First Republic Bank, based in San Francisco, is implementing a workforce reduction of up to 25%, citing the continued impact of the recent Silicon Valley Bank crisis in the United States. The bank's customer deposits plunged by a significant 41% to $104.5 billion in the first quarter, falling short of its target of $137 billion.

According to a report by Bloomberg, First Republic Bank is grappling with an "unprecedented" decline in deposits, and as a result, the bank is considering various strategic options, in addition to layoffs, to strengthen its market position in the United States. The specific strategic options being explored were not disclosed in the report.

First Republic Bank reported a modest decrease in deposits of only 1.7% between the end of March and April 21. The bank stated that this indicated a relatively stable level of customer activity during that period.

"Though we faced challenges and uncertainties with the stabilisation of our deposit base and the strength of our credit quality and capital position, we continue to take steps to strengthen our business," Chief Executive Officer Mike Roffler is reported to have said on a conference call.

According to Roffler, the company has retained 90% of its wealth professionals and maintains a strong dedication to its business, reaffirming its commitment to its workforce.

The company announced that uninsured deposits will constitute a smaller portion of its overall deposit base going forward. Additionally, it plans to moderate loan volumes and shift its focus towards originating loans that can be sold on the secondary market.

During the call, Roffler stated, "We intend to retain servicing on these loans as we always have so that we remain the primary point of contact for our clients. Through these actions, we intend to reduce the size of our balance sheet, reduce our reliance on short-term borrowings, and address the challenges we continue to face." 

First Republic shares experienced a decline of 12% in late New York trading.

In the previous month, the US government took control of the failed Silicon Valley Bank, placing it under "receivership" due to a significant outflow of depositors triggered by the sale of available-for-sale securities. 

This crisis has drawn attention to the issue of banks holding substantial amounts of unrealised and often unreported losses on their balance sheets, with First Republic Bank being one of them. According to Bloomberg, First Republic Bank executives have explored the possibility of selling the entire bank. However, the presence of significant unrealized losses on its balance sheet has dissuaded some potential buyers from considering a buyout, as reported in the same source. 

First Republic, which was established in 1985, has grown its wealth-management services and related offerings for high-net-worth individuals over the years. Nevertheless, in recent weeks, several of its advisers have departed for rival institutions.