First RepublicBank Stock Skids 29.6%
First RepublicBank Corp.'s stock plunged Thursday, a day after the bank said it expects a $350-million fourth-quarter loss, which would be the largest reported by a Texas banking firm and among the biggest nationwide.
The bank’s stock fell $2 a share, or 29.6%, to close at $4.75 a share. The stock was the largest percentage loser among issues trading on the New York Stock Exchange for the day.
Bank executives point to problem real estate loans as contributing heavily to the quarterly loss. Despite a generally improving economic outlook, analysts agree that troubled real estate loans will continue to plague bank performance across the state.
“First RepublicBank’s announcement is not going to be the last one,” said Frank Anderson, a banking analyst with Eppler, Guerin & Turner in Dallas. “We don’t think the thing is going to turn around in January and all of a sudden it’s gone.”
While Anderson said real estate continues to burden banks, “the only thing we’re hopeful of is that there will be a slowing down of that (debt) growth.” He predicted that First RepublicBank’s debts will continue growing at least through the second quarter of 1988.
Bank officials said Wednesday that the expected fourth-quarter loss will bring First RepublicBank’s shortfall for the year to at least $634.1 million.
First RepublicBank also said it has suspended its annual $1-a-share stock dividend.