First Republic Bank plunged at the opening bell Wednesday, an ongoing route that has erased more than 50% of its value just this week on concerns about the bank's financial health in the wake of two other bank collapses.
Shares slumped 16%, following an even more severe tumble Tuesday, after it revealed that depositors withdrew more than $100 billion last month after the collapse of Silicon Valley Bank and Signature Bank.
The bank said late Monday that it was only able to stop the bleeding after a group of large banks stepped in to save it by depositing $30 billion in uninsured deposits.
The San Francisco bank plans to sell off unprofitable assets, including low interest mortgages it provided to wealthy clients. It also has plans to lay off up to a quarter of its workforce, which totaled about 7,200 employees at the end of last year.
Citi analyst downgraded First Republic on Wednesday, saying in a note to clients that there's still a large level of uncertainty in outcomes and expected losses beyond the next year.
“The high cost of its borrowings relative to its earning assets puts it under-water and likely generates losses until it can right-size the balance sheet,” he wrote.
First Republic’s stock closed down 49% at $8.10 on Tuesday, a fraction of the price it was a year ago when it traded for roughly $170 a share.
First Republic reported first-quarter results Monday that showed it had $173.5 billion in deposits before Silicon Valley Bank failed on March 9. On April 21, it had deposits of $102.7 billion, which included the $30 billion the big banks deposited. It said since late March, its deposits have been relatively stable.
The bank's shares, which cost close to $150 apiece in February, traded for around $6 early Wednesday.
