as a result, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis at all relevant times.
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If you purchased First Republic securities during the Class Period, you may move the Court no later than June 23, 2023 to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you purchased First Republic securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Frank R. Cruz, of The Law Offices of Frank R. Cruz, 1999 Avenue of the Stars, Suite 1100, Los Angeles, California 90067 at 310-914-5007, by email to email@example.com, or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.
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