First Republic Bank (FRC) Announces Job Cuts and Cost Reduction Plan After First-Quarter Earnings Report
Layoffs
April 25, 2023
April 24, 2023
First Republic Bank (FRC), a popular San Francisco-based bank, has announced plans to lay off between 20% and 25% of its workforce in the second quarter, as well as implement a cost-cutting program aimed at reducing expenses. The bank's announcement came after it reported its first-quarter earnings, which showed a significant decline in deposits.
For the first quarter of 2023, First Republic Bank reported revenue of $1.2 billion, a decline of 13.4% year-over-year. However, the figure beat consensus estimates of $1.15 billion. The bank also reported earnings of $1.23 per share, exceeding expectations of 85 cents per share. Despite this positive news, the bank's net interest income fell by 19.4% year-over-year, with net interest margins at 1.77% compared to 2.45% in the prior quarter.
One of the more concerning aspects of First Republic Bank's first-quarter results was the significant decline in deposits, which fell by 35.5% year-over-year to $104.5 billion. The bank's borrowings increased to $106.7 billion, indicating that the bank is borrowing more than it is taking in. This decline in deposits appears to be the main reason for the bank's decision to implement cost-cutting measures.
As part of its cost-cutting program, First Republic Bank has announced plans to cut between 20% and 25% of its workforce in the second quarter. The bank also plans to reduce executive officer compensation, cut back office space, and halt non-essential projects. The bank's founder and executive chairman Jim Herbert and president and CEO Mike Roffler stated that the bank was taking these steps to strengthen its business.
Members of LevelFields received the alert of this event on April 24, 4:30 PM ET
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