The seizure of the First Republic could take place by the end of the weekend

Federal regulators are preparing to seize First Republic Bank as early as this weekend, while major banks including JPMorgan Chase and PNC are vying to buy the lender once it goes into receivership, according to multiple reports.

If the San Francisco-based lender falls into receivership, it would become the third U.S. bank to fail since March, following UBS’s Swiss government-brokered buyout of European giant Credit Suisse.

After failing to find a private buyer for First Republic this week, the US Federal Deposit Insurance Corporation has decided that the bank’s position has deteriorated to the point that it is running out of time for a private sector bailout, sources told Reuters.

The FDIC, after gauging initial interest earlier this week, has asked major banks, including JPMorgan and PNC, to submit their final bids to buy First Republic into receivership before Sunday, according to Bloomberg News.

That suggests the regulator could plan a swift move to seize First Republic and then transfer control to a private buyer before the bank reopens Monday morning.

Shares of First Republic fell 75 percent Monday through Friday after the bank announced it lost $100 billion in deposits in the first quarter

The FDIC reached out to banks late Thursday seeking indications of interest, including a proposed price and estimated cost for the agency’s deposit insurance fund, the Bloomberg report said.

The FDIC said in a statement: “We do not comment on or corroborate reports about open and operating banks.”

Spokesmen for First Republic, JPMorgan Chase and PNC declined to comment when reached by DailyMail.com Saturday morning.

A First Republic spokesperson said Friday, “We are in multi-party discussions regarding our strategic options as we continue to serve our customers.”

For suitors, buying First Republic after it enters FDIC trusteeship is potentially more attractive than an open-market purchase for a number of reasons, including a drastic reduction in red tape and potential liabilities.

First Republic had about $233 billion in assets at the end of the first quarter, meaning that if it goes into receivership, it would become the second largest bank in U.S. history to fail, making it would overshadow the March 10 collapse of Silicon Valley Bank.

The collapse of Silicon Valley Bank and, days later, Signature Bank of New York, triggered a run on deposits at First Republic, the U.S. lender with the largest share of uninsured deposits above the FDIC’s $250,000 limit.

A $30 billion lifeline from a consortium of 11 major US banks, which injected the money into First Republic as deposits on March 16, failed to bolster confidence in the lender.

Those deposits are uninsured and it’s unclear what will become of them if the FDIC places First Republic in receivership.

First Republic said earlier this week that its deposits fell by more than $100 billion in the first quarter. The bank’s CEO, Michael J. Roffler, is seen above

For suitors, buying First Republic after it has gone into receivership by the FDIC is potentially more attractive than an open market purchase for a number of reasons

Despite the lifeline, First Republic struggled to find support from larger banks or private equity firms in its proposed move to create a so-called “bad bank” to divest troubled assets.

On Monday, First Republic announced it had lost about $100 billion in deposits in the first quarter, leading to a sharp sell-off in the company’s stock.

Shares of First Republic fell 75 percent Monday through Friday and are now down more than 97 percent since the start of the year when they traded around $120.

At Friday’s low, the bank had a market cap of nearly $557 million, a far cry from its peak valuation of more than $40 billion in November 2021.

The shares, which traded for $2.33 in extended hours on Friday, would be essentially worthless if the company is seized by the FDIC.

However, unlike the events surrounding the SVB and Signature collapses last month, concerns surrounding First Republic had little impact on broader markets or other banking stocks this week.

The Dow Jones Industrial Average gained this week to close out its best month since January as investors appeared to view First Republic’s troubles as isolated.

John Guarnera, senior business analyst at RBC Bluebay Asset Management, told Reuters the First Republic case is an “evolving situation.”

“The rest of the regional banking system feels like it’s in a different place than where [First Republic] it,” he said.

News of the imminent move to put First Republic into receivership followed reports from the Federal Reserve and the FDIC detailing their oversight failures before deposit runs triggered the collapse of Silicon Valley Bank and Signature Bank in March.

The Fed’s assessment of its shortcomings in identifying problems and pushing for solutions at the California-based SVB came with promises of tighter oversight and stricter regulation for banks.