Federal Regulators Race to Sell First Republic Bank as Banking Crisis Continues

Federal regulators are in a race to seize and sell First Republic Bank by the end of the weekend to end the banking crisis that began last month with the collapse of Silicon Valley Bank.[0] First Republic Bank’s stock dropped by 75% last week after it revealed that customers had withdrawn over $100 billion in deposits during the banking sector turmoil last month.[1] Despite a $30 billion bailout from 11 of the largest banks in the country in March, concerns over First Republic’s financial stability remained among investors.[2] Regulators have 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, with JPMorgan and PNC said to be interested.[3] In the absence of a mutual understanding, regulators may choose to confiscate First Republic and assume possession of the financial institution.[3] Due to its already having accumulated over 10% of nationwide deposits, JPMorgan, along with a handful of other large banks, is prohibited by US regulations from acquiring any additional deposit-taking institutions.[4] In order for the biggest bank in the country to expand further, the authorities would need to grant an exception.[5]

0. “Regulators rushing to sell S.F.’s First Republic Bank amid fears of collapse, report says” San Francisco Chronicle, 29 Apr. 2023, https://www.sfchronicle.com/bayarea/article/first-republic-bank-17994980.php

1. “FDIC Sets Deadline for Today for Bids on First Republic” The Real Deal, 30 Apr. 2023, https://therealdeal.com/sanfrancisco/2023/04/30/fdic-sets-deadline-for-today-for-bids-on-first-republic/

2. “Federal regulators race to seize and sell First Republic Bank” ABC News, 29 Apr. 2023, https://abcnews.go.com/Business/federal-regulators-race-seize-sell-republic-bank/story?id=98962248

3. “FDIC races to find buyer for collapsing First Republic Bank: report” New York Post , 30 Apr. 2023, https://nypost.com/2023/04/29/fdic-races-to-find-buyer-for-collapsing-first-republic-bank/

4. “Time running out for US financial firms to bid for ailing bank First Republic” The Guardian, 30 Apr. 2023, https://www.theguardian.com/business/2023/apr/30/time-running-out-for-us-financial-firms-to-bid-for-ailing-bank-first-republic

5. “First Republic Talks Extend Into Night After Banks Place Bids” The Mercury News, 1 May. 2023, https://www.mercurynews.com/2023/04/30/first-republic-talks-extend-into-night-after-banks-place-bids/