During the crisis last month, customers of First Republic Bank started more than $100 billion in deposits, worried that it may be the third bank to fall after Silicon Valley Bank and Signature Bank.
First Republic, a bank with headquarters in San Francisco, claimed on Monday that it wasn’t until other sizable banks intervened to stop the bank’s bleeding by depositing $30 billion in uninsured deposits that the bank could stop it.
The bank, which had roughly 7,200 employees as of the end of 2022, said it intends to sell off assets, reorganize its financial sheet, and perhaps let up to a quarter of those workers go.
Before Silicon Valley Bank’s failure on March 9, First Republic had $173.5 billion in deposits as of the beginning of March, according to first-quarter figures released Monday. It had deposits totaling $102.7 billion on April 21.
This amount included the $30 billion that the significant banks placed. It said that its promises have been comparatively constant since late March.
Jim Herbert, the bank’s executive chairman, and Mike Roffler, the bank’s CEO, stated in a joint statement, “We continue to take steps to strengthen our business.”
Before Silicon Valley Bank’s demise, First Republic possessed a banking brand that was the envy of most of the sector.
Its clientele, who were mainly wealthy and powerful, hardly ever missed their loan payments. The bank gained significant revenue from low-cost loans to the rich, reportedly including Meta Platforms CEO Mark Zuckerberg.
The bank had zero loans over 90 days past due, even during this crisis.
The vast majority of First Republic’s deposits, like those at Silicon Valley and Signature Bank, were uninsured, that is, above the $250,000 cap set by the FDIC, which means that if First Republic were to fail, its depositors might not get all of their money back. As a result, the franchise of the bank became a liability.
According to the bank’s statistics, profits were down 33% from a year ago, and sales were down 13%.