First Republic Bank Loses Almost $72 Billion in Deposits, Stock Price Halves

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First Republic Bank Loses Almost $72 Billion in Deposits, Stock Price Halves
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First Republic Bank’s stock plummeted by almost 50% on Tuesday after the bank reported a significant loss of deposits in the first quarter of the year. The San Francisco-based bank announced a loss of nearly $72 billion in deposits between December 31 and March 31, despite receiving a $30 billion infusion from 11 rival lenders on March 16 in a bid to prevent a broader banking crisis.

While most banks have reported only modest outflows in recent weeks, the drop in deposits at First Republic highlights broader industry concerns that have yet to be fully resolved. Moody’s downgraded 11 regional banks last week, including U.S. Bank and Western Alliance, citing concerns about the stability of deposits and their operational nature.

The exodus of deposits from regional and midsize banks has largely stopped, according to Mark Hamrick, a senior economic analyst at Bankrate. Nevertheless, some industry experts say that signs of relative stability in recent bank earnings belie other concerns, particularly for commercial lending.

On First Republic’s earnings call on Monday, CEO Mike Roffler sought to reassure investors that the worst was over, stating that the bank’s deposits had stabilized since the week of March 27. However, deposit outflows at other banks may also reflect consumers shopping for higher interest rates. This trend is forcing banks to pay more to hold onto their customers’ deposits and attract new ones.

The Federal Reserve’s anticipated interest rate increases, to be announced on May 3, continue to cause concern on Wall Street. A working paper from analysts affiliated with the National Bureau of Economic Research warned that smaller banks with uninsured deposits are more vulnerable to insolvency in a high-interest rate environment.

Economists are monitoring the lending environment for small and midsize businesses for signs of a potential credit crunch. Small and regional banks are responsible for at least 70% of all commercial and industrial loans made to small firms, according to Joe Brusuelas, the chief economist at consulting firm RSM. As the access to credit among Main Street businesses contracts, he worries that the flurry of layoffs announced by name-brand companies could spread further into other industries.

Overall, while most banks have seen only modest deposit outflows in recent weeks, concerns about the stability of deposits and commercial lending persist. The Federal Reserve’s anticipated interest rate increases have only added to the jitters on Wall Street, with smaller banks with uninsured deposits seen as particularly vulnerable to insolvency. Economists are closely monitoring the lending environment for small and midsize businesses for signs of a potential credit crunch..

Considering that most of these news companies rely heavily on digital giants like Google and Facebook for advertisement revenues, the recent IT slowdown in the U.S. has impacted them as well. Google’s digital ad revenue experienced an unparalleled decline in the January-March company results published recently. 



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  1. Jesse Pound. First Republic bank says deposits tumbled 40% to $104.5 billion in the first quarter. NBC News. Published April 25, 2023. Accessed April 26, 2023.
  2. Jesse Pound. Wall Street rides to the rescue as 11 banks pledge $30 billion to First Republic Bank. NBC News. Published March 17, 2023. Accessed April 26, 2023.
  3. Rob Wile. “Walk and chew gum”? Fed faces dual tasks of fighting inflation and easing bank jitters. NBC News. Published March 22, 2023. Accessed April 26, 2023.