First Republic Bank (FRC) Shares Slide Despite Deposit Infusion

On Friday, First Republic Bank faced significant stock market losses despite receiving assistance from other financial institutions the day before. The stock plummeted by 32.8%, making it the poorest performer in the SPDR S&P Regional Banking ETF.

Although PacWest and Western Alliance also saw declines of 19% and 15%, respectively, US Bancorp only dropped more than 9%. To raise funds, First Republic Bank intends to sell shares privately. Goldman Sachs, Morgan Stanley, and Citigroup issued a statement that expressed confidence in First Republic and their commitment to helping banks serve their customers and communities. However, there are still concerns about whether Thursday’s deposit infusion will be sufficient to secure First Republic’s future.

Atlantic Equities downgraded the bank to neutral, predicting that it may need an additional $5 billion in capital. Wedbush analysts gave a $5 price target on First Republic, suggesting that a takeover could eliminate most of its equity value. After the stock market closed on Friday, the New York Times reported that First Republic was in talks to sell shares to other banks or private equity firms in a private sale to raise capital. The price, quantity, and recipient of the shares were still under discussion, and the entire bank’s sale was also a possibility.