Federal agencies are engaged in “urgent” meetings to discuss measures to rescue First Republic Bank, Reuters reported, after the lender’s recent earnings report—which disclosed worse-than-expected outflows of assets—raised fears that it may become the third major U.S. bank to collapse this year.
A security officer walks outside of a First Republic Bank location in San Francisco, Wednesday.
Citing three unnamed sources, Reuters reported that the Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corporation have met with several financial companies to hammer out a deal to provide a “lifeline” to the lender.
While the bank has been independently seeking its own rescue deal, the report notes that the involvement of government agencies has drawn attention from more companies, including banks and private equity firms.
The report adds that the level of the government’s involvement in the final deal is unclear at the moment.
First Republic told Reuters that they are engaged in discussions with “multiple parties” about “strategic options.”
After cratering massively earlier this week, First Republic shares are up more than 10% in pre-market trading early on Friday.
Earlier on Thursday, Press Secretary Karine Jean-Pierre said the White House was monitoring the situation surrounding First Republic Bank and was ready to step in if the need arises. Jean-Pierre reiterated comments by Biden administration officials that the U.S. banking system remained “sound and resilient” after “decisive and forceful” action was undertaken following last month’s dual collapses. She added that the administration has used important tools to stabilize the banking system. and “could use those tools again if needed.”