April 29, 2023 | 20:27
Federal regulators are reportedly looking for buyers to take over the ailing First Republic Bank.
Federal regulators are trying to find a buyer for First Republic Bank as the banking company̵[ads1]7;s stock continues to fall, according to a report.
Federal Deposit Insurance Corp. has asked several powerful banks — including JPMorgan Chase & Co., PNC Financial Services Group Inc., US Bancorp and Bank of America Corp. — to submit a final bid for First Republic Bank by Sunday after gauging initial interest earlier this week, sources told Bloomberg.
The FDIC contacted the banks Thursday, a day after First Republic Bank shares fell 30%.
The bank suffered an initial 50% drop in its share price on Tuesday after the San Francisco-based lender revealed that customers withdrew $100 billion worth of deposits – 40% of the company – in the first three months of the year.
The massive nose dive pushed First Republic Bank to seek federal assistance and go into receivership.
After deciding that the lender’s position had deteriorated beyond its chance of seeking bailout through the private sector, the FDIC reportedly reached out to other large public companies for help.
People with knowledge of the matter told Bloomberg that the regulator offered each bank a proposed price and an estimated cost to the agency’s deposit insurance fund.
First Republic is looking to sell between $50 billion and $100 billion of its assets, including mortgages and securities.
The FDIC has since reportedly narrowed its choices to at least half a dozen banks, including Citizens Financial Group Inc.
A deal is expected to be announced Sunday night before Asian markets open. The regulator is also likely to announce that it had seized First Republic Bank.
If the lender collapses, it would be the third US bank to collapse since March.
If no one takes over, the FDIC can take over the bank and offer a government backstop for all deposits, an action it took with Silicon Valley Bank and New York’s Signature Bank.
Bank of America, JPMorgan, PNC and Citizens Bank declined to comment.
US Bancorp and First Republic Bank did not immediately respond to The Post’s request for comment.
With pole wires