First Republic Bank sold to JPMorgan Chase
According to the Associated Press, regulators seized First Republic Bank early today, selling all of its deposits and most of its assets to JPMorgan Chase Bank. San Francisco-based First Republic is the third midsize bank to fail in two months.
The bank has struggled since the March collapses of Silicon Valley Bank and Signature Bank; its customers then rushed to pull out more than $100 billion in deposits. Investors and depositors had worried the bank might not survive because of its high amount of uninsured deposits and exposure to low interest rate loans. It was saved only because a group of large banks stepped in with $30 billion in uninsured deposits.
As of April 13, First Republic had approximately $229 billion in total assets and $104 billion in total deposits, the FDIC said.
First Republic Bank’s 84 branches in eight states will reopen as branches of JPMorgan Chase Bank, and depositors will have full access to all of their deposits.
As part of the agreement, the FDIC will share losses with JPMorgan on First Republic’s loans. JPMorgan expects the addition of First Republic to add $500 million to its net income per year, although it expects to incur $2 billion in costs integrating First Republic into its operations over the next 18 months.