First Republic Bank is considering options including a sale. Dania Maxwell/Los Angeles Times via Getty Images
First Republic Bank, the San Francisco-based lender that was trashed by S&P Global Ratings and Fitch Ratings on Wednesday, is evaluating strategic options, including a sale, according to people familiar with the matter.
The bank, which is also considering options to boost liquidity, is expected to attract the interest of larger rivals, said some of the people, who all asked for anonymity to discuss confidential information. No decision has been made and the bank can still choose to remain independent, they said. A spokesman for First Republic Bank declined to comment.
First Republic said Sunday it has more than $70 billion in untapped liquidity to fund operations from arrangements that included the Federal Reserve and JPMorgan Chase & Co. giving it a market value of $5.8 billion.
“The Federal Reserve’s additional borrowing capacity, continued access to funding through the Federal Home Loan Bank and the ability to access additional financing through JPMorgan Chase & Co. further enhances, diversifies and strengthens First Republic’s existing liquidity profile,” the bank said in Sunday’s statement.
The lender specializes in private banking and wealth management and has been scrambling to differentiate itself from Silicon Valley Bank, which has been seized by US regulators. Unlike SVB, which counted startups and venture firms among its largest clients, First Republic said no sector accounts for more than 9% of total business deposits.