First Republic hangs in balance as shares plummet again

The most imperiled bank on Wall Street, First Republic, slid closer to the precipice Monday as its shares fell 47%, down nearly 90% since its close March 8, the day Silicon Valley Bank’s woes incited a financial panic.

The calamitous drop in First Republic’s stock price, even as shares of many of its peers steadied, highlights the fears that threaten to consume it. Until recently, the bank, based in San Francisco, boasted $176 billion in deposits and an enviable list of wealthy clientele.

Last Thursday, some of the biggest names on Wall Street threw together a $30 billion cash rescue for First Republic, hoping that would quell a run on the bank. But the plan appears not to have worked so far, failing to convince investors to stick by the bank.

The bank had also been trying to sell a stake in recent days, which quickly morphed into efforts to save the bank, said two people with knowledge of the matter. As of Monday afternoon, First Republic was entertaining some possible buyers, but discussions, if any, are in the early stages, one of the people said. The country’s biggest banks are unlikely to play savior again, the two people said, although the situation is in flux

The urgency only increased Monday, after shares of First Republic fell so much that the New York Stock Exchange automatically halted trading 11 times to prevent a free fall. Monday’s rout also dealt a blow to the bank’s executives because, as recently as Sunday evening, senior leaders and board members were convinced the bank had enough leeway and money from its own clients to weather further tumult, according to two people familiar with the bank’s discussions.

At the very least, they assumed First Republic had weeks, not days, to solve its problems, by either raising new capital or selling itself, one person with knowledge of the matter said.