First Republic Bank, the large regional bank known for its customer service and high net worth clientele, is reportedly set to be taken over by federal regulators and brought into receivership in the near future. The rumored move comes after over $100 billion in deposits have flowed out of the bank, spurred by depositors unsure about the bank’s stability.
First Republic has faced similar issues as the recently collapsed Silicon Valley Bank, whose unrealized losses on long-term bond holdings combined with deposit outflows led to its collapse. First Republic’s financial instability has led to the collapse of its stock price, which has fallen in three months from $141.01 to $3.51 at Friday’s close. In the case of First Republic’s failure, shareholders would be the last to receive any proceeds from sold assets.
Both JP Morgan Chase and PNC Bank are reportedly interested in buying First Republic. Both banks were part of an earlier consortium of large banks who deposited $30 billion to try to shore up the bank’s finances.
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