Officials of First RepublicBank Corp. said federal regulators could decide the fate of the financially troubled bank holding company this week, but executives dismissed as speculation rumors that the bank would be declared insolvent. The Federal Deposit Insurance Corp., which rescued First RepublicBank with a $1 billion loan in March, said Wednesday it was considering all options to resolve the company's financial crisis. An announcement could come Friday. Management of First RepublicBank, which had a net loss of $2.3 billion in the first six months of the year, is competing with three outside bidders for control of the institution. But the FDIC could declare the company insolvent and run the institution itself until a suitor is selected in a so-called bridge-bank transaction. The FDIC received final proposals to buy First RepublicBank on Monday from Citicorp of New York; NCNB Corp., a regional banking company based in Charlotte, N.C.; and San Francisco-based Wells Fargo & Co. First RepublicBank's management, led by Chairman Albert Casey, submitted a plan to the FDIC to remain independent. In a memo to First RepublicBank managers Wednesday, the company said it expected an FDIC decision by the weekend. Spokesman Joe Bowles said the memo was prompted by speculation that a bridge transaction was imminent. ``As the decision time grows near, we expect to see more of this speculation,'' Bowles said. The FDIC would ultimately shoulder close to $2 billion of the cost of any deal, FDIC Chairman Wiliam Seidman has said, including an initial recapitalization of as much as $5 billion. Creation of a bridge bank would eliminate bondholder and shareholder claims and nullify all current lawsuits against First RepublicBank. The FDIC can control the bridge bank for up to two years.
