First Republic Bank (FRC) is the best-performing stock in the S&P 500 on indications several large banks are discussing another bailout of the struggling financial firm.
JPMorgan Chase CEO Jamie Dimon is reportedly in talks with other bank executives on new ways to prop up First Republic, which has been under pressure following the collapse of Silicon Valley Bank and Signature Bank.
Among the ideas said to be on the table are having the other banks invest directly into FRC, and converting into a capital infusion some or all of the $30 billion that JPMorgan Chase and 10 other banks deposited into FRC last week.
Customers of the San Francisco-based bank have withdrawn some $70 billion, or about half of the bank's total deposits as of the end of last year, since Silicon Valley Bank collapsed on March 10 after a run on deposits, which led to a federal takeover.
Behind Silicon Valley Bank and Signature Bank, FRC has the third-highest percentage of deposits that aren’t protected by FDIC insurance, or those exceeding $250,000. For this reason, the lender has been seen as the next potential casualty of the current banking crisis.
Shares of FRC are up 36%. Before today’s gains, shares had plunged 85% since those two banks collapsed, hitting a record low yesterday. Last week, S&P Global and Fitch downgraded FRC's bonds to junk, and S&P Global made a second downgrade Sunday, adding fuel to the selloff.