First Republic Bank faced a second credit rating downgrade on Monday amid concerns that the troubled San Francisco lender needed another liquidity boost.
Another option floated by Dimon to keep First Republic solvent could involve the banks converting some or all of the $30 billion in deposits into a capital infusion, according to the Journal.
"This action by America’s largest banks reflects their confidence in First Republic and in banks of all sizes, and it demonstrates their overall commitment to helping banks serve their customers and communities," the group said in a joint statement. Federal regulators lauded the move, which came after several brutal and volatile days for First Republic shares.
There is mounting investor pressure on First Republic to take action. The lender saw its shares plummet about 47% during trading on Monday, leading losses among regional banks. The stock – which hovered around $115 per share on March 8 – fell to about $12 per share on Monday, the lowest level in a decade and down about 90% from one month ago.
S&P cut the bank's credit rating three notches to B+ from BB+ on Sunday and warned that another downgrade is possible.Customers yanked billions in deposits out of First Republic last week, prompting the bank to shore up its finances with additional funding from the Federal Reserve and JPMorgan. That first cash infusion gave the bank – which boasts $213 billion in assets – roughly $70 billion in unused liquidity.
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