Struggling First Republic Bank still has a path to survival as a smaller version of itself, according to Wells Fargo. Shares of the bank have plunged nearly 90% this year, as the collapse of Silicon Valley Bank and Signature Bank helped to spur massive deposit withdrawals that have put the future of First Republic and other regional lenders in doubt. First Republic has suspended dividend payments for its common and preferred stocks to preserve cash, and 11 larger banks deposited a combined $30 billion last month as a show of confidence and to help backstop First Republic from outflows. FRC YTD mountain First Republic’s stock has fallen about 90% since the start of the year. Wells Fargo analyst Jared Shaw said in a note to clients Sunday that First Republic now has 50-50 odds of survival or seeing a regulator-driven resolution. The trick now is that First Republic needs to get smaller, Shaw said, while holding on to those large new deposits. “These banks have skin in the game now and would likely wish to avoid FRC being shut and potentially losing these funds. Under the ‘survive’ scenario, we assume these banks would rather remain depositors working with FRC as they wind-down the balance sheet,” Shaw wrote. One piece of good news for First Republic is that its balance sheet may be able to shrink naturally, without the forced sales that would cause the bank to take losses. Roughly “30% of total loan balances at FRC are repaid each year … and we believe loans could decline materially from 4Q22 to 4Q24 if balances were paid down at a normal pace in the absence of new production,” Shaw wrote. By the fourth quarter of 2024, total loans could be cut nearly in half from the end of 2022, while deposits would have a less steep decline, according to Wells Fargo calculations, thanks in part to the deposits from large banks. But the journey for First Republic to be a healthy bank again could be a long one. Even under a restructuring scenario, First Republic would still have negative earnings per share in the fourth quarter of 2024, according to Wells Fargo’s calculations. Wells Fargo has a price target of $25 per share for First Republic, representing the 50-50 odds of the bank’s survival. The stock closed at $14.03 last week. — CNBC’s Michael Bloom contributed to this report.