New Haven Register (New Haven, CT)
First Republic Bank announces job cuts, office downsizing
Impact on state not yet clear
GREENWICH — First Republic Bank, which has been acutely affected by the recent turmoil in its industry, said Monday that it was planning to cut at least 20 percent of its workforce, while also reducing its office space — but it was not immediately clear how the downsizing would affect its operations in Connecticut.
The San Francisco-headquartered First Republic has offices at 93 Mason St., in central Greenwich, a property that comprises the bank’s only brick-and-mortar location in Connecticut, according to its website. The Greenwich offices support a bank whose deposits in Connecticut totaled about $943 million, as of June 30, 2022, ranking No. 23 among banks operating in the state, according to data from the Federal Deposit Insurance Corp.
During the first quarter of 2023, First Republic leased 24,061 square feet at 55 Railroad Ave., a building that stands across the street from the downtown Greenwich MetroNorth Railroad station, according to a report from commercial real estate firm CBRE. But the report did not specify whether the lease was signed before or after March 16 — the day when 11 of the largest U.S. banks announced a $30 billion rescue package for First Republic, following the failures a few days earlier of Silicon Valley Bank and Signature Bank.
In response to an inquiry from Hearst Connecticut Media, a First Republic spokesman declined to comment in response to questions about whether the company was proceeding with taking space at 55 Railroad and whether that location would supplement or replace its offices at 93 Mason. The spokesman also declined to comment on how many employees First Republic had in Connecticut and how many would be affected by the job cuts.
“This will be an incredibly difficult decision to make, and we are committed to doing so with respect and care for our colleagues,” Mike Roffler, First Republic’s chief executive officer and president, said during an earnings call Monday, of the plan to cut the company’s workforce by 20 percent to 25 percent during the second quarter of this year.
The financial results that
First Republic released Monday highlighted its predicament. Even after factoring in the $30 billion of relief, its deposit total of nearly $103 billion, as of April 21, was still down more than 40 percent from the end of 2022. Its first-quarter profit of about $269 million was down nearly 33 percent from the same period a year ago.
“As the industry events unfolded in March, we experienced unprecedented deposit outflows,” said Roffler, who has worked at First Republic for about 13 years and was named CEO on March 13. “Beginning the week of March 27, our deposits stabilized, and they have remained stable since that time.”
Roffler added that, “we are focusing on increasing our deposits. We are doing so by focusing on insured deposits from new consumers, small businesses and nonprofit organizations.”
Ahead of the release of the quarterly numbers, First Republic’s shares on Monday jumped 12 percent, to $16. But the company’s stock has still lost nearly 90 percent of its value since closing at about $120 on Feb. 24.
If it moves ahead, however, with taking space at 55 Railroad, First Republic’s presence would solidify the property’s status as a financial services hub. Other tenants include AQR Capital Management, Bank of America, Kensico Capital Management, Loancore Capital Management, Sageview Capital and Viking Global Investors, according to the website of the building’s property manager and redeveloper, Hines.
Messages left for Hines were not returned.
While 55 Railroad has recruited First Republic, at least one tenant is leaving. Viking plans to move its offices later this year to 600 Washington Blvd., in downtown Stamford, where it has signed a lease for about 42,000 square feet.
Despite the proliferation of remote working since the beginning of the pandemic, financial services firms have helped maintain strong demand for office space in Greenwich’s central business district.
That part of town generated about 52,000 square feet of leasing activity in the past quarter, up 84 percent quarterover-year and 18 percent above the five-year quarterly average, according to CBRE. During the same period, the availability rate in the Greenwich CBD ran at only 7 percent, compared with nearly 27 percent for all of Fairfield County.