First Republic Bank drops 50%

[Paradox]

1st Republic is taking quite a hit today. If you have a fixed low interest line of credit, might be a good idea to take it all now..

 

[Paradox]

As of a minute ago, stock is down 73%..

 

[EmpirE231]

Not to worry.... the government will be along shortly to help.

 

[monkeyswrench]

Not to worry.... the government will be along shortly to help.

Seems I heard that happen before...

 

[jetboatperformance]

So Imagine if you will what would happen if a bunch of these "institutions" tanked in a "CASHLESS" society

 

[J DUNN]

Just had a $200k+ millwork project for Signature Bank cancel. Fortunately only ordered materials, could have been much worse.

 

[J DUNN]

So Imagine if you will what would happen if a bunch of these "institutions" tanked in a "CASHLESS" society

The way I see it, that is what is happening right? All of the transfers and company's pulling their funds are just pulling digital representations of their currency, there is no cash that goes from one bank to the next, correct?

 

[jetboatperformance]

The way I see it, that is what is happening right? All of the transfers and company's pulling their funds are just pulling digital representations of their currency, there is no cash that goes from one bank to the next, correct?

Scary when your in business , majority of my sales are , CC, Debit ,Zelle, wire transfers etc all Eletronic money" any job over 1k requires partial advance payment

 

[Badchoices03]

Just had a $200k+ millwork project for Signature Bank cancel. Fortunately only ordered materials, could have been much worse.

Sorry to hear that, I also just received this email in regards to a project I was working on, it wasnt nearly as large as yours though

 

[monkeyswrench]

@Badchoices03 and @J DUNN , were these projects being done for the bank itself, or for projects being financed by the bank?

During the last..."kerfuffle"...I was trying too hard to stay afloat to know or pay attention to what happened. All I knew was people didn't have money to pay me...never really considered where their money came from.

 

[LazyLavey]

Is this the beginning?

 

[Canuck 1]

Is this the beginning?

Just the warm up

 

[monkeyswrench]

Is this the beginning?

Churchill...
Perhaps this is the end of the beginning?

We all get to wait and see how the next few weeks and months go.

 

[Wheeler]

Is this the beginning?

Hold onto your hats!

 

[LuauLounge]

During the 2008 run, an acquaintance was a developer, 50yr company, doing well until Lehman shut down. All of his projects were financed through Lehman. One day all is good, the next turns to shit. Nothing coming in, nothing going out. He survived, but several homes, jet, yacht didn't.
One of his buddies had a number of projects going, a handful financed with Lehman. Large operation, only issue was Lehman wanted a $250M personal guarantee. He gave it to them, all was good until Lehman collapsed. So, during the hearings, the Bankruptcy Judge ruled that Lehman was overstepping with a requirement for a PG, based on when the project was funded, it met all the underwriting requirements. Years later, they end up buying a few of the projects back for 10 cents on the dollar.

 

[Badchoices03]

@Badchoices03 and @J DUNN , were these projects being done for the bank itself, or for projects being financed by the bank?

During the last..."kerfuffle"...I was trying too hard to stay afloat to know or pay attention to what happened. All I knew was people didn't have money to pay me...never really considered where their money came from.

Mine was for the bank itself, it was for a new branch they were doing in Newport Beach.

 

[J DUNN]

@Badchoices03 and @J DUNN , were these projects being done for the bank itself, or for projects being financed by the bank?

During the last..."kerfuffle"...I was trying too hard to stay afloat to know or pay attention to what happened. All I knew was people didn't have money to pay me...never really considered where their money came from.

Mine was for the bank itself.

 

[DrunkenSailor]

All quiet this morning market is correcting.

 

[EmpirE231]

All quiet this morning market is correcting.

Correction; the government is correcting.

 

[PaPaG]

First Republic in trouble again, 50% down yesterday another 20% down today. Who knows if they will be saved again, 20 billion in non protected assets is helping cause another run. I personally do NOT agree with the TO BIG TO FAIL ideology, if a business cannot properly be run or run in a way to cause such a loss in confidence or investments they deserve to fail. JMO.

 

[traquer]

First Republic in trouble again, 50% down yesterday another 20% down today. Who knows if they will be saved again, 20 billion in non protected assets is helping cause another run. I personally do NOT agree with the TO BIG TO FAIL ideology, if a business cannot properly be run or run in a way to cause such a loss in confidence or investments they deserve to fail. JMO.

