San Francisco-based First Republic Bank will cut up to 25% of staff and shift its strategy, the bank announced, after customers withdrew $102 billion in March's banking chaos.
First Republic Bank headquarters as seen on March 16, 2023, in San Francisco. Eleven banks poured in $30 billion in deposits to save First Republic Bank after Silicon Valley Bank's collapse.When Silicon Valley Bank failed in March, it seemed likecould be the next domino to topple as customers rushed to grab their cash. We now know just how huge that fervor became.
Customers pulled about $102 billion of deposits out of First Republic, according to the San Francisco-based regional bank’s quarterly financial reportMonday. The bank had started 2023 with $176.4 billion in deposits, and despite a $30 billion infusion from megabanks in mid-March, First Republic ended the month with $104.5 billion.
The bank announced it will cut 20% to 25% of staff, slash executive pay and condense corporate office space. It is “pursuing strategic options,” according to a press release — the Wall Street Journal has“We are working to restructure our balance sheet and reduce our expenses and short-term borrowings,” chief financial officer Neal Holland said in a published statement, which a bank spokesperson declined to expand on for SFGATE.
First Republic, which is headquartered in the Financial District, caters mostly to wealthy clients — leaving it open to quick, massive withdrawals by customers worried about their deposits. Customers’ deposits tend not to be insured above $250,000 per account. About 70% of the bank’s deposits were at the end of last year, versus the 55% industry median for mid-sized banks. The bank announced Monday that it will borrow less from the Federal Reserve Bank and try to rely less on uninsured deposits going forward.1% interest mortgage loan to Mark Zuckerburg in 2012, and it markets itself as a partner for the tech industry, with “Early,” “Growth” and “Mature” stage products for “innovators.”
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