On Monday, First Republic Bank was seized by the U.S. regulators. JPMorgan Chase then acquired all of First Republic’s deposits, including uninsured ones, and a “substantial majority of assets.” First Republic has been under scrutiny as the weakest link in the U.S. banking system since the post-FTX collapse of Silicon Valley Bank (SVB) and Signature Bank in March 2022. To protect depositors, the FDIC is entering into a purchase and assumption agreement with JPMorgan Chase.
The California Department of Financial Protection and Innovation (DFPI) announced that regulators had taken possession of First Republic. The DFPI appointed the Federal Deposit Insurance Corporation (FDIC) as receiver of the failed bank. The FDIC has accepted a bid from JPMorgan Chase Bank to assume all deposits, including all uninsured deposits, and substantially all assets of First Republic.
“As part of the transaction, First Republic Bank’s 84 offices in eight states will reopen as branches of JPMorgan Chase Bank, National Association, today during normal business hours,” the FDIC said in a statement. “All depositors of First Republic Bank will become depositors of JPMorgan Chase Bank, National Association, and will have full access to all of their deposits.”
“Our government invited us and others to step up, and we did. This acquisition modestly benefits our company overall, it is accretive to shareholders, it helps further advance our wealth strategy, and it is complementary to our existing franchise.”
JPMorgan CEO Jamie Dimon
As of April 13, 2023, First Republic Bank had approximately $229.1 billion in total assets and $103.9 billion in total deposits. In addition to assuming all of the deposits, JPMorgan Chase agreed to purchase substantially all of First Republic’s assets.
The FDIC estimates that the cost to the Deposit Insurance Fund will be about $13 billion.
