First Republic Bank is considering options as a sell. Dania Maxwell/Los Angeles Times via Getty Images
First Republic Bank, the San Francisco-based lender that was wiped out by S&P Global Ratings and Fitch Ratings on Wednesday, is exploring strategic options, including a sale, according to people with knowledge of the matter.
The bank, which is also considering options to bolster its liquidity, should attract interest from larger competitors, some people said, all of whom requested anonymity to discuss confidential information. No decision has been made and the bank could still choose to remain independent, they said. A spokesperson for First Republic Bank declined to comment.
The First Republic said on Sunday it had more than $70 billion in idle cash to fund deal operations including the Federal Reserve and JPMorgan Chase & Co. Still, its stock fell 21% on Wednesday in New York. to hit a ten-year low of $31.16. giving it a market value of $5.8 billion.
“Additional borrowing capacity from the Federal Reserve, continued access to funding through the Federal Home Loan Bank, and the ability to access additional funding through JPMorgan Chase & Co. further expands, diversifies, and strengthens the liquidity profile of First Republic,” the bank said. in Sunday’s release.
The lender specializes in private banking and wealth management, and has made an effort to differentiate itself from Silicon Valley Bank, which has been seized by US regulators. Unlike SVB, which counted startups and venture capital firms among its biggest clients, First Republic said no sector accounts for more than 9% of total company filings.