First Republic lost more than $70 billion in deposits in the first quarter

First Republic, which found itself at the center of a brief banking panic in March following the failures of Silicon Valley Bank and Signature Bank, now holds $104.5 billion in deposits, down more than 40% from the $176.4 billion it held at the end of last year.

To strengthen its balance sheet, the bank plans to cut around 25% of its staff, condense its office space, and pullback on executive compensation and nonessential projects.

First Republic was caught up in a spate of bank runs that took down banks with high amounts of flighty deposits that were well past the FDIC insurance limit of $250,000 per account. The San Francisco-based bank received a $30 billion cash infusion from JPMorgan Chase and 10 other big US banks to stabilize it.

“Unprecedented deposit outflows”

Well known for its private banking services for wealthy clients on the US west coast, First Republic has rarely ever seen this kind of turmoil.

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“With the closure of several banks in March, we experienced unprecedented deposit outflows,” Neal Holland, chief financial officer of First Republic, said in the bank’s quarterly earnings release. “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.”

As a result of the deposit flight, the bank’s Tier 1 leverage ratio—which measures equity capital against risk-weighted assets—fell from 8.5% to 8.25%. 

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