First Republic plunges on expectation of seizure by FDIC

First Republic Bank shares fell as much as 54 per cent in extended New York trading on speculation that it would be seized by regulators, as regional US lenders are pressured by deposit drains and weakening investments.

Regulators were poised to place the San Francisco-based lender into receivership, Reuters reported late Friday, citing a person it didn’t identify. The move was imminent after the Federal Deposit Insurance Corp. and other regulators were unable to engineer a rescue, Reuters said.

The shares fell as low as US$1.62 after ending regular trading at US$3.51. They had lost more than 97 per cent this year as of the market close.

First Republic, which specializes in private banking, has been pressured as the Federal Reserve boosted interest rates, which hurt the value of bonds and loans on the bank’s books. Meanwhile, depositors fled.