First Republic Bank gets $30 billion in deposits from big banks

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A First Republic Bank branch is pictured in Midtown Manhattan in New York City, New York, U.S., March 13, 2023. REUTERS/Mike Segar

 First Republic Bank (FRC.N) has received $30 billion in deposits from several big banks, the banks said in a statement on Thursday, as part of a rescue package for the lender.

JPMorgan Chase & Co (JPM.N), Citigroup Inc (C.N), Bank of America Corp (BAC.N), Wells Fargo & Co (WFC.N), Goldman Sachs Group Inc (GS.N), Morgan Stanley (MS.N) and others are involved in the rescue, according to the statement.

First Republic’s shares were last up nearly 6% at $32.92 in volatile trading on Thursday. The stock tumbled 36% earlier in the day before reports of the rescue plan sent them up as much as 40%.

The shares have lost two-thirds of their value in the past seven days and are down more than 65% month-to-date.

A round of financing on Sunday raised through JPMorgan Chase & Co (JPM.N), gave First Republic access to a total of $70 billion in funds, but failed to calm investors as worries of a contagion deepened in the wake of two large-scale collapses in the banking industry.

The rescue effort was initiated by banks but had strong backing and encouragement from the government, according to a person with knowledge of the matter.

Founded in 1985, First Republic had $212 billion in assets and $176.4 billion in deposits as of the end of last year, according to its annual report.

About 70% of its deposits are uninsured, above the median of 55% for medium-sized banks and the third highest in the group after Silicon Valley Bank and Signature Bank, according to a Bank of America note.

Earlier on Thursday, Reuters reported PacWest Corp (PACW.O) is also in talks about a liquidity boost with investment firm Atlas SP Partners.

Bloomberg News reported earlier on the rescue package and its participants.

SOURCE: REUTERS

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