First Republic Bank is a fascinating case study. It's a bank that no longer exists, swallowed by the maelstrom of the 2023 banking crisis and ultimately absorbed by JPMorgan Chase. Yet, on the financial markets, its spectral presence lingers. Its stock, now trading on the over-the-counter market (OTCPK), still flickers with life, albeit a faint one.

What's truly intriguing, however, is the data. While First Republic Bank officially ceased operations on May 1, 2023, financial data continues to be reported, including earnings for subsequent quarters. For example, data indicates earnings per share (EPS) of 1.43 for the quarter ending September 30, 2023. This begs the question: how can a defunct bank generate earnings?

The simple answer is, it can't. These "earnings" are likely the result of ongoing financial processes, such as the unwinding of assets, resolution of liabilities, and potential tax adjustments. They are echoes of the bank's former life, reverberating through the financial system.

However, the intriguing element lies in the EPS estimate for the same quarter: a dismal -1.46. This negative estimate suggests an anticipation of losses, which, given the bank's demise, would be entirely logical. The substantial difference between the actual EPS and the estimate (a difference of 2.89, representing a surprise percentage of 197.94%) paints a picture of a market struggling to grasp the financial afterlife of a dead bank. FRCB Overview on OTC Markets

This raises a tantalizing hypothesis: are we witnessing the birth of "ghost earnings"? Are these post-mortem financial fluctuations simply artifacts of accounting procedures, or could they be indicative of deeper, less tangible forces at play?

Consider the dramatic rise in FRCB's stock price from a 52-week low of 0.001 to a high of 0.95. While the current price hovers around a modest 0.17, the sheer magnitude of this swing suggests a market driven by speculation and sentiment rather than fundamental analysis. Could it be that the whispers of ghost earnings are fueling this volatility, propelling the stock upwards on the mere possibility of untapped value in the bank's remains?

Further fueling this spectral narrative is the discrepancy in analyst ratings. While the average rating sits at a neutral 2.57, with a target price of 21.22, the data reveals a significant divide: 11 analysts recommend holding the stock, while 3 advise a strong sell. This stark contrast suggests an ongoing debate about the future (or lack thereof) of FRCB. Are the "hold" proponents influenced by the specter of ghost earnings, clinging to a hope that defies conventional logic? FRCB Quotes on WSJ

Adding another layer of intrigue is the high percentage of institutional ownership (86.8%), compared to a relatively low insider ownership (0.517%). This suggests that institutional investors, perhaps driven by sophisticated algorithms and complex financial models, are playing a significant role in the stock's price movements. Could their systems be interpreting these ghost earnings as potential signals, leading to automated buy orders that contribute to the stock's enigmatic volatility?

FRCB Stock Price Volatility

The chart below shows the extreme volatility of FRCB stock price in the past year.

While the true nature of ghost earnings remains a mystery, their presence in the case of First Republic Bank forces us to confront the limits of traditional financial analysis. In a world where even dead banks can seemingly generate earnings, are we on the cusp of a new era of market dynamics, one shaped by the intangible whispers of financial ghosts?

"Fun Fact: First Republic Bank was known for its high-touch customer service and focus on wealthy clients. It even offered personal loans for things like art and yachts!"