A First Republic Bank branch in New York, US, on Friday, March 10, 2023.
Jeenah Moon | Bloomberg | Getty Images
Shares of First Republic were up sharply in early Tuesday trading as concern over the state of the regional bank appeared to ease after a day of heavy selling.
The stock traded 20% higher in the premarket and was one of the best-performing names in the SPDR S&P Regional Banking ETF (KRE) — which was up 5%. Shares of other regional banks also surged before the bell. PacWest jumped nearly 30%, KeyCorp gained 15%, and Zions Bancorp advanced 10%.
Charles Schwab was also rebounding, gaining 8% in premarket trading after dropping nearly 12% on Monday.
Those moves come after regional banks fell sharply on Monday, even after U.S. regulators took extraordinary measures to backstop all depositors in the now-failed Silicon Valley Bank. The KRE suffered its biggest one-day loss since March 2020, losing 12.3%.
First Republic led the way lower, losing 61.8%. Executive Chairman Jim Herbert told CNBC’s Jim Cramer that the bank was not seeing big outflows and was operating as usual. The bank also announced Sunday it received additional liquidity from JPMorgan and the Federal Reserve.
In addition the backstopping SVB’s deposits, federal regulators also announced efforts on Sunday to stabilize the wider banking system. One of those is the Fed’s Bank Term Lending Program, which will allow banks to exchange certain high-quality assets for cash without booking mark-to-market losses.