Shares of First Republic Bank FRC continued lower after hours on Friday, sinking 37% to $2.21 on continued weakness following an earlier report suggesting the bank will be placed under U.S. Federal Deposit Insurance Corporation receivership.
According to Reuters, the FDIC’s pending decision comes as the troubled regional lender’s financial position continues to deteriorate, leaving no more time for a private sector-led rescue.
An anonymous source, who spoke to Reuters, revealed on Friday that the U.S. banking regulator determined that First Republic’s situation had worsened to a point where immediate action was necessary. The FDIC’s anticipated intervention indicates the regulator’s growing concern over the stability of the bank and its ability to meet its financial obligations.
This has dulled hopes of a rescue for the bank, which is down over 97% year to date.
Shares of the embattled lender fell earlier in the week after it reported a decline in deposits and revenue for the first quarter and said it would not take questions on its conference call.
First Republic’s stock was trading at $122.50 on March 1 before the price collapsed, and had previously reached a 52-week high of $171.09 in August 2022.