- Regional U.S. bank First Republic Bank (FRC) continues to see its share price tumble
- FRC stock plunged to an all-time low after the mid-sized lender stated that customers withdrew US$100 billion worth of deposits in Q1 2023
- The bank’s deposits dropped 40 per cent to $104.5 billion Q1 2023
- First Republic Bank (FRC) opened trading at US$6.79
Regional U.S. bank First Republic Bank (NYSE:FRC) continues to see its share price tumble.
Earlier this week, FRC stock plunged to an all-time low after the mid-sized lender stated that customers withdrew US$100 billion worth of deposits in Q1 2023.
The California-based bank’s deposits dropped 40 per cent to $104.5 billion in the quarter, which revived fears about the wider banking sector, with the potential to weigh on other financial names once again during Wednesday’s trading session.
First Republic’s earnings revealed that it made US$269 million in profit for Q1 2023 on revenues of more than US$1.2 billion, both down slightly from last year. However, the bank’s net loss of deposits in Q1 was US$100 billion.
As a result of the recent events, the bank stated that it is taking actions to strengthen its business and restructure its balance sheet. These actions include efforts to increase insured deposits, reduce borrowings from the Federal Reserve Bank, and decrease loan balances to correspond with the reduced reliance on uninsured deposits.
Neal Holland, Chief Financial Officer of First Republic said, “With the closure of several banks in March, we experienced unprecedented deposit outflows. We moved swiftly and leveraged our high-quality loan and securities portfolios to secure additional liquidity. We are working to restructure our balance sheet and reduce our expenses and short-term borrowings.”
This represents the latest move where depositors withdraw money in large groups if they sense trouble.
First Republic Bank (FRC) shares dropped nearly 20 per cent in early Wednesday trading to US$6.79, adding to its 94.8 per cent decline year to date. Since this time, last year, its shares have fallen 95.8 per cent.
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