U.S. regulatory authorities have requested banks to submit their final takeover offers for First Republic by Sunday afternoon.

This measure aims to bring stability to the markets and alleviate the uncertainty surrounding regional lenders, as reported by CNBC

Sources familiar with the matter suggest that JPMorgan Chase and PNC are likely contenders for acquiring the struggling lender.

First Republic would be taken over through receivership and promptly sold to the winning bank. The Wall Street Journal reported on Friday that these banks expressed their interest in the acquisition.

On the other hand, Bank of America, who participated in earlier discussions, has decided not to make a final bid, as per sources familiar with the situation obtained by CNBC.

If the regulators, led by the FDIC, receive an acceptable offer by Sunday, it is possible that a new owner for First Republic will be announced soon.

This scenario would cause minimal disruption for the bank’s customers, who would enter the week knowing that their bank is now owned by a financially stable operator.

The conclusion of the First Republic auction could mark the end of a turbulent period for mid-sized U.S. banks, CNBC reported.

Following the collapse of Silicon Valley Bank in March, First Republic has emerged as the weakest link in the American banking system.

The bank’s shares plummeted by 90% last month and experienced further decline this week after First Republic revealed the severity of its situation.

Similar to SVB, which catered to the tech startup community, First Republic is also a specialty lender based in California.

Its focus was on serving affluent individuals, enticing them with low-rate mortgages in exchange for keeping their funds in the bank.

However, this business model unraveled after the collapse of SVB, leading First Republic clients to withdraw over $100 billion in deposits, as disclosed by the bank on Monday.

Written by staff