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First Republic Bank Shares Fluctuate Amid Capital Infusion Uncertainty

Shares of First Republic Bank (FRC.N) experienced volatility in Wednesday morning's trading session. The regional lender faced difficulties raising capital, leading to concerns that it may need to downsize or seek government support.

First Republic Bank
First Republic Bank

Major Banks and Firms Hesitant to Invest

Major banks and private equity firms have been reluctant to infuse capital into the First Republic, fearing losses on the bank's loan book and investment portfolio due to rising interest rates.

First Republic Bank Shares Experience Turbulence

The bank's shares fluctuated between gains and losses, increasing by 3.6% at 10:31 a.m. ET. However, this month, the shares have lost about 87% of their value.

Downsizing and Selling Business Parts Considered

Reuters reported Tuesday that First Republic is exploring options to downsize and sell parts of its business, including portions of its loan book, to raise cash and reduce costs.

First Republic "In the Eye of the Storm"

Paul Nolte, senior wealth adviser and market strategist at Murphy & Sylvest commented that First Republic is in the process of resolving its issues, but it remains "in the eye of the storm."

First Republic Bank
First Republic Bank

$30 Billion Rescue Deal Proposed

Earlier this month, top power brokers such as U.S. Treasury Secretary Janet Yellen, Federal Reserve Chair Jerome Powell, and JPMorgan (JPM.N) CEO Jamie Dimon proposed an unprecedented $30 billion rescue deal to address concerns about First Republic's financial health.

U.S. Authorities Reassure Public on Banking System

U.S. authorities have sought to reassure Americans that the overall banking system is sound and that regulators are committed to preventing the collapse of another regional lender following Silicon Valley Bank (SIVB.O) and Signature Bank (SBNY.O).

First Republic's Unique Situation Among Banks

Nolte added that First Republic's situation is unique, with other banks negotiating to take over deposits or inject more money into the bank. As a result, it is difficult to say whether the banking crisis is truly over.