- First Republic Bank said it's getting additional funding from the Federal Reserve and JPMorgan Chase.
- It's been a wild weekend for banks after SVB was shut down by regulators following a bank run.
First Republic Bank said Sunday it's getting additional funding from the Federal Reserve and JPMorgan Chase after the regional bank's share price slumped sharply amid Silicon Valley Bank's implosion.
This funding injects $70 billion of unused liquidity into San Francisco-based First Republic, the bank said in a Sunday filing.
"First Republic's capital and liquidity positions are very strong, and its capital remains well above the regulatory threshold for well-capitalized banks," Jim Herbert, the bank's executive chairman, and Mike Roffler, its CEO, said in the statement.
This additional funding excludes what the bank is eligible to receive under the new Bank Term Funding Program announced by the Federal Reserve on Sunday, First Republic added in its filing. The Bank Term Funding Program offers one-year loans to banks that pledge collateral. It is backstopped with $25 billion from the Treasury's Exchange Stabilization Fund, which has a net balance of $38 billion.
First Republic — which has more than 80 branches across the US — said in its latest 10-K filing that it held $176.4 billion in deposits at the end of 2022 of which 68%, or $119.5 billion, was uninsured.
The bank has been in damage control mode all weekend. In a regulatory filing on Friday, First Republic also told customers its liquidity position remained "very strong," in order to reassure them that their deposits were safe.
The development came after a wild weekend for banks — Silicon Valley Bank was shut down by California regulators Friday and taken over by the Federal Deposit Insurance Corporation (FDIC) after its share price collapsed following a failed $2.3 billion capital raise.
The events followed a slump in the share price of SVB Financial Group, the bank's parent company, after it said it was facing a $1.8 billion loss due to a $21 billion firesale of its bond portfolio.
This in turn spurred concerns among tech VCs and founders about Silicon Valley Bank's financial stability, triggering a bank run and sparking fears of contagion at regional banks such as First Republic.
First Republic Bank's shares fell 15% on Friday to $81.76 apiece. They slumped 65% in pre-market trade on Monday at 4.48 a.m. ET. The bank's stock is down 33% so far this year.