It's a bit above my paygrade, but either way you look at it it's not good lol.

 

[Paradox]

It wouldn’t surprise me if the big banks stepped in to save First Republic. They are on the hook if the FDIC has to step in. Banks collectively cover FDIC costs. It would be cheaper to work it out before that happens.

First Republic stock has now dipped into the $5 a share range. it was at $150 earlier this year.

 

[PaPaG]

It was so bad this AM I was tempted to throw a few K at it and see what it did for a quick bounce. Last round it spiked around 28% after being saved, It bounced back more than that this time in a matter of minutes with no news about being saved yet, I wish I grabbed a crap load once I saw it under 4.80 this am, it is up to 6.35 now. I would have been in and out....no way would I stay in it for more than a very short span. Oh well, "Shoulda, Woulda, Coulda" saying comes to mind.

 

[ChumpChange]

It wouldn’t surprise me if the big banks stepped in to save First Republic. They are on the hook if the FDIC has to step in. Banks collectively cover FDIC costs. It would be cheaper to work it out before that happens.

First Republic stock has now dipped into the $5 a share range. it was at $150 earlier this year.

Why save the bank when you can get a FDIC loss share agreement by letting them fail first?

 

[hallett21]

Why save the bank when you can get a FDIC loss share agreement by letting them fail first?

And wtf would you know

 

[Paradox]

Why save the bank when you can get a FDIC loss share agreement by letting them fail first?

Had to look it up.

It appears even under this senerio, banks still cover the losses.

im not too savy on the intricacies of banks going South. I suspect the fall out can get extremely complicated. That said, you would think that whoever ends up holding the bag would act in their best interest regardless of what mechanism is utilized.

 

[EmpirE231]

50% yesterday, another 25% today... it'll be interesting to see how it plays out. Fire up the FDIC printing press

 

[ChumpChange]

Had to look it up.

It appears even under this senerio, banks still cover the losses.

im not too savy on the intricacies of banks going South. I suspect the fall out can get extremely complicated. That said, you would think that whoever ends up holding the bag would act in their best interest regardless of what mechanism is utilized.

View attachment 1223163

“Banks” but not “bank”.

Look at each of the deals that First Citizens got with SVB and Flagstar got with Signature. Made both those bank stocks Pop on announcement. Get the assets without a lot of the risk.

Worked for a couple banks that participated in loss share agreements after the last debacle and another bank that bought the asset of banks for ridiculous discounts by not taking loss share agreements but having the resources to try and work through the portfolio and make it good.

There is a lot that goes into it. A LOT!

 

[white tortilla]

It was so bad this AM I was tempted to throw a few K at it and see what it did for a quick bounce. Last round it spiked around 28% after being saved, It bounced back more than that this time in a matter of minutes with no news about being saved yet, I wish I grabbed a crap load once I saw it under 4.80 this am, it is up to 6.35 now. I would have been in and out....no way would I stay in it for more than a very short span. Oh well, "Shoulda, Woulda, Coulda" saying comes to mind.

I threw $200 at it yesterday at $10 a share. I was about 24 hours too early

 

[hallett21]

I threw $200 at it yesterday at $10 a share. I was about 24 hours too early

Now go $400 lol

 

[Singleton]

Only lost 40% of its depositors in the last quarter.
When 40% of the incoming money goes elsewhere you have a customer confidence problem and leadership is not doing nothing to solve that.

 

[Paradox]

I bit before the close. Ended up with 200 shares at $5.19. Complete crap shot but, its a minor position. Guess we’ll see what happens.

 

[rivrrts429]

Only lost 40% of its depositors in the last quarter.
When 40% of the incoming money goes elsewhere you have a customer confidence problem and leadership is not doing nothing to solve that.

Republic was unique in the fact that their target demographic were some of the wealthiest. Lots of low return loans but dependable.

When your depositors are largely exceeding the FDIC limits in a big way you’re prone to consumer confidence falling quick if somebody senses the health of the bank is stressed. I imagine with the other banks recently falling short Republics depositors moved their money out quick.

