First Republic Bank shares sank more than 20% after the closing bell on Monday as it said deposits plunged by more than $100 billion in the first quarter and it was exploring options such as restructuring its balance sheet.
Without the $30 billion of deposits provided by big banks, the decline in deposits would have been almost $102 billion.
The lender earned $1.23 a share in the first three months ended March, comfortably above the 85 cents per share analysts estimated for the quarter, according to Refinitiv data. This will discourage potential buyers of the bank because "a large mortgage portfolio at incredibly low rates generating little revenue is not very attractive," said Robert Conzo, CEO of New York-based investment advisory firm, The Wealth Alliance.
The bank's choices are limited when it comes to selling assets. Divesting the mortgage arm would likely result in losses, while selling the wealth management unit would get rid of one of its most lucrative businesses, said David Smith, an analyst at Autonomous Research.
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