Its shares were last trading at $4.21, after having risen as much as 6.6% earlier in the session.

Earlier on Friday, Reuters reported that the FDIC, the Treasury Department and the Federal Reserve are among government bodies that have started to orchestrate meetings with financial companies about a lifeline for the bank.

The government's involvement is helping bring more parties, including banks and private equity firms, to the negotiating table, one of the sources had told Reuters.

Still, concerns remain that deposit declines at First Republic could worsen and spark a fresh meltdown in the U.S. banking industry even as it recovers from the collapse of two regional lenders last month.

First Republic earlier this week said its deposits had slumped by more than $100 billion in the first quarter.

"The potential worst-case scenario stemming from the collapse of Silicon Valley Bank appears to have been averted," said Mark Haefele, chief investment officer at UBS Global Wealth Management, in a note.

"But the problems at First Republic are a reminder that further problems remain possible."

The San Francisco-based lender's stock has more than halved so far this week. Since the start of the year, it has lost nearly 95% of its value, making it the worst-performing S&P 500 stock.

Meanwhile, the Federal Reserve is set to publish an internal review of its supervision of Silicon Valley Bank on Friday, April 28, at 11 a.m. ET (1500 GMT).