Shares of First Republic took another significant hit Friday as the regional bank searches for a rescue deal to stop the bleeding.
The stock is down 25% Friday morning to $4.60 — and 71% from Monday’s closing price of $16 after first-quarter deposit outflows of 40% thoroughly spooked investors.
Help may be on the way, though. According to a report from Reuters, US officials from them Federal Deposit Insurance Corporation, Treasury Department and Federal Reserve are meeting with other banks to figure out a rescue plan for First Republic.
One possibility is that First Republic could try a plan where it works with larger banks to sell bonds and other assets at an above-market rate and then raise equity, according to a report from CNBC. The banks would eat a loss buying the assets in the short-term but could avoid bigger problems down the line if First Republic failed.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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