Seizure and sale of the distressed lender could come as soon as this weekend By Andrew Ackerman , David Benoit and Rachel Louise Ensign Updated April 28, 2023 10:51 pm ET First Republic Bank customers pulled around $100 billion in deposits in a matter of days. PHOTO: LOREN ELLIOTT/REUTERS Big banks including JPMorgan Chase & Co. JPM 0.87%increase; green up pointing triangle and PNC Financial Services Group Inc. PNC 1.74%increase; green up pointing triangle are vying to buy First Republic Bank FRC -43.30%decrease; red down pointing triangle in a deal that would follow a government seizure of the troubled lender, according to people familiar with the matter. A seizure and sale of First Republic could come as soon as this weekend, the people said. The San Francisco-based bank has teetered for weeks following the March 10 failure of fellow Bay Area lender Silicon Valley Bank. The SVB meltdown spurred panicky First Republic customers to pull around $100 billion in deposits in a matter of days. The stock has lost some 97% of its value since. NEWSLETTER SIGN-UP Markets A.M. A pre-markets primer packed with news, trends and ideas. Plus, up-to-the-minute market data. Subscribed A group of the nation’s biggest banks, including JPMorgan and PNC, tried to shore up First Republic with a $30 billion deposit, but it wasn’t enough. First Republic considered a sale or outside capital injection and hired investment bankers to advise on its options, The Wall Street Journal has reported. It also floated a plan to sell some of its loans or securities, or both, at prices above market value. A seizure and sale of First Republic would cap the astonishing collapse of a lender that was, until recently, the envy of finance. With some $233 billion in assets at the end of the first quarter, it would be the second-largest bank to fail in U.S. history. A First Republic spokesman declined to comment. An FDIC spokeswoman declined to comment. Advertisement - Scroll to Continue First Republic released a dismal quarterly earnings report Monday that gave new details on the extent of the damage from the deposit run. The bank said it filled the hole from fleeing depositors with expensive loans from the Federal Reserve and Federal Home Loan Bank. That left the lender facing a future where it would potentially pay more on its liabilities than it earned on its assets. The earnings report sent the bank’s stock down nearly 50% in one day. It continued to tumble as the week went on and closed at $3.51 a share on Friday, down from $115 on March 8, the day SVB disclosed a loss that spooked investors and customers. The banking industry turmoil began when customers with balances exceeding the $250,000 deposit insurance limit grew concerned in March about the health of a handful of midsize banks and pulled out their money en masse. New York-based Signature Bank failed days after SVB’s collapse. Regulators and bankers hoped the panic had eased after the government stepped in to make uninsured depositors at SVB and Signature whole. But First Republic’s badly damaged balance sheet left it with few good options. Only a handful of banks could easily absorb First Republic’s assets and deposits. Some of those, like Wells Fargo & Co., face regulatory hurdles to expansion. Others are still digesting recent deals for other banks. JPMorgan and Pittsburgh-based PNC both have a history of stepping into the breach during crises. JPMorgan bought ailing Bear Stearns in 2008, then took on Washington Mutual Inc.’s operations after it was seized by the government. Chief Executive Jamie Dimon parlayed his crisis management into a statesman role among bank executives. He is the longest-serving CEO of the biggest U.S. banks, in the role since 2005, and regularly uses his perch to advise government officials and promote policy moves he says will help the economy. He was a key force behind the $30 billion big-bank deposit that kept First Republic afloat in the early days of the banking panic. He later tried to rally his fellow CEOs to craft a new rescue plan for the troubled bank, suggesting that they could convert some or all of their deposits into a capital infusion, the Journal previously reported. During the 2008 financial crisis, PNC bought ailing Cleveland lender National City Corp. with government assistance. That deal made PNC one of the largest regional banks in the U.S. It was the nation’s sixth-largest bank at the end of last year, according to the Federal Reserve.