New York(CNN) Federal regulators are holding an auction for ailing regional bank First Republic, a person familiar with the matter tells CNN.
Final bids are due for First Republic Bank at 4 p.m. ET on Sunday, the source said.
The Federal Deposit Insurance Corporation, the independent government agency that insures deposits for bank customers, is running the auction.
Neither First Republic nor the FDIC were immediately available for comment.
A decision on a First Republic buyer would seem likely to be announced later Sunday evening. During times of market stress, government officials typically try to announce solutions before global markets start trading. Some Asian markets are scheduled to begin trading at 8 p.m. ET Sunday.
Shares of First Republic (FRC) plunged from $122.50 on March 1 to around $3 a share as of Friday on expectations that the FDIC would step in by end of day and take control of the San Francisco-based bank, its deposits and assets. But that never happened.
The FDIC had already done so with two other similar sized banks just last month — Silicon Valley Bank and Signature Bank — when runs on those banks by their customers left the lenders unable to cover customers’ demands for withdrawals.
The Wall Street Journal previously reported that JPMorgan Chase and PNC Financial are among the big banks bidding on First Republic in a potential deal that would follow an FDIC seizure of the troubled regional bank.
PNC declined to comment. JPMorgan did not respond to requests for comment.
“We are engaged in discussions with multiple parties about our strategic options while continuing to serve our clients,” First Republic said in a statement Friday night.
If there is a buyer for First Republic, the FDIC would likely be stuck with some money-losing assets, as was the case after it found buyers for the viable portions of SVB and Signature after it took control of those banks.
A kind of shotgun marriage, arranged by regulators who didn’t want a significant bank to end up in the hands of the FDIC before it was sold, occurred several times during the financial crisis of 2008 that sparked the Great Recession. Notably, JPMorgan bought Bear Stearns for a fraction of its earlier value in March of 2008, and then in September bought savings and loan Washington Mutual, soon after Bank of America bought Merrill Lynch.
The failure of Washington Mutual in 2008 was the nation’s largest bank failure ever. First Republic, which is bigger than either SVB or Signature Bank, would be the second largest.
First Republic lifeline proved not to be enough
Soon after collapses of SVB and Signature in March, First Republic received a $30 billion lifeline in the form of deposits from a collection of the nation’s largest banks, including JPMorgan Chase (JPM), Bank of America (BAC), Wells Fargo (WFC), Citigroup (C) and Truist (TFC), which came together after Treasury Secretary Janet Yellen intervened.
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Read More: Big banks are bidding for troubled First Republic as FDIC deadline looms