The US Federal Deposit Insurance Corporation (FDIC) is pushing to sell troubled First Republic Bank as the deal deadline approaches. JPMorgan Chase, PNC Financial Services Group and Citizens Financial Group have submitted bids to buy the troubled lender, according to several media houses, but a decision has yet to be finalized.
Neither FIDC nor the First Republic Bank has officially announced bidding, and the process is underway behind closed doors. Bank of America Corp. was also invited. and US Bancorp to bid, but both decided not to participate.
FIDS accepted the bid as of Sunday afternoon and was asking follow-up questions to at least some of the bidders. If no agreements are reached, FIDC will be forced to take over First Republic Bank and put it into receivership, and depositors will only get up to $250,000 if the government steps in with the bailout package.
First Republic has enticed a large segment of high net worth customers with preferential rates on mortgages and loans, and as such, 68% of depositors are uninsured.
JP Morgan already owns more than 10 percent of US bank deposits, which is the minimum under the country’s federal laws. However, the limit is excluded in the case of a failed bank takeover.
Based on reports from multiple sources, the sale of First Republic Bank, FRC$It should have already happened.
However, futures contracts have opened and Asian markets are trading but no deal has been announced.
US markets open in 13 hours and the FDIC is completely silent.
What is happening?
– Kobeissi Letter (KobeissiLetter) May 1, 2023
American banking crisis
The collapse of the First Republic occurred two months after two major US banks, Silicon Valley Bank and Signature Bank, came under FIDC custody, and another, Silvergate Bank, announced voluntary liquidation.
First Republic was founded in 1985 and was acquired by Merrill Lynch in 2007. The bank’s shares were again publicly listed as Merrill’s owner, Bank of America, after the 2008 financial crisis.
San Francisco-based First Republic Bank’s troubles began earlier this year with the crisis at other banks. Subsequently, the bank received a $30 million lifeline from a consortium of 11 large banks, including JPMorgan Chase, PNC, and Bank of America. However, that turned out to be ineffective.
In its latest financial statements, First Republic revealed that its customers withdrew $102 million in just three weeks in March. The outflow reached more than 176 million dollars by the end of last year.
On Friday, shares of First Republic-listed plunged as the bank’s valuation fell from $20 billion to $557 million. Investor sentiment clearly showed a lack of confidence in the bank’s performance, which pushed it towards collapse.
Only at: First Republic Bank FRC$ Another 37% decline amid rumors of a government takeover. pic.twitter.com/gKhyu2eLBk
– Watcher.Guru (WatcherGuru) April 28, 2023
The US Federal Deposit Insurance Corporation (FDIC) is pushing to sell troubled First Republic Bank as the deal deadline approaches. JPMorgan Chase, PNC Financial Services Group and Citizens Financial Group have submitted bids to buy the troubled lender, according to several media houses, but a decision has yet to be finalized.
Neither FIDC nor the First Republic Bank has officially announced bidding, and the process is underway behind closed doors. Bank of America Corp. was also invited. and US Bancorp to bid, but both decided not to participate.
FIDS accepted the bid as of Sunday afternoon and was asking follow-up questions to at least some of the bidders. If no agreements are reached, FIDC will be forced to take over First Republic Bank and put it into receivership, and depositors will only get up to $250,000 if the government steps in with the bailout package.
First Republic has enticed a large segment of high net worth customers with preferential rates on mortgages and loans, and as such, 68% of depositors are uninsured.
JP Morgan already owns more than 10 percent of US bank deposits, which is the minimum under the country’s federal laws. However, the limit is excluded in the case of a failed bank takeover.
Based on reports from multiple sources, the sale of First Republic Bank, FRC$It should have already happened.
However, futures contracts have opened and Asian markets are trading but no deal has been announced.
US markets open in 13 hours and the FDIC is completely silent.
What is happening?
– Kobeissi Letter (KobeissiLetter) May 1, 2023
American banking crisis
The collapse of the First Republic occurred two months after two major US banks, Silicon Valley Bank and Signature Bank, came under FIDC custody, and another, Silvergate Bank, announced voluntary liquidation.
First Republic was founded in 1985 and was acquired by Merrill Lynch in 2007. The bank’s shares were again publicly listed as Merrill’s owner, Bank of America, after the 2008 financial crisis.
San Francisco-based First Republic Bank’s troubles began earlier this year with the crisis at other banks. Subsequently, the bank received a $30 million lifeline from a consortium of 11 large banks, including JPMorgan Chase, PNC, and Bank of America. However, that turned out to be ineffective.
In its latest financial statements, First Republic revealed that its customers withdrew $102 million in just three weeks in March. The outflow reached more than 176 million dollars by the end of last year.
On Friday, shares of First Republic-listed plunged as the bank’s valuation fell from $20 billion to $557 million. Investor sentiment clearly showed a lack of confidence in the bank’s performance, which pushed it towards collapse.
Only at: First Republic Bank FRC$ Another 37% decline amid rumors of a government takeover. pic.twitter.com/gKhyu2eLBk
– Watcher.Guru (WatcherGuru) April 28, 2023
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