Shares of First Republic Bank (NYSE:FRC) are spiraling downward, with shares plummeting another 30% as the bank desperately tries to persuade other financial institutions to buy $50-$100 billion of its long-dated and mortgage securities to steady its faltering balance sheet. With a staggering $72 billion deposit loss in just three months, the bank’s stock has plummeted 93% year-to-date. As the crisis unfolds, government officials are unwilling to intervene, leaving First Republic to fend for itself.
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Trying to bounce back, First Republic has announced plans to slash its workforce by up to 25% and downsize its balance sheet. As depositors abandon ship for larger banks and stock value sinks 95% in the past year, the San Francisco-based bank faces a rough journey ahead. Still, analysts don’t foresee First Republic’s troubles spilling over to other regional banks. With big banks winning over Wall Street thanks to their diverse clientele and revenue streams, it seems that, for now, size really does matter.
Overall, Wall Street has a wait-and-see approach when it comes to FRC stock, assigning it an overall Hold rating. Nonetheless, the average price target remains relatively high at $56.50 per share, implying over 1,000% upside potential.
