First Republic Bank remains in crisis mode this week, despite coordinated efforts by large banks to stabilize its finances and the federal government’s guarantee of deposits in two failed banks earlier this month.
San Francisco-based First Republic continued to teeter on the edge Monday, with its shares falling more than 47%, briefly hitting an all-time low shortly before the market closed, and trading halted numerous times throughout the day. First Republic’s stock has tumbled 90% over the past month, with almost all of the losses occurring since March 8, the day Silicon Valley Bank announced stock sale plans and sparked what would turn into a $42 billion bank run and a subsequent seizure by federal regulators.
But despite sweeping government measures to reassure bank depositors that their money is safe, small and regional banks are still uneasy, with First Republic at the highest risk of another lethal run. Its customers have withdrawn around $70 billion in deposits since SVB’s collapse, or nearly 40% of its total holdings, the Wall Street Journal reported Sunday, citing people familiar with the matter.
Withdrawals slowed somewhat last week after a consortium of 11 banks, including JPMorgan Chase and Bank of America, banded together and on Thursday announced a $30 billion deposit at First Republic to help stabilize it. But over the long term, the bank is far from safe, especially after multiple rating agencies including Fitch Ratings, Moody’s, and S&P Global issued negative credit ratings for the bank over the past week.