FDIC races to find buyer for collapsing First Republic Bank: report
Federal regulators are scrambling to find a buyer for First Republic Bank as the banking company’s stock continue to tumble, according to a report.
The Federal Deposit Insurance Corp. has asked several high-powered banks — including JPMorgan Chase & Co., PNC Financial Services Group Inc., US Bancorp and Bank of America Corp. — to submit final bids for First Republic Bank by Sunday after gauging initial interest earlier in the week, sources told Bloomberg.
The FDIC reached out to the banking corporations Thursday, one day after Shares of First Republic Bank plummeted 30%.
The bank suffered an initial 50% stock price drop 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 out federal assistance and be placed under receivership.
After deciding the lender’s position had deteriorated beyond the chance of seeking rescue through the private sector, the FDIC has reportedly reached out to other major 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 worth of its assets, including mortgages and securities.
The FDIC has since reportedly whittled their choices down to at least half a dozen banks, including Citizens Financial Group Inc.
A deal is expected to be announced on Sunday night before Asian markets open.
The regulator is likely to also announce that it had seized the First Republic Bank.
If the lender falls into receivership, it would be the third US bank to collapse since March.
If none take over, the FDIC could take over the bank and offer a government backstop for all deposits, a course of 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 Post Wires