The American First Republic Bank, whose shares fell 36% on Thursday, received $30 billion in deposits from 11 major US banks, follows from a press release from the bank.
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“First Republic Bank, a leading private bank and wealth management company, today announced it has received $30 billion in uninsured deposits 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” – the message says.
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As of March 15, the bank’s cash position was approximately $34 billion, not counting $30 billion of uninsured deposits from 11 banks with an original maturity of 120 days at market rates.
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From March 10 to 15, bank loans from the US Federal Reserve System (FRS) ranged from $20 billion to $109 billion at an overnight interest rate of 4.75%. Since closing on March 9, First Republic Bank has also increased short-term borrowings from the US Federal Home Loan Bank by $10 billion at a rate of 5.09%.
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California regulators closed Silicon Valley Bank (SVB) on March 10, the largest bank failure in the US since the 2008 financial crisis. The collapse of the SVB turned out to be associated with an increase in the Fed’s key rate, which led to the depreciation of assets on the balance sheets of many financial institutions. In addition, on March 8, the closure of the crypto-focused bank Silvergate was announced, and on March 12, a similar New York-based Signature Bank.
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The New York Times reported that SVB’s failure raised concerns that other US banks could also run into trouble. Against this backdrop, there was a “dumping” of shares of similar SVB banks, such as First Republic, Signature Bank and Western Alliance, on the market. Many of these financial institutions cater to first-time clients and have investment portfolios similar to those of SVB.
