Eleven American banks made an announcement on Thursday that they will deposit as much as $30 billion into First Republic Bank, in an effort to boost confidence in the banking system.
According to a press statement, Bank of America, Wells Fargo, Citigroup, and JPMorgan Chase will all put in roughly $5 billion, while Goldman Sachs and Morgan Stanley will each put in around $2.5 billion. Truist, PNC, US Bancorp, State Street, and Bank of New York Mellon will each deposit around $1 billion.
The news comes after a rough few days for First Republic’s shares, which was triggered by the failure of Silicon Valley Bank last Friday and Signature Bank over the weekend. Each of those banks, as well as First Republic, had a high amount of uninsured deposits, raising concerns that customers would withdraw their funds.
This move “reflects the confidence of America’s largest banks in First Republic and in banks of all sizes, and demonstrates their overall commitment to helping banks serve their customers and communities,” the group of banking institutions said in a joint statement.
According to a First Republic statement, the deposits must remain in the bank for at least 120 days.
On Thursday, shares of regional banks initially dropped but then rose after the report, pushing the troubled lender’s shares up 10%, with all three main US indexes closing higher.