The stock price of First Republic Bank cratered on Monday despite its attempts to quell investor fears after the sudden collapse of Silicon Valley Bank and Signature Bank.
Shares of First Republic, a regional bank based in San Francisco with $213 billion in assets and 7,200 employees, fell more than 70% in early trade only one day after the company said it has added more cash to its reserves.
In a statement on Sunday, CEO Mike Roffler said the bank “continues to fund loans, process transactions and fully serve the needs of clients.” Seeking to reassure investors and depositors, he also said the company’s “capital and liquidity positions are very strong, and its capital remains well above the regulatory threshold for well-capitalized banks.”
First Republic has more than $70 billion available in unused funds, the bank said. The company did not immediately respond to a request for comment.
The stocks of other regional banks also took a hit Monday, including Zions, Pacific West and Western Alliance. More than a dozen regional banks had their trading halted Monday after prices continued to free fall following the seizure by regulators of Silicon Valley Bank (SVB) and New York’s Signature Bank.
The California Department of Financial Protection and Innovation said it took control of SVB because the bank had “inadequate liquidity and insolvency.” The bank’s closure marked the largest failure of a financial institution since Washington Mutual in 2008 at the height of the financial crisis.
Days after SVB’s closure, regulators in New York shuttered Signature Bank. Signature held more than $110 billion in assets before it closed. Taking control of Signature “was the right move to protect consumers,” New York Gov. Kathy Hochul said Monday in a tweet.
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