Shares of First Republic Bank plunged by nearly 50% Friday, ratcheting pressure on the troubled bank and adding to its mounting market-confidence woes.

As of noon ET, the stock was trading at $3.72, down 40% from Thursday’s close of $6.19, after having dropped as low a $3 at one point Friday. Before the Silicon Valley Bank collapse in early March, First Republic Bank’s shares were trading at $115, so the current price represents a massive drop. It is also trading significantly lower than its 52-week high of $171.09.

After the failure of tech-friendly Silicon Valley Bank, an open question was whether other banks with related clientele would suffer a similar fate. While SVB was busy imploding, concern rose that First Republic Bank might see a similar flight of deposits, leading to its own failure.

Those worries accelerated this week after the bank reported its first-quarter earnings, revealing the extent to which its deposit base had contracted.

In its earnings report, First Republic shared that it closed last year (a pre-crisis figure) with $176.4 billion worth of deposits. That figure fell to just $104.5 million by the end of the first quarter. Included in that figure, however, was $30 billion worth of deposits from other banks, blunting somewhat the flight of customer capital from the financial institution.

Since that report earlier in the week, several things have happened.

Reuters reported Friday that officials from the American government were working with industry participants in hopes of “putting together a lifeline for the troubled lender.” Later, CNBC reported that optimism for an industry-led lifeline was fading, and that it was more likely that the “Federal Deposit Insurance Corporation to take it into receivership.”

That’s not so good for the bank, or its customers. While during SVB’s time in the barrel the U.S. government ensured that all of its deposits would be secure and accessible, there is no clear indication yet that that is new de facto policy, or that First Republic customers will enjoy similar protections.

If you’re asking yourself why any customer of the bank would therefore choose to keep money at First Republic given the struggling lifeline talks, possible government intervention, and murky protections for account balances over the quarter million dollar mark, the answer is that they probably won’t. In turn, accelerating deposit flight will only worsen the situation, as we saw with SVB.

Not to be a banking doomer, but this goose appears pretty darn cooked.



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