Other Banks Jump on the Bandwagon Reported Barrons Digital

Other Banks Jump on the Bandwagon Reported Barrons Digital wsjrenewal

Barrons Digital says that shares of First Republic (ticker FRC) closed up 29% to $15.77, though they remain down some 87% since the end of February.

There were gains for other regional banks too. New York Community Bancorp NYCB +6.74% (NYCB) was up 6.7%, Western Alliance WAL +14.96% (WAL) rose 15% and PacWest Bancorp PACW +18.77% (PACW) climbed 19%.

At a banking conference Tuesday, Treasury Secretary Janet Yellen said “the situation is stabilizing.” She also said the government could step in to protect depositors of other banks—as it did with Silicon Valley Bank and Signature Bank—if regulators see a risk of a run on the banking system.

As the turmoil in the broader banking sector eased Monday, helped in part by UBS (UBS) agreeing to buy long-time rival Credit Suisse (CS), things only got worse for First Republic.

The stock plunged 47% Monday, closing at an all-time low of $12.18. The shares had dropped more than 90% since the beginning of the month, as of Monday’s close, Barrons Digital said.

The sharp drop came despite fresh discussions to support the bank. The talks include a potential investment by JPMorgan and other banks that had already put $30 billion in deposits into the First Republic, according to The Wall Street Journal.

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Those deposits could be converted into an investment. A sale of the bank or capital injection are also options, the Journal reported, again citing people familiar with the matter.

A consortium of 11 U.S. banks, including Bank of America (BAC), Citigroup (C), and JPMorgan, pledged Friday to deposit $30 billion in the First Republic for a minimum of 120 days. Designed to boost confidence, it didn’t work as the stock fell 33% Friday.

The latest development, and the prospect of another rescue attempt, didn’t initially reassure investors but it may yet have a stabilizing effect.

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