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First Republic Bank files 8-K – Tech only 4% of total deposits; no sector >9%

ir.firstrepublic.com

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Re: First Republic Bank files 8-K – Tech only 4% of total deposits; no sector >9%

#71

Post by resource0x »

metacritic12 wrote: post #53

Counterpoint: This WSJ Article [1] and their latest 10Ks confirm that: - Their actual assets market-to-market (sold on the fair market) is about $26 bln less than the amount they're carried at on their books. This is as of year end 2022, probably more today. - This would wipe out all their equity, loans, and start hitting depositors. - If there was a bank run, First Republic probably would not be able to meet all dep…

> If there was a bank run, First Republic probably would not be able to meet all depositors.

If everyone knows this, why keep your money there? Tech exposure has nothing to do with it. "In a bank run, he who runs first, runs best".

Re: First Republic Bank files 8-K – Tech only 4% of total deposits; no sector >9%

#72

Post by metacritic12 »

ericd wrote: post #69
mdorazio wrote: post #48

I'd really like to know where people are withdrawing their money from these banks to . They're not taking suitcases of cash, so it must be flowing to some other financial institutions. Is it going to traditional big banks (BofA, Wells, Chase, etc.)?

idk how many companies are doing this right now, but recurring investment on 4 week T-bills are safe, can absorb arbitrary amounts of cash, and yield much more than the large banks. But it can take a bit to set up a TreasuryDirect account.

Agree. Brokerage accounts that sweep to US treasury money market are also safe.

Re: First Republic Bank files 8-K – Tech only 4% of total deposits; no sector >9%

#73

Post by xeromal »

ahzhou wrote: post #62

> Consumer deposits have an average account size of less than $200,000 Whoa! FRB has wealthy customers. US average cash in savings accounts is $41,600. And this is pure cash too - not total net worth.

I'm a customer of FRB and they are definitely a "rich person's" bank (I'm probably their poorest customer" but their customer service is so flippen good. They assign you a banker that you can email day or night, weekend or weekday and they'll usually help you within a few hours. I've asked mine to set aside some currency for travel to a country or to wire some money and they handle it all with white glove service. I really hope they stick around. They're my favorite bank in the world.

They also have delicious homemade cookies and free umbrellas for when you visit.

Re: First Republic Bank files 8-K – Tech only 4% of total deposits; no sector >9%

#74

Post by pishpash »

hackernewds wrote: post #49
huitzitziltzin wrote: post #38

Earlier quoted context omitted.

Another interpretation is that this is generally how the FDIC likes to do things: take over on Friday and reopen on Monday. Not sure that will happen in this case but the regulators get two days to prepare to reopen, which at least in recorded US history is seamless and without risk for retail depositors.

The 2-day shutdown is hence critical for the functioning of the financial system. Same for reporting earnings afterhours. Those calling for 24/7 trading are aloof of how entrenched systems need change management

You already have circuit-breakers and other ad-hoc stoppages. The market needs no rest every fricking day.

Re: First Republic Bank files 8-K – Tech only 4% of total deposits; no sector >9%

#75

Post by karmicthreat »

cjbgkagh wrote: post #25
ummonk wrote: post #17

Earlier quoted context omitted.

The tech sector has been withdrawing money in aggregate (because they continue paying payroll and rent but haven't been raising as much money recently) which increases liquidity pressure, and furthermore tech depositors are more skittish due to experience with FTX and thus prone to panic bank runs. They also have larger average account sizes, way beyond FDIC limits, which makes them more likely to need to withdraw mo…

Huh, so at least one quarter of depositors will get 100% on the dollar.

Probably not if the assets are short. The FDIC can claw back withdrawals from what I understand.

Re: First Republic Bank files 8-K – Tech only 4% of total deposits; no sector >9%

#76

Post by metacritic12 »

resource0x wrote: post #71
metacritic12 wrote: post #53

Counterpoint: This WSJ Article [1] and their latest 10Ks confirm that: - Their actual assets market-to-market (sold on the fair market) is about $26 bln less than the amount they're carried at on their books. This is as of year end 2022, probably more today. - This would wipe out all their equity, loans, and start hitting depositors. - If there was a bank run, First Republic probably would not be able to meet all dep…

> If there was a bank run, First Republic probably would not be able to meet all depositors. If everyone knows this, why keep your money there? Tech exposure has nothing to do with it. "In a bank run, he who runs first, runs best".

Exactly, they're basically changing the subject to distract from the elephant in the room.

Re: First Republic Bank files 8-K – Tech only 4% of total deposits; no sector >9%

#77

Post by fairity »

metacritic12 wrote: post #53

Counterpoint: This WSJ Article [1] and their latest 10Ks confirm that: - Their actual assets market-to-market (sold on the fair market) is about $26 bln less than the amount they're carried at on their books. This is as of year end 2022, probably more today. - This would wipe out all their equity, loans, and start hitting depositors. - If there was a bank run, First Republic probably would not be able to meet all dep…

All true, but they have a $60b debt facility to draw down on before they'd consider liquidating their HTM bond portfolio. Given that they have $120b in uninsured deposits diversified across a disparate client portfolio, it seems like they're truly in a much stronger position than SVB.

I feel like a very likely outcome on Monday is that the FDIC announces a buyer, SVB depositors realize they're going to be made whole, and all the panic subsides.

Re: First Republic Bank files 8-K – Tech only 4% of total deposits; no sector >9%

#78

Post by pishpash »

karmicthreat wrote: post #75
cjbgkagh wrote: post #25

Earlier quoted context omitted.

Huh, so at least one quarter of depositors will get 100% on the dollar.

Probably not if the assets are short. The FDIC can claw back withdrawals from what I understand.

How can they claw back withdrawals?

Re: First Republic Bank files 8-K – Tech only 4% of total deposits; no sector >9%

#79

Post by dannyw »

resource0x wrote: post #71
metacritic12 wrote: post #53

Counterpoint: This WSJ Article [1] and their latest 10Ks confirm that: - Their actual assets market-to-market (sold on the fair market) is about $26 bln less than the amount they're carried at on their books. This is as of year end 2022, probably more today. - This would wipe out all their equity, loans, and start hitting depositors. - If there was a bank run, First Republic probably would not be able to meet all dep…

> If there was a bank run, First Republic probably would not be able to meet all depositors. If everyone knows this, why keep your money there? Tech exposure has nothing to do with it. "In a bank run, he who runs first, runs best".

Tech businesses tend to have more direct access to information (e.g. Twitter, emails), and listen to VCs and investors.

Regular people and businesses don't hear about these things. Today, only 1 other person in my friend group of 6 heard about SVB.

Re: First Republic Bank files 8-K – Tech only 4% of total deposits; no sector >9%

#80

Post by technotony »

sroussey wrote: post #60
nemo44x wrote: post #37

Earlier quoted context omitted.

> Multiple people were calling me to ask whether they should get their money out of their bank Should we? At minimum keep as close to $250k or less spread across however many banks as practical, right now.

I thinks lots of small companies with a sudden $4m influx of cash are not in a good position to open accounts at 16 banks. Now that said, there are hot money managers that will do this for you.

We use a sweep account that does this automatically with us just holding one bank account
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