After First Republic Bank reported that depositors withdrew more than $100 billion during the crisis last month, its stock crashed at the opening bell on Tuesday, sparking concerns that it would become the third bank to fail following the failures of Silicon Valley Bank and Signature Bank.
A consortium of sizable institutions intervened to save the San Francisco bank by depositing $30 billion in uninsured deposits, the bank claimed late Monday. This was the only way it was able to stop the bleeding.
It stated that it now intends to liquidate assets, reorganize its balance sheet, and fire up to 25% of its workers, which numbered roughly 7,200 people as of the end of 2022.
In a note to clients, Citi analyst Arren Cyganovich stated, “With still a large level of uncertainty in outcomes and expected losses beyond the next year, we recommend investors sell shares as the outlook appears largely unclear.”
When the markets opened, shares were down more than 28%.
Several regional banks came under pressure on what appeared to be a gloomy day for the markets, but the early losses were slight.