(NEW YORK) — Shares of First Republic Bank plummeted more than 25% in early trading on Tuesday as the banking crisis continued to ripple through the financial system.
The regional lender, left in dire condition after the failure of Silicon Valley Bank last month, suffered a major loss of $102 billion in deposits over the first three months of 2023, an earnings report showed on Monday.
The lost deposits made up more than half of the $176 billion retained by the bank at the end of last year.
In all, shares of First Republic Bank have fallen nearly 90% since the outset of the year.
The bank’s profit fell 33% to $269 million over the three months ending in March when compared with the same period last year, the earnings report showed.
Meanwhile, revenue dropped 13% to $1.2 billion over the first three months of 2023, the report said.
On an earnings call with analysts, First Republic Bank CEO Michael Roffler acknowledged “unprecedented deposit outflows” in the middle of March, saying the bank faces “challenges and uncertainties.”
“Over the past seven weeks as we were impacted by industry events, our commitment to delivering exceptional client service has not wavered,” he added.
The sharp decline of First Republic Bank shares comes more than a month after the nation’s largest financial institutions injected $30 billion in the bank to stem losses and exhibit confidence in the lender.
Bank of America, Citi, JPMorgan Chase, Wells Fargo and Goldman Sachs were among a slew of big banks that participated in the effort.
Over the week following Silicon Valley Bank’s failure, small banks lost $108 billion in deposits, Federal Reserve data showed.
Meanwhile, deposits to the nation’s 25 biggest banks increased by $120 billion over that week, the data said.
JPMorgan Chase, the largest U.S. bank, received a huge wave of customers and deposits, amounting to hundreds of accounts and billions of dollars in the aftermath of the bank collapse, a source familiar with the matter previously told ABC News.
First Republic Bank came under stress in the days following the failure of Silicon Valley Bank on March 10, which marked the largest bank collapse since the 2008 financial crisis.
Two days after that came the fall of Signature Bank, the nation’s 29th-largest bank, suggesting that the banking crisis had spread.
The banking panic spooked many depositors, who rapidly withdrew their funds from smaller banks and placed them in larger ones.
In response, the U.S. government took rapid and extraordinary steps to protect the financial system.
Still, many bank stocks plummeted in March, including First Republic Bank. The company’s shares fell 88% over the course of that month.
Since then, the shares have stabilized, jumping 10% this month.
The weak earnings report on Monday and the stock decline on Tuesday, however, left in question the steadiness of the bank.
Bank executives declined to take questions on the earnings call on Monday.
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