First Republic falls nearly 50% to record low after reporting massive deposit drop

Shares of First Republic fell sharply and hit a record low Tuesday, as investors questioned how the bank would stabilize itself after losing about 40% of its deposits during the first quarter.

First Republic’s stock fell more than 49% on Tuesday, extending its year-to-date losses beyond 90%. It closed at $8.10 per share, its lowest closing level on record.

The decline comes after the bank’s first-quarter earnings report, which showed that First Republic’s deposits shrank by 40.8% during the quarter as customers pulled out their money following the collapse of Silicon Valley Bank.

First Republic’s quarter-end deposits included a $30 billion infusion from 11 larger banks that were meant to stabilize the broader financial system. Excluding those funds, First Republic’s net outflows would have topped $100 billion.

The bank said in its press release that it was “pursuing strategic options” to reshape its balance sheet after the massive deposit flight. CNBC’s David Faber reported Tuesday that the next few days are crucial for First Republic’s future as other banks and federal officials looking for solutions to stabilize the regional bank.

One potential path would be for larger banks to buy some of First Republic’s assets and for the regional bank to then raise additional equity, Faber reported, but it is unclear if other banks will be willing to do so. There will not be a full sale to another bank, Faber reported.

Bloomberg News reported Tuesday that First Republic was looking to sell up to $100 billion of loans and securities to restructure its balance sheet.