2023-03-16 11:16:22 ET
Shares of First Republic Bank (NYSE: FRC) had plunged by more than 34% as of 10:28 a.m. ET today after the bank announced last night that it is exploring strategic options that might include a sale or further attempts to shore up liquidity.
First Republic is one of the banks that investors are closely monitoring after the collapse of SVB Financial and Signature Bank last week. While First Republic is not in nearly as bad shape as SVB was, it does have billions of unrealized losses sitting in its bond portfolio that would destroy substantial shareholder equity if the bank had to sell them more immediately. First Republic also has lots of uninsured deposits , which have spooked investors.
Recently, First Republic said it had secured additional liquidity from the Federal Reserve and JPMorgan Chase , which brought their unused liquidity to $70 billion. First Republic CEO Jim Herbert also told CNBC a few days ago that the bank wasn't seeing too many depositors leave. But the idea that the company is exploring strategic options hints that it might still be seeing deposit outflows.
For further details see:
First Republic May Explore a Sale; Shares Are Tanking