Shares In First Republic Bank Plummet Even After Rescue Deal From Big Banks

Shares in First Republic Bank plummeted some 26% on Friday morning even after a rescue deal backed by a number of large financial institutions.

Wells Fargo, JPMorgan Chase, Bank of America, and Citigroup each offered to contribute $5 billion of liquidity to assist First Republic Bank, which is heavily involved in wealth management and has many customers with deposits exceeding the $250,000 threshold protected by the Federal Deposit Insurance Corporation. Banks such as Truist Financial and BNY Mellon also contributed to the overall $30 billion arrangement.

Treasury Secretary Janet Yellen, Federal Reserve Chair Jerome Powell, FDIC Chairman Martin Gruenberg, and Acting Comptroller of the Currency Michael Hsu said in a statement that the “show of support” is “most welcome” and “demonstrates the resilience of the banking system.”