Regulators seized the battered First Republic Bank on Monday morning, making it the second-biggest bank failure in US history, and quickly sold all of its deposits and most of its assets to JPMorgan Chase Bank in an attempt to prevent more banking turmoil in the country.
San Francisco-based First Republic is the third midsize bank to go bankrupt in two months. The single largest bank failure has been that of Washington Mutual, which collapsed at the height of the 2008 financial crisis and was also taken over by JPMorgan.
First Republic had struggled since the collapse of Silicon Valley Bank and Signature Bank in early March and investors and depositors were increasingly concerned that it would not survive due to the large number of uninsured deposits and exposure to low-rate loans. low interest.
The Federal Deposit Insurance Corporation (FDIC) said Monday morning that First Republic Bank’s 84 branches in eight states will reopen as JPMorgan Chase Bank branches and depositors will have full access to all their deposits.
Regulators worked from late last week and over the weekend to chart a path forward before US stock markets opened. They solicited offers for First Republic Bank’s assets and once again turned to JPMorgan Chase, the country’s largest bank, which has a reputation as a dealmaker in times of crisis. Treasury officials also hired JPMorgan last month to spearhead a $30 billion financing package for First Republic.
“Our government invited us and others to step up, and we did,” said Jamie Dimon, Chairman and CEO of JPMorgan Chase.
As of April 13, First Republic had about $229 billion in total assets and $104 billion in total deposits, the FDIC said, a federal agency that also estimated that its deposit insurance fund will take a $13 billion hit by placing First Republic bankrupt. His bailout of Silicon Valley Bank cost the fund a record $20 billion.
