Top executives at embattled lender First Republic Bank raised nearly $12 million by selling shares just before chaos unfolded in the banking sector – including sales that took place as recently as this month. this.
Stock sales are under scrutiny as the country’s biggest banks throw in a whopping $30 billion lifeline to prevent the collapse of the First Republic following an exodus massive depositors this week.
On Friday, shares of the bank have plunged nearly 80% since February.
In total, company executives made about $11.8 million in sales this year and sold shares at average prices of just under $130 each. The stock is currently trading at less than $27 per share.
The windfall included the sales of First Republic Executive Chairman James Herbert II, who has raked in $4.5 million from stock sales year-to-date, The Wall Street Journal reported Thursday, citing government documents.
Herbert’s sales came in two tranches in January and February and were worth 7% and 5% of his total stake in the bank, respectively, according to filings.
Robert Thornton, chairman of First Republic Private Wealth Management, sold 73% of his stake in the bank on Jan. 18 and earned $3.5 million on the transaction, according to the report.
CEO Mark Roffler sold nearly $1 million worth of stock in January, after selling $1.3 million worth of stock last November.
David Lichtman, First Republic’s chief credit officer, reportedly made $2.5 million in three stock sales that all took place this year.
Its most recent sale was on March 6, just two days before Silicon Valley Bank revealed it suffered a $1.8 billion loss in a fire sale of its bond holdings due to rising interest rates. This disclosure led to the failure of SVB and the resulting problems for regional banks.
Lichtman and his wife had previously sold $2.5 million worth of stock in deals that took place late last year, according to filings.
A bank spokesperson told the Journal that First Republic and its executives declined to comment on the sales.
A spokesperson for Herbert said the stock sales “were in line with his annual estate planning and philanthropy, with more than a fifth of profits going to charity,” according to the Journal.
The Post has contacted the First Republic for comment.
Unlike most publicly traded companies, First Republic is not required to report sales of its executives’ stock to SEC regulators. The bank is one of the few to be exempted due to a quirk related to the Securities Act of 1933, which exempted certain institutions.
Instead, First Republic submits the reports to the Federal Deposit Insurance Corp., which then posts them to an online database. The bank also publishes the information on its website.
The First Republic has so far avoided the kind of federal intervention that has taken place at SVB and Signature Bank of New York – which have been placed in receivership and all of whose deposits were guaranteed by the FDIC.
Earlier this week, a report said the SEC and Justice Department are already investigating the circumstances that led to SVB’s downfall – as well as recent stock sales by its top executives.