FDIC to place First Republic under receivership – source

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FILE PHOTO: A trader works at the post where First Republic Bank stock is traded on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., March 16, 2023. REUTERS/Brendan McDermid

(Reuters) – The U.S. Federal Deposit Insurance Corporation (FDIC) is preparing to place First Republic under receivership imminently, a person familiar with the matter said on Friday, sending shares of the lender down more than 40% in extended trading.

Shares of the bank closed down 43% after CNBC reported earlier in the day the lender was likely headed for receivership under the FDIC, worsening a stock rout that has wiped out 75% of its value this week.

The U.S. banking regulator decided the troubled regional lenderโ€™s position has deteriorated and there is no more time to pursue a rescue through the private sector, the source told Reuters, requesting anonymity because the matter is confidential.

Shares of the bank closed down 43% after CNBC reported earlier in the day the lender was likely headed for receivership under the FDIC, worsening a stock rout that has wiped out 75% of its value this week.

First Republic and FDIC representatives did not immediately respond to requests for comment.

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