In the first quarter of 2023, deposits of First Republic Bank customers decreased by 41% to $104.5 billion, while the consensus forecast of analysts assumed that this figure would be much higher and amount to $137 billion. Remember that the top US banks, including JPMorgan, Bank of America, Wells Fargo, Citigroup, and Truist, rescued FRC in mid-March by depositing $30 billion.
At the opening of trading in the United States, shares of First Republic Bank (FRC) were down more than 25%. From the report of the American regional bank, it turned out that in the first quarter of 2023, its customers’ deposits decreased by 41% to $ 104.5 billion, while the consensus forecast of analysts assumed that this figure would be much higher and amount to $ 137 billion. Since the beginning of the year, the shares of First Republic Bank have already collapsed by 90%.
This news is alarming for the US financial system, indicating that even an emergency pumping of liquidity did not save FRC from a large-scale outflow of deposits. Recall that in mid-March, the largest US banks, including JPMorgan Chase, Bank of America, Citigroup, and Truist, pledged to deposit $30 billion in FRC. The weak quarterly report of First Republic Bank — especially regarding the dynamics of deposits — suggests that problems continue to haunt regional US banks can also be seen in the dynamics of the S&P Regional Banks Select Industry Index, which collapsed from the high of early February to the low of late March by 35% and since then has not been able to develop a precise correction.
