NEW YORK (Reuters) – PNC Financial Services Group (PNC.N) and JPMorgan Chase (JPM.N) will submit final bids for First Republic Bank (FRC.N) by noon on Sunday is one of the banks in A source familiar with the matter said the auction is being run by US regulators.
The Federal Deposit Insurance Corporation plans to announce the deal on Sunday night before Asian markets open, and regulators are likely to say it has seized lenders at the same time, three sources previously told Reuters. Told.
U.S. regulators are looking to win the sale of First Republic over the weekend, with about half a dozen banks in the bid, sources said Saturday. Guggenheim Securities has advised the FDIC, two sources familiar with the matter said on Saturday.
Citizens Financial Group (CFG.N) was another bidder vying for the bank, according to a source familiar with the matter on Saturday.
The FDIC was not available for comment. Guggenheim, the FRC and the bank declined to comment.
After Silicon Valley Bank and Signature Bank collapsed amid deposit flight from U.S. lenders, the First Republic deal came within two months, and the Federal Reserve took urgent action to stabilize the market. I was forced to teach.
Markets have since calmed down, but the First Republic deal will be eye-catching for the amount of help the government needs to provide.
The FDIC officially guarantees deposits up to $250,000. But fearing further bank crackdowns, regulators have taken the exceptional step of insuring all deposits at both Silicon Valley Bank and Signature.
It remains to be seen whether regulators will have to do so for First Republic as well. They require approval by the Secretary of the Treasury, the President, and a majority of the Boards of the Federal Reserve and the FDIC.
In an attempt to find buyers before closing banks, the FDIC is turning to some of the biggest US lenders. Big banks were encouraged to bid on his FRC assets, according to one of his sources.
beautiful autumn
First Republic was founded in 1985 by James “Jim” Herbert, the son of an Ohio community banker. Merrill Lynch bought the bank in 2007, but it went public again in 2010 after being sold by Merrill’s new owner Bank of America Corporation (BAC.N) after the 2008 financial crisis. .
For years, First Republic has attracted high net worth customers with preferential interest rates on mortgages and loans. This strategy made them more vulnerable than local lenders with less affluent customers. The bank had a high level of uninsured deposits representing 68% of deposits.
The San Francisco-based lender scrambled to raise more than $100 billion in deposits in the first quarter.
Despite an initial $30 billion loan in March from 11 Wall Street banks, the effort proved futile.
A source familiar with the situation told Reuters on Friday that the FDIC had determined that lenders were in a worse position and had no more time to seek relief through the private sector.
By Friday, First Republic’s market value hit a low of $557 million from a November 2021 peak of $40 billion.
Stocks of several other regional banks also fell Friday, revealing First Republic heading for FDIC receivership and PacWest Bank Corp (PACW.O) down 2% after the bell. , Western Alliance (WAL.N) fell 0.7%. .
Reported by Chris Prentice and Nupur Anand, written by Megan Davies.Edited by Paritosh Bansal
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