First Republic Bank, the most dangerous U.S. bank since last month’s banking crisis, revealed dire details Monday about its troubled business.
The bottom line: The bank that serves wealthy clients along the coast is sticking with it. It lost a staggering $102 billion in customer deposits in the first quarter — far more than half of the $176 billion it held at the end of last year — and that doesn’t include a $30 billion take from the largest U.S. bank last month. temporary lifeline.
First Republic posted a quarterly profit of $269 million, down a third from a year earlier. Its shares fell 7% in after-hours trading after the results were announced.
The bank said deposit outflows largely stopped in the last week of March. The bank said it lost just 1.7% of deposits from March 31 to April 21, most of which were related to customers’ tax payments.
The bank’s slide began about six weeks ago, when midsize lenders Silicon Valley Bank and Signature Bank were taken over by federal regulators after customers withdrew large numbers of deposits. San Francisco-based First Republic is widely considered the bank most likely to fail next because it has many clients in the start-up industry — similar to Silicon Valley Bank — and many of its accounts hold more than $250,000, the cap on federal deposit insurance.
Shares of First Republic rose more than 10% on Monday ahead of its earnings report, but have fallen more than 85% since mid-March.
First Republic has been in talks with financial advisers and government officials to develop a rescue plan that could include selling the bank or parts of it, or raising new funds.