I have a mortgage with FRC. What happens to that mortgage if FRC goes under?
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First Republic Bank files 8-K – Tech only 4% of total deposits; no sector >9%
141–150 of 237 posts
Re: First Republic Bank files 8-K – Tech only 4% of total deposits; no sector >9%
#142Earlier quoted context omitted.
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.
This is mainly but not limited to trying to prevent a bankrupt entity from “getting rid” of all its assets. I don’t know if it would apply to a bank wire transfer of “your own money” unless it was a literal fraud situation (pyramid scheme).
I can't imagine that going well.
"No we're taking your $50k life savings back so we can give it all to a client that had $5mil and deserves your $50k life savings more than you do"
Re: First Republic Bank files 8-K – Tech only 4% of total deposits; no sector >9%
#143I have a mortgage with FRC. What happens to that mortgage if FRC goes under?
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Re: First Republic Bank files 8-K – Tech only 4% of total deposits; no sector >9%
#144I have a mortgage with FRC. What happens to that mortgage if FRC goes under?
The mortgage is one of the assets seized by the FDIC and sold off to meet bank liabilities. On your end little should change in the short term, and you may have a different owner for the mortgage at some point (and as I understand it, your mortgage changing ownership is a fairly common occurrence in general). As far as payment and servicing goes, there should be continuity in how that is handled. In short, you'll sti…
I have a line of credit from them - will that terminate. The line of credit rate is dependent on me making deposits there and a min deposit.
Re: First Republic Bank files 8-K – Tech only 4% of total deposits; no sector >9%
#145> 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.
FRB expanded their business by catering to the HENRY population (high earner, not rich yet). So they've got a lot more customers now with medium-large deposits. This should actually make them less vulnerable to bank runs. Some techie with $40k in their account is well protected by FDIC.
Re: First Republic Bank files 8-K – Tech only 4% of total deposits; no sector >9%
#146In general, if anyone wants to go through all the recent 8-K filings, this is what SEC EDGAR is for. Here's a link that'll bring up all recent 8-K filings by date and time, descending: https://www.sec.gov/cgi-bin/browse-edgar?action=getcurrent&d... In general, I would expect a ton of 8-Ks on Monday the 13th for companies to release information on their exposure to SIVB, particularly if their exposure is minor or non-…
Thanks for that. I find it interesting that so many of the companies filing SVB-related 8-Ks (even if to say "we have no/minimal deposits with SVB") are biotech/pharma. Traditional tech gets most of the attention, but SVB has been the Bay Area's biotech banker as much as anyone else, and thanks to its specialized wine practice is probably even more dominant in that sector.
They have north of $1B in fine wine assets in their list of collateral! Presumably vinyards and maturing vintages.
Re: First Republic Bank files 8-K – Tech only 4% of total deposits; no sector >9%
#147Earlier quoted context omitted.
This is mainly but not limited to trying to prevent a bankrupt entity from “getting rid” of all its assets. I don’t know if it would apply to a bank wire transfer of “your own money” unless it was a literal fraud situation (pyramid scheme).
I can't imagine that going well. "No we're taking your $50k life savings back so we can give it all to a client that had $5mil and deserves your $50k life savings more than you do"
Well up to $250k wouldn’t be touched, but yeah, doing a clawback for a bank could cause a run on all banks.
Re: First Republic Bank files 8-K – Tech only 4% of total deposits; no sector >9%
#148Earlier quoted context omitted.
SVB was only able to borrow $15B from their FHLB debt facility, before they got cut off. The FHLB total capacity is ~$60 billion. Is First Republic stating actual numbers they are guaranteed to have access to? Their shareholders are already panic selling (FRC down 36%), their bonds appear to be sinking, and few private parties wants to throw good money after bad. When you have to put out an emergency statement to rea…
Off-topic but it really BAFFLES me why people don't pay more attention to FHLBs. It's like we don't learned anything from the last 10 crises...
Everybody got bailed and and essentially nobody went to jail. Of course no lessons were learned.
SVB though sounds like nobody should go to jail it was just really bad investment decisions.
Re: First Republic Bank files 8-K – Tech only 4% of total deposits; no sector >9%
#149The 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.
Strangely I’ve heard about a lot of deposits to first republic in the last 24 hours. It’s unclear your assumption is correct.
I can confirm knowledge of this as well
Re: First Republic Bank files 8-K – Tech only 4% of total deposits; no sector >9%
#150Earlier quoted context omitted.
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,…
>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. Everyone saying "they will be made whole" is completely missing the fact that money has a time value. There's nothing "made whole" about getting access to your money weeks or months from now.
A likely outcome is everyone is going to be made whole on Monday. The feds will find a buyer to take on the deposit accounts and people are going to wake up consumers of Goldman or whomever instead of SVB.
Look at history and for example what happened to WaMu. It was literally one day.