The Federal Deposit Insurance Corporation has reported that First Republic Bank has become the third bank to collapse in recent months and that JPMorgan Chase will assume all of its assets.
The FDIC claimed that the agreement would minimize customer interruptions while preventing the agency from having to deploy its emergency powers.
On Monday, the Federal Deposit Insurance Corporation (FDIC) confirmed that the bank had collapsed and JPMorgan Chase is expected to assume “all of the deposits and substantially all of the assets of First Republic Bank” under the terms of the agreement.
“JPMorgan Chase Bank, National Association submitted a bid for all of First Republic Bank’s deposits. As part of the transaction, First Republic Bank’s 84 offices in eight states will reopen as branches of JPMorgan Chase Bank, National Association, today during normal business hours,” the FDIC told ABC News. “All depositors of First Republic Bank will become depositors of JPMorgan Chase Bank, National Association, and will have full access to all of their deposits.”
First Republic Bank is the third major U.S. bank to collapse in recent months after the collapse of both Silicon Valley Bank and Signature Bank.
“As of April 13, 2023, First Republic Bank had approximately $229.1 billion in total assets and $103.9 billion in total deposits,” the FDIC said. “In addition to assuming all of the deposits, JPMorgan Chase Bank, National Association, agreed to purchase substantially all of First Republic Bank’s assets.”
The FDIC further stated that keeping the agency from taking over would “minimize disruptions for loan customers.”
Early Monday, Jonathan McKernan from the FDIC Board of Directors released a statement regarding the Bank’s collapse.
“I am pleased we were able to deal with First Republic’s failure without using the FDIC’s emergency powers. It is a grave and unfortunate event when the FDIC uses these emergency powers,” said McKernan. “Any decision to use the FDIC’s emergency powers should be approached skeptically, taking into account the unique facts and circumstances of the time, and with careful attention to the implications for the future.”
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