First Republic Bank on the brink? JPMorgan, PNC as potential…

First Republic Bank on the brink? JPMorgan, PNC as potential…


Bank of the First Republic FRC Fate seems to be sealed, and rumors are pointing to it Regional bank would be taken over by the government After that, there would be potential buyers for his assets.

What happened: Shares of First Republic went on a free fall on Friday, falling 43.3% in regular trading to $3.51 and down 33.62% in after-hours trading Benzinga Pro data.

The decline was prompted by reports that the bank could be put under receivership by the Federal Deposit Insurance Corporation, suggesting a government takeover of the bank.

A Wall Street Journal report called JPMorgan Chase & Co., Inc. JPM and regional banking colleague PNC Financial Services Group, Inc. pnc could bid for the First Republic after government confiscation.

The seizure and sale could be announced as early as this weekend, the report said.

See also: Best regional bank stocks

Why it matters: The development could be a setback even as the banking system recovers from the recent US dollar collapses Silicon Valley Bank and the signature bank. Both banks were taken over by the state and later sold to the SVB First Citizens Bankshares, Inc. FCNCA.

The underlying problem behind the collapses is the mismatch in asset maturities, which left banks investing in longer-dated government bonds with huge book losses. When the problem became known, it sparked bank runs, leading to a flight of deposits away from regional banks.

San Francisco-based First Republic came under the spotlight when it announced measures to strengthen and diversify liquidity in mid-March. It was at this point that Street began to smell trouble with the lender. In less than a week, the bank said 11 banks led by JPMorgan would collectively contribute $30 billion in uninsured deposits.

Then First Republic announced the suspension of the dividend on all series of preferred shares.

Then came the bank’s first-quarter results earlier this week, with key metrics beating expectations. Also the bank…


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