Shares of First Republic slumped to a record low Tuesday after the regional bank reported a larger-than-expected decline in deposits during March.
Shares ended the regular trading session off $7.90, or 49%, at $8.10.
Updated at 2:05 pm EDT
Earlier, First Republic (FRC) shares were halted in trading on the New York Stock Exchange Tuesday, after falling to a record low amid heavy volatility, amid renewed concern for the fate of the regional lender and wealth manager.
Reports say it's considering a major asset sale to shore up its balance sheet.
Bloomberg reported that the company could divest between $50 billion and $100 billion of its long-dated securities and mortgages as it scrambled to cope with a bigger-than-expected slump in its deposit base over the first quarter.
First Republic on Monday had noted that it was "pursuing strategic options to expedite its progress while reinforcing its capital position" while planning to eliminate around 20% to 25% of its overall workforce.
Fitch Ratings, meanwhile, told Reuters that the bank's strategic options would be "very challenging." The credit rating company added that "there's going to be some big write-downs that would have to be taken against some of the assets," given the year-to-date rise in Treasury-bond yields and the discount at which they're likely to be sold. Bond prices and yields move inversely to each other.
First Republic Q1 Deposits Fell 41%
First Republic's overall deposits were down $71.9 billion, or 41%, from end-December levels to $104.5 billion over the three months ended in March, First Republic said late Monday. The figure was well below Wall Street forecasts of around $145 billion.
The $104.5 billion total, as well, includes the collective $30 billion that was added to the bank's deposit base by a collection of Wall Street lenders, led by JPMorgan (JPM), following the collapse of Silicon Valley Bank last month.
The figures offset an otherwise solid first-quarter-earnings report. Profit topped analysts' estimates at $1.27 a share while revenue also beat forecasts at $1.21 billion.
First Republic shares were last seen 44.6% lower in early afternoon trading Tuesday and changing hands at $8.86 each. The stock touched a record low of $8.27 each earlier in the session before being halted by officials on the NYSE.
Earlier this month, The Wall Street Journal reported that JPMorgan CEO Jamie Dimon had led a fresh round of talks with other big U.S. banks in an effort to provide further support, including potentially converting their $30 billion in deposits into a capital injection.
Standard & Poor's, which had lowered First Republic's credit rating to junk status in the days following SVB's collapse, on March 19 cut it by a further three notches to B+. S&P said the bank continued to face "high liquidity stress with substantial outflows."
The credit-rating company also said the banking group's $30 billion addition to FRC's deposit base "may not solve the substantial business, liquidity, funding, and profitability challenges that we believe the bank is now likely facing."
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