Unusual Whales

First Republic Bank shares hit a record low as the US government said it was unwilling to rescue

Unusual Whales -

Per Reuters

US government officials said they were unwilling to rescue First Republic Bank, which resulted in the bank's shares tumbling. On Tuesday, the company's shares fell by 25% to $6.05 after losing half its value.

Per CNBC, First Republic Bank shares dropped by more than 90% year-to-date after volatility resulted in its trading being halted multiple times. On late Monday, the bank said that in the first quarter, it lost roughly 40% of its deposits.

The decline happened despite $30 billion being infused by 11 larger banks into First Republic Bank. This comes as wider bank runs are being prevented from spreading further.

Aptus Capital Advisors portfolio manager David Wagner gave a statement regarding what could happen.

Wagner: "The (First Republic) assets will be sold, but it may take some time and could be sold at a pretty severe discount to par,"

Another statement came from B Riley Wealth in Boston's chief market strategist Art Hogan gave a statement regarding the problem with First Republic Bank.

Hogan: "First Republic's problems are likely idiosyncratic ... and they obviously have a painful path in front of them,"

In March, First Republic Bank increased by 56% pre-market after it received additional funding. Amid the collapse of other banks, FRB announced that it could raise $70 billion in unused liquidity even before it received funding from the Federal Reserve.

This came after $FRC's shares initially dropped to $19.00 from $62.59, which dropped further to around $6 as of press time.

Some of the banks that injected capital into First Republic Bank include the following.

  • JPMorgan Chase & Co.
  • Citigroup Inc.
  • Bank of America Corp.
  • Wells Fargo & Co.
  • Morgan Stanley
  • Goldman Sachs Group Inc.
  • U.S. Bancorp
  • PNC Financial Services Group Inc.
  • Truist Financial Corp.
  • Bank of New York Mellon Corp.
  • State Street Corp.

Here's a list of the banks that contributed and the amount they contributed.

See flow at unusualwhales.com/flow.

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Resources:

Reuters

CNBC