First Republic, Q1 Deposits Plunge 40%... "100 Billion Dollar Outflow"

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Deposits at First Republic, a U.S. regional bank hit by the fallout from the Silicon Valley Bank (SVB) collapse last month, fell by more than 40% in the first quarter of this year alone. It is estimated that if 11 major U.S. banks, which acted as 'white knights,' had not deposited $30 billion, the scale of deposit outflows would have exceeded $100 billion.

According to local media including CNBC on the 24th (local time), First Republic reported that its deposits in the first quarter of 2023 decreased by 40.8% ($72 billion) compared to the same period last year, holding a deposit balance of $104.5 billion. This is below the expert forecast of $145 billion.

In particular, the $30 billion deposited by 11 major U.S. banks at the end of March to prevent a domino bankruptcy crisis was included in the announced deposit balance. Excluding this amount, more than $100 billion left First Republic in the first quarter alone, resulting in an estimated deposit decline of over 50%. This indicates that the scale of deposit outflows was much larger than initially expected.

First-quarter revenue was $1.21 billion, and earnings per share (EPS) were $1.23. Both revenue and EPS exceeded market expectations (respectively $1.15 billion and $0.85).

First Republic announced plans to reduce costs by cutting executive compensation in the second quarter, downsizing office space, and reducing staff by 20-25%.

On the day, First Republic's stock price fell 20% in New York after-hours trading, then slightly recovered but still ended down 18%. The bank's stock price has plummeted more than 90% since the beginning of the year.

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