Apr
Barrons Digital Edition Reported that First Republic Bank shares traded around $1.86 shortly before 5 p.m., down 47% from its closing at $3.51, down 43% in regular trading. The stock had opened Monday at $14.27.
First Republic (ticker: FRC) is continuing to work on a private sector solution in which it could sell assets to stay afloat or be bought by another bank, a source familiar with the matter told Barron’s.
But the chances of the bank remaining independent are dwindling and it’s more likely that the FDIC will take it into receivership, CNBC reported Friday, citing unidentified people close to talks. The FDIC is asking banks for potential bids if First Republic were to be seized, the report said.
While the First Republic is working on its options, the government has been involved in talks to bring relevant parties together, the source told Barron’s.
Separately, Reuters reported that officials from the U.S. government, Federal Reserve, and FDIC are coordinating meetings to provide a lifeline to the First Republic, citing unidentified people close to the talks.
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A spokeswoman for the FDIC declined to comment, saying First Republic is an “open and operating” institution.
The Treasury Department declined to comment on Barron’s. The Fed did not immediately respond to a request to comment.
FDIC takeovers usually occur over a weekend, outside of the pressure of regular banking and trading hours. Ideally, authorities find a buyer for a bank or its assets over the weekend, aiming to prevent a run on deposits when banks open for business on a Monday.
The Financial Times reported that the Biden administration is skeptical of First Republic’s efforts to find a private-sector solution that would shore up confidence in the bank. In March, JPMorgan JPM +0.87% Chase (JPM) and other big banks placed $30 billion of deposits at First Republic to ease fears about its health.
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“We are engaged in discussions with multiple parties about our strategic options while continuing to serve our clients,” a spokesperson for First Republic said.
Other regionals were edging lower Friday. PacWest Bancorp PACW –6.45% (PACW) was down 3.2%. Western Alliance (WAL) was off 0.5%.
Investors don’t appear to see contagion spreading from the First Republic. The Financial Select Sector SPDR exchange-traded fund (XLF) was ahead by 0.9%.