The Federal Deposit Insurance Corporation (FDIC) has reportedly called on US banks to submit their final bids for the First Republic Bank by Sunday in order ensure a swift transition amid a growing US banking crisis.
US media outlets reported Saturday that the US federal regulator had started calling on banks late Thursday to determine which financial institutions were interested in taking on First Republic.
Aside from JPMorgan Chase and the PNC Financial Services Group, the FDIC has also reached out to the US Bancorp and the Bank of America Corporation. The Citizens Financial Group Inc. is also reported to be involved in the bidding war.
Insiders have indicated that based on initial submitted bids, interested parties are now expected to submit their final offers.
However, of the named banking companies, it's alleged Bank of America has yet to commit to a final submission, and that JPMorgan may be ineligible as it has more than 10% of nationwide deposits in its pocket.
Additionally, it's also unclear whether a potential solution will in fact include officials sidestepping a federal seizure of First Republic in favor for an open-market fix.
Officials with knowledge of the back door discussion have relayed to US outlets that officials are hoping to announce a deal by Sunday night before Asian markets open for trading.
The latest developments come as reports surfaced midweek that the San Francisco-based bank was on its way to go under FDIC receivership in the same fashion as Silicon Valley Bank and Signature Bank days later. In fact, it came just after a Monday earnings report led First Republic's stock to plummet and only continue to drop during after hours.
Starting with the SVB collapse, the US' 2023 banking crisis has been blamed on a variety of hiccups including mismanagement and supervisory missteps, according to a report released by the US Federal Reserve. The Friday findings also detailed that federal regulators carried the blame for failing to fully recognize SVB's issues and act promptly.