On Monday, bank shares, including First Republic Bank, experienced a decline despite regulators’ Sunday evening actions to support all depositors in Silicon Valley Bank and Signature Bank, as well as provide extra funding for other distressed institutions.
First Republic Drops 60%, Leads Decline In Bank Stocks
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| First Republic Drops 60%, Leads Decline In Bank Stocks |
On Monday, regional bank stocks saw significant declines despite regulators' actions to support troubled institutions. Shares of First Republic Bank in San Francisco fell by 61.8% after a 33% decline the previous week. PacWest Bancorp dropped by 45%, and Western Alliance Bancorp lost over 47%.
Zions Bancorporation shed about 26%, and KeyCorp fell 27%. Other financial firms were also under pressure, with Bank of America slipping 5.8%, and Charles Schwab tumbling more than 11%. Throughout the day, many bank stocks were repeatedly halted due to high volatility.
Despite being less concentrated in one industry than Silicon Valley Bank, First Republic Bank has a tendency to serve businesses and affluent individuals who have significant uninsured deposits. As a result, the bank is likely to be affected by a flight of uninsured deposits from smaller and less diverse banks to larger and more diverse ones following the collapse of Silicon Valley Bank.
This trend was noted by Oppenheimer analyst Chris Kotowski in a note to clients.
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