First Republic Shares Crash 60% As Regional Bank ‘Crisis In Confidence’ Spreads

Via ZeroHedge

First Republic Bank’s stock crashed in premarket trading in New York following a statement issued on Sunday night that sought to ease investor worries about its liquidity situation in the wake of the failures of Silicon Valley Bank and Signature Bank.

Shares of the regional bank are down 60% in the premarket. The lender said in a statement late Sunday that it had more than $70 billion in unused liquidity to fund operations from agreements that included the Federal Reserve and JPMorgan Chase & Co.

“The additional borrowing capacity from the Federal Reserve, continued access to funding through the Federal Home Loan Bank, and ability to access additional financing through JPMorgan Chase & Co. increases, diversifies, and further strengthens First Republic’s existing liquidity profile,” the bank said, adding that more liquidity is available through the Fed’s new lending facility.

“The plunge in its shares is classic market psychology at work, with investors starting to question the credentials of any lender that may be remotely in the same category of Silicon Valley Bank,” Bloomberg’s Ven Ram wrote.

We pointed out over the weekend, “as a result of the SVB failure – one look at what is already taking place at some smaller, vulnerable banks such as this First Republic Branch in Brentwood should be sufficient to see what comes tomorrow if the Fed makes the wrong decision today.”

Despite the emergency lending program announced by the Fed and Treasury on Sunday to increase the availability of funds to meet bank withdrawals and prevent runs on other banks, fears have not been alleviated as other regional banks continue to experience significant pressure.

And why would that be? Well, as we outlined, “banks which are sitting on some $620 billion in unrealized losses on all securities (both Available for Sale and Held to Maturity) at the end of last year, according to the Federal Deposit Insurance Corp.”

If the Fed’s goal was to shore up wavering confidence in the banking system by announcing the alphabet soup of bailout facilities, the BTFP lending program — well, it hasn’t worked yet this morning:

• PacWest Bancorp’s stock tumbled 27%
• Western Alliance Bancorp’s shares slid 17%
• Charles Schwab’s shares lost 6.7%
• Bank of America’s stock fell 4.4% 
• Citizens Financial Group’s stock declined 2.7% 
• Wells Fargo’s stock slid 2.3%

The current question on everyone’s mind is whether the measures taken by the Fed are sufficient in preventing further depositor panic at other regional banks.

Then there’s this: “There’s no doubt in my mind: There’s going to be more. How many more? I don’t know,” William Isaac, the former chairman of the Federal Deposit Insurance Corporation, told Politico on Sunday. “Seems to me to be a lot like the 1980s,” he added.

… and Cramer strikes again.

-----------------------------------------------------
It is my sincere desire to provide readers of this site with the best unbiased information available, and a forum where it can be discussed openly, as our Founders intended. But it is not easy nor inexpensive to do so, especially when those who wish to prevent us from making the truth known, attack us without mercy on all fronts on a daily basis. So each time you visit the site, I would ask that you consider the value that you receive and have received from The Burning Platform and the community of which you are a vital part. I can't do it all alone, and I need your help and support to keep it alive. Please consider contributing an amount commensurate to the value that you receive from this site and community, or even by becoming a sustaining supporter through periodic contributions. [Burning Platform LLC - PO Box 1520 Kulpsville, PA 19443] or Paypal

-----------------------------------------------------
To donate via Stripe, click here.
-----------------------------------------------------
Use promo code ILMF2, and save up to 66% on all MyPillow purchases. (The Burning Platform benefits when you use this promo code.)

Click to visit the TBP Store for Great TBP Merchandise