First Republic is already the third bank to be taken over by US authorities in less than two months.
The United States authorities have taken over First Republic Bank, which was in crisis. Most of its operations are sold to the big bank JPMorgan Chase.
Tells about it United States Deposit Protection Authority FDIC (you switch to another service). According to the agreement, all of First Republic’s deposits and most of the bank’s assets will be transferred to JPMorgan.
It is the second largest bank failure in US history. At the end of last year, First Republic was the 14th largest bank in the United States.
The bank had lost a huge amount of deposits
California’s First Republic’s downfall steepened a week ago on Monday, when the bank released its interim report. The figures revealed that the bank had lost about $100 billion in deposits during the early part of the year, when severe turmoil hit the US banking sector.
In March, 11 major US banks, led by JPMorgan, gave First Republic a $30 billion deposit in an effort to help the troubled bank stay afloat. In the end, the First Republic could only limp along for a few weeks before collapsing.
First Republic is the third bank to be taken over by the FDIC in less than two months. Another Californian bank, Silicon Valley Bank, and New York’s Signature Bank went bust in March.
In the US, mid-sized banks have suffered a flight of deposits since the collapse of Silicon Valley Bank, and bank stock prices have fallen. First Republic’s share price has collapsed during this year.
Branches open as part of JPMorgan
During the weekend, the US authorities hurriedly organized the sale of First Republic’s operations to the new owner.
Along with JPMorgan, the largest bank in the United States, two other banks, PNC and Citizens, had made an offer to buy First Republic’s operations, according to media reports.
First Republic had about $229 billion in assets and $104 billion in deposits as of mid-April.
As a result of the deal with JPMorgan, the FDIC’s Deposit Insurance Fund will incur an estimated $13 billion in losses.
First Republic’s 84 branches in eight states will open Monday as part of JPMorgan. The bank’s depositors will become JPMorgan’s customers and will have full access to their deposits, the FDIC says.