JPMorgan Takes Over Seized First Republic Bank

JPMorgan Chase agreed to acquire First Republic after the bank was seized by financial regulators after efforts to rescue the regional lender over the weekend failed to materialize—leading to the third major US bank failure of 2023, Siladitya Ray reported for Forbes.

Photo Insert: All depositors of First Republic will retain full access to their funds as they now become depositors of JPMorgan.

As part of the deal, JPMorgan Chase will assume all of First Republic’s deposits and a substantial majority of its assets, the Federal Deposit Insurance Corp. (FDIC) said in a statement.

The deal comes after efforts to rescue the troubled regional bank fell through and First Republic was shut down by California regulators on Monday, with the FDIC taking over as receiver.

FDIC has agreed to share losses from the transaction with JPMorgan and the federal agency estimates its Deposit Insurance Fund (DIF) will take a $13 billion hit. All depositors of First Republic will retain full access to their funds as they now become depositors of JPMorgan.

First Republic held total deposits of $103.9 billion as of April 13 and this appears to have shrunk over the past few weeks as JPMorgan said it expects to assume control of approximately $92 billion of deposits.

JPMorgan will also assume approximately $203 billion worth of First Republic’s assets, including $173 billion of loans and around $30 billion of securities.

WEEKLY FEATURE : MVP Group Keeps Lights On During Pandemic