First Republic Bank Shares Crater by Nearly 50 Percent Overnight

Financial Times: Shares of First Republic continued to plunge on Tuesday as regulators in Washington and financiers on Wall Street scrambled to come up with a plan to stabilise the ailing bank. The California-based lender’s stock price, which is down by more than 93 percent this year, fell by a further 49.4 percent, a day after it revealed its customers had withdrawn $100bn of deposits during last month’s turmoil. They said the leading options are for some of the large US banks that recently deposited $30bn into First Republic to rescue the lender, or for the Federal Deposit Insurance Corporation to take control of the institution and offer a government guarantee for all deposits, as it did with SVB (Financial Times).  Wall Street Journal: Investors are worried about the grim math behind First Republic’s operations. The bank is paying more to borrow money. But many of the loans it made to customers carry long-term, fixed interest rates, putting a continued squeeze on the bank. First Republic said Monday that while its average account sizes decreased, it retained 97% of client relationships from the start of the first quarter. It also announced a number of changes, including job cuts, meant to right the ship (Wal Street Journal).