JPMorgan to Acquire First Republic Bank

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Last Updated on May 1, 2023 by Bitfinsider

The American banking giant JPMorgan Chase is poised to acquire First Republic Bank’s (FRB) assets following the failure of initial rescue efforts. On April 29, JPMorgan and multiple other banks submitted an offer to acquire the assets of the troubled FRB.

The California Department of Financial Protection and Innovation closed FRB on May 1 and entered into a receivership agreement with the Federal Deposit Insurance Corporation (FDIC). To safeguard depositors, the FDIC then entered into a purchase and assumption agreement with JPMorgan.

JPMorgan will acquire the entire asset portfolio of First Republic Bank, including all uninsured deposits. FRB has current assets of $229.1 billion and deposits of $103.9 billion.

As part of the transition, 84 First Republic Bank locations in eight states will reopen as branches of JPMorgan Chase. All FRB depositors will join JPMorgan and will have access to their total FDIC-insured deposits. Customers can continue to access banking services at the current branch until JPMorgan notifies them of a change.

In addition to the transfer of assets, the FDIC and JPMorgan reached a loss-sharing agreement for residential and commercial loans acquired by the FRB. The FDIC, in its capacity as receiver, and JPMorgan will divide the losses and any recoveries on the loans covered by the loss-share agreement.

The trouble for FRB began to percolate on April 26 when news of a government receivership became public. The announcement caused a 20% drop in the bank’s stock price within hours. The days following the announcement were even more volatile for the bank, which was eventually shut down by regulators.


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