Deposits in First Republic Bank plunged by over $100B in the first three months of 2023.
The scale of the outflows overshadowed the better-than-expected profits announced during the bank's first-quarter earnings call.
- Shares dropped by over 20% after First Republic revealed how much money its customers pulled from their accounts last quarter.
- The earnings call lasted only 15 minutes and executives decided not to take questions from analysts.
- The company said it is considering options that include restructuring its balance sheet.
- First
Republic also said it plans to cut expenses by reducing its office
space, slashing executive compensation, and laying off 20% to 25% of its
employees in the second quarter.
- The embattled lender may seek U.S. government assistance, according to an unnamed source cited by Reuters.
- Confidence in the global banking sector was shaken following the seizure of Silicon Valley Bank and Signature Bank by federal regulators in March.
- Shares in First Republic plunged 70% after the seizures, prompting larger U.S. banks to contribute $30B to shore up its finances.
