STORY: MICHAEL ROFFLER, EX-CEO OF FIRST REPUBLIC BANK: “First Republic was contaminated overnight by the contagion that spread from the unprecedented failures of those banks….”
In his first public statements since his bank was seized by regulators, Michael Roffler, the former CEO of First Republic Bank, blamed his bank's collapse on a panic ignited by the failures of two other lenders: Silicon Valley Bank and Signature Bank.
“Everything changed overnight. On the morning of March 10, when Silicon Valley collapsed, a run on First Republic began. [FLASH] Over the course of the ensuing weeks, over 100 billion in deposits were withdrawn from the bank.”
Appearing before a House Financial Services subcommittee on Wednesday, Roffler said industry-wide alarm over the soundness of regional banks led to a run at First Republic that even a $30 billion lifeline from other major banks could not stem.
“Investor and depositor confidence never recovered.”
Banking regulators shut First Republic on May 1 and sold its assets to JPMorgan Chase in a deal that resolved the largest U.S. bank failure since the 2008 financial crisis.
Since then, regional lenders have seen their stock valuations battered by worries of a broader crisis.
But on Wednesday, one regional bank helped allay those fears – at least for now.
Western Alliance Bancorp reported that its deposits grew by $2 billion over roughly the past two months – sending its shares up 15% and lifting other regional bank shares with it.
PacWest Bancorp – whose stock has seesawed this week - soared more than 20%. Comerica and Zions also rose by double-digit percentages.
Deposit flows at U.S. banks, which investors have been pouring through for signs of distress, climbed to more than $17 trillion in the week ended May 3, according to data from the Federal Reserve - marking the first increase in four weeks.