JPMorgan Chase acquired First Republic Bank, which was facing financial difficulties. On Monday, JPMorgan Chase announced that it would acquire deposits and a substantial amount of assets and certain liabilities from failed First Republic Bank.
The California Department of Financial Protection and Innovation closed First Republic and put it into the receivership of the Federal Deposit Insurance Corporation (FDIC), which then sold it to JPMorgan. This marks the third time this year that the U.S. government has taken control of a U.S. lender.
The acquisition includes the assumption of approximately $92 billion of deposits and the acquisition of the substantial majority of First Republic Bank’s assets. JPMorgan will rebrand the 84 branches, which will open as normal on Monday.
CEO Jamie Dimon said that the bank made a bid to minimize costs to the FDIC’s Deposit Insurance Fund, estimated to cost around $13 billion. First Republic is the third and biggest U.S. bank to fail this year. In March, federal regulators insured all deposits at Silicon Valley Bank and Signature Bank after they took unprecedented action to protect customers.
After the banks were taken into receivership, the FDIC solicited bids to buy the two lenders, and New York Community Bank and First Citizens Bank acquired them, respectively. While the fear of bank runs did not materialize, the deposit pressure on First Republic was worse than expected.
