Reuters quotes anonymous sources familiar with the matter while saying, “PNC Financial Services Group and JPMorgan Chase & Co were among banks set to submit final bids for First Republic Bank by midday Sunday in an auction being run by US regulators.”
“Citizens Financial Group Inc was another bidder in the final phase of the process, according to one of the sources familiar with the matter,” adds Reuters.
Three sources familiar with the matter said that the Federal Deposit Insurance Corporation (FDIC) is expected to announce a deal on Sunday night before Asian markets open, with the regulator likely to say at the same time that it had seized the lender.
A deal for First Republic would come less than two months after Silicon Valley Bank and Signature Bank failed amid a deposit flight from U.S. lenders, forcing the Federal Reserve to step in with emergency measures to stabilize markets.
While markets have since calmed, a deal for the First Republic would be closely watched for the amount of support the government needs to provide.
In trying to find a buyer before closing the bank, the FDIC is turning to some of the largest U.S. lenders. Large banks had been encouraged to bid for FRC’s assets, one of the sources said.
A source familiar with the situation told Reuters on Friday that the FDIC decided the lender’s position had deteriorated and there was no more time to pursue a rescue through the private sector.
By Friday, First Republic’s market value had hit a low of $557 million, down from its peak of $40 billion in November 2021.
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Reports are circulating that JPMorgan Chase and PNC Financial Services Group have put in the final bids to acquire First Republic Bank in a recent FDIC auction.
First Republic Bank, the San Francisco-based private banking and wealth-management startup, is the subject of a potential acquisition by a couple of America’s most prominent financial-serivce institutions. Sources have stated that JPMorgan Chase and PNC Financial Services Group have put in the final bids to acquire the banking institution in a Federal Deposit Insurance Corporation (FDIC) auction. The FDIC auctions off assets of financial institutions who are unable to remain in business or continue to provide services.
As of now, the terms of the two bidders have yet to be disclosed. The market can only speculate as to how much JPMorgan Chase and PNC Financial Services Group are willing to pay for First Republic Bank.
Despite the looming acquisition, First Republic Bank will continue to operate business as usual and its banking services, including the assistance of existing customers, will remain unaffected.
The potential acquisition by JPMorgan Chase and PNC Financial Services Group further solidifies the efforts of both conglomerates to expand its services into the private banking and wealth-management sector—key markets that overlap in current banking services. With the addition of First Republic Bank, JPMorgan Chase and PNC Financial Services Group are expecting more profitable revenues in the banking industry.
It is expected that First Republic Bank will have a formal announcement of the acquisition in the near future, but until then all information regarding the business terms of the deal remain confidential.