First Republic Bank collapses, JP Morgan to take over ‘all deposits’

Investment banking firm JP Morgan Chase will take over all of the deposits — insured and uninsured — and almost all assets of collapsed First Republic Bank, the Federal Deposit Insurance Corporation (FDIC) confirmed in a statement on Monday.

The San Francisco-based bank is the third to go under in recent months, following in the footsteps of Silicon Valley Bank and crypto-friendly Signature Bank in March. First Republic’s shares plummeted over 75% last week after it revealed that its customers had recently pulled out $100 billion of deposits. Since January, First Republic stock has devalued by 97%.

According to the FDIC, First Republic Bank had around $104 billion in deposits and roughly $230 billion in total assets. JP Morgan said in its own statement released Monday that it will take on $173 billion of loans and $30 billion of securities belonging to First Republic Bank, including $92 billion of deposits. However, the firm isn’t taking on the bank’s corporate debt or its preferred stock. At press time, JP Morgan shares are up 3% pre-market.

• The California Department of Financial Protection and Innovation (DFPI) announced that regulators took possession of First Republic Bank early Monday.
• The DFPI said that the FDIC would receive the bank, and that it accepted JP Morgan’s bid.
• The FDIC estimates that it’ll cost the Deposit Insurance Fund around $13 billion.

Read more: US gov’t creates moral minefield after SVB and Signature bailout

Chair and CEO of JP Morgan, Jamie Dimon, said in the firm’s statement that its bid was developed to “minimize costs to the Deposit Insurance Fund,” and added, “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.”

First Republic Bank’s 84 offices in eight states will be reopened under JP Morgan Chase branding, the statement said.

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