First Republic shares dropped like a stone on Tuesday morning after less-than-positive first quarter earnings sent investors running from the regional bank.
Shares were down 29% at the open to hit $11.41 in New York.
The bank saw unprecedented deposit outflows following the collapse of two other mid-sized banks that sparked fear from customers.
Deposits plunged 40% to $104.5 billion in the quarter, worse than the $145 billion FactSet consensus estimate, although the company said that figure has stabilized since.
First-quarter revenue fell 13.4% to $1.2 billion, while its diluted earnings per share for the period dropped 38.5% to $1.23.
One of the “poster children” for the banking crisis, First Republic Bank (NYSE:FRC) issued earnings that surprised to the downside, TickMill Group’s market analyst Patrick Munnelly said, which created jitters amongst investors and left lingering concerns about further problems within the regional banking sector in the US.
The results “were not happy news for investors,” according to Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
“The latest quarterly report showed that deposits at First Republic Bank (NYSE:FRC) fell by $72bn – more than expected, despite the $30bn help that big banks put in the bank as a show of support following the Silicon Valley Bank’s (SVB) collapse,” Ozkardeskaya said.
“The good news is, outflows slowed in the past few weeks, but the bank continues losing blood and is planning to cut its workforce by 25%.”
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