First Republic Bank customers pulled greater than $100 billion in deposits from the bank during the crisis last month as fears arose that it may very well be the third bank to fail after the collapse of Silicon Valley Bank and Signature Bank.
The San Francisco-based First Republic said Monday that it was only after a bunch of major banks stepped in to avoid wasting it by depositing $30 billion in uninsured deposits that the bank was in a position to stem the bleeding.
The bank said it now plans to sell assets and restructure its balance sheet, and said it expects to put off as much as 1 / 4 of its workforce, which had about 7,200 employees at the end of 2022.
The First Republic reported its first-quarter results on Monday, which showed it had deposits of $173.5 billion in early March before the Silicon Valley Bank collapsed on March 9. On April 21, it had deposits of $102.7 billion, including $30 billion deposited by major banks. He said his deposits have been relatively stable since late March.
“We proceed to work to strengthen our business,” Jim Herbert, the bank’s executive chairman, and Mike Roffler, the bank’s chief executive, wrote in a joint statement.
Before the collapse of Silicon Valley Bank, the First Republic had a banking franchise envied by most of the industry. His clients, mostly the wealthy and powerful, seldom defaulted on their loans. The bank made a whole lot of money by providing low cost loans to the wealthy, reportedly including Meta Platforms CEO Mark Zuckerberg.
Even during this crisis, the bank’s portfolio of loans greater than 90 days overdue was zero.
![Bank of the First Republic branch](https://nypost.com/wp-content/uploads/sites/2/2023/04/NYPICHPDPICT000010096546.jpg?w=1024)
But his franchise became a liability as bank customers and analysts began to give attention to the incontrovertible fact that the overwhelming majority of First Republic deposits, akin to Silicon Valley and Signature Bank, were uninsured – that’s, above the $250,000 limit set by the FDIC – meaning that if the First Republic collapsed, its depositors won’t get all of their a refund.
In response to the bank’s results, profits fell by 33% in comparison with the previous 12 months, and revenues fell by 13%.