 

[Paradox]

Republic was unique in the fact that their target demographic were some of the wealthiest. Lots of low return loans but dependable.

When your depositors are largely exceeding the FDIC limits in a big way you’re prone to consumer confidence falling quick if somebody senses the health of the bank is stressed. I imagine with the other banks recently falling short Republics depositors moved their money out quick.

No way do I even remotely resemble wealthy but, I’ve got an account there. They lured me in with a fixed rate 2.75% unsecured LOC for $65k. When things started going sideways, I pulled the entire sum and put it in CDs. Much of it at the same bank. It’s currently earning 4.35% which will soon be 4.95%. The LOC goes into a fully amortized status in about 8 months and will be fixed for 7 years. Essentially I’m making a spread on their money and it’s fully FDIC insured. No risk. The higher the rates go, the better I do with it.

Not big money but kind of fun to play with. It’s not often you get one over on a bank.

 

[rivrrts429]

No way do I even remotely resemble wealthy but, I’ve got an account there. They lured me in with a fixed rate 2.75% unsecured LOC for $65k. When things started going sideways, I pulled the entire sum and put it in CDs. Much of it at the same bank. It’s currently earning 4.35% which will soon be 4.95%. The LOC goes into a fully amortized status in about 8 months and will be fixed for 7 years. Essentially I’m making a spread on their money and it’s fully FDIC insured. No risk. The higher the rates go, the better I do with it.

Not big money but kind of fun to play with. It’s not often you get one over on a bank.

This is likely how they sorta find themselves in the position that they do today. Nicely done on making the best of a potentially bad situation. To your point it’s not often a win for the good guys

 

[hallett21]

Down almost 50% again this morning.

 

[EmpirE231]

another bank failure.....

 

[Paradox]

Sold my minor position yesterday for a $250 profit..

 

[DrunkenSailor]

It's official FRC is now in receivership.

 

[ChumpChange]

It's official FRC is now in receivership.

Who’s reporting that?

 

[DrunkenSailor]

Who’s reporting that?

FDIC prepares to place First Republic under receivership

News of the move came as the Fed and FDIC detailed their supervisory lapses before deposit runs caused the collapse of Silicon Valley Bank and Signature Bank in March.

www.reuters.com

I am seeing it in a few different places

 

[ChumpChange]

FDIC prepares to place First Republic under receivership

News of the move came as the Fed and FDIC detailed their supervisory lapses before deposit runs caused the collapse of Silicon Valley Bank and Signature Bank in March.

www.reuters.com

I am seeing it in a few different places

Your use of the words now and official kind of threw me off as if it’s happened. Not saying it’s not going to happen but I know it hasn’t happened yet. They’ll wait til the bank closes this evening. They may be on their way but I don’t think the black cars are parked outside just yet. They’re still in traffic on the way there.

 

[hallett21]

Your use of the words now and official kind of threw me off as if it’s happened. Not saying it’s not going to happen but I know it hasn’t happened yet. They’ll wait til the bank closes this evening. They may be on their way but I don’t think the black cars are parked outside just yet. They’re still in traffic on the way there.

 

[DrunkenSailor]

From what I'm hearing the black cars are already there.

 

[ChumpChange]

View attachment 1224033

Trust me I’ve been watching it all day. Just seemed a little bit early in the day for them to have officially been seized.

 

[ChumpChange]

From what I'm hearing the black cars are already there.

Just text my buddy to look out the window and he doesn’t see them.

 

[DrunkenSailor]

Tell him to check again lol...

 

[DrunkenSailor]

Just text my buddy to look out the window and he doesn’t see them.

I shouldn't have added the lol. I know people there too. It's not funny. Hopefully they get a miracle sale over the weekend but nobody wants the long term low yield debt.

 

[bowtiejunkie]

Article in WSJ today that even for free, buying First Republic would likely require $30B in capital. According to the quoted source.

Being fresh through a FDIC receivership, it’s a pretty disruptive experience. Definitely not a preferred path, but there’s only a select few banks domestically that could even buy First Republic and they haven’t stepped in at this stage.

 

[Paradox]

Been watching it a lot today as well. Nothing definitive yet as far as I can see. Media certainly gives the appearance that it’s all but a done deal.

Stock is trading in the $2 range after hours. Takes balls of steel to buy in big at this point.