Part 4/9:
One of the glaring issues was the bank's dependency on uninsured deposits, which accounted for a staggering 67.7% of its total deposits by the end of 2022. Compounding this vulnerability, First Republic had a heavy allocation of these deposits in long-term assets, including a sizeable mortgage portfolio. A significant proportion of these loans had long maturities, making the bank more susceptible to fluctuations in interest rates – a peril that became all too real as rates climbed.