Shares for First Republic Bank dropped to an all-time low on Wednesday as the San Francisco-based bank fights for survival and is seeking a lifeline after becoming engulfed in the banking crisis that hit regional lenders following the collapse of Silicon Valley Bank (SVB).
First Republic's market value fell below $1 billion for the first time ever, plummeting to around $886 million amid doubts that the troubled lender can be saved.
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Wednesday's selloff – which triggered halts in trading multiple times – follows a free fall that began Monday after the closing bell following the bank's revelation that its deposits dropped 40% in the first quarter as panicked customers pulled their funds amid fears of a growing crisis when SVB was seized by regulators last month.
First Republic reported that its deposits totaled $104.5 billion at the end of March – down 35.5% year over year and a drop of 40.8% compared to Dec. 31, 2022. That figure includes the infusion of $30 billion in uninsured deposits from 11 of the largest U.S. banks that were provided to stabilize the bank amid the crisis in March.
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The Federal Deposit Insurance Corporation swooped in to take control of SVB amid its run on the bank, but regulators were reportedly reluctant to take the same actions to seize First Republic as of Wednesday morning.
Citing sources, CNBC reported Wednesday that the U.S. government is currently unwillingly to step in and begin rescuing First Republic.
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Meanwhile, a source familiar told Reuters the bank is looking at its options, including selling assets.
Reuters contributed to this report.
