First Republic Bank (FRB) is set to be acquired by JPMorgan Chase after early efforts to rescue it failed. On May 1, the California Department of Financial Protection and Innovation closed FRB and entered into an agreement with the Federal Deposit Insurance Corporation (FDIC) as the receiver.
JPMorgan will assume all assets of FRB, including uninsured deposits, which currently amount to $229.1 billion in assets and $103.9 billion in deposits. In addition, a loss-sharing agreement was agreed upon between the FDIC and JPMorgan for residential and commercial loans acquired by the FRB. As part of the transfer, 84 locations of First Republic Bank in eight states will reopen as JPMorgan Chase.
The acquisition was prompted by FRB’s troubles that started on April 26 when the news of a government receivership surfaced, leading to the bank’s shares sinking by 20%.
Despite being one of the top-performing banks in the United States, FRB has joined Silicon Valley Bank and Signature Bank to become the latest U.S. bank to collapse in 2023.