PEOPLE PASS NEAR ONE OF THE FIRST REPUBLIC BANK BRANCHES IN NEW YORK, U.S. APRIL 28, 2023. REUTERS/EDUARDO MUNOZ
PNC Financial Services Group, JPMorgan Chase & Co, and other banks are bidding for First Republic Bank in an auction overseen by U.S. regulators.
The Federal Deposit Insurance Corp (FDIC) is expected to announce a deal and the seizure of the bank on Sunday night.
Guggenheim Securities is advising the FDIC in the auction.
- The bank's strategy of attracting high-net-worth customers with preferential rates on mortgages and loans made it vulnerable.
- This led to a significant outflow of deposits in the first quarter.
- Despite efforts to raise funds and a lifeline from Wall Street banks, the bank's deteriorating position necessitated an FDIC receivership.
- The market value of First Republic Bank dropped to $557M from its peak of $40B in November 2021, impacting other regional banks' stock prices as well.
First Republic Bank, founded in 1985, was previously acquired by Merrill Lynch and relisted on the stock market in 2010.
