First Republic is racing to reassure customers and clients that it can avoid the fate of Silicon Valley Bank, which collapsed last week.
, which built up a wealth-management franchise with some $US271 billion in assets, putting it in rarefied air among US institutions. Yet it’s the emphasis on that business that could make First Republic’s fate different from SVB and New York’s Signature Bank.
In a March 12 message to clients, signed by executive chairman Jim Herbert and CEO Michael Roffler, the bank said it has taken steps to bolster its liquidity with access to additional financing from JPMorgan. First Republic started actively courting Silicon Valley’s tech wealth. The bank opened a branch inside Facebook’s campus in Menlo Park, California, in an effort to win over early employees on the road to riches. In San Francisco, it has a bank location inside Twitter’s headquarters on Market Street, which remains open.
Mr Hou, Mr Sear and other Evoke partners though have kept money with First Republic amid the past week’s upheaval. So have other clients and fund managers, some expressing love for the bank on social media and urging people to stay put.One Silicon Valley investor said they planned to keep all of their personal and business funds with First Republic.
The person said the wealth manager does not intend to leave the bank forever, but is looking to spread cash around and diversify after SVB’s collapse. The money is being rerouted to institutions including JPMorgan and BNY Mellon, that person said.Mr Herbert, who was First Republic’s CEO for 37 years, has ranked among the highest-paid US executives. The bank’s board includes Colony Capital founder Tom Barrack.
“They’re supporting nonprofits with the understanding that they can grow their private wealth business,” said Mr Berteaux, a retired investment manager.
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