After attempts to save the local lender over the weekend fell through, First Republic was taken over by financial regulators early on Monday, resulting in the third significant American bank failure of 2023. JPMorgan Chase then agreed to buy First Republic.
Based on a number of metrics, JP Morgan Chase was already the biggest bank in the US, and this past weekend, the bank won the auction for First Republic.
The company’s stock (NYSE: JPM) is holding stead only a few points off of its 52-week high in Monday trading at $141-$142 per share.
According to a statement from the Federal Deposit Insurance Corporation (FDIC), JPMorgan Chase will take over all of First Republic’s deposits as well as a significant portion of its assets as part of the agreement.
First Republic’s failure is the largest bank failure since 2008.
The agreement was reached after failed attempts to save the struggling regional bank led to First Republic’s closure by California regulators on Monday and the FDIC’s appointment as receiver.
The FDIC anticipates that its Deposit Insurance Fund will lose $13 billion as a result of the agreement, which calls for the federal agency to split losses from the transaction with JPMorgan.
The statement also states that as First Republic depositors are now JPMorgan depositors, they will all continue to have complete access to their money.
First Republic owned $103.9 billion in total deposits as of April 13 according to the FDIC, however this amount seems to have decreased over the last few weeks as JPMorgan announced it would be taking over control of about $92 billion of deposits.
A total of $203 billion worth of First Republic’s assets, including $173 billion in loans and about $30 billion in securities, will also be assumed by JPMorgan.