Yahoo Finance Live anchors Julie Hyman and Jared Blikre break down the plunge in stock for First Republic Bank.

Video Transcript

JULIE HYMAN: We’re a few moments from the opening bell here. And, as we mentioned, we just got some headlines on First Republic Bank. We’re going to get to Credit Suisse in just a second. Just wanted to reiterate those First Republic Bank headlines, which is that it was cut to junk by S&P on the risk of outflows.

Now, we’ve already seen a lot of money come out of the stock, right? And it’s going down once again this morning, down by 25%. S&P saying “We expect increased wholesale borrowings to further weigh on its net interest margin at First Republic. We believe that First Republic’s deposit base is more concentrated than most large US regional banks, which presents heightened funding risks in the current environment.” That is effectively what happened at SVB. All of its depositors were from one industry.

And so this is a risk that S&P is highlighting here at First Republic, too