FRC update:
First Republic is a hot mess. The reason has a lot to do with its wealthy clientele
Updated 5:25 PM EDT, Fri March 17, 2023
https://www.cnn.com/2023/03/17/business/first-republic-bank-rescue/index.html
First Republic is a hot mess. The reason has a lot to do with its wealthy clientele
Big banks like JPMorgan Chase have diversified their depositor bases to include more of what McCoy calls “sticky deposits.” In other words, regular folks who have less than the FDIC-insured limit of $250,000 in the bank.
About two-thirds of First Republic’s deposits were uninsured. That’s far less than the 94% uninsured that Silicon Valley Bank had, but First Republic also had an unusually large 111% loan-to-deposit ratio at the end of last year, according to S&P Global — meaning it has loaned out more money than it has in deposits.
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