First Republic Bank stock FRC continued its steep drop on Wednesday after losing nearly half its value in the previous session, while PacWest Bancorp PACW is rallying after it disclosed a rise in deposits with its first-quarter results. First Republic fell 17% to $6.62 a share, a fresh all-time low, on heavy volume of 2 million shares, while PacWest moved up by 10.7%. The Financial Times and other publications reported efforts behind the scenes to come up with a solution to backstop First Republic again after injecting $30 billion in deposits into the lender last month. CNBC reported that banks are mulling a bond purchase from First Republic at a loss of a few billion dollars to keep the bank afloat. If First Republic fails, banks would have to repay the $30 billion in deposits that would be covered by the Federal Deposit Insurance Corp. First Republic faced doubts about its viability on Tuesday as analysts sifted through a difficult first-quarter update.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.