JPMorgan Chase agrees to purchase First Republic Bank

Customers of First Republic Bank, including its 10 locations in Los Angeles and Orange counties, awoke Monday to find themselves customers of JPMorgan Chase Bank, with regulators seizing First Republic in what’s being called the second-largest bank failure in U.S. history.

First Republic was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation as receiver. The FDIC, in turn, entered into an agreement to sell the bank’s assets to JPMorgan Chase.

As a result, First Republic Bank branches opened Monday morning as branches of JPMorgan Chase, with customers being assured their deposits and assets are safe.

“JPMorgan will protect all deposits, insured and uninsured, bringing our financial strength, capabilities and capital to support First Republic’s clients and the U.S. banking system,” Chase officials said in a statement. “JPMorgan Chase has been a leader in financial services for more than 200 years, and we look forward to continuing to serve you and be deserving of your trust and business.”

Chase noted that all banking offices will be operating as usual, and customers can continue to manage their funds through www.FirstRepublic.com or on the bank’s mobile app.

First Republic Bank had approximately $229.1 billion in total assets and $103.9 billion in total deposits as of April 13, 2023, according to the FDIC.

First Republic Bank was based in San Francisco. It is the third and biggest U.S. bank to fail this year, following the collapse of Silicon Valley Bank in March and Signature Bank. First Citizens Bank eventually acquired Silicon Valley Bank and a subsidiary of New York Community Bank bought most of Signature Bank after they were taken into receivership by the FDIC.

First Republic Bank had 7,213 employees as of 2022 and served customers in Connecticut, Florida, Massachusetts, New York, Oregon, Wyoming in addition to California.

On Friday, shares of First Republic Bank stock closed at $3.51, down more than 97% to date. Trading of the bank’s shares was halted on the New York Stock Exchange several dozen times last week because of its value was so volatile. The bank announced on April 24 it lost $100 billion worth of deposits during the first three months of the year.

Gov. Gavin Newsom issued a statement saying, “In close partnership and coordination with the FDIC, California DFPI took decisive and critical action to stabilize the situation, avert layoffs, and protect Californians. The swift action by FDIC to secure a purchaser for the bank will protect depositors, including uninsured depositors.”

The failure of First Republic is second in size only to the 2008 collapse of Washington Mutual, which was also taken over by JPMorgan Chase.