First Republic Bank shares have plunged this morning, extending a week-long rout, as executives consider courting a buyer to prop up the bank in the wake of the collapse of several regional peers.
Bloomberg reports that, according to people familiar with the matter, the San Francisco-based bank is said to be exploring strategic options that include a sale. The firm is also weighing options for shoring up liquidity, some of the people said.
“Normally, a headline of a potential sale would support the stock,” Christopher McGratty, an analyst at Keefe, Bruyette and Woods, wrote in a report.
“However, the potentially significant deposit outflows post-SIVB failure likely leave FRC in a tough spot.”
“Any potential sale would likely be a tough outcome for existing shareholders, given mark-to-market accounting on loans,” McGratty wrote.
FRC shares are down over 30% this morning, back at post-SVB lows…
First Republic saw its credit rating was cut to junk by S&P Global Ratings and Fitch Ratings.
“First Republic’s options have narrowed following deposit outflow, a sharp share-price decline and recent downgrades from ratings agencies, while a potential sale of the bank could center on the attractive wealth-management business,” Herman Chan, an analyst at Bloomberg Intelligence, wrote in a note.
But, but, but President Biden said:
“Americans can rest assured that our banking system is safe. Your deposits are safe.”
It’s not over.
Tyler Durden
Thu, 03/16/2023 – 09:39
