Regulators were rushing to secure a deal for First Republic Bank before Asia markets open later on Sunday. (Photo by Spencer Platt/Getty Images)
First Republic Bank
assets could conclude as early as Sunday evening, before the markets open in Asia, with the pool of potential buyers including JPMorgan Chase and PNC Financial Services Group, a person familiar with the matter told Barron’s.
U.S. government officials have asked the banks who want some or all of First Republic’s (ticker: FRC) assets to make binding bids by noon on Sunday, the person said. The Wall Street Journal first reported that JPMorgan (JPM) and PNC (PNC) were bidding on the bank.
JPMorgan would need an exception, as it is among a small number of big banks that has more than 10% of nationwide deposits, Bloomberg reported.
The Federal Deposit Insurance Corp. is expected to put First Republic into receivership while it announces which institution would acquire some of the bank’s assets and liabilities, the person told Barron’s. If it doesn’t accept a bid, the FDIC could instead seize First Republic and set a new bidding deadline for late next week, the person said.
Spokespeople for the FDIC and First Republic declined Barron’s requests for comment.
Rep. Ro Khanna (D., Calif.), whose district was home to Silicon Valley Bank, which collapsed in March, told CBS’ Face the Nation on Sunday that companies in the area are being advised by payroll companies to move their deposits out of First Republic. “I think it’s so important that we guarantee all bank depositors,” the lawmaker told CBS.
“Regional banks, they’re going to be insecure, people are going to be concerned and they’re going to start to consolidate into the top banks,” Khanna said.
First Republic’s shares came under pressure last week after the San Francisco-based bank said deposits were $104.5 billion in the first quarter, down $72 billion from three months prior. First quarter deposits included $30 billion injection from large banks including JPMorgan and Bank of America (BAC). Analysts had expected $137 billion in deposits.
First Republic said it would cut its workforce by as much as 25% to cut costs and shrink its balance sheet, but that didn’t appease investors. The stock lost about 84% of its value last week, including Friday’s after-hours decline. After closing down 43% on Friday to $3.51, the stock fell nearly 34% in late trading.
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