First Republic Bank: FRC

FRC has issued a 8-k, what this tells is while non-interest bearing or CD’s below $250K have remained stable, while deposit flight has occurred (blue circle). Also, the $30 B deposit indicates there is a flight of deposits and FED, FDIC, and FRC has determined they need this liquidity. They have raised considerable liquidity and the cash they are raising will cost them dearly. The NII of the 1Q, and the rest of the year profitability is going to take significant hit.

The below slide captures FRC’s issues

In the 8-K they said,
The Bank is focused on reducing its borrowings and evaluating the composition and size of its balance sheet going forward. Consistent with this focus and during this period of recovery, the Bank’s Board of Directors has determined to suspend its common stock dividend.

Most likely it may be they are going to sell some of their assets and issue equity or bonds (raise capital) to pay down the borrowings. The stock is reacting to this news.

They have earnings on 4/11 and they have to have a new strategy and answer by then.


Bloomberg is mentioning Tom Barrack (ex-Colony Capital) is advising FRC; I guess their fate is now doomed. When you have a crisis, all the bad actors crawl out of rock. Sigh.