First Republic Bank turmoil pushes stock to plunge 95% this year as the lender seeks another lifeline from big US banks
This time, advisors are asking banks to purchase bonds from First Republic at above-market rates for a total loss of a few billion dollars. If the purchases aren't made, those banks may face. should First Republic fail, the report said.
Those banks are already facing FDIC fees stemming from the collapse and federal seizures of Silicon Valley Bank and Signature Bank last month. If the bond purchases are successful, advisors are optimistic others will come forward to bolster First Republic's capital and already have lined up potential buyers of new stock, sources told CNBC, which said spokespeople for First Republic and the FDIC declined to comment on its report.
The stock has tumbled 95% so far this year, with this week's sell-off set off after the bank said it lost. It was also under pressure following reports the bank was preparing to sell shares as part of a rescue plan. First Republic ran into trouble in part on a strategy to pull in wealthy clients by offering interest-only mortgages, where the borrower didn't have to pay back any principal for the first decade of the loan,The drop in deposits at regional banks like First Republic has fanned fears about their survival and worries that a
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