Posted on 04/29/23
| News Source: i24
The Californian bank, valued at $20 billion at the beginning of 2023, was worth only $654 million dollars at the close of the markets on Friday
The wind of panic in the banking sector continued to blow through the financial markets this week. Friday's market close on Wall Street appeared to give the First Republic a temporary reprieve, after rumors of a possible bailout have been rampant in recent weeks.
The Wall Street Journal (WSJ) claimed in its weekend edition that the FDIC, the U.S. agency responsible for guaranteeing bank deposits, could take over the bank this weekend. JPMorgan Chase and PNC Financial Services have already expressed their interest, according to the WSJ.
A plummeting stock
First Republic's stock finished down 43 percent on the New York Stock Exchange Friday, at $3.51, after being suspended several times during the session for excessive volatility. That values it at $654 million, down from more than $20 billion at the start of the year and more than $40 billion at its peak in November 2021.
Founded in 1985, First Republic was the 14th largest bank in the country by asset size at the end of 2022. Headquartered in San Francisco, it has a network of branches located primarily in California and urban areas on the East Coast, serving wealthy clientele.
After the failures of Silicon Valley Bank and Signature Bank, its fate has been hanging in the balance after three U.S. banks with similar profiles failed in early March. Federal authorities and other financial institutions came to its rescue shortly afterwards to prevent it from suffering the same fate as Silicon Valley Bank and Signature Bank, namely bankruptcy after sudden massive withdrawals by their customers.