First Republic said in its latest earnings call that is exploring its strategic options, Wall Street code for searching for a white knight. The company noted that it is “taking actions to str…
First Republic Bank is in a fight for its survival.. Now, some analysts say a collapse of the bank is imminent.
First Republic said in its latest earnings call that is exploring its strategic options, Wall Street code for searching for a white knight. The company noted that it is “taking actions to strengthen its business and restructure its balance sheet.” First Republic CEO Michael Roffler attempted to assure investors in an earnings call Monday that the bank had enough liquidity to do that. The lender, he said, had twice the available liquidity of uninsured deposits .The second option, said Chiaverini, would be to try to sell some of its loans and securities at the same cost they bought them for. In exchange, the buyer would receive a preferred equity interest in the company.
It essentially comes down to impact analysis for banks: Pay a few billion dollars now or a few more billion dollars later. Either way, private equity could still swoop in and save the day, said Chiaverini. “Private equity would be a more likely buyer and participant in that sort of transaction,” he said. “They’re willing to take that sort of risk, whereas the big banks aren’t in the business of purchasing preferred equity in in other banks.”
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