First Republic Bank Stock Earnings: After regular session rally, FRC stock gives it all back and more

First Republic Bank (FRC), the Comeback Kid if ever there was one in the banking sphere, reported much better earnings than Wall Street expected late Monday. Earnings per share of $1.23 bested the dour Street outlook by 71 cents, while revenue of $1.21 billion came in $80 million ahead of consensus.

FRC stock fell as much as 9% immediately after earnings were released, but then it recovered a bit before falling a full 15.6% to $13.50. First Republic stock rose 12.2% in Monday's regular session to $16 on the dot. The reason for the stock sliding was that deposits were much lower than the market had anticipated.

First Republic Bank earnings: Deposits drop 41%

We now know exactly how much deposits fell at First Republic during the Silicon Valley Bank-caused banking scare. That figure is $72 billion. With both banks being headquartered in or near San Francisco, worries over banking in general led depositors to pull cash from both banks despite First Republic being on firm financial footing at the time. Deposits dropped the whole way to $104.5 billion, well below the $136.7 billion that analysts had estimated. Extreme borrowing from the Federal Reserve and a group of large banks has made up the difference in the meantime, but deposits are still off by 41% from the previous quarter.

First Republic reported $923 million in interest income, which beat expectations but was 19% below the same quarter one year ago. Book value per share, however, rose more than 10% to $76.97 a share – 381% higher than Monday's closing share price. Net interest margin in the quarter was a narrower 1.77% compared to 2.45% seen last year.

First Republic said they were letting go of between 20% and 25% of their workforce in order to perform a proper turnaround. Following March's fiasco, management already has ended dividend payments for both common shares and preferred shares.

First Republic stock forecast

The 1-hour chart below shows FRC stock hurtling toward support at $12.70. That is far below the $14.70 threshold that FRC bested in Monday's regular session but could not seem to hold. $12.70 helped on three occasions last week and will likely hold the line this time around as well. This brings to an end the short

FRC 1-hour chart