Joe Biden’s America.
The FDIC asked PNC Financial Services and JPMorgan Chase to make their final bids by Sunday as it prepared to seize First Republic Bank.
First Republic is the third bank to fail since March.
Silicon Valley Bank and Signature Bank both collapsed last month after depositors withdrew billions of dollars.
The Federal Deposit Insurance Corp. has asked 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, according to people with knowledge of the matter.
The regulator reached out to banks late Thursday seeking indications of interest, including a proposed price and an estimated cost to the agency’s deposit insurance fund. Based on those submissions Friday, the regulator invited some firms to the next step in the bidding process, the people said, asking not to be named discussing the confidential talks.
Spokespeople for JPMorgan, PNC, US Bancorp, Bank of America and the FDIC declined to comment. Bank of America is considering whether to proceed with a formal offer, one of the people said.
The bidding process kick-started by regulators — after weeks of fruitless talks among banks and their advisers — could pave the way for a tidier sale of First Republic than the drawn-out auctions that followed the failures of Silicon Valley Bank and Signature Bank last month. Authorities are stepping in after a particularly precipitous drop in the company’s stock over the past week, which is now down 97% this year.
Unclear to some involved in the process is whether regulators might use a bid for a so-called open-market solution that avoids formally declaring First Republic a failure and seizing it.
First Republic Bank’s shares plunged 50% Friday morning.
The company’s stock has plummeted more than 90% this year.
Earlier this week First Republic Bank said customer deposits tumbled 40% in Q1 – worse than Wall Street expected.