HomeTop U.S. NewsFirst Republic Stock Drops Almost 50% After Outflow of $100 Billion in...

First Republic Stock Drops Almost 50% After Outflow of $100 Billion in Deposits

First Republic’s stock took a huge hit on Tuesday, dropping almost 50% after the San Francisco, California, based bank revealed an outflow of deposits in March.

According to an earnings report shared on Tuesday, First Republic has lost 40.8% of deposits during the first quarter of 2023. Following the collapse of several mid-sized banks like Silicon Valley Bank, customers feared that the same could happen to the First Republic and decided to take their money elsewhere. This resulted in $100 billion in net outflows.

There are now legitimate questions about whether the First Republic can keep itself from folding. The bank is reportedly considering a number of strategies to remain afloat, including selling some of its assets, increasing the number of insured deposits, and trimming its workforce.

Bloomberg reported on Tuesday that the creation of a “bad bank” is another option considered by First Republic executives. “Bad banks” usually buy bad loans and other non-performing assets from other financial institutions and then try to extract additional value from them.

First Republic’s stock closed at $16.00 per share on Monday before gradually sliding in after-hours trading. It opened at $12.24 on Tuesday morning and sank to a historic low of $8.10 by the end of the day. The bank’s shares are now 93.34% down year-to-date.

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