Shares of US bank First Republic Bank fell sharply on Friday, by 50%, and were suspended from trading as hopes of a rescue deal that could keep the bank afloat dwindled, CNBC reports.

Sources told CNBC that the most likely outcome for the troubled bank is for the Federal Deposit Insurance Corporation to take it under administration.

Shares of First Republic have fallen more than 90% this year as investors lost confidence in the bank following the bankruptcy of two regional banks in March.

Sources told Faber that the FDIC is courting other banks in potential bids for First Republic if regulators put the bank under receivership.

According to these sources, there is still hope for a solution that does not involve a competitive process.

First Republic said Friday that “we are in discussions with several parties regarding our strategic options while continuing to serve our customers.”

CNBC reported Wednesday that advisers to First Republic are preparing to propose a plan to larger banks that would allow the regional bank to sell bonds and other assets at above-market prices and then raise equity capital. The sales will result in losses for the banks that buy the bonds, but may be cheaper in the long run than failing the bank and being seized by regulators.

Reuters reported on Friday that US officials, including the FDIC, the Treasury Department and the Federal Reserve System, are coordinating meetings with other banks to broker a rescue plan for First Republic.

First Republic shares closed at $16 a share on Monday, before the bank reported first-quarter financial results that showed a roughly 40 percent drop in deposits.

Over the next two days, the bank’s shares fell by more than 60%, hitting a new all-time low.

First Republic is a regional bank that focuses on affluent individuals and their businesses, particularly by offering mortgage loans at low interest rates.

The market value of those mortgages, as well as other long-term assets on the bank’s balance sheet, has fallen since the Fed began raising interest rates last year, leading investors to worry that the bank will have to post big losses if it is forced to sell those assets to raise money. .

The massive outflow of bank deposits followed the collapse of Silicon Valley Bank and Signature Bank in March.

The largest US banks, including JPMorgan Chase, have already helped First Republic with $30 billion by creating time deposits. (source: news.ro)