The news: Though most US regional banks’ deposits have stabilized after March’s banking crisis, First Republic Bank is grasping at straws to stay alive, per Bloomberg.
Worse than expected: Nearly all of First Republic’s Q1 results came in lower than analysts’ already pessimistic expectations. After a brief earnings conference, First Republic executives declined to take any questions.
As of Tuesday morning, the bank’s stock price was down 29%, triggering a slide in some other regional banks’ shares, like PacWest.
Running out of options: First Republic is taking major steps to stay alive, and says it’s considering all options for its future. Many industry analysts expect the bank’s struggles will continue through the end of the year, and that it may never fully recover.
The big takeaway: Despite First Republic’s dismal state, other US regional banks’ Q1 earnings reports indicate that last month’s crisis is mostly behind them. Their deposits appear to have stabilized; some even reported deposit growth. But economic uncertainty and the threat of a recession mean regional banks aren’t totally in the clear. Deteriorating credit conditions could squeeze profits, and banks’ exposure to commercial real estate could spell trouble as the work-from-home trend continues to prevail in post-pandemic life.
This article originally appeared in Insider Intelligence’s Banking Innovation Briefing—a daily recap of top stories reshaping the banking industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.
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