First Republic Bank Stock Crashes After Hours On Heels Of $30B Deposit Deal, Dividend Suspension
First Republic Bank FRC shares are trading lower in Thursday's after-hours session after the bank announced a deal for $30 billion in deposits from major banks and said it has decided to suspend its dividend.
What To Know: First Republic is set toreceive uninsured deposits totaling$30 billionfrom several banks including Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley, Bank of New York Mellon, PNC Bank, State Street, Truistand U.S. Bank.
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"Their collective support strengthens our liquidity position, reflects the ongoing quality of our business, and is a vote of confidence for First Republic and the entire U.S. banking system," said Jim Herbert, founder and executive chairman, and president and CEO Mike Roffler in a joint statement.
First Republic noted that it previously obtained additional liquidity and has since drawn on its borrowing capacity due to recent developments in the banking industry.
As of March 15, First Republic had a cash position of approximately $34 billion, which doesn't include the aforementioned $30 billion in uninsured deposits from various banks.
Daily deposit outflows have slowed considerably in recent days and the bank is now focused on reducing its borrowings and evaluating its balance sheet. As a result, First Republic said it will suspend its dividend.
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FRC Price Action: First Republic shares were down 23.5% after hours at $26.30 at time of publication, according toBenzinga Pro.
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