USB - JPMorgan PNC Financial Citizens among bidders for First Republic Bank - report

2023-04-30 21:05:36 ET

JPMorgan Chase ( NYSE: JPM ), PNC Financial Services ( NYSE: PNC ), and Citizens Financial Group ( NYSE: CFG ) were said to be among the banks that had submitted bids for First Republic ( NYSE: FRC ) by the Federal Deposit Insurance Corp.'s deadline of noon Sunday, the Financial Times said.

Bank of America ( BAC ) and U.S. Bancorp ( USB ), which were also invited to submit bids, decided not to bid, Bloomberg reported , citing people with knowledge of the matter.

Regulators had set Sunday noon as the deadline for the bids for First Republic, the San Francisco-based bank that had been suffering from deposit withdrawals since the failures of Silicon Valley Bank and Signature Bank, the FT said. But there was a chance that could stay open longer, people familiar with the matter said.

People close to the situation told the FT that the regulators, led by the FDIC, were focused on negotiating a deal before First Repulic ( FRC ) opens for business on Monday.

If JPMorgan ( JPM ) submits the top bid for First Republic, regulators would have to grant special permission for the acquisition. JPM already holds more than 10% of U.S. deposits, making it ineligible to acquire another institution that takes deposits. Bloomberg reported Sunday that the Office of the Comptroller of the Currency was standing by to quickly assess a deal and make a decision if the FDIC considers the JPM offer to be attractive.

On Friday, CNBC reported that FDIC receivership was the most likely outcome for FRC. That sent the stock tumbling further and sparked more than 20 trading halts during the session.

The company's stock had taken a turn for the worse last week when the bank reported Q1 earnings, which showed that its deposits dropped by more than $70B during the quarter, despite the $30B that 11 of the U.S.'s largest banks deposited in FRC. At the same time, First Republic ( FRC ) management said it was working on a plan to reduce its balance sheet and to cut jobs.

At March 31, 2023, FRC's uninsured deposits, excluding the $30B it received from the large U.S. banks was estimated to be 27% of total deposits.

In the past week, FRC stock plunged 75% and has lost 97% of its value year-to-date.

Earlier, JPMorgan, PNC, Bank of America ( BAC ) said bidding for First Republic.

More on First Republic Bank:

• Stock slides 18% more as it strives to survive
• First Republic Bank weighs plan to sell up to $100B of securities, mortgages
• Stock tanks after Q1 deposit outflows, plans to cut headcount

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