Shares of First Republic Bank resumed their punitive decline on Friday, adding to a string of losses this week that came as doubts over the regional lender’s future mounted.
The company’s stock price fell more than 43 percent to $3.51 per share, bringing its loss since Monday to more than 75 percent.
First Republic has failed to fully stabilize itself since it was engulfed in the crisis that led to the bankruptcy of California’s Silicon Valley Bank and New York’s Signature Bank in March. Those banks were seized by regulators after depositors rushed to collect their money in the space of just a few days over concerns about their long-term viability.
While it was also seen as a troubled bank, First Republic got a brief respite when 11 of the largest U.S. banks came together to inject $30 billion in deposits into the lender. But the predicament came into focus again this week when it reported earnings results, telling investors it had outflowed more than $100 billion in deposits since mid-March.
Now a mixture of doubt and speculation clouds the road ahead, unnerving investors. The bank has been in talks with regulators, policymakers and industry peers for weeks about a rescue package, but failed to work out a long-term solution.
The stock fell nearly 50 percent on Tuesday, following the company’s dismal earnings update on Monday. It fell again on Wednesday, before recovering slightly on Thursday. With Friday’s drop, the stock price has fallen from more than $120 per share in early March — a more than 95 percent drop that has wiped about $22 billion from First Republic’s market valuation.
However, First Republic’s problems appear to be under control, unlike in March when investors feared a cascading effect of bank failures. That’s partly because other lenders have also reported earnings and have shown themselves to be in relatively good health.
The S&P 500 rose 0.8 percent on Friday, with every bank except First Republic rising and outperforming the broader index the most. Even the KBW Regional Bank Index, an index of smaller regional lenders in the United States, rose 1.2 percent on Friday, ending just before the week.
“The market has a pretty short attention span,” said Ron Temple, chief market strategist at Lazard, adding that he thinks the potential for systemic problems from another bank failure is understated. “Most investors seem to have moved on,” he said.
Instead, the focus has shifted to a slew of robust earnings updates from companies across the country. The S&P 500 was on track to finish the week up 0.9 percent, up 1.5 percent for the month.
