Shares of First Republic tumbled 50% in a matter of hours on Tuesday as the troubled bank revealed a massive flight of customer capital.
The bank says customers pulled $100 billion worth of deposits out of the bank in March – a number that surprised analysts and fueled fresh concerns about the health of the US banking system as a whole.
Fox Business senior correspondent Charles Gasparino says bankers working with First Republic now expect a total federal takeover of the troubled institution.
“Bankers working with First Republic Bank say they expect eventual government receivership for the ailing bank after it exhausts private sector solutions such as asset sales and finding a buyer, both of which appear difficult.
Officials at the big banks believed the Feds were poised last week to take over FRC just before its earnings announcement crushed shares.”
The bank says it will fire 20 to 25% of employees as part of an effort to shrink its balance sheet and stay afloat.
First Republic stock is now down 93% since the start of 2023, and its Tuesday selloff triggered a downward move in the regional banking sector as a whole.
About a month ago, Fox News reported First Republic may be headed for a sale. The report named Morgan Stanley and PNC as potential buyers.
If First Republic outright fails with no buyout and no additional government assistance, the FDIC will insure individual customer accounts up to $250,000.
Don't Miss a Beat – Subscribe to get email alerts delivered directly to your inboxCheck Price Action
Follow us on Twitter, Facebook and Telegram
Surf The Daily Hodl Mix
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Generated Image: Midjourney
