The National Observer | Daily Edition | April 27 | Paths forward for First Republic

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Even after a massive deposit infusion from other banking institutions in March,?First Republic Bank may not be long for this world, reports Mark Calvey of the?San Francisco Business Times.

The bank "needs to pull off the mother of all pivots to survive," Timothy Coffey, an analyst with Janney Montgomery Scott, told clients Tuesday. His comments came after First Republic's earnings report came in worse than expected, revealing customers had pulled $100 billion in deposits after the failure of Silicon Valley Bank in March.

While the bank declined to comment on which options it's pursuing, Calvey laid out three ways the situation might progress.

Sell all or part of the bank:?If a complete sale without government help were an option, it would probably already be done. A deal is made harder by billions of dollars in paper losses on First Republic's portfolio of loans and securities. First Republic is already exploring the sale of $50 billion to $100 billion of its hardest-hit mortgages and securities as part of a broader rescue effort, according to a Bloomberg report.

Raise fresh capital:?Prospects for raising fresh capital on Wall Street could improve dramatically if First Republic can strengthen its balance sheet by selling off assets. Some have speculated that the $30 billion in deposits placed with First Republic last month by 11 of the nation's largest banks could shift to an equity investment in some form, though getting those institutions on-board may take regulatory arm-twisting.

Wait for the FDIC:?The Federal Deposit Insurance Corp. could seize the bank and facilitate a sale with government assistance. In that scenario, First Republic would suffer the same fate as Silicon Valley Bank and Signature Bank, wiping out shareholders but safeguarding depositors. Considering the turbulence that rippled through the banking system after those two closures, it is likely the FDIC would only take this step if it felt the other two options were no longer viable.

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This newsletter was written by Joshua Mann, who you can reach with comments or questions at [email protected].