JPMorgan, PNC In Fray For First Republic As FDIC Calls For Bids, Report

Bids for the troubled regional lender are due Sunday

General view of First Republic Bank in Century City on March 17, 2023

AaronP/Bauer-Griffin / Getty Images

The Federal Deposit and Insurance Corp. (FDIC) has asked for bids to buy First Republic Bank (FRC) by Sunday, with JP Morgan Chase Inc. (JPM) and PNC (PNC) said to be interested.

Key Takeaway

  • All interested parties for the acquisition of First Republic must submit bids by Sunday, according to reporting from Bloomberg.
  • Shares in First Republic slumped 43% on Friday over FDIC seizure rumors.
  • The market cap of First Republic has slumped to $650 million.

The two institutions are leading the bids for the ailing First Republic, which the FDIC could seize and sell as soon as this weekend, according to the Wall Street Journal.

The company’s market capitalization hit $650 million on Friday. Shares slumped another 43% ahead of the weekend to new record lows and the company’s valuation is down sharply from a $39 billion peak in November 2021. 

The San Francisco-based lender reported its deposits had slumped 40%, or by $100 billion, when it released its first-quarter earnings on 24 April. The slump led to fears for the future of the bank’s operations.

The company’s stock continued to decline over the rest of the week, with trading halted multiple times on Friday, amid reports that the FDIC was set to seize the company as early as this weekend.

The Financial Times reported Friday that First Republic was working on a plan to prevent government intervention which caused the stock to rise in the premarket. Advisors were said to be asking banks to purchase bonds at above-market rates from the troubled lender, allowing the company to reduce its losses.

Potential buyer JP Morgan was part of a $30 billion rescue deal for First Republic in March with the bank putting up $5 billion alongside some of the country’s largest lenders.

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  1. Bloomberg. "FDIC Asks JP Morgan, PNC for Final FRC Bids".

  2. WSJ. "JP Morgan, PNC bid to Buy First Republic".

  3. FT. "First Republic Works on Plan to Prevent Seizure".

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