Due Diligence

Share this post

Oh, the Calamity — Is FRB FUBAR?

www.stockduediligence.com

Oh, the Calamity — Is FRB FUBAR?

First Republic Bank remains in hot water.

Carter Kilmann
Apr 28, 2023
4
Share
Share this post

Oh, the Calamity — Is FRB FUBAR?

www.stockduediligence.com

Good morning, investors!

If this is your first time with us, don’t forget to subscribe here. If you enjoy today’s issue, please hit the heart button at the end of the report.

Free stock research

Without further ado…


Avert Your Eyes: FRB Reports Q1 Results

Once upon a banking crisis, two large U.S. regional banks, Silicon Valley Bank and Signature Bank, took a nosedive in early March, sending ripples of panic throughout the global banking community. The government’s ensuing rescue may very well have buttressed the financial system from a meltdown reminiscent of ‘08 — but many banks aren’t out of the woods yet.

Caught in the turmoil was First Republic, the 14th-largest U.S. commercial bank. 

Image

On Monday, FRB reported Q1 results, announcing a $100 billion drop in deposits (excluding $30 billion of rescue deposits from major banks) and a one-third reduction in net income. 

The bank's troubles began when two-thirds of its deposits were found to be uninsured, triggering scrutiny in the wake of Silicon Valley Bank's collapse. A rescue plan involving 11 big banks placing $30 billion in deposits at First Republic failed to alleviate concerns. Instead, the bank suspended dividends, its shares slumped further, and rumors swirled about its future as a stand-alone institution. 

Despite the setbacks, First Republic bravely claimed it would survive, but not without some belt-tightening — particularly "significant" executive pay reductions and a workforce cut of up to 25% by midyear. 

Investors, however, remain as jittery as a caffeinated squirrel, with First Republic's shares trading just above their all-time low. The restructure also casts a scorching light on $12 million of share sales by FRB executives ahead of the collapse and multi-million-dollar payments to the bank founder’s family. 


Three Insightful Reads

The Demise of Silicon Valley Bank —

Net Interest

The Invasion of Zombie Companies that Wasn’t — Goldman Sachs

A Share Bought is a Share Sold —

Lewis Enterprises


Thanks for reading. Don’t forget to hit the heart button if you enjoyed today’s report.

If you haven’t subscribed already, you can do so here.

4
Share
Share this post

Oh, the Calamity — Is FRB FUBAR?

www.stockduediligence.com
Comments
Top
New
Community

No posts

Ready for more?

© 2023 Kilmann Media LLC
Privacy ∙ Terms ∙ Collection notice
Start WritingGet the app
Substack is the home for great writing