Troubled regional credit institution First Republic Bank, which is struggling to raise capital and sell assets, is expected to be seized by the US government soon, according to sources working with the bank.
Sources told Fox Business News that the bank has exhausted all private sector solutions and will likely be placed under trusteeship by the Federal Deposit Insurance Corporation (FDIC).
First Republic Bank is recognized as a regional bank that provides banking and wealth management services to individuals and businesses.
It does not offer its customers the chance to purchase cryptocurrencies on its own platform. However, it does allow its customers to connect their personal bank accounts or debit cards to a Financial Crimes Enforcement Network (FinCEN) licensed broker to purchase digital assets such as Bitcoin (BTC) and Ethereum (ETH).
Sources said they believed federal regulators were poised to take over the bank, just before officials at the major banks that provided $30 billion in support to the First Republic in recent weeks announced a bad quarterly earnings call that caused the bank's stock to plummet.
First Republic posted a net loss of $4.2 billion in the first quarter of 2023, while it had net income of $295 million in the same period of 2022. The company also announced that it is suspending dividends on its preferred stock and is facing a potential class action lawsuit from shareholders.
First Republic Bank has also faced financial difficulties since the collapse of Silicon Valley Bank, which sparked a regional banking crisis. The company has received a $30 billion bailout from the country's largest banks, but has yet to raise any more cash or sell its assets or itself.
*Not investment advice.