JP Morgan acquires First Republic Bank, here’s all you need to know about this third major lender to fail in 2 months

JPMorgan Chase & Co, a financial services company, is prepared to take over a sizable portion of the liabilities and assets of the troubled First Republic Bank. The First Republic’s demise was certified by the Federal Deposit Insurance Corporation (FDIC) on Monday.

On Monday, the FDIC and regulators revealed the agreement, announcing that they were simultaneously closing the bank, selling JPMorgan the majority of the firm’s assets worth $93.5 billion and all of its depositors. Following the failure of Washington Mutual in 2008, the First Republic’s demise is the second-largest bank’s collapse in the history of the US.

JPMorgan would “believe every single deposit, primarily all unprotected deposits, and roughly all assets” of the First Republic, according to a statement from the California Department of Financial Protection & Innovation.

The 84 locations across eight states of First Republic Bank will reopen as JPMorgan Chase Bank locations on Monday. First Republic, like Silicon Valley Bank, which collapsed in March and targeted venture capital firms, specializes in private banking that appeals to wealthy clients.

The US FDIC was chosen by the California regulator to be the bank’s receiver. The regulator estimates that First Republic Bank had approximately $229.1 billion in total assets as of April 13, 2023, while it had $103.9 billion in total deposits.

The Expansion of JPMorgan Chase & Co Envisaged

The largest lender in the US, JPMorgan, will now spread and get bigger thanks to this acquisition. Considering the size and existing share of US deposits held by the banking behemoth, US regulatory requirements would have prevented growth in the lender’s asset base under normal circumstances.

After Signature Bank and Silicon Valley Bank (SVB) failed, First Republic was confronted with a growing crisis.

On Sunday, Citizens Financial Group Inc, JPMorgan Chase & Co, and PNC Financial Services Group were reportedly among the institutions that filed final offers for First Republic Bank in an auction held by US authorities.