First Republic Bank FRC stock fell 7% in after-hours trades on Monday, despite stronger-than-expected first-quarter profit from the bank, as its deposits fell by 35.5%. The San Francisco-based lender also said it plans to reduce the bank’s workforce by 20% to 25% in the current quarter. First Republic’s first-quarter profit dropped to $269 million, or $1.23 a share, from $401 million, or $2 a share, in the year-ago quarter. First Republic was expected to earn 95 cents a share in the latest quarter, according to estimates compiled by FactSet. Revenue fell 13.4% to $1.2 billion, close to the analyst estimate of $1.22 billion. Deposits dropped by 35.5% to $104.5 billion. The bank said deposit activity began to stabilize beginning the week of March 27. Total deposits of $102.7 billion as of April 21 are down 1.7% from March 31, “primarily reflecting seasonal client tax payments that occur each April.” The results came after First Republic announced a $30 billion deposit from 11 banks on March 16 and suspended its dividend after a drop in deposits. After Silicon Valley Bank collapsed early last month, First Republic’s share price started dropping sharply as well. First Republic stock has fallen about 87% in 2023, compared to a loss of 18% by the KBW Bank Index BKX and a loss of 3.1% by the Financial Select Sector SPDR Fund XLF.
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