Global Courant 2023-05-01 13:59:23
First Republic Bank is the third major US bank to fail in recent months.
JPMorgan Chase will acquire “all deposits and virtually all assets of First Republic Bank” after the Federal Deposit Insurance Corporation (FDIC) confirmed Monday that the troubled bank had collapsed.
“JPMorgan Chase Bank, National Association has made 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 today during normal business hours as branches of JPMorgan Chase Bank, National Association,” the FDIC said in a statement obtained by ABC News. “All First Republic Bank depositors become JPMorgan Chase Bank, National Association depositors, and have full access to all of their deposits.”
First Republic Bank is the third major US bank to fail in recent months.
“As of April 13, 2023, First Republic Bank had approximately $229.1 billion in total assets and $103.9 billion in total deposits,” according to the FDIC. “In addition to taking over all deposits, JPMorgan Chase Bank, National Association, agreed to purchase virtually all of First Republic Bank’s assets.”
The collapse of Silicon Valley Bank in March and Signature Bank soon after sparked widespread fears of a wider banking crisis that could affect the global economy.
FILE – First Republic Bank signs and logos will be displayed on April 26, 2023 at a branch in Wellesley, Mass. , May 1.
Steven Senne/AP
“The FDIC and JPMorgan Chase Bank, National Association, are also entering into a loss equity transaction on single-family, residential and commercial loans they purchased from the former First Republic Bank,” the FDIC continued. The FDIC as trustee and JPMorgan Chase Bank, National Association, will share in the losses and possible recoveries on the loans covered by the loss-share agreement. The loss-share transaction is expected to maximize asset recovery by keeping them in the private sector. The transaction is also expected to minimize disruption to loan customers.”
Jonathan McKernan of the FDIC board of directors released a statement early Monday regarding the collapse of the First Republic Bank.
“I’m glad we were able to resolve First Republic’s failure without using the emergency powers of the FDIC. It is a serious and unfortunate event when the FDIC uses these emergency powers,” McKernan said. “Any decision to use the emergency powers of the FDIC should be approached with skepticism, taking into account the unique facts and circumstances of the time, and with careful consideration of the implications for the future.”
ABC News’ Victoria Arancio contributed to this report.
