People walk in front of a First Republic Bank branch on March 20, 2023, in New York City.
Gary Hershorn | Corbis News | Getty Images
Shares of First Republic were marginally Friday as the regional bank looks for a potential rescue deal to reshape its business after suffering massive deposit outflows in the first quarter.
The stock was up less than 1% in early trading after rising more than 8% on Thursday. The stock has fallen more than 90% this year as investors have lost confidence in the bank after two regional lenders failed in March.
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Reuters reported on Friday that U.S. officials — including from the Federal Deposit Insurance Corporation, Treasury Department and Federal Reserve — are coordinating meetings with other banks to broker a rescue plan for First Republic.
CNBC reported on Wednesday that First Republic’s advisors were preparing to pitch larger banks on a plan that would let the regional lender sell bonds and other assets at an above-market rate and then raise equity. The sales would result in a loss for the banks that buy the bonds, but could be cheaper long-term than letting the bank fail and get seized by regulators.
First Republic told CNBC’s David Faber on Friday that “we are engaged in discussions with multiple parties about our strategic options while continuing to serve our clients.”
Shares of First Republic closed at $16 on Monday before the bank reported its first-quarter results, which showed a decline in deposits of about 40%. The stock fell more than 60% over the next two days, hitting a new all-time low.
First Republic’s stock is seeing a small rebound after falling more than 60% over two days.
First Republic is a regional bank that has focused on high-net-worth individuals and their businesses, offering mortgages at low interest rates.
Those mortgages, as well as other long-term assets on the bank’s balance sheet, have fallen in market value since the Fed began hiking rates last year, making investors worried that the bank would have to book a sizeable loss if forced to sell those assets to raise cash.
The bank’s massive deposit outflows came after the collapse of Silicon Valley Bank and Signature Bank in March. The nation’s largest banks, including JPMorgan Chase, have already helped out First Republic since then with $30 billion in time deposits.
