by Jason Cohen
Federal regulators took ownership of the First Republic Bank and sold it to JPMorgan Chase on Monday, marking the second-largest bank failure in U.S. history.
First Republic was the 14th largest commercial bank in the country, according to the Federal Reserve Board, and the third bank to fail in the past several months following the collapse of Silicon Valley Bank and Signature Bank. Banking giant JPMorgan Chase acquired the vast majority of the failed lender’s assets and all of its deposits from the Federal Deposit Insurance Corporation (FDIC), according to a JPMorgan Chase press release.
Regulators seized the bank after it reported losing over $100 billion in deposits. Eleven of America’s largest lenders, including JPMorgan Chase, injected $30 billion into First Republic in an attempt to save it from collapse and prevent contagion on March 16.
“Our government invited us and others to step up, and we did,” said Jamie Dimon, Chairman and CEO of JPMorgan Chase in the press release. “This acquisition modestly benefits our company overall, it is accretive to shareholders, it helps further advance our wealth strategy, and it is complementary to our existing franchise,” Dimon added.
First Republic’s 84 branches, spanning eight states, will reopen as JPMorgan Chase on Monday during regular business hours, according to an FDIC press release. Every depositor at the failed lender will be transferred to JPMorgan Chase Bank and have complete access to all their deposits.
The bank’s stock finished at $3.51 per share on Friday, compared to about $170 a year ago, according to the Associated Press.
First Republic Bank’s failure is the second-largest in U.S. history, behind the failure of Washington Mutual in 2008, and is the latest casualty in ongoing banking turmoil that began with the failure of Silicon Valley Bank. The Federal Reserve’s banking supervisors did not take sufficient action to handle Silicon Valley Bank’s vulnerabilities before its collapse in March, according to a report by the central bank released on Friday.
The U.S. economy’s annual growth rate slowed more than anticipated to 1.1% in the first quarter of 2023, according to GDP statistics published by the Bureau of Economic Analysis (BEA) on Thursday morning.
In the financial sector, there is broad agreement that the economy will continue encountering complications this year as over a dozen large banks forecast poor growth or a recession, according to Politico.
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Jason Cohen is a reporter at Daily Caller News Foundation.
Photo “First Republic Bank” by Can Pac Swire. CC BY-NC 2.0.
