economy and politics

First Republic Bank gets $30 billion in deposits from big banks

First Republic Bank gets $30 billion in deposits from big banks

The banks’ support was announced in a joint statement by the Treasury Department, the Federal Reserve (Fed), the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency.

First Republic shares rose nearly 6% to $32.92 in volatile trading Thursday. Earlier, they had fallen a further 36% that day before reports of the bailout sent them as high as 40%.

Shares have lost two-thirds of their value in the last seven days and are down more than 65% so far this month.

A funding round on Sunday, through JPMorgan Chase & Co., gave First Republic access to a total of $70bn in funding, but failed to calm investors as contagion concerns deepened in the wake of two large-scale collapses in the banking industry.

The bailout effort was initiated by the banks but had strong backing and support from the government, according to a person with knowledge of the matter.

Founded in 1985, First Republic had $212 billion in assets and $176.4 billion in deposits at the end of last year, according to its annual report.

About 70% of its deposits are uninsured, above the median of 55% for midsize banks and the third highest in the group after Silicon Valley Bank and Signature Bank, according to a Bank of America note.

Earlier on Thursday, Reuters reported that PacWest Corp is also in talks for increased liquidity with investment firm Atlas SP Partners. Bloomberg News previously reported on the bailout package and its participants.

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