First Republic Bank Shares Rise in Pre-Market Trading

Investor confidence in First Republic Bank has reportedly picked up.

The bank’s stock rose as much as 14% in pre-market trading in New York after having fallen 95% this year following the collapse of three other regional banks, Bloomberg reported Friday (April 28).

Bloomberg attributed the rise to reports of possible rescue plans for First Republic Bank led by the banking industry or regulators.

It cited a report from the Financial Times that the banks are working on a solution led by the private sector and a report from Reuters that United States officials are also in talks about a possible rescue plan. Both reports cited unnamed sources.

During a Thursday (April 27) White House press briefing, Press Secretary Karine Jean-Pierre said the administration is monitoring the situation at First Republic Bank and has taken action in the past to give Americans confidence in their deposits and to give banks access to liquidity.

“As the president and [Treasury] Secretary [Janet] Yellen and [Federal Reserve] Chair [Jerome] Powell have said, we have used important tools to quickly stabilize the banking system,” Jean-Pierre said in the briefing. “We could use those tools again if needed.”

First Republic Bank said Monday (April 24) that it is working to strengthen its business, restructure its balance sheet and reduce expenses after experiencing “unprecedented” deposit outflows after the closure of three other regional banks in March.

The bank delivered this news in its first earnings report since experiencing the bank run and getting support from 11 large U.S. banks in the form of $30 billion in uninsured deposits.

“With the stabilization of our deposit base and the strength of our credit quality and capital position, we continue to take steps to strengthen our business,” First Republic founder and Executive Chairman Jim Herbert and CEO and President Mike Roffler said Monday.

A day later, the bank was looking to sell long-dated mortgages and securities amounting to $50 billion to $100 billion as it works on a turnaround plan.

On the same day, it was reported that First Republic Bank is considering asking the government to take over its operation in one of several paths it is pursuing.