First Republic Bank, a San Francisco-based bank, has reported a significant drop in deposits in the first quarter of 2021. According to the bank’s latest financial report, deposits fell by 40% to $104.5 billion, compared to $174.3 billion in the same period last year.
The bank attributed the decline in deposits to a decrease in the number of wealthy clients who had parked their money in the bank’s savings accounts and certificates of deposit. The bank’s CEO, James Herbert, said that the bank’s clients had been moving their money to other investment options, such as the stock market, real estate, and private equity.
The bank’s net income also fell by 22% to $246.6 million, compared to $316.5 million in the first quarter of 2020. The bank’s earnings per share also dropped to $1.47, down from $1.89 in the same period last year.
Despite the decline in deposits and earnings, First Republic Bank remains optimistic about its future prospects. The bank’s CEO said that the bank’s business model, which focuses on serving high-net-worth clients, remains strong and resilient. He also noted that the bank’s loan portfolio had grown by 7% to $120.6 billion, compared to $112.5 billion in the first quarter of 2020.
The bank’s loan growth was driven by strong demand for mortgages, which accounted for 70% of the bank’s loan portfolio. The bank’s CEO said that the bank’s mortgage business had benefited from low interest rates and a strong housing market.
In conclusion, First Republic Bank’s latest financial report shows that the bank’s deposits and earnings have taken a hit in the first quarter of 2021. However, the bank remains optimistic about its future prospects, citing strong loan growth and a resilient business model. It remains to be seen whether the bank can bounce back from the decline in deposits and earnings in the coming quarters.