The US Federal Deposit Insurance Corporation (FDIC is preparing to seize the San Francisco-based First Republic Bank, according to Reuters.
The FDIC has asked major banks including JPMorgan Chase & Co. and PNC Financial Services Group to submit final bids for the bank by Sunday, Bloomberg News reported Saturday.
The move comes in the wake of a major crash in the value of the bank’s shares, which dropped by approximately 75 percent this week following a disappointing first-quarter earnings report Monday.
In its report, the bank said its deposits have dropped by more than $100 billion since January 1, with total deposits down by 43 percent to $104.5 billion, instead of the $136.7 billion in deposits expected by analysts.
The bank’s shares have dropped by a total of approximately 97 percent since the start of 2023 and on Friday, the stock lost more than half of its value.
First Republic received an injection of some $100 billion last month from Bank of America Corp, Citigroup Inc., JPMorgan and Wells Fargo & Co., hoping to head off another crisis after the collapse of Silicon Valley Bank and Signature Bank.
A statement from FDIC on the status of First Republic Bank is expected by Sunday.
