Connect with us

Hi, what are you looking for?


First Republic Bank (FRC) collapse is underway as FDIC seeks rescue

First Republic Bank’s (NYSE: FRC) collapse is imminent as the FDIC works to save the troubled back. On Friday, the FRC stock price ended the week at $3.51, which was lower than its all-time high of $225. Its market cap crashed to just $638 million, meaning that investors believe that its equity is worthless.

First Republic Bank rescue

Talks are continuing in the US to try to save the company and its depositors. According to Bloomberg, the FDIC has turned to some of the biggest banks to try and buy the company. Some of the banks it has approached are JP Morgan, Bank of America, US Bancorp, and PNC Financial.

These banks were first asked to show indications of interest, potential price, and the estimated cost to the agency. It then narrowed the list to a few banks as it seeks to conclude the transaction before the market opens on Monday.

Banks are a bit sceptical about taking over First Republic, a company that lost over $100 billion in deposits in the first-quarter. These losses likely increased after the company’s shares collapsed during the week.

Additional concerns are the potential losses after the merger. First Republic’s balance sheet has billions of dollars in unrealized losses that the acquirer will need to cover.

Banks like JP Morgan have the additional issues since regulations bar large American banks from continuing growing. As such, any bid will need guarantees that these regulations will be waived. 

Why FDIC wants a buyer

The FDIC hopes that FRC will find a buyer considering that its stock price has plunged, making it an attractive target. Also, by moving into receivership, it means that the FDIC will avoid paying billions of dollars to depositors. 

None of all these options are good for First Republic Bank shareholders who have seen their equity crash by over 90% in the past few months. As I wrote here, drawing from the lessons of Credit Suisse and SVB, catching a falling knife is dangerous when it comes to troubled banks. 

Other regional banks are also in trouble as more people move their cash to the big banks. Also, there are concerns about the safety of the commercial real estate sector. Some of the biggest regional banks at risk are Valley National Bancorp, PacWest Bancorp, Pacific Premier Bancorp, and Independent Bank among others.

The post First Republic Bank (FRC) collapse is underway as FDIC seeks rescue appeared first on Invezz.

Enter Your Information Below To Receive Free Trading Ideas, Latest News And Articles.

    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    You May Also Like

    Latest News

    Rep. Jennifer Wexton (D-Va.) announced on Tuesday that she has been diagnosed with Parkinson’s Disease. “If there’s one thing that Democrats and Republicans can...

    Latest News

    After Dianne Feinstein announced she’d contracted the shingles in early March, her staff said she planned to return to the Senate within a matter...


    A U.S. District Court judge has ruled that Elizabeth Holmes, founder and CEO of the disgraced blood-testing company Theranos, cannot remain free on bail...

    Latest News

    SEOUL, South Korea — When a group of American lawmakers arrived in South Korea for meetings with government and military officials, President Yoon Suk-yeol...

    Disclaimer:, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2022 All Rights Reserved.