JPMorgan Chase buying most assets of embattled First Republic Bank
JPMorgan Chase is buying most assets of First Republic Bank and assuming all of the lenders deposits in a deal announced on Monday that was arranged by the US Federal Deposit Insurance Corporation.
New York, May 1,2023: JPMorgan Chase is buying most assets of First Republic Bank and assuming all of the lenders deposits in a deal announced on Monday that was arranged by the US Federal Deposit Insurance Corporation.
JPMorgan said it had acquired “the substantial majority of assets” and assumed the deposits, insured and uninsured, of First Republic Bank from the FDIC, the independent government agency that insures deposits for bank customers, CNN reported.
“In carrying out this transaction, JPMorgan Chase is supporting the US financial system through its significant strength and execution capabilities,” the bank said in a statement.
The FDIC took control of the embattled First Republic and then immediately announced a sale of many of its assets and deposits. It makes the lender the second-largest bank failure in the nation’s history.
The move represents the latest effort by federal regulators to prop up consumer confidence in the banking system, which has now suffered three major bank failures in the last six weeks.
Silicon Valley Bank and Signature Bank both were taken over by the FDIC last month following runs on those banks by their customers, CNN reported.
The collapse of those banks sparked weeks of speculation about the health of US regional banks, especially those with a largely uninsured deposit base.
“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,” it noted.
First Republic, which started operations in 1985 with a single San Francisco branch, is known for catering to wealthy clients in coastal states.
It had assets of $233 billion as of the end of March.
As of the end of last year, it was the nation’s 14th-largest bank, according to a ranking by the Federal Reserve, CNN reported.