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Embattled First Republic bank says it will slash jobs as it explores strategic options

Kaja Whitehouse   

Embattled First Republic bank says it will slash jobs as it explores strategic options
  • First Republic Bank said deposits fell 41% to $104.5 billion in the first three months of 2023.
  • In response, it's taking steps to shore up its balance sheet, including cutting jobs and exec pay.

First Republic Bank is not out of the woods yet.

The San Francisco-based bank's stock plummeted in after-hours trading Monday after it said deposits plunged by more than $100 billion in the first three months of the year.

In announcing earnings, First Republic revealed that deposits fell 40.8% during the first quarter from December 31, 2022. Excluding $30 billion in deposits the bank received from a conglomerate of banks, led by JPMorgan Chase, that amounts to a deposit decline of over $100 billion.

Shares of First Republic recently traded down 1%, at $12.65 a share.

First Republic was among a group of regional banks that suffered a crisis of confidence last month, resulting in customers removing their savings for safe havens. Neighboring Silicon Valley Bank was closed by state regulators and taken over by the Federal Deposits Insurance Corp. New York-based Signature Bank was also shuttered.

First Republic said that it's taking steps to strengthen its balance sheet, including slashing executive officer compensation, condensing corporate office space, and reducing non-essential projects and activities. The bank also plans to reduce its workforce by 20% to 25% in the second quarter.

First Republic also said it is "pursuing strategic options to expedite its progress while reinforcing its capital position." Exploring strategic options is often industry jargon for a sale or spin-off.

On a conference call, the bank said it was withdrawing all previous financial guidance "given the events of March." Executives took no questions from analysts on the call.



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