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Trending: First Republic Stock Plunges on Bankruptcy Fears analyzes the search patterns of our visitors each week. By sharing these trends with our readers, we hope to provide insights into what the financial world is concerned about and how to position your portfolio.

This fortnight was all about the banking sector, as the Silicon Valley Bank blowup has raised concerns about the health of other financial institutions. First Republic Bank, which is first in the list, is in trouble. JP Morgan Chase, which is second in the list, has seen its stock drop but the banking giant has actually benefited from the crisis as deposits increased. Third in the list is U.S. Bancorp, another bank at risk, with AT&T coming in last.

Don’t forget to read our previous edition of trends here.

First Republic Bank Plunges on Fears of Capital Shortfalls

First Republic Bank (FRC) has taken the first position in the list with an advance in viewership of 106%.

First Republic shares have plunged 93% since peaking at the end of 2022, as the blowup of Silicon Valley Bank (SVB) raised fears of contagion. First Republic received a lifeline of $30 billion from a consortium of banks, but that was not enough to stem the fall in the stock price.

The bank now either has to raise new capital or seek strategic alternatives. SVB was bought by First Citizens at a deep discount, and First Republic might face the same fate.

Naturally, First Republic suspended its dividend, a move that triggered another fall in the stock price. First Republic was paying an annual dividend of $1.08 per share, which amounted to a yield of 7.87%.


JP Morgan CEO Warns Current Banking Crisis Not Over

JP Morgan Chase (JPM) has taken the second place in the list with an advance in viewership of 23%. The banking giant has seen an inflow of deposits from failed banks like SVB, Signature Bank, and Silvergate Capital. However, JP Morgan CEO Jamie Dimon has said in his annual letter to shareholders the notion that the bank benefited from the crisis was “absurd.” Dimon argued repercussions of the current crisis will be felt for years to come, but noted this one was unlike the 2008 implosion.

Despite ongoing stress in the U.S. banking sector, JP Morgan has had a good 2022, generating $38 billion in net income, which is about 22% lower than last year. The stock pays a dividend of $4 per share, resulting in a yield of 3.1%.


U.S. Bancorp Stock Plunges on Contagion Fears

U.S. Bancorp (USB) has taken the third position in the list with an increase in viewership of 19%.

U.S. Bancorp stock has seen its stock decline around 44% since peak, as the market worries the banking contagion could spread. Like failed SVB, U.S. Bancorp sits on around $11 billion of unrealized bond losses. If realized, this would erase about one third of the company’s tangible common equity, currently worth about $30 billion.

However, U.S. Bancorp is much better positioned than SVB on the deposit side. Its deposits are from a wider customer base, including corporates and consumers, with about half of them being insured.

With the drop in the stock price, U.S. Bancorp’s dividend now stands at about 5.5%.


AT&T Struggles with Low Margins and Competition

AT&T (T) is last in the list and the only non-banking stock. The telecommunications company has seen its viewership jump 16%. AT&T recently declared a dividend on common equity that was unchanged from the previous quarter. Still, AT&T’s dividend yields a handsome 5.6% on a payout ratio of 44%.

But the company is not in great shape. It cut its dividend last year and the business is struggling with low margins and competition from cable providers, which are looking to bundle cheaper wireless plans.



The Bottom Line

First Republic Bank is fighting for its life as investors fear the company will have to either sell itself or raise more funds. JP Morgan has benefited from the crisis in regional banks but CEO Jamie Dimon disputes this assumption. U.S. Bancorp is also feared to be at risk, although the stock has not declined as much as First Republic and the bank’s deposit base looks stronger. Finally, AT&T has been struggling with low margins and growing competition.

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