A First Republic bank branch in Manhattan on April 24, 2023 in New York City.
Spencer Platt | Getty Images
Troubled regional bank First Republic said Monday that its deposits fell 40.8% to $104,474 billion in the first quarter, which saw the collapse of two other mid-sized banks and sparked fear from customers about widespread bank failures.
The deposit flight at First Republic was worse than Wall Street expected with analysts estimating the quarter-end figure to be about $145 billion, according to the consensus estimate from FactSet’s StreetAccount. Analysts’ deposit estimates ranged from $100 billion to $206 billion, according to FactSet.
The deposit figure for the end of March included $30 billion in time deposits from 11 larger banks that was announced on March 16 in an attempt to stabilize the broader banking system. If those deposits were excluded, First Republic’s deposits would have fallen by more than 50%.
First Republic said Monday that deposit flows have since stabilized.
“Deposit activity began to stabilize beginning the week of March 27, 2023, and has remained stable through Friday, April 21, 2023. Total deposits were $102.7 billion as of April 21, 2023, down only 1.7% from March 31, 2023, primarily reflecting seasonal client tax payments that occur each April,” the release said.
As part of its earnings release, First Republic announced that it was cutting expenses through reductions in executive compensation, condensing office space and cutting headcount by 20-25% in the second quarter.
First Republic also said in the release it is “pursuing strategic options to expedite its progress while reinforcing its capital position.” The shares, which jumped 12% during regular trading, were off about 6% in after hours trading.
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