The stock prices of First Republic, a regional bank located in San Francisco with 7,200 employees and $213 billion in assets, took a dive Monday. Despite its effort to alleviate investor fears following the abrupt shutdowns of SVB and Signature Bank, First Republic Bank’s stock tumbled 60 percent just one day after the company stated it had placed more funds in its reserves.
First Republic claims to have more than $70 billion in unused funds that are available. Looking to calm investors and depositors, CEO Mike Roffler stated the bank’s “capital and liquidity positions are very strong, and its capital remains well above the regulatory threshold for well-capitalized banks.” He added that the bank “continues to fund loans, process transactions and fully serve the needs of clients.”
Additional regional banks’ stock prices suffered Monday, including Pacific West, Zions, and Western Alliance. As prices continued to plummet following SVB’s and Signature Bank’s seizures by regulators, trading ceased for over a dozen regional banks.
Regarding what may unfold in the coming days, Bank of America analysts said they “expect regional bank stock volatility to remain challenging in the short run as investors recalibrate the risk-reward.” Their report further stated, “the events of the last few days are likely to worsen the funding cost pressure that the industry was already facing. No bank is immune, but this pressure will likely be most pronounced among banks with larger mix of rate sensitive customers.”
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