Reinforcing Confidence in First Republic Bank

Rhea-AI Summary

First Republic Bank (NYSE:FRC) announced it will receive $30 billion in uninsured deposits from major banks, including Bank of America and JPMorgan Chase, on March 16, 2023. This support, reflecting confidence in the bank, is aimed at strengthening liquidity amid recent industry challenges. As of March 15, 2023, First Republic's cash position was approximately $34 billion>, exclusive of the new deposits. The bank has drawn on additional borrowing capacity from the Federal Reserve and the Federal Home Loan Bank, with short-term borrowings increasing significantly. The Board has suspended the common stock dividend as part of a strategy to focus on liquidity and balance sheet assessment.

Positive

• Receipt of $30 billion in uninsured deposits from major banks strengthens liquidity position.
• Cash position of approximately $34 billion shows robust financial foundation.
• Support from leading banks reflects confidence in First Republic and its business quality.

Negative

• Suspension of common stock dividend may disappoint shareholders.
• Heavy reliance on Federal Reserve borrowing, with amounts ranging from $20 billion to $109 billion at a high overnight rate of 4.75%, raises concerns about long-term financial stability.

$30 Billion in Uninsured Deposits Committed from America’s Largest Banks

SAN FRANCISCO--(BUSINESS WIRE)-- First Republic Bank (NYSE:FRC), a leading private bank and wealth management company, today announced it will receive uninsured deposits totaling $30 billion on March 16, 2023 from Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley, Bank of New York Mellon, PNC Bank, State Street, Truist, and U.S. Bank.

This support from America’s largest banks reflects confidence in First Republic and its ability to continue to provide unwavering exceptional service to its clients and communities.

Jim Herbert, Founder and Executive Chairman, and Mike Roffler, CEO and President of First Republic Bank said, “We would like to share our deep appreciation for Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley, Bank of New York Mellon, PNC Bank, State Street, Truist, and U.S. Bank. Their collective support strengthens our liquidity position, reflects the ongoing quality of our business, and is a vote of confidence for First Republic and the entire U.S. banking system. In addition, we want to share our sincerest thanks to our colleagues, clients, and communities for their continued and overwhelming support during this period.”

As previously announced, First Republic (the “Bank”) obtained additional liquidity through additional borrowing capacity. It has since drawn on this borrowing capacity following recent industry events.

• As of March 15, 2023, the Bank had a cash position of approximately $34 billion, not including the $30 billion of uninsured deposits from Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, Goldman Sachs, Morgan Stanley, Bank of New York Mellon, PNC Bank, State Street, Truist, and U.S. Bank with an initial term of 120 days at market rates.
• From March 10 to March 15, 2023, Bank borrowings from the Federal Reserve varied from $20 billion to $109 billion at an overnight rate of 4.75%.
• Since close of business on March 9, 2023, the Bank has also increased short-term borrowings from the Federal Home Loan Bank by $10 billion at a rate of 5.09%.

Insured deposits from close of business on March 8, 2023 to close of business on March 15, 2023 have remained stable. Daily deposit outflows have slowed considerably.

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.

About First Republic Bank

Founded in 1985, First Republic and its subsidiaries offer private banking, private business banking and private wealth management. First Republic specializes in delivering exceptional, relationship-based service and provides a complete line of products, including residential, commercial and personal loans, deposit services, and private wealth management, including investment, brokerage, insurance, trust and foreign exchange services. Services are offered through preferred banking or wealth management offices primarily in San Francisco, Palo Alto, Los Angeles, Santa Barbara, Newport Beach and San Diego, California; Portland, Oregon; Boston, Massachusetts; Palm Beach, Florida; Greenwich, Connecticut; New York, New York; Jackson, Wyoming; and Bellevue, Washington. First Republic is a constituent of the S&P 500 Index and KBW Nasdaq Bank Index. For more information, visit firstrepublic.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipates,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimates,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases. Accordingly, these statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that could cause actual results to differ materially from those expressed in them. All forward-looking statements are necessarily only estimates of future results, and there can be no assurance that actual results will not differ materially from expectations, and, therefore, you are cautioned not to place undue reliance on such statements. Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout our public filings under the Securities Exchange Act of 1934, as amended. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

FRC-G

View source version on businesswire.com: https://www.businesswire.com/news/home/20230316005726/en/

Investors:

Andrew Greenebaum / Kimberly Esterkin

Addo Investor Relations

agreenebaum@addo.com, kesterkin@addo.com

(310) 829-5400

Media:

Greg Berardi

Blue Marlin Partners

gberardi@firstrepublic.com

(415)-239-7826

Source: First Republic Bank

FAQ

What support is First Republic Bank receiving from other banks?

First Republic Bank is set to receive $30 billion in uninsured deposits from major banks like Bank of America and JPMorgan Chase.

What is First Republic Bank's cash position as of March 15, 2023?

First Republic Bank reported a cash position of approximately $34 billion as of March 15, 2023.

What has First Republic Bank done regarding dividends?

First Republic Bank's Board of Directors has suspended its common stock dividend as part of its liquidity strategy.

How is First Republic Bank's liquidity situation?

The bank has significantly increased its cash position and received substantial support from major banks, enhancing its liquidity amid recent market pressures.

What are First Republic Bank's borrowing amounts from the Federal Reserve?

From March 10 to March 15, 2023, borrowings from the Federal Reserve varied between $20 billion and $109 billion.