From Wall Street On Parade, April 19:
When JPMorgan Chase, Bank of America, Citigroup and Wells Fargo announced on March 16 that they were plunking $5 billion each of their corporate funds as uninsured deposits into the sinking First Republic Bank, they tied their corporate brand and their own bank’s image of safety and soundness to that of a teetering lender.
Here’s what happened in short order thereafter:
First Republic Bank’s stock closed on Thursday, March 16, the date of the announcement of the big infusion of money during market hours, at $34.27. On Friday, March 17, First Republic’s stock closed at $23.03. On Monday, March 20, the stock closed at $12.18. What the mega banks had hoped would be a vote of confidence in First Republic Bank was viewed by the composite wisdom of the markets as an act of desperation and the market savaged the stock price of First Republic by 64 percent in two trading sessions. (Currently, First Republic’s stock remains down 89.6 percent year-to-date.)
On Sunday, March 19, S&P Global downgraded the credit rating of First Republic Bank deeper into junk territory and kept the bank on negative credit watch.
Also on Sunday, March 19, the Wall Street Journal reported that First Republic Bank customers “have pulled some $70 billion in deposits.”....
....MUCH MORE
