JPM - First Republic stock slides 7% after deposits sank by more than $70B in Q1

2023-04-24 16:35:54 ET

First Republic Bank ( NYSE: FRC ) stock slumped 7.3% in Monday after-hours trading after the San Francisco-based bank showed deposits dropped by more than $70B during Q1 2023.

Deposits of $104.5B, missing the $160.6B Visible Alpha consensus, compared with $176.4B at the end of Q4 2022. the total at March 31, 2023 included $30B of time deposits received from 11 large U.S. banks.

Total deposits were $102.7B as of April 21, 2023, down 1.7% from March 31, 2023.

Borrowings of $106.7B rose by $101.2B from a year ago. Due to large deposit outflows, First Republic ( FRC ) accessed additional liquidity from the Federal Reserve Bank the Federal Home Loan Bank and JPMorgan Chase ( JPM ). Total borrowing peaked on March 15, 2023 at $138.1B, the company said. At that time, it had $34.0B of cash on its balance sheet.

"With the closure of several banks in March, we experienced unprecedented deposit outflows," said Chief Financial Officer Neal Holland. "We moved swiftly and leveraged our high-quality loan and securities portfolios to secure additional liquidity. We are working to restructure our balance sheet and reduce our expenses and short-term borrowings."

Loan originations of $11.4B in the quarter compared with $15.6B in the prior quarter. Loans totaled $173.3B at March 31, 2023 vs. $166.9B at Dec. 31, 2022.

Total investment securities were $34.8B at the end of Q1, up 9.8% from $31.7B at Dec. 31.

Q1 net interest income was $923M vs. $1.17B in the prior quarter and $1.15B in the year-ago period.

Q1 EPS of $1.23 fell from $1.88 in Q4 2022 and from $2.00 in Q1 2022.

The bank plans to reduce the size of its balance sheet, reduce its reliance on short-term borrowings, and address the challenges it continues to face, it said.

Conference call at 4:30 PM ET.

Earlier, First Republic Bank GAAP EPS of $1.23 beats by $0.71, revenue of $1.21B beats by $80M

More on First Republic:

• First Republic Bank: A Shrewd Move To Preserve Capital
• First Republic Bank: The Preferred Dividend Is Gone
• First Republic gains after getting $30B in deposits from banks
• First Republic recovers from record low on new rescue plan

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