First Republic Bank Said to be Exploring Sales Potential

First Republic Bank, the mid-sized lender whose shares plunged this week amid the wider banking turmoil, is exploring extreme measures including a possible sale, said a person familiar with the matter, suggesting the bank's moves over the weekend to strengthen its balance sheet may not. was enough to calm investors' worries.

The bank is considering alternatives, such as cash infusions, said the person who spoke on condition of anonymity because the process is confidential. There is no definitive agreement, the person added.

A First Republic spokesperson did not immediately respond to a request for comment. Bloomberg News before reported that First Republic is considering options including a sale.

Despite its efforts in recent days to shore up its finances, First Republic, a San Francisco-based lender known for its affluent customer base, remains a cause for concern because it shares much in common with Silicon Valley Bank, the bank seized by federal regulators. last week. The collapse of Silicon Valley Bank was partly due to excess amounts of unsecured deposits and investments in long-term bonds that had fallen in value.

First Republic shares have plunged about 70 percent over the past five days, giving it a market value of $5.7 billion. The bank's credit rating was downgraded to junk by S&P Global Ratings on Tuesday.

Another US regional bank that has been battling market turmoil faced renewed pressure on Thursday. PacWest Bancorp shares were down more than 10 percent at the market open, and East West Bancorp was down 5 percent. By contrast, the largest banks, such as JPMorgan Chase and Bank of America, posted smaller declines.

On Sunday, First Republic announced that it had gained access to the neighborhood $70 billion in additional liquidity from the Federal Reserve and JPMorgan Chase. That comes on top of the funding he was able to access as part of a government emergency program created to stem the fallout from the Silicon Valley Bank fiasco.

The bank has been trying to convince investors and customers of its steadfastness.

“First Republic's capitalization and liquidity position are very strong, and its capital remains well above regulatory thresholds for well-capitalized banks,” the bank said in a statement on Sunday.

On Monday, the company chairman, James H. Herbert II, to CNBC in an off-camera interview that not many depositors have fled.

But it is not clear whether concerns over regional bank stability have been assuaged by the federal government's action.