First Republic Bank shares slammed in Silicon Valley Bank fallout

The bank has been investing heavily in its wealth management group for more than a decade.

The share price of First Republic Bank, which has been investing heavily in its wealth management group for over a decade, took a tumble Monday, falling almost 63% shortly after noon and getting close to $31. On Friday, shares closed trading at $81.76.

Caught in the backdraft from the failure of Silicon Valley Bank, regional banks across the United States on Monday saw their shares struggle. The iShares U.S. Regional Banks ETF (IAT) was trading at $35.55 close to 12:30 p.m. Monday, which was a new 52-week low and marked a decline of 14%.

First Republic Bank is an outlier of sorts among regional banks because it has invested so prominently in its U.S. wealth management operations. Wealth management assets at First Republic totaled $271.2 billion at the end of last year, compared to $16.6 billion in assets at the end of 2010, according to prior InvestmentNews reporting.

Over the past decade, the bank has been a significant destination for wirehouse advisers looking to leave Wall Street for a smaller firm while getting paid a significant bonus to do so. First Republic has been known to pay on the high end of bonuses for financial advisors in regions it is looking to expand.

First Republic Bank was part of Merrill Lynch when Bank of America Corp. took over the firm during the credit crisis in 2010; Bank of America later sold First Republic to a group of private investors, who then took it public.

In a statement Sunday, the bank said it had access to additional liquidity from the Federal Reserve Bank and JPMorgan Chase & Co.

“First Republic’s capital and liquidity positions are very strong, and its capital remains well above the regulatory threshold for well-capitalized banks,” Jim Herbert, founder and executive chairman, and Mike Roffler, CEO and president of First Republic Bank, said in a joint statement. “As we have done since 1985, we operate with an emphasis on safety and stability at all times, while maintaining a well-diversified deposit base.”

“First Republic continues to fund loans, process transactions and fully serve the needs of clients by delivering exceptional service,” the two executives added.