JPMorgan Chase bank will take over all deposits and most of the assets of the battered First Republic Bank, the US Federal Deposit Insurance Corporation (FDIC) announced on Monday.
California regulators have closed First Republic and named the federal agency as its recipient, the FDIC said. JPMorgan Chase would assume “all of First Republic Bank’s deposits and substantially all of its assets,” the statement said.
First Republic Bank’s 84 branches in eight states were set to reopen Monday as offices of JPMorgan Chase.
Authorities were looking for a way to resolve the situation before markets in the United States opened on Monday. San Francisco-based First Republic Bank had been in trouble since the collapse of Silicon Valley Bank and Signature Bank in early March. That added to concerns that the bank might not survive much longer as an independent entity.
Regulators worked over the weekend to find a way forward before US stock markets opened. Markets in many parts of the world were closed for the May 1 holiday, International Workers’ Day. The two markets in Asia that were open, in Tokyo and Sydney, were up.
As of April 13, First Republic had about $229 billion in total assets and $104 billion in total deposits, the FDIC said. Late last year, the Federal Reserve ranked it 14th in size among US commercial banks.
Before Silicon Valley Bank failed, First Republic had a banking franchise that was the envy of most of the industry. His clients, mostly wealthy and powerful, rarely defaulted on their loans. The 72-branch bank has made much of its money making low-cost loans to the wealthy, which reportedly included Meta Platforms CEO Mark Zuckerberg.
Filled with deposits from the wealthy, First Republic saw total assets more than double to $102 billion at the end of the first quarter of 2019, when its full-time workforce stood at 4,600.
[Con información de The Associated Press y Reuters]