First Republic stock craters 49% after the bank reveals customers pulled out $100 billion of deposits last quarter
- First Republic shares fell 49% Tuesday on the back of dire first-quarter earnings.
- The regional bank's customers pulled out more than $100 billion worth of deposits last quarter.
First Republic's stock price cratered Tuesday after the embattled lender revealed its customers pulled out over $100 billion worth of deposits last quarter due to the banking turmoil.
Shares were down more than 49% shortly before 4 p.m. ET, trading at just over $8.
First Republic's stock dropped after it released a shocking first-quarter earnings report on Monday that laid bare the extent to which last month's banking turmoil dented its deposit base.
Deposits plunged from around $176 billion to just over $104 billion in the three months ending March 31, despite the US's biggest banks including Bank of America, Citigroup, JPMorgan, and Wells Fargo providing the embattled regional lender with $30 billion worth of emergency funds.
Without that lifeline, First Republic's deposit outflows would have totaled $102 billion – which equates to around 41% of the customer deposits it held prior to the first quarter, according to Deutsche Bank.
The bank plans to weather the outflows by implementing cost cuts. It intends to slash executives' pay, give up some office space, and lay off between 20% and 25% of its employees.
"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 briefing.
Customers rushed to pull their funds from regional lenders like First Republic in the aftermath of Silicon Valley Bank's sudden collapse on March 10, choosing to instead park their deposits with larger financial institutions.
"With the closure of several banks in March, we experienced unprecedented deposit outflows," the San Francisco-based bank's CFO Neal Holland said after Monday's earnings release.