(Bloomberg) -- First Republic Bank shares slid during after-market trading amid concerns the crisis is far from over despite efforts of larger banks to stem tumult by agreeing to add $30 billion of deposits to the lender.

Share-price volatility continued after First Republic suspended its dividend payments and said it will focus on reducing its borrowings. The stock sank 17% after closing with a 10% gain amid record daily trading volume, as nearly a dozen larger banks banded together in a show of support for the beleaguered firm.

Spreading the risk of financial contagion to achieve “a false sense of confidence” in First Republic Bank is “bad policy”, Pershing Square’s Bill Ackman said in a tweet. The activist investor said moves by the largest US banks to deposit $30 billion with First Republic “raised more questions than it answers.” 

Thursday’s jump during regular trading hours made First Republic one of the top performers in the SPDR S&P Regional Banking ETF during regular hours. Among other top gainers was Western Alliance Bancorp,, which also reversed earlier declines to close higher by 14%.

“With the new funds being added at market rates, we expect earnings will be revised notably downward for the coming quarters,” Andrew Liesch, an analyst at Piper Sandler who holds a neutral rating on First Republic, wrote in a note. “We think this will serve as a headwind to the stock in the near-term, as much of the bank’s earning assets are tied to fixed rates and have below-market yields with limited repricing benefits on the horizon.”  

“This show of support by a group of large banks is most welcome, and demonstrates the resilience of the banking system,” said a joint statement by the Federal Reserve, Federal Deposit Insurance Corp., Office of the Comptroller of the Currency and the Department of the Treasury.

First Republic specializes in private banking and wealth management, and has tried to differentiate itself from Silicon Valley Bank. Investors across the banking space are on tenterhooks amid the upheaval in US regional lenders as well as the tumult surrounding Credit Suisse Group AG.

--With assistance from Maxwell Zeff and Naoto Hosoda.

(Updates with after-market price move in second paragraph, adds Bill Ackman tweet in third paragraph.)

©2023 Bloomberg L.P.