By Jason Cohen
Daily Caller News Foundation
First Republic Bank’s stock price fell over 25% as of midday Tuesday following a Monday earnings report which showed massive deposit outflows.
The regional bank lost $102 billion of its deposits following sector turmoil in March, bringing its total deposits to $104.5 billion at the end of the first quarter of 2023, according to its earnings report. This deposit total would be significantly smaller if not for the $30 billion infusion from the largest financial institutions, including JPMorgan Chase, to save First Republic from failure.
First Republic’s quarterly profit declined one-third to $269 million from $401 million the previous year, while revenue fell 13% to $1.2 billion, according to the report.
The bank is “working to restructure our balance sheet and reduce our expenses and short-term borrowings,” finance chief Neal Holland said in a statement in the report. One cost-cutting measure will be laying off 20-25% of employees and cutting executive salaries, the bank said in an earnings call on Monday.
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First Republic is discussing crafting a strategy to save itself with financial advisers and government officials that might include the sale of the bank or portions of it, or raising additional capital, according to The New York Times. The stock had risen over 10% before the report was released, though its share price has fallen over 85% since March.
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