We sold the Fund's First Republic (FRC, Financial) position at a substantial loss. Our team rightly had questions about some of First Republic's recent balance sheet choices, but we also thought the company's relationship banking model would help shelter its historically sticky deposit base. We simply were not imaginative enough about the possibility of a bank run, sparked and fueled by severe problems at a different bank. As confidence eroded and deposits fled, the company quickly lost control of its destiny. We sold the stock in the high $30s, which was suboptimal but kept a bad outcome from becoming even worse.
From Wallace Weitz (Trades, Portfolio)'s Weitz Partners Value Fund first-quarter 2023 commentary.
