Shares of crisis-hit bank First Republic plunged on Friday after reports said there was a dim outlook for a timely rescue. Trading was halted several times even as the stock nosedived as much as 40 percent amid reports that the bank could be taken into receivership by the Federal Deposit Insurance Corporation.
Friday’s plunge means the stock has lost more than 90 percent after reports in March brought out liquidity crisis at the bank.
Meanwhile, FDIC, the Treasury Department and the Federal Reserve are working on various options to stem the crisis at the bank, Wall Street media outlets reported.
First Republic Bank at Glance
First Republic bank was founded in 1985 by Jim Herbert in California. The bank initially catered to wealthy customers and businesses. According to Yahoo Finance, 40 percent of the bank’s total deposits came from the San Francisco Bay area, while 19 percent was from from New York and 9 percent from Boston and 8 percent from Los Angeles.
The withdrawal pressure on the bank happened in the aftermath of the collapse of SVB and Signature Bank. It was reported that out of the bank’s $176.4 billion in deposits, a huge chunk was above the insurance levels backed by Federal Deposit Insurance Corporation.
S&P Global Market Intelligence said as of the end of last year, 67.7 percent of the bank’s domestic deposits were uninsured. The uninsured investors made a beeline for withdrawals in the wake of other California bank failures.