(Reuters) – First Republic Bank’s profit beat market expectations for the first quarter as higher interest payments boosted its income, but its deposits fell 41%, sending its shares down 13% in extended trading.
Its deposits fell to $104 billion from $176 billion in the fourth quarter. The lender also said it expects to reduce its workforce by nearly 20-25% in the second quarter.
The lender came into intense focus after Silicon Valley Bank (SVB) and Signature Bank collapsed last month, shaking the confidence in U.S. regional banks and prompting customers to move billions of dollars to bigger institutions.
As the turbulence roiled markets, First Republic received $30-billion lifeline in combined deposits from U.S. banking behemoths, including Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co and Wells Fargo & Co.
Small U.S. banks shed $177.5 billion in deposits in March from the previous month, according to data from the U.S. Federal Reserve.
The lender earned $1.23 a share in the first three months ended March compared with $2 a year ago. Analysts had estimated the company to earn 85 cents for the quarter, according to Refinitiv data.
(Reporting by Mehnaz Yasmin in Bengaluru; Editing by Lananh Nguyen)
