First Republic Bank became the epicenter of the U.S. regional banking crisis after the wealthy clients it courted to fuel its breakneck growth started withdrawing deposits and left the bank reeling.
"You're not going to be able to realize nearly the same levels of growth," said David Smith, a bank analyst at Autonomous Research.
In an investor presentation in January, First Republic boasted of shareholder returns compounding at 19.5% annually, more than double its peers. It outlined its strategy of pursuing wealthy customers and stated its median single-family home loan borrower had access to cash of $685,000, significantly more than the average American."To get to our best relationship pricing, we want the full deposit relationship," First Republic executive Robert Lee Thornton told investors on Nov. 9.
A spokesman for Ross' Related Companies said he remains committed to First Republic. Representatives for Zuckerberg, Mehta and Palihapitiya did not respond to requests for comment. First Republic also caters to less-wealthy members of the community, according to bank materials which note that schools and non-profits account for 22% of its business loans.First Republic started amassing paper losses last year when the Federal Reserve began hiking U.S. interest rates rapidly to fight inflation while the bank was still trying to beat rivals on pricing.
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