First Republic Bank Stock Drops Nearly 50% After Total Deposits Fell 41% In Q1

Key Points:

• First Republic Bank reported a 41% decrease in its total deposits in Q1 2023.
• The bank is taking proactive measures to reduce expenses, including cutting compensation and reducing its workforce by 20-25%.
• Despite concerns about the bank’s health, TD Ameritrade’s Investment Movement Index reported its clients were net buyers of the bank in March.

First Republic Bank’s deposits fell by 41% in Q1 2023. The bank is cutting expenses, reducing workforce and considering selling off assets.

First Republic Bank recently reported a significant decrease in total deposits, which has raised concerns among investors. The bank’s deposits fell by 41% in the first quarter, a substantial decline. Although analysts expected deposits to be around $136.7 billion, the bank only reported $102.7 billion in deposits as of April 21, 2023, down only 1.7% from March 31, 2023. The decrease is linked to the collapse of Silicon Valley Bank and Signature Bank last month. Additionally, the bank saw a reduction in year-over-year revenues of 13.4%.

First Republic Bank’s stock has declined significantly, over 90% YTD, causing concern among investors. The bank is taking proactive measures to reduce expenses, including cutting executive compensation, consolidating office space, and reducing nonessential projects. It plans to cut its workforce by 20-25% this quarter and is considering selling off assets to restructure its balance sheet. While Bloomberg reported that the bank is looking to sell $100 billion of loans and securities to balance its books, First Republic Bank declined to comment.

During the call on Monday, First Republic’s CEO, Michael Roffler, reassured investors that the bank was liquid. He stated that as of April 4, First Republic had twice the available liquidity of uninsured deposits, excluding the $30 billion received from large banks.

Despite concerns about uninsured deposits and the overall health of the banking system causing the company’s shares to plummet over 88%, TD Ameritrade’s Investment Movement Index noted that its clients were net buyers of First Republic Bank in March.

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Thana

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