First Republic Bank shares sank more than 20% after the closing bell on Monday after the lender said deposits plunged by more than $100 billion in the first quarter and it was exploring options such as restructuring its balance sheet.
A First Republic Bank branch is pictured in Midtown Manhattan in New York City, New York, U.S., March 13, 2023. REUTERS/Mike Segarshares sank more than 20% after the closing bell on Monday after the lender said deposits plunged by more than $100 billion in the first quarter and it was exploring options such as restructuring its balance sheet.
The deposit slump overshadowed profits that beat expectations for the beleaguered lender, which was shored up through an injection of deposits by larger U.S. banks last month after the collapse of two U.S. regional lenders. The bank plans to slash expenses by cutting executive compensation, paring back office space, and laying off nearly 20% to 25% of employees in the second quarter, it said Monday.
The company also aims to increase its insured deposits and cut borrowings from the Federal Reserve Bank. "We're taking steps to meaningfully reduce our expenses to align with our focus on reducing the size of the balance sheet," CEO Mike Roffler said in a post-earnings call, which ran for less than 15 minutes and ended without executives taking questions from analysts.
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