[인포스탁데일리=서동환 기자] San Francisco-based First Republic Bank (NYSE: FRC) confirmed that deposits fell by more than $70 billion during the first quarter of 2023.
After the news broke, the company’s stock price plunged 49.38% in trading on the 25th (local time).
Deposits totaled $104.5 billion as of March 31, 2023, compared to $176.4 billion at the end of the fourth quarter of 2022, including $30 billion in time deposits from 11 major U.S. banks.
Deposits on April 21, 2023 totaled $102.7 billion, down 1.7% from March 31.
In addition, First Republic Bank is said to be considering selling $50 billion to $100 billion in long-term securities and mortgages as part of a larger restructuring plan.
First Republic Bank chief financial officer Neal Holland said the bank experienced an unprecedented outflow of deposits in March as several banks closed.
“With our quick decisions, we have secured additional liquidity by leveraging our portfolio of quality loans and guarantees,” he added.
First Republic Bank said it plans to reduce the size of its balance sheet, reduce its reliance on short-term borrowing and address challenges it continues to face.
As part of its cost-cutting plan, it plans to cut its workforce by 20% to 25% in the second quarter and reduce corporate office space.
According to Bloomberg on Tuesday, First Republic Bank has the potential to sell up to $100 billion in long-term securities and mortgages.
First Republic Bank said it was working to strengthen its balance sheet to avoid a takeover by authorities and allow for a possible capital increase, adding that government support may also be needed for negotiations with some of the largest US banks .
Meanwhile, investment firm Janney Montgomery Scott lowered its investment rating on the company from Neutral to Value and its target price from $10 to $8, respectively.
Reporter Seo Dong-hwan oensh1@infostock.co.kr
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