U.S. regulators asked large banks to submit their takeover bids for First Republic Bank (NYSE: FRC) over the weekend, in an effort to rescue the troubled bank.
The Federal Deposit Insurance Corp. (FDIC) reportedly held an auction, asking multiple banks to solicit bids for FRC before an afternoon deadline on April 30. As of press time, no announcement had been made.
First Republic released a statement on April 28 stating that the bank is in talks with multiple parties regarding its strategic options, while continuing to serve its clients.
Over the weekend, media reported anonymous sources as saying that about six banks competed to acquire all of FRC’s deposits, a large portion of its assets, and some of its liabilities. Citizens Financial Group Inc., PNC Financial Services Group, US Bancorp, and JPMorgan Chase were among the bidders in an auction run by the FDIC.
A Month of Pain
First Republic’s stock price has tumbled by a staggering 97 percent from a year ago. Shares that were valued at more than $153 last April dropped to $3.51 in regular trading on April 28.Last month, top U.S. banks infused $30 billion into First Republic to avoid impending financial problems. However, over $100 billion in deposits left the bank’s vaults since early March, which experts said was a death blow to the bank.
News of the deposit exodus sent the bank’s stock to record lows.