First Republic Takeover

JPMorgan Chase agreed to pay $10.6B to the Federal Deposit Insurance Corp. to acquire First Republic Bank yesterday, marking the second-largest bank failure in US history. JPMorgan will assume control of about $92B in customer deposits, $173B in outstanding loans, and $30B in securities. The FDIC, which seized First Republic early yesterday, estimates its insurance fund will suffer a loss of roughly $13B.

The San Francisco-based bank is the third to fail this year, with Silicon Valley Bank and Signature Bank collapsing in March. First Republic was known for catering to wealthy clients, with many of its accounts holding more than $250K—the insurance limit set by the FDIC. In March, the bank received a $30B funding package from major US banks, including JPMorgan. However, following previous bank failures, panicked investors withdrew more than $100B in deposits.

First Republic was ranked as the 14th largest bank in the US at the end of 2022, with consolidated assets of nearly $213B. Account holders at First Republic became customers of JPMorgan upon acquisition.