First Republic Bank’s shares tanked again on Monday, falling 47 percent and surpassing last week’s lows. The slide follows yet another downgrade in the bank’s credit rating by Standard & Poor’s, which dropped First Republic to B+ from BB+ on Sunday after first lowering it to junk status just last week.
The San Francisco-based bank received the rescue package from 11 major U.S. banks last week in a bid to prevent its collapse. S&P Global Ratings stated that while the package may relieve short-term liquidity pressures, there are significant long-term challenges facing the business.
Due to the volatility, trading in First Republic’s shares was halted multiple times, with the stock price dropping approximately 88 percent in the last two weeks.
During afternoon trading, the stock’s volume exceeded 158 million shares, compared to the average of less than 14 million shares per day. At closing, the stock was down 47 percent, at $12.13, bouncing back from its intraday low of $11.52, an all-time low for First Republic’s stock.
As part of the rescue package last week, the banks that provided deposits to the troubled bank were Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley, BNY-Mellon, PNC Bank, State Street, Truist, and U.S. Bank. Those deposits were uninsured, according to a press release issued by the banks.
“This action by America’s largest banks reflects their confidence in First Republic and in banks of all sizes, and it demonstrates their overall commitment to helping banks serve their customers and communities,” the banks said in a joint statement. “Regional, midsize and small banks are critical to the health and functioning of our financial system.”
