Apr 24, 2023 - Economy & Business
First Republic's deposits plunged over 40%
The riptide of client money out of First Republic was even stronger than analysts expected.
Driving the news: The San Francisco-based lender, which was battered by the collapse in confidence that followed Silicon Valley Bank's failure, reported that its deposits plunged by nearly $72 billion during the quarter that ended in March.
- The company disclosed the drop — which amounted to more than 40% of its deposits — in its quarterly earnings report shortly after the close of trading Monday.
- That 40% decline comes despite attempts at an industry-led rescue, in which major banks stashed $30 billion in deposits at First Republic in an effort to shore up confidence.
What they're saying: "The situation is worse than even bears had thought, in our view," wrote David Smith, an analyst with Autonomous Research, shortly after the release of the report.
- In its statement, the bank indicated that the outflow of deposits had relented since late March.
Between the lines: The market didn't like the news, and the stock dropped about 20% in after-hours trading.
- It's down over 90% in the last 12 months — making it the single worst-performing company in the S&P 500 over that period.