A group of financial institutions have agreed to deposit $30 billion with First Republic Bank in what is meant to be a sign of confidence in the banking system, the banks announced Thursday afternoon.
Bank of America, Wells Fargo, Citigroup and JPMorgan Chase will contribute about $5 billion each, while Goldman Sachs and Morgan Stanley will deposit about $2.5 billion, the banks said in a press release. Truist, PNC, US Bancorp, State Street and Bank of New York Mellon will each deposit around $1 billion.
“This action by America’s largest banks reflects their confidence in the First Republic and in banks of all sizes, and demonstrates their overall commitment to helping banks serve their customers and communities,” the group said in a statement.
Deposits would be required to stay at the First Republic for at least 120 days, sources told CNBC’s David Faber. Shares of regional banks initially fell on Thursday but reversed after reports from Faber and others about the development of the filing plan.
The news comes after shares of First Republic have been battered in recent days, sparked by the collapse of Silicon Valley Bank last Friday and Signature Bank over the weekend. Both of these banks had a high number of uninsured deposits, as did First Republic, which raised concerns that customers would withdraw their money. New deposits from major banks are not insured.
First Republic’s stock, which closed at $115 per share on March 8, traded below $20 at one point THURSDAY. The stock was stopped several times during the session and hit $40 per share at one point, up more than 20% on the day.