First Republic Bank shares dive on 40% drop in deposits

First Republic Bank lost over 40% of its deposits in Q1 2023, but the situation stabilized since late March. The bank’s shares fell more than 20% in after-hours trading following its first earnings report since Silicon Valley Bank and Signature Bank’s failures last month, which led to emergency measures to fortify the industry. First Republic announced cost-cutting measures, including a 20% to 25% workforce reduction, the condensing of corporate office space, and significant cuts in executive compensation.

US regulator sells failed Signature Bank assets to another lender

Flagstar Bank will take over deposits and some loan portfolios of failed Signature Bank, according to the Federal Deposit Insurance Corporation. The bank’s 40 branches will open under Flagstar on Monday, but $60 billion in loans and $4 billion in deposits related to Signature Bank’s digital banking business will remain under the regulator’s control. Meanwhile, the FDIC is seeking to sell the failed Silicon Valley Bank in at least two parts after a massive wave of withdrawals from the bank sparked fears of contagion across the industry.

Crypto-linked bank failures fuel regulation debate

Regulators are rushing to protect consumers from fraud and scams in the global cryptocurrency industry, which has been hit hard by setbacks, scandals, and high-profile failures. The industry has boomed during the pandemic, but customers often invest without realizing they are investing in unregulated and illegal assets. Regulators are concerned about the conflicts of interest of trading platforms and the complex and volatile nature of cryptocurrencies. Officials in the US and Europe are working on frameworks to oversee crypto firms and increase transparency in their operations.