UNITED STATES NEWS

First Republic clients pulled $100B in deposits during panic

Apr 24, 2023, 2:33 PM

NEW YORK (AP) — Customers of First Republic Bank pulled more than $100 billion in deposits out of the bank during last month’s crisis, as fears swirled that it could be the third bank to fail a fter the collapse of Silicon Valley Bank and Signature Bank.

San Francisco-based First Republic said Monday that it was only after a group of large banks stepped in to save it by depositing $30 billion in uninsured deposits that the bank was able to staunch the bleeding.

The bank said it now plans to sell off assets and restructure its balance sheet, and said it also expects to lay off as much as a quarter of its workforce, which totaled about 7,200 employees at the end of 2022.

First Republic reported first-quarter results Monday that showed it had $173.5 billion in deposits in early March before Silicon Valley Bank failed on March 9. On April 21, it had deposits of $102.7 billion, including the $30 billion the big banks deposited. It said since late March, its deposits have been relatively stable.

“We continue to take steps to strengthen our business,” Jim Herbert, the bank’s executive chairman and Mike Roffler, the bank’s CEO, said in a joint statement.

Before the failure of Silicon Valley Bank, First Republic had a banking franchise that was the envy of most of the industry. Its clients, mostly the rich and powerful, rarely defaulted on their loans. The bank made much of its money making low-cost loans to the rich, which reportedly included Meta Platforms CEO Mark Zuckerberg.

Even through this crisis, the bank’s book of loans more than 90 days past due was zero.

But its franchise became a liability when bank customers and analysts started focusing on the fact that the vast majority of First Republic’s deposits, like Silicon Valley and Signature Bank, were uninsured — that is, above the $250,000 limit set by the FDIC — which means that if First Republic were to fail, its depositors may not get all their money back.

The bank’s profits fell 33% from a year earlier, according to its earnings, and revenues were down 13%.

United States News

Associated Press

Man in custody after 4 found dead in Brooklyn apartment attack, NYPD says

NEW YORK (AP) — The New York Police Department says it has taken a man into custody in connection with the deaths of a grandmother, a mother and her two children in the family’s Brooklyn apartment. Police said in a statement Saturday that officers responded to a report late Friday night of an assault, and […]

20 minutes ago

Passengers wait at Benito Juárez International Airport in Mexico City, Friday, July 19, 2024. Some...

Associated Press

8.5 million computers running Windows affected by faulty update from CrowdStrike

As the world continues to recover from massive business and travel disruptions caused by a faulty software update from cybersecurity firm CrowdStrike, malicious actors are trying to exploit the situation for their own gain. Government cybersecurity agencies across the globe and even CrowdStrike CEO George Kurtz are warning businesses and individuals around the world about […]

2 hours ago

FILE - This April 18, 2024, photo released by the Utah Department of Corrections shows death row in...

Associated Press

Utah scraps untested lethal drug combination for man’s August execution

Utah officials said Saturday that they are scrapping plans to use an untested lethal drug combination in next month’s planned execution of a man in a 1998 murder case. They will instead seek out a drug that’s been used previously in executions in numerous states. Defense attorneys for Taberon Dave Honie, 49, had sued in […]

3 hours ago

Associated Press

Plane crash near Ohio airport kills 3; federal authorities investigating

VIENNA, Ohio (AP) — A plane trying to make an emergency landing at an airport in northeastern Ohio crashed, killing all three people aboard, authorities said. The Federal Aviation Administration said Saturday that the twin-engine Beechcraft 60 went down near the Youngstown-Warren Regional Airport in Ohio at about 6:45 p.m. Friday. The Ohio State Highway […]

4 hours ago

Firefighters battle a fire at First Baptist Dallas church on Friday, July 19, 2024, in Dallas. (Chi...

Associated Press

A fire severely damages the historic First Baptist Dallas church sanctuary

A fire all but destroyed the historic church sanctuary at First Baptist Dallas, sending smoke billowing over the city but causing no deaths or injuries, Dallas firefighters said. The fire in the Texas Historic Landmark, a Victorian-style red brick church built in 1890, was reported about 6:30 p.m. Friday, and contained about three hours later, […]

5 hours ago

Associated Press

New Hampshire Gov. Sununu signs bill banning transgender girls from girls’ sports

CONCORD, N.H. (AP) — Republican Gov. Chris Sununu of New Hampshire has signed a bill that would ban transgender athletes in grades 5-12 from teams that align with their gender identity, adding the state to nearly half in the nation that adopted similar measures. The bill passed by the Republican-led Legislature would require schools to […]

7 hours ago

Sponsored Articles

...

Sanderson Ford

3 new rides for 3 new road trips in Arizona

It's time for the Sanderson Ford Memorial Day sale with the Mighty Fine 69 Anniversary, as Sanderson Ford turned 69 years old in May.

...

Day & Night Air Conditioning, Heating and Plumbing

Beat the heat, ensure your AC unit is summer-ready

With temperatures starting to rise across the Valley, now is a great time to be sure your AC unit is ready to withstand the sweltering summer heat.

...

Condor Airlines

Condor Airlines can get you smoothly from Phoenix to Frankfurt on new A330-900neo airplane

Adventure Awaits! And there's no better way to experience the vacation of your dreams than traveling with Condor Airlines.

First Republic clients pulled $100B in deposits during panic