First Republic Bank began to founder after the collapse of Silicon Valley Bank, with its stock dropping from $115 per share on March 8 to around $20 Thursday. Now it looks like First Republic—which like SVB had numerous uninsured depositors—will get by with a little help from its friends.
Here’s more from CNBC:
Bank of America, Wells Fargo, Citigroup and JPMorgan Chase will contribute about $5 billion apiece, while Goldman Sachs and Morgan Stanley will deposit around $2.5 billion, the banks said in a news release. Truist, PNC, U.S. Bancorp, State Street and Bank of New York Mellon will deposit about $1 billion each.
In the same release, the group said the “action by America’s largest banks reflects their confidence in First Republic and in banks of all sizes.” The statement said the depositors were also demonstrating an “overall commitment to helping banks serve their customers and communities.”
While bank stock nosedived Thursday, reports of aid to First Republic managed to push them back up. The deposits, CNBC reports, must remain with the beleaguered bank for up to four months.
According to sources who spoke to the Wall Street Journal, bank execs recently convened with Treasury Secretary Janet Yellen and others in Washington to talk over the plan. The WSJ quoted from a joint statement by the Treasury, Fed, FDIC and Office of the Comptroller of the Currency which said in part that the “show of support by a group of large banks is most welcome, and demonstrates the resilience of the banking system.”