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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%

#121

Post by Caligatio »

vineyardmike wrote: post #113
ptero wrote: post #67

Earlier quoted context omitted.

FDIC insures $250k per account, so most retail clients have no reason to bolt, which provides a lot of stability for traditional banks.

True, but can you imagine having rent money in your account when the bank collapses... edit: apparently getting your money is fast and easy

FDIC takes almost no time. From their website (https://www.fdic.gov/consumers/consumer/news/cnfall14/miscon...):

The FDIC almost always pays insured depositors within a few business days of a closing, usually the next business day. Payment is made either by providing each depositor a new account at another insured institution or by issuing a check to each depositor.

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

#122

Post by flerchin »

The banks that the market has deemed "at-risk"

"Trading in Pacific West, Western Alliance, and First Republic were stopped due to volatility after they all initially fell 40 to 50 percent. Trading was also briefly stopped in Signature Bank after its shares fell nearly 30 percent. Several of those banks sought to reassure the market by putting out statements highlighting their differences from SVB in terms of asset and depositor base."

https://arstechnica.com/tech-policy/2023/03/silicon-valley-b...

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

#123

Post by nico »

obblekk wrote: post #5

The fact that they filed a last minute report on a Friday night speaks volumes about the amount of withdrawals they must be experiencing. This is about as strong as a signal they could put out to stop a possible run.

> This is about as strong as a signal they could put out to stop a possible run.

Or a desperation signal, which might actually trigger a run. Like what happened with SVB.

The minute the CEO of SVB tried to reassure investors and told them everything would be ok if they just kept their deposits with them, immediately everyone started withdrawing.

Are the “safe” banks all putting out statements about the strength of their financials? They probably don’t feel like they really need to say anything. They feel safe, and that’s what keeps them safe. The moment they panic, their clients panic.

I guess we’ll see what happens.

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

#124

Post by gnicholas »

dannyw wrote: post #79
resource0x wrote: post #71

Earlier quoted context omitted.

> 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.

> Today, only 1 other person in my friend group of 6 heard about SVB.

Really? My mom knew about it, and she's a retired teacher who doesn't live in the Bay Area.

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

#125

Post by arcticbull »

mediaman wrote: post #104
loopdoend wrote: post #92

Earlier quoted context omitted.

Which legal system has a claw back period on withdrawals? Can you imagine rolling back wire payments 90 days old!

It’s not always 90 days, but the American federal bankruptcy system does allow for clawbacks on payments made immediately leading up to a filing. Meaning, the bankruptcy administrator will absolutely file and get a judgment on your assets, which will be forcibly collected, if you received a payment from a bankrupt entity within the window established by the court.

It's up to a year for high-up individuals and their families as I suspect Alex Mashinsky is going to be able to tell us all about.

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

#126

Post by [deleted] »

twblalock wrote: post #95
digitaltrees wrote: post #90

Earlier quoted context omitted.

The bankruptcy code provides guidance for a 90 day look back period from the date of insolvency where transactions can be clawed back or must be repaid. The FDIC will talk to the recipient bank and get a court order to deposit the funds in to a trustee account so that all available assets can be distributed evenly and fairly.

They are very unlikely to do that to normal individual account holders. It would undermine the purpose of providing the deposit insurance in the first place.

[deleted]

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

#127

Post by ZephyrBlu »

breck wrote: post #112
mtlmtlmtlmtl wrote: post #70

Earlier quoted context omitted.

Sure you can. I'm sure you'll do integrations with 9001 different legacy systems and the other endless bullshit that comes with software dev in the public sector. All by yourself. Let there be no doubt that you had it all planned out in your head already in the 10 seconds it took you to think up that comment. Because you're that good .

1. I don't have much to gain from such a thing, but someone in the know might have tremendous amount to gain. Hence the `if anyone wants to fund it`. It would have to be worth my while. 2. Yes, I am that good and could certainly build it. My tech is magic. I can turn any complex domain into the simplest form possible.

> Yes, I am that good and could certainly build it. My tech is magic. I can turn any complex domain into the simplest form possible

Sure grandpa, let's get you to bed.

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

#128

Post by rurp »

csomar wrote: post #61
gonehome wrote: post #24

Earlier quoted context omitted.

Sort of the other way to handle it would be to say “we can’t find risk-free yield for the volume of cash we just had deposited, so deposits now get 0.8% instead of 1.0%” Which is kinda fine? Means you might lose some business as others chase yield. But I feel like most startups don’t actually have that much cash in the bank so they shouldn’t really be chasing yield anyway. It didn’t take a genius to predict interest…

> It didn’t take a genius to predict interest rates were going to rise. Locking cash away for 10yrs in very low % return vehicles seems stupid? Everyone is a genius in hindsight. You could have made millions out of a few thousands if you were able to predict an interest rate regime change. But where are your millions?

Eh, one could be pretty sure that average rates would be a lot higher than 1.5% over the next decade but not expect them to spike this far so fast.

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

#129

Post by alex_young »

digitaltrees wrote: post #85
resource0x wrote: post #71

Earlier quoted context omitted.

> 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".

Not really the money can and will be clawed back if a bank is placed into bankruptcy or receivership. The legal system disincentivizes runs on the bank by enforcing a 90 day look back period where withdrawals have to be repaid so that funds can be distributed more broadly and fairly.

A bit of a technical point - in the US banks cannot go into bankruptcy.
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