U.S. regulators have announced today that First Republic Bank has been taken over and will...
U.S. regulators have announced today that First Republic Bank has been taken over and will be sold to JPMorgan Chase & Co.
This marks the third major U.S. institution to fail within a two-month period.
According to the regulators’ statement, JPMorgan will acquire most of First Republic’s assets and all of its deposits, including those that are uninsured.
The sale came after an auction process in which multiple potential buyers, including PNC Financial Services Group and Citizens Financial Group Inc, submitted final bids on Sunday, as reported by sources familiar with the matter.
As of April 13, First Republic had total assets worth $229.1 billion and deposits worth $103.9 billion, according to a statement by the FDIC.
Jamie Dimon, the Chairman and CEO of JPMorgan Chase, stated that his company responded to the government’s call to action and presented a bid that would minimize costs to the Deposit Insurance Fund, leveraging JPMorgan’s financial strength, capabilities, and business model.
This rescue operation took place in the context of a deposit flight from U.S. lenders, which had caused the failures of Silicon Valley Bank and Signature Bank in less than two months.
In response, the Federal Reserve had to intervene with emergency measures to stabilize the markets. These events followed the voluntary liquidation of Silvergate, a bank that specialized in cryptocurrency.
According to the statement, JPMorgan Chase Bank will reopen the 84 offices of the failed First Republic, located in 8 states, as its own branches starting from Monday.
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