Yesterday, on Friday, the share price of the American First Republic bank hit a new low on the New York Stock Exchange. There are rumors circulating about a plan or strategy to rescue the bank, but it has not been put into action yet.
Yesterday, the share price of the bank, which was ranked 14th among the largest US banks by assets size in 2022, dropped by 43% on Wall Street and reached $3.51 at the end of the session. The bank had to suspend trading several times during the session due to significant fluctuations in the share price.
The bank’s estimated value is currently $654 million, which is significantly lower than its value at the beginning of the year ($20 billion) and its peak in November 2021 (over $40 billion).
First Bank, established in 1985 and based in San Francisco, operates branches in cities across the East Coast and California, and caters primarily to affluent customers.
Last March, failed with two other banks that share a focus on specific customers and/or a specific geographic area, and now its fate seems uncertain.
The First Republic was in danger of facing bankruptcy due to customers making large, sudden withdrawals, similar to what happened to Silicon Valley Bank and Signature Bank. Authorities and financial institutions attempted to prevent this outcome.
According to sources familiar with the matter, the US Deposit Insurance Agency may purchase the bank and subsequently sell its assets to another entity. This was reported by The Wall Street Journal.
JPMorgan and PNC Financial Services are also among the institutions that are interested.
Last Monday evening, the bank confirmed that in the first quarter of this year, several clients withdrew over $100 billion in deposits.
He received $30 billion from other banks, but investors were still unsatisfied and caused the share price to drop on Tuesday and Wednesday. The decrease stopped on Thursday.